How a deep dive into the benefits of gender-diverse founding teams led me on an anti-short-termism crusade
Like many EdTech founders, I am headed to Austin next week for SXSW EDU and have been working on my elevator pitch.
Here’s what I got so far:
Hi, I’m Nicole Gallardo! I am the Founder & Chief Design Officer at Founders Who UX. I have been designing products, building design teams, and growing companies for almost two decades.
Founders Who UX is an EdTech company that runs immersive and practical UX/UI programs for early-stage startups. My goal is to help underrepresented founding teams (especially those led by women) learn how to design the right product before they invest a ton of money into building the wrong thing.
Each program includes a culmination of the knowledge, experience, and lessons I’ve learned throughout my career. I transfer it to teams via live virtual classes, hands-on workshops, and customized bootcamps.
While I finally feel satisfied with my intro, I am also uncomfortably conscious that I’m leaving out my most valuable attribute every time I say it. Perhaps because it’s implied by the way I present myself. Perhaps because saying it out loud sounds cliche? Or perhaps because it’s simply underappreciated, especially within tech.
So what is my most valuable, yet unspoken attribute?
I’m a woman.
Today marks the first day of Women’s History Month and as a woman founder, I can’t help but feel two overwhelming emotions:
- Gratitude — To all the women before me who fought and sacrificed in order for me to even be writing this article and elevator pitch today.
- Frustration — Men get money, power, and status while women get a few days marked on a calendar.
Being a woman founder is hard, but the startup world is also one of the only places in our economy where anything is possible for us.
Much of the problem-solving I do for Founders Who UX is centered around leaning into being a woman founder instead of trying to fit into a man’s version of what entrepreneurship should look like.
While it’s probably not the center you’d expect for a company offering UX/UI programs for early-stage startups, women founders are who need my programs the most. The programs I’ve created are part of a unique solution to what I believe to be the largest societal problem within our startup ecosystem today: gender inequality.
I’ve spent most of my career researching, studying, and trying to better understand how women entrepreneurs can build successful businesses in today’s economy by amplifying their unique traits to offset the tremendous odds stacked against them.
Because I’ve made it my personal mission to make the startup ecosystem more gender equitable, you can definitely assume I’ve read enough books and articles on the topic to make a librarian proud.
In one of my favorite books, Own It by Sallie Krawchek, I was introduced to a term that would lead me down a research rabbit hole for years to come:
Short-termism [ shawrt-tur-miz-uhm ] adjective — When companies want to be more profitable in the near term, they will put off investing in research and development, which means less innovation, less invention, and fewer breakthroughs in the long run.
After reading this definition for the first time, I couldn’t get it out of my mind.
It was clearly an oversimplified explanation for the root cause of most startup failures.
It deeply supported the value of UX.
And it was impossible for founders of any gender to ignore.
I began sliding a warning about short-termism into pitches, design reviews, workshops…anywhere that I thought founders would listen to and could benefit from it.
I even used it as a gut check to myself as I wrote and rewrote my own business plans.
But short-termism didn’t just live inside my thoughts and words. It appeared everywhere I looked as well. It was what new founders with low burn rates were tempted by daily. It was present in board meetings when budgets were discussed. It was what design teams struggled with when trying to meet important deadlines.
It was everywhere business was.
I decided to officially begin an anti-short-termism crusade.
To start, I’ve summarized the five main negative effects short-termism has on startups that founders (myself included) need to be aware of:
- Weakened strategy. As new founders try to make ends meet, it’s easy to get distracted by shiny things right in front of them that could bring profit, even if they don’t align with their long-term strategy. Without a strong long-term plan, startups can quickly lose direction, water down their offerings, and struggle to achieve sustainable growth. Every time I meet a new founder with unique challenges that aren’t covered by my current program offerings, I’m tempted to create an entirely new one-off program specifically for them. But over time, I’ve learned to stay true to my core plan and vision because everything outside of that distracts me from reaching my ultimate goal. Squirrel!
- Missed opportunities. On the flip side of not getting distracted, it’s also important for founders to thoroughly explore every opportunity that presents itself. Growth opportunities take longer to pay off. If founders are too narrowly focused on cost-cutting and tempted by short-term profits, they may miss foundational opportunities that help them ride the highs and survive the lows long-term.
- Inability to attract and retain the right talent. Startups are only as good as the founding team building them. However, short-term thinking can result in a lack of investment in team member development, culture, and work/life balance. This typically leads to burnout, high turnover rates, and a hard time attracting top talent. I spent the last 10 years building a UX agency and in order to retain our top talent, I spent around 40–50% of my time as co-founder and CEO dedicated to team development, inclusion, and culture.
- Designing the wrong product for the wrong people. Early-stage startups are expected to acquire customers quickly, most times before product-market fit is even achieved. In the rush to do so, they often don’t take enough time to learn what these new customers really need and want out of a product and therefore, don’t understand how to build long-term relationships with them. This lack of UX research and mindset typically results in founding terms designing products that are based on the founder’s own assumptions, not those of the customers or the end-users.
- Hard time securing funding. From an investor’s perspective, putting money into a company involves expecting a return on the investment in the future. However, if the company’s founding team doesn’t seem to have a clear idea of where they’re headed and a realistic plan for how to get there, it’s hard to justify putting their money on the line.
If the founding team suffers from short-termism, they are extremely limiting their startup’s potential for sustainable growth and success by undermining strategic planning, new opportunities, team building, customer relationships, product development, and funding prospects.
I knew that if I could figure out how founding teams could combat short-termism, I would be holding a golden hammer that could fix most things related to startup failure.
What I eventually discovered was even more practical than a golden hammer. It was data that directly connected the dots between the two things that I spend most of my professional energy thinking about: women founders and long-standing, sustainable companies.
It’s no secret–women and men are different.
A study by First Round Capital found that companies with at least one female founder performed 63% better than all-male founding teams.
I believe these companies perform better because women founders naturally possess 6 important qualities that combat short-termism:
- Women focus on long-term goals over short-term gains. Companies with at least three women on their board of directors had a higher Return on Equity (ROE) than those without any women on their board. This suggests that women are better at balancing short-term and long-term goals, which is essential for startups that want to build sustainable businesses.
- Women tend to have a higher Emotional Intelligence (EQ). This is essential for effective leadership. Women score higher than men on 11 of 12 key emotional intelligence competencies. This means that women are better equipped to lead teams, build relationships with customers, and make decisions that take into account the needs of all stakeholders, including team members, users of the product, and investors.
- Women tend to be more risk-aware than men. While risk-taking is often associated with entrepreneurship, it’s important to balance risk with caution. Many studies across a multitude of industries have shown that women tend to be more risk-averse than men, which can lead to more prudent decision-making. This can be especially important in the early stages of a startup when resources are limited and mistakes can be costly. This doesn’t mean that women are risk-averse, but rather that they are more cautious and deliberate when it comes to decision-making. To me, it means that women are less likely to make rash decisions that prioritize short-term gains over long-term sustainability.
- Women prioritize social impact. Research by the University of California has found that women founders are more focused on social and environmental impact. While profitability is important for any startup, a focus on social impact can help build a loyal customer base and attract top talent — both of which benefit the company in the long run.
- Women are great at collaboration and consensus-building. Women leaders tend to have a more collaborative and inclusive leadership style, which leads to better decision-making and a more positive team culture. This is helpful in ensuring that all team members are aligned on the long-term vision and are working towards the same goals.
What it comes down to is diversity. Women founders bring a unique perspective to the table. Their qualities, experiences, and insights can help startups make better decisions, innovate according to a long-term strategy, and identify the right opportunities for growth.
For men founders:
If the data provided above isn’t enough to convince you, I can personally tell you as a woman founder who has worked with both men and women co-founders, having a diverse founding team is essential.
Don’t shy away from actively looking for a woman co-founder. My advice would be to start looking first within your own network. Most founders will tell you that they met their co-founders either in college or at a previous company.
If you aren’t having luck there, try attending events and conferences that are specifically geared toward women in tech. These are a great way to expand your network of women who are interested in entrepreneurship and may be looking for a co-founder like yourself.
Remember, by actively seeking out a woman co-founder, you are not only intentionally combatting short-termism and increasing your chances of success, but you are also contributing to a more inclusive and equitable tech industry overall.
For women founders:
As woman founders, it’s essential we connect with like-minded individuals who understand the unique challenges and experiences that come with the role. My advice to you would be to explore and join communities and organizations dedicated to supporting others like us.
Here are three of my favorite:
- 10th House by Female Founder Collective: The 10th House is an exclusive membership community for female founders to connect, get educated, and grow and scale their businesses.
- Femstreet: Femstreet is where women and tech lead, shape, and fund the future. They have a newsletter, podcast, and with the premium membership, access to their slack community.
- Female Founders Alliance: The Female Founders Alliance is a community of female founders, investors, and startup experts. Its goal is to provide a supportive and inclusive environment where women entrepreneurs can connect and learn from each other.
By joining one or more of these communities, you’ll gain access to a wealth of knowledge, resources, and support to help you succeed as a woman founder. (If you have any others to recommend, please share them with me in the comments below!)