Research and news tell the same story: there is
discrimination both in employment and in business. Women are few and far
between among executives and founders of technology firms, and claims of bias
are often made, especially in Silicon Valley. On the financing side, venture
capital firms appear to disadvantage women in executive roles.
#AirbnbWhileBlack is a hashtag collecting discussions of discrimination, and has
led to Airbnb examining its processes for retaining hosts.
This looks like a problem for women seeking to start
businesses, especially if those businesses are in industries with few women to
begin with, like high technology. Even worse, the tendency to favor similar
people to oneself – homophily – could make this even worse. Interestingly, a recent article in Administrative Science Quarterly by Jason Greenberg and Ethan Mollick has found a counter effect.
The idea is that if a minority thinks that it is discriminated against, it will
be especially supportive of its own members. It will not only favor its own, as
all groups do, but it will do so in an activist way. If this happens, being
recognized as a disadvantaged minority – like women in technology – will lead
to better treatment, at least from members of the same minority.
Does it happen? It is not clear whether this is always true,
but one good place to look is in crowdfunding, where ventures and their
founders are presented to a “crowd” of any interested funder, and they in turn
decide what ventures to back. And indeed, Greenberg and Mollick found
that women targeted women’s ventures for funding, and did so especially for
industries were women are known to be scarce. So, women especially supported
other women not in fashion or publishing, where women are frequent business
founders, but in technology, where they are scarce.
This is clearly not a reason to think that discrimination
will balance out. Crowdfunding is the form of funding where this type of
activist support is most effective, but most venture funding is not done through crowds – and we already know that venture capital firms, for example,
have mostly male executives. Also, activist funding does not have large effects
when there are few women funders to begin with. So, we can conclude that this
provides some relief, but it is a less fair solution than simply evaluating
ventures on their merit.
