Women represent the largest disruptive force in business — and the business world is unprepared. Currently we are the largest unserved market in business. Put very simply, most of the structures, design, technology and products we interact with are designed with male as the default: For example, designing a “personal assistant” AI with a female interface, i.e. — Alexa, Siri, Amy. The news we read is produced by male-dominated environments. Not to mention the innocuous daily toils of using products that were designed for men.
With the recent success of companies like The Honest Company and Thinx, we’re seeing a new rise of women-centred innovation: products and services designed for women by women, based on the pain points women experience in daily life. The investment ecosystem is unprepared to understand this opportunity, much less identify, invest in, and nurture this next generation of companies. The coming shift will have deep implications for the role women will play in the future of business, tech, and innovation.
Even though women are half the population, we live in a world where it’s taken for granted that the male perspective should be centred. This invisible bias is “coded patriarchy,” and it shapes our daily lives. As a result, the female perspective is quietly omitted in design, business, media, technology, clothing — and even our cities. Take something as simple as entering your office each morning: The average woman struggles to open doors when going in and out of buildings — because most doors are designed for the tensile strength of an average man. Or even your drive to work: When airbags were first released, hundreds of women and children were injured or killed when the bags deployed. The reason? The group of male engineers who designed them were all over 250 lbs and didn’t think to test for women. Forward-thinking industries like tech can be just as stuck in the past: Of the top health trackers (Apple, Fitbit, Nike) — not one had a period tracker at release, even though half of the target customer base tracks periods as part of their normal health routine, and health trackers are primarily used by women.
The result of all of this is that men move through the world unaware that it’s been designed for their comfort, and women move through the world encountering small points of friction or discomfort daily, or pain points.
Women are the single largest productive economic force, and drive almost every economic indicator for businesses. But that’s not the impression we get when we read economic data or view advertising.
According to some estimates, women control 85% of consumer spending in the US Why? Because your average woman makes purchases for herself, her husband or partner, her children and also her elderly parents. Women make 70% of major financial decisions for themselves and their families, everything from auto, home, and investment. In the US alone, women control $£10.5 trillion in assets or roughly 60% of personal wealth, which is expected to climb to £16.5 trillion in 2020. Globally, women control £27 trillion in total wealth.
Based on statistics released in 2015, women collectively represent the second largest economy in the world based on earned income vs GDP. This would seem like a logical assumption because women make up half the population, but due to a lack of data, this number undercounts female contribution to the global economy. These numbers don’t account for the fact that women are paid 25–40% less than men globally, and that your average woman does an estimated 4.5 hours of unpaid work daily (22.5 hours per week). In developing countries, women are doing as much as 10 times work as men, and according to a World Bank report, out of 173 economies, 100 have job-related restrictions that impact women. Adjusted for all of these factors, women would likely be the largest collective economic power on the planet — let that sink in. Now let one more piece of data sink in: Globally, only 50% of women participate in the formal economy.
When a population influences 85% of consumer spending, yet only receives 2% of venture funding, there is a fundamental disconnect at the leadership level in the business and investment community.
Yet in most countries, we have poor data as to women’s true productivity because women’s work often isn’t properly tracked or captured by economic indicators. Only a fraction of the total productive work women do globally is reflected in traditional economic indicators. GDP, or gross domestic product, is the economic indicator for measuring the strength of a country’s economy. These numbers were designed by men, and though it’s an estimate, it doesn’t represent total value of everything produced by all the people and companies in a given country. GDP doesn’t account for women’s uncompensated labour — an area of productivity that is foundational to the function of every economy in the world. The estimates are staggering: Women globally produce a minimum £7.5 trillion in uncompensated labour.
With all of this data, you’d expect companies and businesses to invest heavily in balanced or female-heavy teams to better understand and engage with their customers — many of whom are women.
However, when we look at business, we see the opposite. Women are largely excluded from senior management positions across every industry from business, advertising agencies, media, health, and even technology. Technology companies employ approximately 20% women, but they’re mostly shut out of coding, innovation, and design divisions. Out of 1,500 S&P CEOs, there are fewer female CEOs than there are CEOs named John. Despite the increased scrutiny when it comes to funding and entrepreneurship, women’s access to capital is decreasing: In 2015, women were receiving 15% of total VC funding, and those numbers have declined to 2% in 2017. Markets and investment have continued to flow in ways that run contrary to the logic of objective data on the immense opportunity presented by the economic force of women.
A new generation of women is increasingly stepping into entrepreneurship and innovation. Yet as they do so, we are seeing a wave of businesses with women-centred innovation at the core — meaning, products and services that are designed to reflect women’s pain points and direct needs.
This may seem like a minor point — but keep in mind that this simple assertion disrupts thousands of years of social conditioning to “code” for the masculine. Almost all of the products and services women purchase are created, designed, built, and sold to women by male-led companies.
I would argue that women are the single largest opportunity in the market today — overlooked, and underfunded.
I would argue that women are the single largest opportunity in the market today — overlooked, and underfunded. There are few markets left in today’s world with little competition — yet this is exactly the state of affairs when it comes to women. While there are 23 billion pairs of shoes sold globally in 2015, it’s estimated that men own an average of 12 pairs of shoes while women own an average of 27 pairs of shoes. Women spend an estimated four and a half times more on clothes and shoes than men — however, there are almost no shoes designed by women with women in mind. And the same is true across almost every category that women consume with very few exceptions.
The result is that any new product will be the first and likely market leader. However, unlike your standard emerging market, you don’t have to wait years for the market to mature. Women are already a fully matured market in terms of size and economic spending. There’s almost no gap or lag time. In addition, due to the lack of access to capital, women don’t have the luxury of building wildly unprofitable businesses for 5–7 years. As a result women are more likely to build revenue-positive businesses.
The result is that women’s companies can grow at an incredibly fast pace. Glossier, whose business is based on trusted beauty product referrals for real women, raised £26 million in funding, had 60K names on waitlist for their products, and revenue on track to grow 600% in 2016. Stitch Fix built a profitable retail startup with £750 million in revenue in less than six years —and was the first female tech founder to have an IPO in 2016.
As women begin to innovate products based on their own experiences and pain points, what will result is a fundamental shift in consumer buying, belief, and behaviour patterns.
I suspect there will be a greater scrutiny and dissatisfaction of products and services. Consumers could develop a preference for female-designed products, and female audiences may be less willing to engage with branding and messaging that is not authentically crafted with female-driven insights.
As advertising rarely reflects women’s perspectives or needs, women have learned to rely on the recommendations of other women. Women have formed their own networks where they share product referrals to understand the efficacy and fit of a product before buying. This also accounts for the very different behaviours of men and women online. Women share and refer content 62% more than men; and use social networking to form communities, while men prefer content oriented sites that can increase their status. The implications of this are profound for new product adoption rates, because women operate as organic evangelists. As women find new products that they like the word will spread quickly, translating into faster uptake and adoption by other women.
As pointed out earlier, women dominate consumer spending because they buy for so many people within their immediate circles. Yet think of the multiplier effect across close circles — women engage in an average of 68% of gift-buying activities and for a greater number of recipients compared to men: birthdays, wedding and baby showers, graduations, weddings, holidays. Men primarily report simply purchasing a gift for their wives.
The current business, technology and investment establishment is asleep at the wheel. After decades of an “I’ll ask my wife” or “just make it pink and charge more” mentality when it comes to women’s products, along with decades of resistance to calls for inclusion — existing institutions lack the internal resources and knowledge necessary to adapt. These companies and funds don’t have the internal culture or external network to identify, invest in, and nurture this next generation of companies.
Men currently control wealth, and the system of investment. Women simply represent the largest arbitrage opportunity in the market today.
We’re already seeing a shift in executive leadership as businesses grow less tolerant of harassment. We’ll likely see new waves of changes in executive leadership as companies see the profits that result from taking women seriously as customers and founders. The darlings of the business world shifted from middle-aged men in Brooks Brothers suits, to college drop-outs in hoodies – it’s about to shift again.
As female-founded companies reach maturity, a new ecosystem could form, resulting in a wave of women founders and employees becoming entrepreneurs and investors. Female-founded companies could also create a new investor class, by tapping into the £10.5 trillion in capital currently controlled by women, and converting them from passive to active investors. This wave of female-controlled capital coming off the sidelines could be a game changer that redefines how we quantify economic value.
The implications for women are profound, from a career, innovation, and business leadership perspective. In this new era, every woman, by virtue of her lived experience, is now a walking hub of multi-million dollar business ideas. For the last 50 years, women have been asked to reject or mask their femininity in the workplace. In the female-driven economy, insight from lived experiences — from menstruation to motherhood — can become lucrative business ideas.
In this ideal world, as a woman, every pain point you’ve experienced walking through daily life is an empire-building business idea that has never occurred to a single one of the Fortune 500 CEOs named John, Mark, or James.
Danielle Kayembe is a serial entrepreneur who works on projects at the intersection of women and social impact.