Women Work the Web
Finding an edge in the dotcom world
Question: What do the following Internet companies have in common?
MuseumShop.com, Pets.com, eStyle.com, Oxygen.com, and eBay.
Answer: They are either founded by or run by women - or both. (And that's the abbreviated list.)
It seems that overnight the Internet has become the hottest new stomping ground for businesswomen.
In the past year, in particular, women - many of them high-ranking executives who have built successful careers in corporate America - are leaving in droves to launch or run Internet startups.
The latest defectors: Jeanne Jackson, who recently resigned from her post as head of the Banana Republic division of Gap Inc. to be chief executive of Wal-Mart.com. And last month, Citigroup's chief financial officer, Heidi Miller, stepped down to become CFO at Priceline.com, a site where consumers bid on everything from plane tickets to hotel rooms.
Some say an unquenchable thirst for talent is pushing the door wide open. Yet most agree that something far bigger is propelling the trend: The Internet has created a new frontier when it comes to doing business.
And that frontier doesn't pay any attention to gender.
"The reason that women are coming to the Internet - really good businesswomen - is that for the first time, [we] don't perceive that there is a glass ceiling. It is so talent-based and results-oriented," says Deborah McWhinney. The former executive vice president at Visa International left her post last year to run San Francisco-based I/PRO, which analyzes site activity for online businesses.
The trend is more than anecdotal.
Consider: Women were chief executives in about 6 percent of US Internet companies financed by venture-capital firms in 1999, according to VentureOne, a research firm in San Francisco. Also, women held top-management posts in 45 percent of such start-ups.
In comparison, women account for only 3.8 percent of the highest-ranking corporate officer positions in the Fortune 500 companies, according to Catalyst, a New York-based firm that researches women in business.
New ways of doing business are created every day on the Internet. That means a new "anything goes" attitude prevails.
"Corporate America is so grounded in tradition," says Laurie McCartney, founder and chief executive officer of Los Angeles-based eStyle.com, a retail site that caters to women. "The Internet is opening up a whole new playing field. It is opening up the opportunity to create a whole new corporate paradigm."
Ms. McCartney had always planned to be an entrepreneur. (Starting in elementary school, she'd help her father in his traffic-supply business, which sold road signs, cones, and the like.)
The Harvard MBA struck out on her own at the end of 1997, after some five years at the Walt Disney Company's strategic-planning department, where she learned from the ground up how to build a brand as well as a loyal customer.
She headed back home to New York to contemplate her next move. Shortly afterward, she found out she was pregnant, and the idea for her start-up was born.
"There wasn't a great solution on land or online to buy baby gear or set up a nursery" all in one stop, she says.
During her pregnancy, McCartney clocked 16-hour days, putting together a business plan and beating the venture-capital streets. Her son Jack arrived in October 1998. A month later she landed just under $1 million. And her staff moved into her home to get to work on its flagship site, Babystyle.com.
"It was a little bit crazy," she quips. "Bringing order to chaos is what the Internet is all about. There are a lot of parallels between motherhood and the Internet."
Last October, the dotcom launched Babystyle.com, which sells everything from maternity and baby clothes to strollers and cribs and is packed with plenty of primo brands such as DKNYbaby, Peg Perego, and Mustela.
Her company now has 100 employees and occupies the entire 27th floor of one of downtown Los Angeles's more posh skyscrapers. Last week, they rolled out another site, Kidstyle.com.
Another factor propelling women on the Net: The "old boys" network isn't an issue - basically because there aren't any old boys.
"The Internet, on the whole being a young industry, is populated by young executives," says Sue Levin, co-founder and CEO of Portland, Ore.-based Lucy.com, a women's online sports-apparel retailer. "People in their 20s and 30s have grown up in a time when there are more women in the workplace and in management."
Most men in the senior ranks of Fortune 500 companies, she speculates, "have never reported to a woman."
Ms. Levin is also a corporate America defector. Just over a year ago she left athletic giant Nike, where she was the US women's brand director, responsible for all aspects of the consumer market for Nike's $1 billion US women's footwear and apparel business.
The idea for Lucy.com came while at Nike.
"I learned that there is this huge disconnect between what [female] consumers wanted and retailers were selling," she says. "We couldn't get the products past the retailers. They wouldn't buy them and didn't understand them."
Enter Lucy.com, which debuted in November. "I never saw myself as an entrepreneur," Levin concedes. "But this seemed to me like a once-in-a-lifetime opportunity."
Another important factor is that many businesswomen have spent their careers honing skills in marketing, retail, consumer relations, and communications that make them well suited for running a start-up.
"Branding, positioning, and marketing - these are the skills women have [developed], and these are the skills needed to run an Internet company," says Denise Brosseau, president of the Forum for Women Entrepreneurs in San Mateo, Calif.
Yet another big piece of the start-up puzzle is funding, which has long been a challenge for female entrepreneurs.
One benefit of launching a dotcom is that it takes a lot less capital than it does to put up a bricks-and-mortar store.
Rebecca Reynolds Moore, founder and CEO of MuseumShop.com, based in Arlington, Mass., raised $25,000 from friends and family back in 1997 to launch her site, which partners with museums to sell their products on the Web.
But she soon realized that wasn't going to be enough.
"When I started my business, I was assuming I would pull it along with minimum investments," says Ms. Reynolds Moore. "But after a year and a half, I realized the industry was moving too fast and I needed to bring in professional money."
She did. In October, she raised $3.1 million in her first round of venture-capital financing.
Still, statistics indicate that only about 4 percent of all venture capital goes to women-owned businesses.
No doubt dotcoms are where a lot of the VC money is going right now, which industry watchers say gives women launching Web-based businesses a better chance to obtain funding.
"The sky's the limit," says Susan Williams De-Fife, president and CEO of womenconnect.com, a business site for women based in McLean, Va. "If you've got a good idea and can put together a good management team, you're going to be able to get the funding for it."
At the same time, the number of female venture capitalists is growing. That will ultimately help the cause.
Six years ago, when the Forum for Women Entrepreneurs was launched, Ms. Brosseau had only about 10 women venture capitalists in her Rolodex. She now has 76. "That's a huge change in six years," she says.
Most agree the venture-capital world is still run by men. And that often means bridging the communication gap.
"You have to position yourself in a way that appeals to them," says eStyle's McCartney, who says she uses a lot of sports metaphors - comparing strollers to golf clubs, for example - when pitching her ideas to men.
It must have worked: eStyle has landed $60 million in venture capital since its inception.
Still, she and others admit, that it's the female venture capitalists who have been most receptive to their ideas.
"A lot of the champions I found in venture capitalists," McCartney says, "I found in women."
(c) Copyright 2000. The Christian Science Publishing Society