
Do Female Executives Drive Start-up Success? - eidorianu
http://diegobasch.com/do-female-executives-drive-start-up-success
======
Jun8
One thing that annoyed me (and it's typical of writing on gender and racial
issues) is that he bends over backwards to state, effectively, "not that
having women execs don't drive success". This hyper-careful threading brings
to mind the famous Seinfeld "not that there's anything wrong with that"
episode ("The Outing").

My approach in these matters is Bayesian: Do having female, black, Asian,
Indian, etc. executives drive start-up success? The a priori probability I
assign to this statement is 0.5, i.e. may or may not. I also employ the My
Human Law of Large Numbers, i.e. any "large enough" human population (i) has a
Gaussian distribution of any cognitive skill and (ii) the parameters of this
distribution is pretty much independent of the particular population sample. I
don't have solid proof of this principle and in certain subdomains it may be
wrong (e.g. the great cognitive differences between men and women debate,
etc.) but I doubt that population differences would be significant.

Now, armed with the simple Bayesian approach and the MHLLN, we can see that
most of these articles are BS. The evidence to move the a priori value of 0.5
up or down should be _substantial_ , e.g "extraordinary claims require
extraordinary proof". I would be _extremely_ surprised if any gender, racial,
etc. factor would derive success of any size company.

Since the above analysis is rather trivial, one then has to ask why these
things continue to be written. I think the motivation is usually benign: One
sees the dearth of women in startups and wants to show that "it's a good
thing". This approach, however, is misguided in that, by making silly
arguments or sub-par statistical analysis, it hurts the cause due to the "the
lady doth protest too much" effect: many people politely nod, but see through
your sloppiness and internally become convinced of just the opposite cause
(especially if they are inclined to do so, i.e. if the prior was less than
0.5).

A quote I like a lot is "To be ideological is to preconceive reality." These
authors, rather than being objective, have already decided what their results
will be and are just filling up the blanks.

~~~
btilly
Yeah, I know it is cool to throw the word Bayesian around. But it is a lot
cooler when it is done by someone who actually knows enough about statistics
to be making sense. You clearly don't. Adding your comments about the
sloppiness of others makes it just ridiculous.

First of all 50/50 "better", "equal" is not a valid Bayesian prior. Here is a
simple litmus test to demonstrate that. If you have a valid prior, then you
can assign an actual probability to particular predictions. The ability to do
that is a prerequisite of Bayes' theorem. If you can't generate probabilities,
you don't have a prior. Suppose you were shown a random startup with women on
board. What would you predict their odds of success to be? You can't give me a
figure? Then you didn't have a valid prior!

Here is an actual prior that matches the "50% same or better" description that
you gave: We give 50% chance to the theory, "Startups with or without early
women have a 10% success rate." And 50% chance to the theory, "Startups with
no early women succeed 10% of the time, with succeed 20% of the time." I am
not saying that this is a reasonable prior, just a valid one. Though that
said, a 2 to 1 advantage for having women on board is roughly in line with the
figures in the (admittedly flawed) dataset.

With this prior, what happens if we look at a startup which had early women?
Well we assign 50% probability to the theory that there is a 10% success rate,
and 50% to the theory that there is a 20% success rate, so we calculate 15%
odds of it succeeding. We can calculate probabilities of protection. Litmus
test passed.

Now what happens if that startup succeeds? Well from Bayes' theorem, we now
would give a 2/3 chance to the theory in which women help and 1/3 to the
theory that they do not.

And if it fails? There we move the needle rather less since both theories
predict high probability of failure. In fact we'd be giving the women help
theory a weight of .4/.85 which is around 47% - so only a 3% shift in our
opinions.

Notice something? I came up with a concrete prior that fit your description.
And I found that every single data point makes a noticeable shift in the
posterior opinions that should be held. This is the exact opposite of your
hand waving claim that extraordinary proof is required.

Before you next try to use Bayesian analysis to make your claims seem
authoritative, please learn something about the subject. A starting exercise
might be to figure out what kind of valid priors actually would result in your
extraordinary claims require extraordinary evidence hypothesis.

~~~
Jun8
So, by throwing big words around and pretending to be an expert I gained a few
karma points, fan _tas_ tic. Please don't get so worked up about sloppy posts
and "attribute to malice that which is adequately explained by stupidity" :-)

The 0.5 prior thing was an irrelevant use of the principle of indifference.
What I really had in mind was a situation with the null hypothesis that having
early women on board has no effect on the success rate of a startup whereas
H_1 would be that they do have an effect. However, from my description I think
what came out was a prior of the kind P(success | women).

Without using any terminology, intuitively the point I was trying to make
(ineptly, as you point out) was this: the likelihood that I assign to the
statement that "having women early in a startup increases its succeed rate" is
very low, I need to see _many_ cases, form startups working on diverse areas
for me to update my likelihood value for this. Why? Because I don't think that
a subset of population selected with no clear connection to success will
affect the success of a startup. Clearly, if the selection has some obvious
connection, e.g. coming from a highly educated family, being good in
programming, etc. then it _will_ affect success. It's just not clear to me how
being a female or black or gay or Indian, etc. has such a connection. I may,
of course, be wrong.

And what about the irony of me calling the kettle black: I don't hold my HN
posts to the same standard as research reports from a major company.

~~~
btilly
First of all, you were the one who started off on a high horse. Don't be
surprised if people come back in kind.

Now what you're now admitting is that your real prior isn't 50/50 or anything
close. You're starting from the assumption that it is incredibly unlikely that
women can make much of a difference, and therefore you really do require
extraordinary evidence before you'll even consider the _possibility_ that
hiring women could help. In short your mind is so made up that your actual
prior can fairly be described as fact resistant.

But is that a reasonable theory to have? Independent estimates are that women
make an estimated 85% of all consumer purchases. If having women at the top of
your company helps you figure out how to talk to that group, there is a clear
potential connection between success and having women involved.

You don't like where this is leading? Well try something a little less biased
on for size. If the vast majority of startups do not have women at a high
level, but ability is equally divided between women and men, does that mean
that startups with women involved early likely have an advantage getting
better people?

I'm seeing lots of reasons to see that it could be _plausible_ that having
women involved early is beneficial for your startup. (Not necessarily true,
only reasonably plausible.) My advice to you is therefore to not be so fast in
setting preconceptions that let you reject data out of hand, sight unseen.

------
carsongross
I couldn't give a shit less if someone is male or female: either they can help
me code&sell and they can stomach startup life (which is not for everyone, and
certainly not for me in the long run) or not.

Period.

Who hires sex/gender? Big companies and organizations. Startups hire specific
people who can do specific things, and, quite literally, can't afford to give
much of a shit about this stuff.

~~~
aaronbrethorst
[http://boingboing.net/2012/09/24/you-might-be-
discriminating...](http://boingboing.net/2012/09/24/you-might-be-
discriminating-ag.html)

~~~
carsongross
Well, then, I guess my competitors will take advantage of my cognitive
disability, eat my lunch, and I'll learn my lesson, won't I?

~~~
btilly
If you're like most people, the least likely claim, by far, is _I'll learn my
lesson._

Most of us manage to come up with theories to explain our failures that direct
blame away from us, and for any unsuccessful startup there are so many obvious
candidate explanations for failure that useful self-examination would take a
miracle.

~~~
carsongross
Does this apply to women as well?

~~~
btilly
As far as I know, yes.

------
Crake
I really doubt it.

Hormonal differences have a large impact on what traits are most commonly
found in the "average" woman (or man, depending on what you're looking for),
at the very least in regards to increased chance of risk-taking. I think this
is pretty firmly established in scientific literature by now. However, any
specific person may be above or below another of the opposite sex in any
particular category, since the variables are so numerous. Making hiring
decisions on the basis of sex would be rather stupid. "You should hire females
because we'd like to have more females around" is just as sexist as "you
should hire more males because we'd like to have more males around." How about
looking for people to hire, instead of specific sets of genitalia?

I also think that technically inclined females sometimes have more in common
with technically inclined males than they do with "normal" women. A
personality amenable to huddling away comfortably in front of a computer
screen with a ton of coffee for long periods of time is probably the most
crucial factor to success. That's one of the great things about programming
though, it's much more talent-based than it is concerned with biological sex,
how much money your parents spent on your degree, or whatever else that
shouldn't really be relevant but in too many career fields, is still heavily
emphasized.

------
programminggeek
Not to sound like a guy, but here goes. No.

Do male executives drive start-up success? No.

Do smart people drive start-up success? No.

Do great coders drive start-up success? No.

Do great salesman drive start-up success? No.

Does great funding drive start-up success? No.

Any or all of the above could in certain situations, but not all situations.

If you could mathematically model startup success, you'd probably end up with
something that looks and feels a lot like the Google Search ranking algorithm.
You'd have possibly hundreds of factors you might tweak up or down over time
to try to best fit the data set, but ultimately it's not even close to a
guarantee of relevance and it would require some hand tweaking of results at
times to be "correct".

If someone could reliably define that you need so much of X, Y, Z factors to
be the next Facebook, Google, Dropbox, or even Instagram, they would build a
factory to build companies that print money. So far no company has truly built
that yet.

~~~
therealarmen
_If someone could reliably define that you need so much of X, Y, Z factors to
be the next Facebook, Google, Dropbox, or even Instagram, they would build a
factory to build companies that print money._

Pretty much YC in a nutshell.

------
vilda
Out of curiosity, I often read gender/green studies mentioned in mainstresm
press, published by various NGO. I am constantly horrified how misused
statistics is. I believe that most of these studies are written for a specific
purpose and math is there just to give it a science-cover. Even worse, I hear
them cited by politicians making a real impact to our lives.

~~~
trhtrsh
s|gender/green||; s|NGO|organizations|

------
daveman
That kind of hokey abuse of statistics always gets me riled up. Just because
cigar smokers are likely to live longer doesn't mean the habit extends
longevity.

A more telling study might be to compare success rates of startups with all
female teams, versus all male teams. Then at least you remove the bias of
having success attract a more gender-diverse team. Although you'd probably
need to correct for industry area, since I'm guessing females choose a
different set of markets to go after, in aggregate.

Crappy logic aside, I actually do think the original claim that women boost
startup success is probably true. It's super valuable having team members who
understand 50% of the population (and ~85% of purchasers), and knowing your
customers is critical.

------
jineris
As a feminist management theorist and geek, study conclusions like this always
frustrate me. Obviously, the study sheds little light on the actual cause of
the correlation, but my guess based on my personal experiences with leadership
strategy is this:

The choice to hire diversely is symptomatic of certain types of thinking: 1)
Open / wide / flexible thinking. Someone who hires diversely is more likely to
find it easier to conceptualize worldviews farther from their own as still
relevant. 2) Civic responsiblity / empathy. A desire to be a part of the
solution to gender imbalance rather than a part of the imbalance. 3) Long term
thinking. Having people who are more different from you on the team is a more
effective solution in the long run, because you're likely to cover more bases.

This means that leaders who make the choice to hire diversely are more likely
to also be leaders who plan slightly further ahead, are more dextrous in the
different ways they could see problems, and able to focus on non-top-down
perspectives on the business, such as what the customer might be thinking.
(All of this is correlative of course, not a->b.) As a result, leaders who
hire diversely are more likely to be already be leaders who are better at
running a successful company.

Ie, diversity is a litmus, not a direct cause.

I would be very, very surprised to find if, someday when women run 50% of
companies and are in workforce balance, companies with women executives are
still more likely to be successful.

EDIT: I do, however, think there is also an edge to leadership that can
sometimes come simply from being in a minority, whatever the minority is. Not
because there's anything wrong with white men, but simply because there's a
unique perspective on problems and indirect causality that you get from being
at a cultural disadvantage that, if you manage not to get weighed down by it,
ends up being pretty useful in business.

------
riams
Once again, this is the product of unclear thinking, not distinguishing
between correlation vs. causation. This is not a hard concept to grasp, so I'm
really disappointed in mankind that we let this mistake happen so often.

Since gender equality is such a hot and sensitive topic, I can see how it
incentivized people to jump to such conclusions.

------
orangethirty
I don't know about female executives, but female hackers are a pleasure to
work with. I'm lucky to be working with two right now on Nuuton, and its just
great. Very smart hackers without the testosterone driven need to prove
themselves on every opportunity. They just work independently and give great
feedback. They are a key driver of the success of Nuuton.

~~~
k33n
Seems like pretty stereotypical ways to view genders in the workplace. I've
worked with women who are always trying to look good at someone else's
expense. I've worked with men who work independently and give great feedback.

Gender has almost nothing to do with it. Your experiences are purely
anecdotal.

~~~
orangethirty
You are right.

------
richforrester
Personally, I don't really give a hoot about the gender of who I work with -
pleasing aesthetics are nice, but I'd work with Swamp Thing if he'd get the
job done.

I'm sure there's just as many well spoken, even-keeled men as there are women,
and perhaps women _do_ come out of this test better than men. Maybe because
they have to work harder to overcome discrimination, maybe because they charm
their way into the mainly male start-up work-force.

Again, it doesn't matter. Don't go out looking for particular genders, because
all you're doing is limiting yourself.

tldr: tldr.

~~~
groby_b
See, it's statements like that which annoy women. What do "pleasing
aesthetics" have to do with anything? Why do you even need to refer to that
when you talk about women?

And then, just for good measure, the good old "she must've slept her way up
the ladder" trope.

No, I can assure you, we (for the large majority, at the very least) have
_not_ "charmed our way into the work force". We've worked pretty damn hard to
get there. We put up with a lot of bullshit, and yes, we (on average) put up
with more bullshit than the average male dev.

~~~
esharef
Thank god for this comment. "Charmed our way." haha

~~~
richforrester
See below/above.

I'm saying that I don't give a hoot about how. My point was that
discriminating against man is just as stupid as discriminating against women.

------
kkwok
If I'm reading the study correctly the impact seems to be: 1) There is a
correlation between female execs and success, so companies that tend to do
better are also companies that tend to have female executives. 2) We can't
make any statements about causation, so this means it's not effective for
companies to just say let's hire female executives--without fixing any
underlying reasons they didn't before. In fact I'd guess it's more likely that
both success and having female executives is a result of a better firm
culture/outlook rather than one of them being the direct cause of the other.

------
coolswan
Pretty related: [http://www.forbes.com/sites/quora/2012/10/10/do-females-
amon...](http://www.forbes.com/sites/quora/2012/10/10/do-females-among-first-
hires-have-an-effect-on-the-success-of-a-startup/)

"Startups who have female first hires typically are those with less
discriminatory hiring practices. So the effect is not female hires => higher
profits, but rather female hires => startup doesn’t discriminate => startup
seeks most efficient outcome => maximizes profits."

------
sxp
One other factor that's missing from the study is the level of success
achieved by the companies. Instead of just grouping companies into "Generating
Revenue"/"Profitable" or "IPO'd", they should have done a breakdown by how
successful the company is. If the stereotype that bell curves for men and
women have the different stdevs is true, then the data would show that
companies founded by men have both a higher chance of failure (higher risk)
but also a larger return on investment. Unfortunately, most gender based
studies tend to only care about the means of the samples and ignore the
stdevs. For something like the founding of a successful company, the black
swans at the tail of the bell curves matter more than the rest of the bell
curve which consists of failures or mediocre successes.

------
mammalfriend
It doesn't appear that they controlled for the size of the company. So it
could be that larger companies in the survey (but still "startups") have more
females, since they hired and few founders are women.

Not that women don't drive startup success! But DJ disappoints on statistical
analysis.

------
wildgift
Maybe female executives tend to choose to work in start-ups that are more
likely to succeed. At least that's somewhat implied by the content of the
generally sexist blog post at WSJ.

So the question is really: what kinds of startups have appeal to women?

------
alid
That people are even questioning the value of a person's input based on their
sex is a form of subconscious discrimination. The title of this thread - 'Do
female executives drive start-up success?' - is a polemic, dichotomous
question, inferring a yes/no response. To invert the scenario, it would be
intriguing to see the voracity of comments harnessed from an article entitled
'Do male executives drive start-up failure?' - rather absurd, oui?

I leave you with this thought - diversity, in all its forms, is a strength in
business and in life.

~~~
littlegiantcap
Diversity for diversity's sake is an empty gesture. Not only that, but
diversity for diversities sake is demeaning. I love startups. One of the
reason is that when I was in school I despised the political correctness of
large, bureaucratic institutions. We exist in a meritocracy, and when success
in a startup is already so difficult, anything less than choosing a team based
on merit is making an already difficult task damn near impossible.

------
gnarbarian
Maybe it's because people they do business with want to sleep with them.

------
mishia29
I think that female executives have this inner intuition that connects them
well with customers; that's why they're doing well on social media. Just a
thought.

------
lettergram
I kind of feel the answer should be no more than males... Pros and Cons pretty
much even out

