Are Women Entrepreneurs Succeeding in Business?

The title is the topic to discuss in this Category of the site. Are there actually differences between business created and / or managed by women and “men dominated” business?

Do we just need to think about “business” in general, like numbers?

5 + 7 = 12 without any gender distinction. Are businesses the same?

Here I start to research this topic -comments and discussions are absolutely welcome- without a specific agenda but with the commitment to post all my findings.

Let’s start with this blog that I found and inspired the title of this post: “Are Women Entrepreneurs More Likely to Succeed?”

Some figures and comments (that I haven’t checked):

“Women-owned businesses are growing at a phenomenal rate in the U.S.”

  • “40% of all privately held U.S. firms are owned or controlled by women”
  • “Women’s companies are creating jobs at twice the rate of all firms”
  • “Women’s companies are responsible for more payroll than all the Fortune 500 companies combined”
  • “Women’s companies are growing profits faster than all firms”
  • “Women’s companies only get 5% of all venture capital”
  • “Women take on more personal debt to fund their businesses than men do”

It would be good to know the sources of these figures, but from my experience in the Venture Capital industry, the 5% figure is totally realistic.

I managed a boutique VC firm in New Zealand focused in early stage ventures. Only two women presented proposals to the firm in more than three years. Other 6 -8 women were supporting their partners in a sort of joint venture (remember a proposal in Invercargill about an original pram: she was the designer, he was the mechanic) but they were a team, not a “women’s business”.

So I want to highlight this paragraph from the blog:

“A new book by Margaret Heffernan,”How She Does It”, explores what makes women-owned or controlled firms successful...”

According to Heffernan, “As long as women continue to slug it out in traditional companies that were build by men for men, much of their energy will go into fitting into those cultures. It is a big drain on resources. But once a woman runs her own company that drain evaporates. These phenomenal numbers how just how effective women can be when they work on their own terms. They also demonstrate just how much talent those traditional corporations lose when their women give up on them.”

This is a good avenue to follow…

Nicolás Erdödy

From Flexible Learning Network Ltd

“Nicolás Erdödy was employed as Programme Manager – Open Source Learning Laboratory in our Wellington office between November 2008 and August 2009. As a start-up initiative with a brand new approach to education and training in the field of open source, the project has been highly complex and challenging. Nicolás played an instrumental role in getting the project on a firm footing. He offers a wide range of experience and expertise, a sharp intelligence and entrepreneurial spirit that has added tremendous value to this venture. Nicolás has provided strong leadership on this large, strategically important project and did an excellent job conceptualising the core attributes of the project and deliverables required. I would like to recommend Nicolás relating to open source technologies, e-learning and start-up projects – these areas are his forte.” September 1, 2009. Richard Wyles, Director Flexible Learning Network Ltd

The Four Words Sequence

We all have a wish list. Or a “bucket list“. It could be full of ambitions. Maybe unfulfilled dreams.

But when it comes down to business, the wish list should have some boundaries. It will make it real.

The best way to make a dream real is to put some figures around it. Not necessarily numbers for an accountant. Not every business starts by thinking about money. But it helps to think about figures.

For example, you want to achieve something, you really, really want to make xyz happen!

Then the first step is to set up a time-frame.

“I want to be a very good soccer player in 3 years from now” sounds more realistic than simply say “I want to be a very good soccer player”.

Then you need to work out if it is feasible to achieve that.

Which is your definition of being “a very good soccer player”?

Today I am an excellent soccer player if I can play 20 minutes with my 9 years old son and not end exhausted. 25 years ago I wanted to be Diego Maradona

Every time that an entrepreneur comes for advice or I do a Due Diligence, I mentally try to classify the proposal using the “Four Words Sequence”.

Dream –> Idea –> Project –> Business

Many people imagine a “business idea” and spend a lot of time talking about it. Rarely does something else. I simply call that “business idea” a dream.

When you are able to put some boundaries to your dream, set up a starting point and achievable milestones within a realistic time-frame, then your dream is becoming an idea.

Then you are in the position to bounce around that idea and I sincerely recommend doing it.

At certain stage you’ll realise the need to list the resources needed to make it happen. Also to define exactly where is the starting point A and how you will reach point B. Someone would say that you “need a strategy“. Yes, that’s correct. When you start to think about resources, strategies and some of the friends that listened to your idea, are also interested, then you have a project.

But you really have a business idea, when your project has realistic figures around it.

Then you are ready to write the draft of your first business plan!

Know your numbers and you will be closer to a realistic definition of your business idea.

Nicolás Erdödy

From Sr. Technical Director, Broadcom

“In a world of rigid pre-defined roles, Nicolas is a unique entrepreneur, flexible and creative. I had the opportunity of using Nicolas’ team talents and services in the area of algorithmic research, programming, and productization”. April 21, 2008.

Ariel Hendel (Sun Microsystems Distinguished Engineer in 2008)


From Ing. Angel Caffa, Uruguay

“Nicolás es un emprendedor nato, con una gran visión para la creación y capitalización de oportunidades de negocio. Por otra parte tiene la flexibilidad de adaptarse a varias áreas. Lo considero también una persona muy valiente, capaz de “quemar las naves” y hacerse cargo de proyectos riesgosos. Por otra parte y aunque esté de más decirlo, es también un profesional recto y honesto, cualidades necesarias para administrar el dinero que terceros están arriesgando, algo muy común en la actividad empresarial.” Ing. Angel Caffa, MSc., MBA, Uruguay. September 2009

Business Plan (1) – Definition

What is a Business Plan?

If you are in business or you are an aspiring entrepreneur, you either heard about this concept or someone already said that “you need a Business Plan!”

Could be your accountant or lawyer, or your bank manager or even a friend with “business experience”.

Then you have a big question mark in front of you: what actually is a Business Plan (BP)?

There are many resources available online for free (if you prefer to pay, I’m sure that you’ll find software that will promise to make everything for you) but still there is one thing that Business Plans cannot do for you: they can’t run your business.

Let me go step by step.  Go to Wikipedia and read about the topic. Ask around. Your nearest public library will certainly have one or dozens of books on BP. New Zealand Trade and Enterprise (NZTE) has a wealth of resources on its website. Particularly useful are the “Guides to starting a business”, which include “Planning for Success“, a do-it-yourself kit. It is completely free, you can download it or ask for a hard copy

But there is still “a problem”: who will do the homework through the templates?

“Preparing an effective business plan for a startup can easily take 250 to 300 hours. Squeezing that amount of time into evenings and weekends can make the process stretch over 4 to 12 months” (Timmons & Spinelli, “New Venture Creation – Entrepreneurship for the 21st Century” – one of my text books at the Master of Entrepreneurship at Otago University).

So if it takes so long, how can be people out there offering to do a BP for you in one – two days?

The answer is simple: they can write down a few of your ideas in a way that others can read it. The only problem is who are those “others”?

In the following days, I’ll be posting comments about what is useful to be included in a BP, based in my experience as venture capitalist who between 2005 and 2008 reviewed around 3,000 proposals, did formal due diligence in 300 but only invested in three of them…

Like in every area of activity, you can write whatever you want, but the question that remains is simple: will achieve the desired outcome?

Some BPs are for the internal use of your company. Others are written to be presented to the bank for a loan. Or you are looking for an external investor that could become a partner.

You can be an established company that had been trading for 10 years. Or you are just playing with an idea that is looking feasible but has no numbers around it. Every case requires a different approach, but in general, a BP should cover the following items

1- Executive Summary

2- The industry and the company and its product(s) or service(s)

3- Market research and analysis

4- The economics of the business

5- Marketing plan

6- Design and development plans

7- Manufacturing or production and operations plan

8- Management team (existent and to be recruited)

9- Overall schedule

10- Critical risks, problems and assumptions

11- The financial plan

12- Proposed company offering (In case that you are asking for money)

13- Appendices

This table of contents is adapted from Timmons (ibid) but there is no standard rule “written in stone” that says that “this is THE way to write a BP”. It is similar to write a CV: it must achieve the goal of finding a job for the applicant, not to be written in a specified format…

I will discuss the above contents in detail. But remember two things:

a) It’s different to prepare a BP for a high tech start up in an unknown scenario than one for an existent business that operates in a known industry with existent and recognised benchmarks

b) Do not completely outsource the process of doing your BP. No one knows YOUR company better than you. I can help, advisors can provide assistance in many specialised areas, but the BP needs to be clear and understood for the people that will be implementing it: that’s YOU and YOUR TEAM.

And you know that the best way to learn things is doing them.

Nicolas Erdody

From Director/Architect for Ethernet Connectivity and Fabric at Sun Microsystems Inc.

“Nicolas has a unique blend of business and academic skills which are very hard to find. His willingness to drive technology to produce business results is the mark of a true CEO. Being able to build a team from the University arena he was able to demonstrate excellent value proposition at a reasonable cost…have delivered excellent results on schedule.”
Yatin Gajjar, Sun Microsystems Inc. Santa Clara, California, USA. September 8, 2009

Good morning

The new mini-site at http://www.erdody.net is operational now. A very convenient way to have a web presence. I bought the domain months ago from Name Secure (www.namesecure.com) for USD 9 per year. It comes with a free one page mini site where you can post a good amount of information. I repeat, it costs USD 9 PER YEAR.

Then you use other tools which are completely free like this blog, plus twitter and facebook, so there is easier than ever to have an online presence.

How can we explain that these tools are so cheap / free?

The difference these days is not on how fancy is your site but what are you saying. If there is no substance in your web presence, your visitors / customers are gone in miliseconds. There are many fancy sites, but not all of them offer something unique that distinguishes them over the noise of the net.

Will see if this blog pass the test!

Best regards,

Nicolas Erdody