by Lindsay Amos3/30/2021
We’ve been talking about the unique challenges facing women founders for years, but the pandemic was particularly hard for women looking to start their own companies. According to recent data, funding to women-founded companies dropped from 2.8% in 2019 to 2.3% in 2020.
Last year, during Y Combinator’s Future Founders Conference, a16z’s Sonal Chokshi led a conversation on “Leveling the Playing Field” with Anu Hariharan, YC Continuity Partner. Frankly, we’re still thinking about Anu’s incredible advice for women founders.
Anu started her career as a software engineer for Qualcomm, before joining BCG’s Private Equity Practice in New York City, and finally becoming an investment partner at Andreessen Horowitz, where she worked with portfolio companies like Airbnb, Instacard, Udacity, and Medium. In 2016, she joined Y Combinator to launch the Continuity Fund, where she partners with companies as they scale their businesses.
Anu is never short on advice for founders, but her words are particularly salient for women looking to build and grow their startups in the aftermath of the pandemic. Here are her best pieces of wisdom for leveling the playing field.
On (not) doubting yourself:
“If you ask male founders, the thing is always, ‘I knew I always wanted to be a founder, and so I started a company.’ When you ask female founders what it is that got them to start a company, it’s because someone told them, ‘You can do it.’ It’s a small, but a very important difference. When I reflect back upon my career, women are always preparing for their next role. We are always figuring out what are the 10 skills we need to be perfect and do the job.
Now, I’m not a founder, but I was very happy in my role at Andresseen Horowitz. Unexpectedly, YC had reached out when they launched their Continuity Fund about 5 years ago. One month after getting the offer, I had not signed. I remember this vividly: Geoff Ralston, [YC President], called me and said, ‘Why haven’t you signed the offer?’ He thought it was maybe compensation, maybe the role, maybe he needed to clarify more. But in the four weeks since I had gotten the offer, I had talked myself out of taking the job, because I realized I was not ready for it. When he heard that, he was shocked. I don’t know if he remembers this, but he said, ‘The whole YC partnership is convinced you are going to be really successful at this job. You just need to get this through your head.’ And he hung up. That’s how it was! And the next day, I signed.
This is a common thing I see among female founders; if there’s one thing I want you to hear, the very fact that you are sitting and listening in this conference is that you have the ambition to be a founder. So, go do it and we’ve got your back.”
On the mindsets that founders need to succeed:
“Building a startup is incredibly hard, so you’re going to have to be willing to try, and be okay with some failures, and keep trying. That is resilience. Secondly, I think so much about being a startup founder is really about being optimistic about the future, and believing in your vision when no one else does — and most people don’t in the early days. The third trait founders need is resourcefulness. You are going to run into so many roadblocks as a startup founder; not even as a startup founder, but in real life. As you scale in your career, how resourceful you are, and creative you are in forging your own path and solving problems for the company, is an important mindset you need to have.”
On the tangible skills that founders need to succeed:
“I would highly recommend you learn how to code. I think whether you’re building a tech startup or not, most startups or companies today have some tech component — e-commerce at the very least, has a website. Learning to code is not that difficult; I grew up learning to code, and programming has only dramatically improved in the way in which you can learn. There are a lot of low-code, no-code tools, so I’d highly encourage you all to learn to code. At the very least, when you are trying to find a co-founder or you’re hiring those engineers, don’t let them bullshit you. You know if you learn how to code and know how to build a prototype, you just have way more leverage in starting a company.
Number two, I’d highly recommend you work at a startup. There’s nothing that comes close to learning from a startup. I worked at Qualcomm; I started my career as a software engineer. But if I could go back to my twenties and give advice, I’d go join a startup. What you learn at an established company in 10-15 years, you learn at a startup compressed in 3-4 years, especially at a scaling startup. Working at a startup really gives you a feel for the day-to-day, what roadblocks you’re going to run into, and it also teaches you to be resourceful, because you don’t just do your own role. You wear multiple hats.
The third thing is sales skills. When I say sales, it’s not about the traditional field sales or inside sales role. It’s more your ability to sell to your customers, to your investors, to potential employees. If you work at a startup, you have to wear that hat anyway, because you’re convincing other people to join the startup or even your own team. I think working at a startup and building those sales skills are really handy.”
On how to know you’re ready to start your company:
“Too many female founders have told me they wasted too much time thinking about when to start a company instead of just getting started. The most important thing is to have an idea, a problem or a pain point that you yourself face… You don’t have to spend months and months doing market research; talk to 10 or 12 people, then start a side project. If you’ve learned to code, it doesn’t take that long to ship an MVP [minimum viable product]. So, start a side project and test it out. Does it truly solve your problem? Are a few other users at other companies willing to sign up for it? If you have a compelling idea that’s a pain point, that you truly think is yours and a few others have it, that’s a good moment. The other important moment is having a co-founder. This is the one that actually takes time, not the idea or the MVP.”
On where exactly to find your co-founder:
“It’s so important to have a co-founder who you trust and who can basically take the load off you on certain things — who can share the workload. But most importantly, you are the support system for the other person when things are hard. Finding a co-founder is hard for everyone, but really hard for female founders. Why is that? Because we are limited by the access to our own network, which is our own social circle. If you are not a coder, the odds of finding a technical cofounder is really 10 times harder, because you’re not wining and dining with them. But if you ask a male founder, ‘Who is your co-founder?’ It’s usually their best friend from college, their dorm mate, their roommate, or they live in the hacker house. Those are not things I want to do; I’m not hanging out with them on my weekends! But female founders can be deliberate.
If you’re deliberate, you can actually knock it out of the park. The tendency here is we want to join a lot of societies and communities, and I would say that our tendency is to join ‘Women in Product’ groups, or ‘Women in Engineering,’ and that’s how we’re going to try and invest our time. But is that the best place you’re going to find a co-founder? Probably not. The best place you’re going to find your cofounder is at other startups. Think Stripe, DoorDash, Airbnb, or Dropbox, because the early engineers in those teams are probably itching to go start something else. The very fact that they’re working at a startup means they are itching to start something of their own. If you’re smart and deliberate, and take the time to find those people in those specific companies, build relationships, maybe work on a side project with them over a year, you’re likely to find a co-founder from there.
I want to emphasize this message: You’ve got to be proactive. It’s not going to land in your lap. But if you are deliberate, you can really find a great co-founder.”
On being deliberate in building your network to create opportunities:
“Five years into BCG [Boston Consulting Group], I learned a lot about private equity investing, but I missed tech. I really wanted to figure out if I should go back and do tech investing. This was 2013, 2014. I wrote down a list of 10 people I really admired in tech, based on all the reading I had done, and one of them was Jeff Jordan. I didn’t know any of the 10, but I read a lot about their work, and I emailed them — not for asking for coffee chats. This is really important; everyone always asks for coffee. Instead, I messaged Jeff Jordan and said, ‘You know, I read your blog post about retail, and the transition of retail to online.’ He had a take that some categories were not going to shift as fast, including grocery, and I disagreed with him. I said, ‘Our research at BCG says this, if it’s interesting to you, here is where it is.’ And he responded! It was intriguing for him; he realized it was a contrarian view, so we went back and forth and traded lots of notes.
In hindsight, I didn’t realize what I was doing then, but I was doing a side project. I was spending nights and weekends, debating and sourcing new startups to prove a point, and six months later, I had an opportunity to join Andresseen Horowitz. That was because I was deliberate. It was not serendipitous, where the job landed in my lap. It was a conversation I had over six to seven months.”
On the importance of women taking VC money:
“I think most female founders hesitate to raise VC money, but the fact is, startups need growth. And chances are, if you’re solving a pain point that’s real, your company is going to grow fast, because the demand for the product is going to be really high. You need to invest a lot more money to support that growth before you make money. This is another difference I notice between male and female founders: Male founders never even ask this question. They’re just ready for venture funding. Most female founders hesitate, and I’d say that’s part of company-building. You’ve just got to do it.”
On her best advice for female founders pitching investors:
“Storytelling and sales skills are the most important skills for pitching VCs. At the end of the day, this is a confidence game. It’s about how you deliver your vision for the company with conviction. This is again where I’ve seen female founders underdeliver because they tend to emphasize more on risks and how everything could go wrong in spite of the traction looking stellar and they have built something amazing. They have also usually spent a lot less money to get here vs. male founders building companies in the same category. Male founders on the other hand will just say. ‘We’re here for the win.’ in spite of their companies having less traction and burning more money. I think that goes back to the point I made earlier: We women are always trying to be perfectionists and we’re always second-guessing ourselves. But pitching is not the time to second guess; it’s the time to convince investors. For them to look you in the eye and believe you’re going to get this done.”
On what metrics early-stage founders need to focus on:
“At the earliest stage, really only two to three metrics matter depending on your business model. Revenue is your best metric. If you’re not charging, then define the customer behavior: How do you expect a customer to use your product? Whatever that metric is, really measure that. When you are pitching investors, that is really what they want to hear.”
On listening, but not always acting:
“Listening to your customers is the single most important thing. I’ve noticed both male and female founders can do that a little better, but female founders in particular — when it comes to listening to their team, investors, and customers — tend to listen a bit too much. From when we are young we are taught to try and please everyone; this is not the time to please everyone. You know your idea. You have conviction. So, take the feedback, but don’t feel compelled to listen if you are really convinced about it. It’s important to hear and listen, but don’t take in all the feedback and take action.”
On why it’s okay to fail:
“It’s okay to fail. What’s the worst thing that can happen? You tried an idea and it didn’t work out? You can go onto the next one. If you look at Pinterest, Ben Silbermann talks about this: It was his third company, not the first company, and even then it was not a slam dunk. The most important attribute we all need to have is the willingness to try, and that it’s okay to fail. That is a very important mindset, along with the mindset that no one is ever ready. There is no perfect moment to start a company. Those go hand-in-hand.”
Answers have been edited for length and clarity. For the whole interview, see here.
Lindsay Amos is the Director of Communications at Y Combinator. In 2010, she was one of the first 30 employees at Square and the company’s first comms hire.