When you think of technology and startups, what image comes to your mind? If you are a technolibertarian Gen Z who is easily fascinated by hyperbole and pomposity, for better or worse, it’s probably Elon Musk.
In case you are a millennial whose dad gifted you an iPhone before your eighteenth birthday and who wastes no opportunity to talk about how Apple’s experience is far superior compared to other devices, then Steve Jobs it is. If you are a kid from across the border, then it’s possibly someone like Sundar Pichai, Satya Nadella or one of the countless successful Indian executives in the US.
In any case, it’s almost always going to be a man. None of that is coincidental as tech by design, and culture, has been particularly hostile towards women. Take, for example, the self-proclaimed flagbearer of liberal values and free speech, Mark Zuckerberg, whose first iteration of Facebook — sorry, Meta — was basically an app that rated women based on their looks.
Relatively more sophisticated men have been scantily better as the industry is rife with misconduct of one sort or the other. For instance, Bill Gates, who espouses a very fatherly look, had to step down from the board of Microsoft after his prior relationship with a subordinate was probed. Or how Andy Rubin, the inventor of Android, was given a face-saving exit and a get out of jail card from Google despite sexual assault allegations.
Out of 100 directors across 13 tech entities listed on the PSX only 11 are women with three companies having absolutely no female representation on the board
And these are examples from companies with supposedly some of the strongest corporate governance practices. Imagine how things must be like in smaller tech, or relatively less structured, startups. Actually, we don’t even need to talk about such extreme cases to make this point. Let’s just look at where women stand when it comes to some of the most valuable tech companies. Of the 291 unicorns — private companies with a valuation of $1 billion or more — that came into being in the US during 2021, only six were led by women.
But how does any of it relate to Pakistan? I guess that’s the irony of globalisation. For all the technological advances and funding frenzy, women entrepreneurs in the developed markets still have more in common, at least in terms of relative access to capital, with their fellow female founders in early-stage ecosystems.
After all, the share of total venture capital allocated to female-founded startups in the US stood at just 2.1 per cent in 2021, according to Pitchbook. That is not dramatically better than the corresponding figure of 1.1pc in Pakistan during the same year. The 2022 picture is even bleaker so far as not a single investment round has been raised by a startup with a women-only founding team.
Unfortunately, this is not a surprise to anyone as women are hard to find if you happen to visit pretty much any tech company in the country. As per the Pakistan Software Houses Association, the national gender diversity ratio in the IT industry is a mere 17pc. While they don’t report the data by levels of seniority, the number goes down when you climb up the ladder. To confirm that, we looked at the board of directors’ composition of the 13 tech entities listed on the Pakistan Stock Exchange. Of the 100 directors across these organisations, only 11 were women with three companies having absolutely no female representation on the board.
The situation is most likely worse in the private markets where no guidelines exist from the Securities and Exchange Commission mandating the representation of women in the boardroom. Even when there are female directors or co-founders, there is sometimes a catch. In the case of the former, it’s common to see women from the same family being nominated on the board, which certainly reeks of nepotism. On the other hand, there are many instances of startups, including some notable ones, having titular female co-founders without giving them any significant equity. This obviously not only helps a bit with optics but also check off the eligibility criteria for some of the gender-focused grants.
Now some would argue that why should the gender of a worker — whatever the level of seniority of equity ownership — matter. Any decision, whether hiring, sales or investment, should instead be based on the aptitude and skill set of the person. It might even sound appealing in theory but as loads of studies and more importantly, anecdotal evidence shows, that representation makes the world of difference. No need to look further than banking where boomer men, surrounded by fellow boomer men, decide what’s best for women. The result? A massive gender disparity in financial inclusion.
Technology presents an opportunity to change that. Oraan, a savings and investment startup that raised a $3 million seed round in September 2021, is a good case in point. By starting with committees, which are quite popular among women, it took a fresh approach to a target audience that the existing service providers had never really given much thought to. But such examples are far and few in between, which only emphasises the need for renewed efforts to bring more women to the industry and help build products that don’t ignore half of the population.
Published in Dawn, The Business and Finance Weekly, March 7th, 2022