Female Entrepreneurs: Orchids in the Forest – Conditions for female start-ups
Author(s): Yunfeng Wang, Tutor: Dr. Prof. Philippe Daudi Leadership and Management in International Context Examiner: Dr. Prof. Philippe Daudi
Ana Isabel Quiroga Fernández, Subject: Master's Thesis Leadership and Management in International Context Level and semester: Master level Spring 2011
To
Future Female Entrepreneurs
with respect and love
Abstract
The last century has witnessed blooming achievements of females as rising workforce in modern society. With their active participation in business world recently, female entrepreneurship research has caught extensive attention globally, not only from academic field, but also from market entities, policy makers, social activists, as well as broad masses, concerning the social and economic contribution of female-started entreprises. Current studies within this topic concentrate on two issues: the difference between male and female entrepreneurs; demographic research for certain countries, regions, or industries.
Following a qualitative research approach, this thesis applies implementations of actors view and grounded theory. With the purpose to create in-depth business knowledge, a well-structured empirical exploration is conducted mainly through theoretical sensibility acquisition, secondary data collection and face-to-face dialogues focusing on the issue of conditions for female entrepreneurs to start up and to develop a business.
The researchers share their comprehensive (from both micro and macro perspective) understanding about this subject: . There is no such a formula of necessary conditions existing. Female entrepreneurs need to define them according to the type of the ventures they establish and the demand for their projected growth, pursue them by taking actions instead of waiting for all conditions to be ready. . The forthcoming female economy brings millions of opportunities that favor female entrepreneurs to start up enterprises, despite the current situation where they have not received effective supports that they deserve.
In the end, the researchers create a new term „femesh‟ to conclude their findings and their anticipation for the future blossom of female entrepreneurs.
Especially, the academic research process is described as an exploration adventure for searching orchids in the forest, together with the romantic writing style of the authors, bringing enjoyable readability without losing its preciseness, accuracy and logic as an academic research.
Keyword(s):
Entrepreneurship, Female Entrepreneurship, Female Entrepreneur, Start-up Conditions.
Acknowledgement
This thesis has been elaborated with the great help and guidance of many supportive individuals. Their contributions deserve a special recognition. Our greatest gratitude goes to Dr. Prof. Philippe Daudi, our thesis tutor as well as Head of the Master Program Leadership and Management in International Context, for his bright insights, continuous guidance and outstanding support. Additionally, we highly appreciate Dr. Prof. Björn Bjerke and Dr. Mikael Lundgren for their brilliant ideas and precious advice. We also would like to thank our friend Woraphan Atikomtrirat for his infinite patience and help in the design of the thesis website to share our research achievements.
We would like to express our deep gratitude to all the female entrepreneurs who are involved in our research. Besides the three female entrepreneurs presented in our thesis, Sofia Hagelin, Linda Krondahl and Jeanette Gorosch, there are several amazing ladies who provide us with valuable contacts and inspiration, such as Emelie Norborg, Terese Gustafsson, Mai-Li Hammargren and Anna Omstedt Lindgren. Special thanks go to extraordinary members of the Swedish female entrepreneur community PokerFace in Stockholm for sharing their energy and passion with us. Their experiences as entrepreneurs have been impressively determinant in the development of our research.
Additional thanks to Terese Johansson for her assistance and her contribution to the administration of our program.
Our profound appreciation extends to our families, friends and young, bright and beautiful classmates for their ultimate support, creative ideas and constant encouragement.
Yunfeng Wang & Ana Isabel Quiroga Fernández. Kalmar, Sweden.
Table of Content
1. Introduction: Female entrepreneurs- Orchids in the forest ...... 1 1.1 Background ...... 1 1.2 The issue of female entrepreneurship ...... 1 1.3 Research question and research purpose ...... 3 1.4 Romantic research journey ...... 3 2. Methodology: Mapping the journey with GPS ...... 6 2.1 Qualitative Approach ...... 6 2.2 Actors View ...... 7 2.3 Grounded theory ...... 7 2.4 The development of empirical cases and dialogues ...... 8 2.5 Adjustment system ...... 11 2.6 Justification and limitation ...... 12 3. Literature Review: Exploration tools ...... 13 3.1 Entrepreneurship ...... 13 3.2 Female Entrepreneurship ...... 15 3.3 Conditions to start up and develop a business ...... 17 3.3.1 Motivation ...... 20 3.3.2 Entrepreneurial characteristics ...... 20 3.3.3 Creativity ...... 21 3.3.4 Uncertainty and risk-taking ...... 22 3.3.5 Opportunity recognition ...... 23 3.3.6 Working experience ...... 24 3.3.7 Capital ...... 24 3.3.8 Network ...... 25 4. The narratives of female entrepreneurs: Bloomed orchids ...... 27 4.1 Anita Roddick ...... 27 4.2 Zhang Yin ...... 34 4.3 Beatriz Canedo Patiño ...... 38 4.4 Findings of the three cases ...... 43 5. The narratives of female entrepreneurs: Blooming buds ...... 48 5.1 Sofia Hagelin ...... 48 5.2 Linda Krondahl ...... 52 5.3 Jeanette Gorosch ...... 55 5.4 Findings of the three dialogues ...... 60 6. Conditions that favor female entrepreneurs: The ecosystem of orchids ...... 69 7. Comprehensive perspective：Helicopter view of the forest ...... 74 7.1 Females in our society ...... 74 7.2 Female Economy ...... 77 8. ‘Femesh’ prospect: The journey is not over! ...... 79 Reference ...... 80 Appendix ...... 88
Table of Figures
Figure 1 Rates of female entrepreneurs 2007 ...... 2 Figure 2 Entrepreneurial rates comparison between females and males ...... 3 Figure 3 The romantic research journey ...... 4 Figure 4 The ecosystem of a plant ...... 69 Figure 5 The influence of personal characteristics ...... 70 Figure 6 Risk management ...... 71 Figure 7 Opportunity recognition ...... 71 Figure 8 Networking skills ...... 73 Figure 9 Conclusion of the ecosystem ...... 73 Figure 10 Comprehensive perspective on female entrepreneurship ...... 74 Figure 11 MBA graduates current jobs ...... 75 Figure 12 Profitability differences between companies led by women and men ...... 76 Figure 13 Projected growth of female global income from 2009 to 2014 ...... 77
1. Introduction: Female entrepreneurs- Orchids in the forest
1.1 Background
Just one hundred years ago, women were entitled the right to vote, demonstrating the beginning of their political participation in society. Nowadays, numerous extraordinary female politicians are using their power to influence and shape the future of the world, with around 20% of global positions in parliaments (both houses). As for work participation, the 20th century symbolizes the milestone of female workforce in every occupational field. Before that, since of limited access to public education, women only had few working alternatives, such as teaching, nursing, and tailoring. Within one century of social and economic evolution, women now account for 40% of global labor, covering every single profession. Furthermore, females are more and more actively involved in venture operation and being incessantly appointed to leading positions. Consequently, company with vibrant female engagement presents impressive performance. As a leading firm in women fast-fashion clothes industry, Sweden-based H&M offers us the best case, with their steady and rapid growth in sound profits as well as expanding market share. Perhaps such achievements are attributed to the fact that almost 80% of their employees, 77% of store managers and 44% of country managers are females. So are 7 of the 11 board members.
1.2 The issue of female entrepreneurship
Recently, increasing attention has been given to female entrepreneurs, as a new trend of women career progress. The survey (see detailed data in the appendix) conducted by Allen et al. (2008) from Global Entrepreneurship Monitor (GEMS) provides related data on female entrepreneurship in 41 different countries that represent 93% of global GDP (gross domestic product). Figure 1 indicates that in the US, 10.73% of women opened their own businesses and in counties like Thailand, this rate is as high as 45.44%, which means among every two women, one is entrepreneur, despite of the lowest level in Europe (such as Sweden, one of twenty females is self-employed).
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Figure 1 Rates of female entrepreneurs 2007
Resource: Allen et al. 2008
Increasing female entrepreneurs have been considered important for economic growth, not only generating employment but also contributing with diversity in entrepreneurship as an economic process (Verheul & Thurik 2001, cited in Verheul, Stel & Thurik 2004). Female and male entrepreneurs structure their businesses in a different way, addressing different sectors, offering different products and services and pursuing different objectives (Fischer et al. 1993; Brush 1992; Chaganti & Parasuraman 1996; Verheul & Thurik 2001; Verheul 2003; Carter et al. 1997).
Although we have seen the rising trend of female entrepreneurs and the positive impacts they bring to our economic development, we have to admit that compared to male participation in entrepreneurship, there is still a huge gap among nations worldwide. Figure 2 illustrates this phenomenon. Except Japan， no other countries in this survey (GEMS) represent more female entrepreneurs than male entrepreneurs. Based on above observations, we approach our research topic female entrepreneurship by asking: Why are there still so few women entrepreneurs (compared to men)?
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Figure 2 Entrepreneurial rates comparison between females and males
Resource: Allen et al. 2008
1.3 Research question and research purpose
To address the question „Why are there still so few women entrepreneurs (compared to men)?‟, millions of pathways could be searched since it involves unaccountable factors that would exert impacts to female entrepreneurship, such as historical revolution, social transition, economical progress, demographic characteristics, psychological traits, and others. It is impossible for us to examine every factor in this thesis; therefore we prefer to create empirical knowledge with depth rather than breadth. With this research purpose, we define our research question as „What are the conditions for them to start up and develop a business?‟ By exploring the conditions, we try to share our understanding about what women need to establish and grow their businesses. We expect that those potential females with motivation to become entrepreneurs would benefit from this research, no matter what inspiration, idea or practical stimulation they could achieve. It would be ultimately appreciated if we could see emerging females start their entrepreneurial adventure with the encouragement from our research.
1.4 Romantic research journey
The romantic idea of our journey originates from a beautiful metaphor. In Chinese classical literature
3 females are compared to flowers since they are both beautiful. The majority of our research is conducted during Kalmar‟s lovely spring days; every day we can find more and more flowers blooming around roads, in gardens and even at small street corners when we suddenly turn back. Finding more flowers brings us the same excitement as finding more female entrepreneurs! While the „flower‟ metaphor is too rough and not accurate enough to describe female entrepreneurs because females are as diverse as flowers in „colours‟, „shapes‟ or „scents‟. Therefore we want to find a special family of flowers to symbolize female entrepreneurs as a distinguished group of women. Having excluded many „boring‟ choices (like rose), „elegant‟ orchids pop into our minds with surprise since they are not only beautiful but also rare, the same as female entrepreneurs (referred to our previous introduction of the issue of female entrepreneurship). Various orchids survive in almost every habitat even the Arctic Circle and mainly flourish in the tropics, mostly Asia and South America, where we come from and exactly where there are prosperous female entrepreneurs (if we refer to Figure 1 again). Then astonishing numbers of romantic ideas are flooding. Our academic search is transferred into a romantic journey to look for orchids in the forest. The structure of this thesis becomes a travel project (see Figure 3): Figure 3 The romantic research journey
Before the adventure, we need to map our journey with GPS, which will offer us practical guidance in case we get lost in the thick forest. It will function as methodology in this thesis.
Without exploration tools, our journey could be dangerous and end up with blinded findings. Therefore we will develop a theoretical sensibility through literature review.
Here starts the real journey. The conditions study turns out to be a curious exploration about the living
4 elements of an orchid in her surroundings. Bloomed orchids firstly come into our eyes since they are colourful and dazzling, projected by mature female entrepreneurs who have been operating their businesses for several decades. Their successful experiences provide us a long-term perspective on how conditions have been accessed and developed. The enterprises that they have established bring us bright insights about how they could react to changing environments through times and how they could match their businesses with challenging waves. However, the primary stage for orchids to root and germinate could not be carefully studied since they are already grown up, which means the conditions for female entrepreneurs to start up a business need further research. Then we go to those blooming buds that are in the process to reach their peaks, projected by female entrepreneurs with new start-ups. We believe the combination of searching both bloomed orchids and blooming buds will comprehensively serve our research purpose and will help us build solid conclusions based on these „orchids ecosystem‟ studies.
After exploring the micro ecosystem of orchids, we feel there is a need to take a helicopter above the forest to check the macro environmental conditions such as climate and geography, in order to complete our trip. We perceive the micro ecosystem of orchids as an integration of self-conditions and the macro environment as social and economical conditions for female start-ups. This part will function as a holistic view in our thesis on social and economic happenings, which will help us better understand the conditions with a broader vision about our times and entitle us the capability to predict and look forward.
Till this moment, the „virtual‟ adventure is over while the academic research will never come to an official end. Since the research process leaves us endless ideas and imaginations, we decide to „make up‟ a new word „femesh‟ with our creativity to share our perspectives beyond empirical level, which we believe will best conclude our achievements.
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2. Methodology: Mapping the journey with GPS
In order to guide our journey we need a GPS system. In case that we will get lost in the vast and mysterious forest, we have mapped the whole journey before we start. In this chapter, we will illustrate the research approaches applied in our whole thesis and explain why we choose such approaches to answer our research question. We will describe how we perceive the application of qualitative approach, actors view, grounded theories and related techniques.
2.1 Qualitative Approach
Quantitative and qualitative studies are two kinds of approaches to conduct a research. The quantitative research approach mostly emphasizes on testing or verifying an existing statement by transferring the data to numbers, quantities and statistical models in order to measure or analyze. Since quantitative research is based on the strictly controlled measurement of quantity or amount, it involves studies that use statistical analyzes to obtain „objective‟ information. Researchers with this approach have a clear idea about what they want to test and what want to prove or falsify therefore the process is strongly result-oriented. (Quinn, 2002)
However, the qualitative research approach is usually used to earn better understanding of one phenomenon or to describe a situation, which is often obtained by in-depth interviews (Fisher, 2007). Since qualitative data consists of descriptions, quotations, observations, and excerpts from documents, it often involves interviews and observations with researchers‟ active participation. (Quinn, 2002) Researchers with this approach usually have no clear vision about final results; therefore they actively participate the research process and contribute their subjective perspectives.
According to our research purpose of learning about the conditions for female entrepreneurs to start up and develop their businesses, we apply qualitative approach to gather data and describe the phenomenon. We devote ourselves into the research process and not limit the findings emerging from our empirical studies and deep dialogues (later we use words like “talks”, “conversations” as synonyms in the text) with our interviewees. As for the results, we keep open-minded and give our subjective understanding about female entrepreneurship, which perhaps is quite different from previous studies within this academic field.
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2.2 Actors View
Arbnor and Bjerke (2009) suggest three methodological views to guide business knowledge creation: analytical view, systems view and actors view. For the theory prerequisites, analytical view and systems view largely rely on existing theories. Analytical view is built on verified or falsified hypotheses and systems view uses analogies or homologies to develop the relationship among various factors to construct the whole system. However, researches with actors view explore constitutional factors (sometimes chaotic), general pre-understanding, interactive development of understanding without any hypotheses or assumptions, instead of making use of existing theories. For the results, analytical view tends to build cause-effect explanations and systems view offers explanations or understandings about structural classifications. Nevertheless, actors view provides descriptive languages of subjective understandings about social phenomenon, situation or process. This research approach is more romantic, creative and interactive.
Based on above considerations, the methodological view that we consider will guide our research is the actors view since it provides us with the vision of reality as a social construction where both confusion and structures are in place and where participants perform as actors and keep these structures together. This view leads us to reflect upon the context of female entrepreneurship and picture it as a scenario where conditions, context and circumstances influence their roles, decisions and strategies. Our representation in this scenario is very active as knowledge creators and our aim is to understand how these structures have been developed and enacted. Furthermore, the actors view will allow us to develop our research with more flexibility, understanding how people behave in various ways since reality is neither absolute nor objective.
2.3 Grounded theory
Grounded theory is a “qualitative research approach whose systematic techniques and procedures of analysis enable the researcher to develop a substantive theory that meets the criteria for doing „good‟ science”. (Strauss & Corbin1990, p.31) It is seen an adequate way to build a theory which emerges from empirical data and it takes into account the strong connection which exists between data collection, data analysis and theory construction. In traditional scientific research approaches, the researcher elaborates hypotheses first and this is followed by thorough empirical testament or
7 statistical data confirmation. Conversely, with the approach of grounded theory, we firstly go to the field, and participate and observe the female entrepreneurship phenomenon in real time and real place rather than making links and theories sitting in an office by reading previous researches.
We develop our technical implications to apply grounded theory as follows:
1. Our theoretical framework and intellectual orientation are vital inputs in the investigation of the study at the empirical level. However, the background and the theoretical sensitivity should not constitute a bias in the investigation, but should function as an enhancer of our empirical sensitivity. Thus, we go through previous researches to gain a general view about our research topics and make an empirical review of entrepreneurship, female entrepreneurship and how scholars perceive conditions to start up a new business.
2. We collect empirical data from the research field, realizing that it represents the experiences of the actors concerned and the phenomenon being studied. In our case, we collect secondary data from newspaper, journal articles, biographies, as well as website publications to make an empirical analysis and review about three famous female entrepreneurs. As well, we develop dialogues with several female entrepreneurs who are listed in the 2010 Swedish 101 young talent by Veckan magazine. We search their contact information online, get in touch with them by email and finally make appointments with four supporting ladies within one week in Stockholm, which involves our active observation and participation.
3. The data is collected, researched, organized and analyzed at the theoretical level. Key theoretical concepts are applied and conclusions are drawn based on the empirical research. Depending on the results that emerge from our research and analysis, a new theoretical investigation might be necessary in order to enhance our theory. Therefore, we make a helicopter literature review on previous studies in relative fields with a broader vision.
2.4 The development of empirical cases and dialogues
To conduct the empirical study, we apply two types of research approaches to collect data: empirical case study through secondary information collection and face-to-face dialogues with interviewees, based on the consideration of maturity of targeted companies. The three companies chosen in case studies we are started during 1970s or 1980s, with operation for more than thirty years and have 8 expanded globally, which helps us well understand the development of one company through long-term and broad perspective. However, these three „mature‟ companies could not provide us enough and qualified information about the starting-up conditions since the primary processes happened almost three decades ago and there are limited accesses for us to examine them. Moreover, the information obtained from various channels does not support and prove each other and we face the limitations to test the facticity of the resources. Therefore we select another four female entrepreneurs who started their companies three or four years ago, which we believe we can gather real and trustful information about the start-up process of a company by face-to-face dialogues.
About the selection of the three cases, we take account of national and industrial diversity. We begin with Anita Roddick, the founder of The Body Shop, the well-known cosmetics company started in Britain, with around 2,400 shops globally. We believe the „famous‟ case will help us to further our study and also help our readers to gain a familiar but fresh understanding about female entrepreneurs through our romantic story-telling. Another two companies are chosen from China and Bolivia, where the two researchers come from. Our particular cultural and language backgrounds make the information collecting process smooth and fluent. Zhang Yin, the founder of Nine Dragon Paper Holdings, is the richest Chinese self-made woman, operating the largest paper producing company in the world. Beatriz Canedo Patiño, the founder of BCP Alpaca Designs, pioneered clothes designing with alpaca material and famous for tailoring suits and dresses for presidents, kings and queens from all over the world. We read through newspapers, journal articles, biographies, video interviews, professional comments contributed by known scholars, as well as vast web media resources to gain a comprehensive understanding through our personal perspectives.
As for the four dialogues, we make use of regional advantage and choose four female entrepreneurs from the list of 2010 Swedish 101 young talents from all kinds of professions, published by the Veckan magazine, considering that they are publicly exposed and there are already scattered reports about them appearing in public media, which will help us to gain more accesses to information. There are nine female entrepreneurs from the list. We firstly write emails to them to ask if we can make appointments to conduct a dialogue about our thesis. Then we receive several positive replies and through them, we got contact with a Swedish female entrepreneur community named PokerFace in Stockholm and with the help of the founder, we get extra contacts about more female entrepreneurs. With the consideration of personal and industrial backgrounds of those entrepreneurs (see detailed 9 information in chapter 5), our own research interest, as well as the limit of their and our schedule arrangement, we finally conduct four face-to-face dialogues in Stockholm during the week from 21st to 25th of March. Finally, based on privacy consideration, we decide to present three female entrepreneurs in our thesis, who are:
Sofia Hagelin, founder of Heart of Lovikka, a clothing company inspired by centuries of knitting tradition in Lovikka, a village in North Sweden. (Conducted in the morning of March 21st , 2011, Café Snickarbacken).
Linda Krondahl, founder of HiNation, a company defeated to the development and manufacturing of solar powered products. (Conducted in the afternoon of March 22nd, 2011, Coffee Dawyne‟s).
Jeanette Gorosch, the founder of Nannynu! , a baby care service business. (Conducted in the afternoon of March 23rd, 2011, in their office. Due to emergent administrative issues, Jeanette Gorosch could not meet us personally. She kindly arranged a dialogue with her Co-CEO Therese Gustafsson telling us the history of the company and the story of the founder. Later we contacted Jeanette by email to confirm the information provided by Therese and also to gather more information that we need).
Before our dialogues, we send them the topic we are determined to talk and kindly ask them to reflect on our topic one week before we meet. Those dialogues are mostly conducted in coffee shops with a relaxing atmosphere and last 60 to 90 minutes. We start with asking them to describe the process of start-up of their companies and actively participate into the conversations to lead them talk more about the conditions and their problems. From curiosity and need of research, we end up with our conversations by asking the same questions: „If times goes back to the year when you graduate, will you choose to work for others or immediately open your own business? ‟ During our conversations, we get the permission to record, write and publish the gathered information. After that, we file and documente our conversations in a structured way as story-telling. We send these documents respectively to our interviewees, asking them to review and comment. With their supportive feedback and valuable suggestions, we make relative adjustments about our writing from our concise academic research attitude and from our respects to those female entrepreneurs.
In regard of the writing style of the six cases, we adopt a romantic story-telling approach. In order to deliver our readers a clear and complete story of each female entrepreneur, we provide comprehensive information about each case, which perhaps partly does not have a close relation with our research 10 question but cannot be separated from the context. We hope our readers could understand our intention and enjoy reading the complete stories. The stories are structured in the way to present the main points about the conditions for these female entrepreneurs to start-up and develop their sustainable businesses, rather than in a chronological sequence. In each point of the story-telling structure we start with direct quotations from the entrepreneur herself in order to reflect their original ideas.
As we mentioned in the introduction part, we categorize the six cases into two sections: the three empirical cases about mature companies established by successful female entrepreneurs and another three dialogues developed with three new female start-ups. In each section, after story-telling, we analyze certain aspects about condition-building emerged from those cases and provide our interpretation of the key conditions that we find they have in common. Based on the two sections of data collection and empirical analysis, we conclude the self-conditions that favor female entrepreneurs to start up and to develop a sustainable business with the application of our theoretical sensibility gained from literature review.
2.5 Adjustment system
Strongly fascinated by this research topic and inspired by our impressive research findings, we invest considerate passion, energy and efforts into this research. In case that we will input too much inner thoughts of ourselves and partly ignore the „truth‟ (if exists), we try to build an adjustment system to gather feedback from all kinds of channels.
Weekly meeting with our tutor- Dr. Prof. Philippe Daudi, is one the most vital inputs of our research. We have discussions about our on-going research progress almost every week. We share our achievements as well as our confusions with our tutor. From him, we receive numerous guidance and advice to modify and improve our work. The discussions have existed all the way since we chose this attractive topic. Such guidance guarantees that our research is on the right track and will continue to move on.
Additionally, with the inspiration of our tutor, we build our official website Femesh (www.femesh.com) to present our findings and gather feedback from our readers. We get encouragement from our tutor and our classmates, which largely inspires us to move forward. We get criticism from our readers, which
11 comment that our research is too optimistic and reminds us to keep scientific research attitude in our mind. We also get enquiry from our readers to ask for deeper discussion about our topic, which pushes us to contribute more in our research. With these positive and negative comments, we gained better understanding about our own research, which enables us to continuously improve our work.
Besides, as mentioned before, we also seek feedbacks from our interviewees to get their opinions. As researchers, we cannot launch our scientific journey with blind eyes. With feedback and adjustment system, can we be open-minded and always look for room to improve.
2.6 Justification and limitation
Under the frame of qualitative approach, actors view and the guidance of grounded theory, we believe our research will well serve for both academic and practical purpose.
However, the main limitation lies in the information resources about the seven female entrepreneurs in our study. For the three empirical cases, we gather information from various channels and we cannot prove or falsify the facticity of these materials. For the four dialogues, due to the time and context limitation, there is no way for us to explore every aspect of our interviewees and their companies. Nonetheless, we try our best to offer trustful information and for that information which could not be proven, we give our own understanding based on our previous readings and our own judgments, which could be misunderstood by others. Moreover, previous studies and figures about female entrepreneurship are dominated by U.S. scholars; therefore it represents barriers for us to obtain a global vision on this topic.
To conclude, our developed theory in this thesis will be grounded in the real life experiences of the actors- mainly female entrepreneurs involved in our research, with the help of our theoretical sensibility gained from readings. Moreover, we believe our analysis and conclusions will be great help to potential female entrepreneurs who have strong motivations to start up their businesses but are confused of the conditions. At the same time, this research could be also helpful to researchers and scholars who are working in this field, as well as anybody who is interested in this topic.
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3. Literature Review: Exploration tools
Having mapped our route with GPS, it is time for us to collect exploration tools. According to actors view and grounded theory, we need literature review to gain a theoretical sensibility in order to conduct our empirical studies. In this chapter, we will present previous discussions within the following topics: entrepreneurship, female entrepreneurship and conditions to start-up and develop a business.
3.1 Entrepreneurship
The word entrepreneur, derived from 17th-century French entreprendre, originally meaning “undertakers”, refers to individuals who undertake the risk of new enterprises. Yet the word entrepreneurship became a common topic since 18th century.
Cantillon (1755) in his Essai sur la nature du commerce en général describes an entrepreneur as a person „who pays a certain price for a product to resell it at uncertain price, thereby making decisions about obtaining and using resources while consequently assuming the risk of enterprise‟ (Holt 1992 p.3). Adam Smith speaks of the “enterpriser” in his famous Wealth of Nations as an individual who forms an organization for commercial purpose. He also describes entrepreneur as an individual with unusual foresight who could recognize potential demand for certain goods or services and who could transform demand into supply. In 1871, Carl Menger published Principles of Economics, indicating that economic changes do not arise from environment but from an individual‟s understanding of the environment. Therefore, entrepreneurs as change agents transform resources into demanding goods and services, and at the same time, create the environment that leads to industrial growth and economic development. Schumpeter (1934) specifically addresses entrepreneurship as a force and a process of creation, by establishing new or better ways to get things done.
In retrospect, the concepts of entrepreneur and entrepreneurship during the 17th and 18th centuries were mainly from the discipline of economic but in the last half of 19th century, scholars who studied on small business management started to deliver courses on entrepreneurship and their contribution partly influenced the research in this field. In the 1970s, professors from management, marketing, or engineering conducted research on entrepreneurship while as we entered 1980s, this subject attracted mainstream scholars and new paradigms of entrepreneurship research began to flourish. In this sense,
13 entrepreneurship as a formal subject in academic field is quite young.
Present studies in this subject have been involving more and more scholars from different research approaches. Based on our previous readings, we categorize those researches into mainly three topics:
Topic 1: “Traits” or “Characteristics” Approach, trying to distinguish entrepreneurs from others. McClelland (1961), a psychologist, conducts a research on the motivation of people who behave in entrepreneurial ways, whether they are starting their new businesses or working in existing organizations. He finds that those people have a higher need for the sense of achievement. Collins and Moore (1964) examine the personal histories and psychological parts of entrepreneurs in the area of Detroit, reporting that those individuals who have poor relationships with their fathers and authority figures are more likely driven to open their own businesses because of the need of independence. However, not all studies have found that entrepreneurs are different from others. For instance, Brockhaus (1980) finds that the risk-taking propensity between entrepreneurs and non-entrepreneurs is almost at the same level. Often collecting demographic and working experience data, such researches have compared particular groups of entrepreneurs with larger population. However, those researches are under sharp criticism. Gartner (1988) argues that the focus of entrepreneurship research should focus on behavior, rather than personal traits.
Topic 2: “Process” Approach, examining processes of venture organization, resources elaboration, strategy formulation and so on. Amongst these researches, new venture financing, the role of networks, and the importance of creativity and innovation are highly emphasized. Bygrave and Timmons (1992) describe operating process of entrepreneurial practice and the outcomes realized by the venture capital industry. The methods for entrepreneurs to finance their businesses and attract investors have also been examined (MacMillan et al. 1987; Salman 1992). More scholars have studied how entrepreneurs develop their networks to search information, raise capital and enlarge business (Larson 1992). It is also reported that networks with reputable partners, connections have advantages to gain sales growth. Regarding of creativity and innovation, Acs and Audretsch (1990) argue that small firms with a substantial percentage of major innovations have higher potential to succeed in the future.
Topic 3: “Performance assessment and prediction” Approach, measuring the extent to which entrepreneurs‟ personal traits, process of start-up, and environmental factors influence the outcomes
14 of entrepreneurial activities. In 1961, Mayer and Goldstein conducted a study to examine the performance of 81 firms during their first two years. Later, much larger volume of samples and more evaluating variables are developed within the academic field. For instance, Bruderl et al. (1992) measure as many as 1,849 startups and conclude that new companies with greater initial capital, better human resources and good market strategies have a greater likelihood of survival and growth.
Apart from these three mainstreams, there are numerous researches on this topic. To give an example, public policy makers are also interested in entrepreneurship and small business since they create more jobs. However, as a young subject of an academic field, the research results are blooming with the contribution of scholars from all kinds of backgrounds and with diverse academic approaches.
3.2 Female Entrepreneurship
Even though statistics indicate that the number of female-owned companies has been growing in last few decades, it is still underrepresented. In order to understand the reason of this gap in female participation we have considered several studies developed on gender differences in entrepreneurship.
Eagly (1987) cited in Gartner et al. (2004) indicates that gender is a socially constructed phenomenon. Individuals that form part of different social groups have a range of status and power according to their sex, race and class due to cultural structures that would influence behaviors and roles. Given that individual‟s social identity is shaped through their interaction, the female entrepreneur is more than „other than male‟, according to Bird and Brush (2002) cited in Gartner et al. (2004, p. 13). As a contrast, Ahl (2002) proposes a different view on gender and entrepreneurship stating that female entrepreneurship does not have any difference from male entrepreneurship; research developed provides examples of biased conclusions, mainly caused by stereotypes, amplification of small differences and the attribution of unique characteristics to female entrepreneurs in order to consider them as an exception to „regular‟ women. The author indicates that both leadership and entrepreneurship have a male gender concept and current research is focused on reinforcing differences instead of taking into account the similarities.
Although nowadays women have more accesses to education, there is still a lack of training on skills that would benefit to establish a business. Moreover, women are less likely to follow technical studies such as engineering and IT, industries that have a high potential of growth. Brush and Manolova (2004)
15 cited in Gartner et al. (2004) indicate that women are more likely to hold degrees in business, education or law. Furthermore, women are less likely to have relevant working experience in managing people. For instance, less than 8% of managerial positions in Fortune 500 companies are assigned to women (Carter & Brush 2004, p. 16). Additionally, their careers tend to be repeatedly interrupted or they work part time (Hakim 2006). According to Gartner and Carter (2004, p. 239) women and minorities pay more attention to „personal and social challenges‟ while starting-up a business than white men.
Gilligan (1982) cited in Carter and Brush (2004, p. 14) indicates that female „approach things intuitively and in a more personal way.‟ Scott (1986) indicates male become entrepreneurs in order to be their own boss while women decide to open a business since they look for personal challenges, the opportunity of creating jobs and balancing work and family. Research has found that the family is a key fount of support for the entrepreneur but it can also be adverse. The research conducted by Stoner, Hartman and Arora (1990) demonstrates that women have experienced less support from their partners and go through work-home clashes. In a study conducted by Caputo and Dolinsky (1998) cited in Ahl (2002, p. 102) they indicate that women are more likely to start-up their own companies by „role models, advice and encouragement‟.
Despite the previous differences, Brush (1992) cited in Carter and Brush (2004, p. 16) affirms that women see their businesses as „cooperative networks of relationships‟, where business networks are connected with family, society and personal spheres.
In a study elaborated by Neider (1987) within a small sample of female entrepreneurs in California it is found that women have similar motivations with men looking for achievement, independence, influence and strong will. They are willing to run their businesses in an austere way and avoid subscribing loans to support their companies in order to retain its control. Although there is a generalized view in regard of risk-taking indicating that females are more risk averse than men, research finds no difference in risk-taking between males and females (Masters & Meier 1988). Therefore, both female and male entrepreneurs are likely to make decisions that imply risk on equal basis.
In a research conducted by Women‟s Enterprise Task Force (2009) in the United Kingdom suggests that although women-owned businesses have a bigger participation in industries that are more prone to be affected by the recession, several firms established by females have lower liabilities and tight
16 control on their expenditure. These measures allow these enterprises to access new opportunities and foresee a favorable horizon in regard of their continuous growth during tumultuous economic scenarios.
Anita Roddick (2008) gives us an empirical view of female entrepreneurship when she indicates that female entrepreneurs are „better at taking risks and coming with new ideas: they are more opportunistic and optimistic.‟ She also affirms that women tend to make differences among aspects from their interests and „are perfectly happy to trade that into a very low-tech business, often operating from the dining room or kitchen or a garage.‟ (Roddick 2008, p.47) According to Roddick, men tend to move beyond operations; they want everything in a business. She is not sure whether this was good or not. What she was sure about is that women have been able to deal better with complexity.
These previous views give us a vision on female entrepreneurship and how roles have a subtle influence into the process and conditions of starting up a company.
3.3 Conditions to start up and develop a business
To establish a firm, entrepreneurs need to go through a series of conditions that would influence their decisions about what type of business to establish and how to set a company that meets particular social, economic and environmental demands (Gartner & Carter 2004). In this section we reflect upon these conditions and their transcendence when an idea is transformed into reality. Previous studies regarding conditions for entrepreneurs consider motivation, entrepreneurial characteristics, creative thinking and innovation, risk taking, opportunity recognition, previous working experience, capital raising, team building and network as relevant aspects to start up a firm.
Entrepreneurs are characterized for having motivation, an inner flame that drives them towards achieving their goals. This motivation is described by Liao and Welsch (2004) cited in Gartner et al. (2004, p. 187) as a strong willingness to reach an objective, to make it progress and succeed. Entrepreneurs maintain one aim in their minds which is to „start a business and work toward its survival and growth‟ that often demands surrendering other valuable aspirations.
Entrepreneurial characteristics research has been one of the mainstreams within this subject. McClelland (1961), Collins and Moore(1964), Brockhaus (1980) and others adopt different approaches to study the psychological aspects of entrepreneurs. Among these researches, scholars summarize and 17 analyze some common characteristics shared by most entrepreneurs. Kao (1963) develops a list of eleven factors; Hornaday (1982) gives 42 aspects and Soo Ji Min (1999) offers a list of top ten characteristics that he thinks evident in our times.
Innovation and creativity has been broadly mentioned in several books of entrepreneurship. According to Ward (2003, p. 173) a good business idea is a „balance between novelty and familiarity‟. Such ideas are new in the sense that captures attention, and they are familiar at the same time so will not be immediately rejected. This balance would define its originality. This creative process is deeply related with previous knowledge gathered by the entrepreneur, how concepts are analyzed to create innovative products or exploit new markets, how these are contrasted and how problems are formulated (either concrete or abstract). The creative process is not only applied during the start-up process of a venture but in other decisive roles such as strategies development, marketing programs, processes optimization, among others.
Entrepreneurs are risk takers. Establishing a firm implies a series of challenges and difficulties to solve (Brush & Manolova 2004) that differ from stage to stage, kind of event, „entrepreneur and venture‟ (Cooper 1982; Gartner 1985; Vesper 1990; Carter, Gartner & Reynolds 1996; Gartner 2001 in Brush & Manolova 2004, p. 273) The structure of an organization is in hands of the entrepreneur; therefore, the creation of effective procedures, obtaining resources and support from people involved (Becker & Gordon 1966; Penrose 1959; Aldrich 1999). Cooper (1982) and Vesper (1990) indicate that entrepreneurs study the potential market for a new product or service, how this could be defined and how it could be conveyed. According to Brush and Manolova (2004) moving ahead the business through its development represents the main challenge for the entrepreneur.
Opportunity recognition or forward sight has been broadly discussed by scholars searching whether this aptitude is conditioned by the entrepreneur‟s previous education, experiences, roles, etc. Hills and Singh (2004) indicate that there are many ways in which entrepreneurs identify opportunities. While some consider different opportunities as alternatives, others consider only one. Some open a business without spotting an opportunity and others asses the opportunity beforehand. Opportunity recognition has been denominated by Shane and Venkataraman (2000) as the most important feature of entrepreneurship, and researchers have included it in several models of entrepreneurship research. Entrepreneurs are doers; they take actions and these actions change the surrounding conditions and
18 bring up new settings.
Referring to previous working experience of the entrepreneur would positively influence the success of the new venture according to some scholars. On the other hand, other researchers affirm that limitations and non-effective practices could be replicated in new businesses and this would represent a great obstacle to overcome (Gasse 1982).
According to Gatewood et al. (2008) even though female entrepreneurs contribute significantly to economic growth, they deal with limitations to obtain resources to make their businesses expand. This research concludes that women searching for investors hold graduate degrees and experience that should not limit financing their enterprises through this alternative. Furthermore, they defeat large amount of time looking for financing through their personal and business networks. Jia, Xiao, Junyan and Zhong (2008) indicate that female entrepreneurs rely on their own savings, borrowings from relatives or friends during the initial stage of their start-ups. The authors affirm that women face difficulties in accessing to informal financial networks due to lack of experience and skills. According to some scholars, female entrepreneurs have difficulties in leveraging their businesses, nonetheless, Ahl (2002) affirms that this issue could be influenced by the industry and the risk categorization established by financial institutions.
Networking and team building play an important role for entrepreneurs. In this context, Aldrich and Carter (2004) indicate that diverse networks (e.g. age, gender, occupation, education) allow entrepreneurs to access different resources. They classify networks in strong and weak connections. Strong connections would provide emotional support while weak connections would link the new entrepreneur to necessary resources to run her or his business. In regard of team building, Aldrich, Carter and Ruef (2004) affirm that most entrepreneurs decide to organize teams instead of going on their own. These teams are organized based on similarities and familiarity. By building a team, entrepreneurs expect to reduce uncertainty. What determines these choices is trust instead of skills and knowledge.
These previous conditions are developed in the next section with the aim to understand the process of starting up a business from a wide perspective.
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3.3.1 Motivation
Donald and Richard (2007) state that entrepreneurs‟ motivation during the process of start-up has effects on their sustaining behaviours in the future. It is important to analyze the contribution of motivations to entrepreneurial process (Shaver & Scott 1991). Therefore examining the psychological characteristics of entrepreneurs could help us better understand the results of entrepreneurial activities.
There are various motivations exhibited by entrepreneurs. Brockhaus and Nord (1979) affirm that on average entrepreneurs have worked for six years on and in more or less three different organizations before opening a business. What pushes entrepreneurs to start-up a firm tends to be dissatisfaction in their previous jobs (Brockhaus 1980), discontent with colleagues and lack of opportunities to obtain a promotion (Bush & Manolova 2004). However, Cooper and Artz (1995) argue that motivation lies in the satisfaction with an entrepreneur‟s willingness to sustain the business. In this activity, entrepreneur‟s personal goals, attitudes, and backgrounds are important determinants of final satisfaction. Furthermore, Reuber and Fischer (1999) find that the motivation of an entrepreneur could be strengthened or weakened during the development of one business, influenced by the comparison of entrepreneurs‟ expectations and actual results. If the results perfectly meet or even exceed the expectation of an entrepreneur, the original motivation will be strengthened. To the opposite, it will have a negative effect to entrepreneurial motivation. Referring to the motivations for female entrepreneurs to start up their businesses, Carter and Shaw (2006, p.9) offer a good summary, indicating that female entrepreneurs are influenced to take the decision of opening a business due to the „gender pay-gap, occupational segregation, unequal employment opportunities and work-life balance issues‟.
3.3.2 Entrepreneurial characteristics
Previous literature reveals the existence of entrepreneurial Characteristics that can be consolidated into a small profile of entrepreneurs. Kao (1963) identifies eleven common characteristics shared by most entrepreneurs: . Total commitment, determination, and . Taking initiative and personal responsibility perseverance . Seeking and using feedback . Drive to achieve and grow . Opportunity and goal orientation 20
. Internal locus of control . Realism and a sense of humor . Low need for status and power . Calculated risk taking and risk seeking . Persistent problem solving . Integrity and reliability
Stevenson and Gumpert (1985) outline the entrepreneurial characters such as imagination, flexibility and willingness to accept risks by examining entrepreneurial organizations. Gartner (1989) studies previous literature and finds a diversity of reported characteristics that are attributed to entrepreneurs. Hornaday (1982) studies various research resources and formulates a list of 42 entrepreneurial characteristics, such as confidence, resourcefulness, optimism and independence. Kuratko and Hodgetts (2007) indicate that entrepreneurship has been featured as the interaction of some certain skills as follows: „inner control, planning and goal setting, risk taking, innovation, reality perception, use of feedback, decision making, human relations and independence‟.
Moreover, new findings of entrepreneurial characteristics are added into this field. Soo Ji Min (1999) gives a list of top ten characteristics shared by entrepreneurs:
. Recognize and take advantage of opportunities . Hard worker . Resourceful . Optimistic . Creative . Innovator . Visionary . Risk taker . Independent thinker . Leader
3.3.3 Creativity
Creativity is the generation of ideas that lead to efficiency or effectiveness improvements in a system (Matherly & Goldsmith 1985). Donald and Richard (2007) argue that the combination between creative thinking and systematic analysis is a key factor to the success of entrepreneurial practice. Entrepreneurs are thought to have an ability to notice, recognize and create opportunities where others only find existing problems.
Some individuals have a greater aptitude for creativity than others. For those who do not have a good aptitude of creativity, the innovative process is more difficult and if they want to be creative, they have to learn how to implement creative process (Mellou 1996). Creativity can be developed and improved (Eward 1992).
In organizations, William (1999) channels creativity into seven different categories:
. Idea creativity: coming up a new idea or concept;
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. Material creativity: creating a new product, launching an advertisement, developing a photograph or a report;
. Organization creativity: designing or improving organizational structure or organizing people in a creative way;
. Relationship creativity: using innovative approaches to achieve collaboration, cooperation with others;
. Event creativity: producing a creative event such as an annual meeting, an awards ceremony;
. Inner creativity: being open to new ideas and questioning about oneself in different ways;
. Spontaneous creativity: acting in a spontaneous manner, such as giving a witty response in a meeting, a quick and
simple way to settle a problem.
Among the seven types of creativity, entrepreneurs could behave or improve in every single aspect or some aspects to achieve creative outcomes.
3.3.4 Uncertainty and risk-taking
In most economic theories we read, uncertainty and risk-taking are very often mentioned. We know that entrepreneurship only exists where there are uncertainties, concerning that if every individual in the economy has perfect information, then all profitable opportunities would be exploited and there will be no chances for entrepreneurs to start up a new business (Zoltan & David 2005). In other words, the existence of uncertainties is one condition for entrepreneurial actions.
Kihlstrom and Laffont (1979) state that entrepreneurs tend to be less risk averse and to bear more risks. Therefore, individuals with less risk averse personalities are more likely to become entrepreneurs. There are some scholars (Cramer et al. 2002) supporting this theory and they have conducted empirical research to borne out this argument. Nevertheless, there are few research results presented to readers to explain the reason why entrepreneurs are less risk averse.
However, Zoltan and David (2005) argue that to measure risk aversion as one criterion of entrepreneurs is quite difficult since one individual‟s attitude towards risk relies on wealth, among other things. Evidences are provided by Kahneman and Tversky (1991) that the attitude towards risk depends on one‟s status conditions and also on whether final results are gains or losses. Blanchflower and Oswald (1998) find that people who receive an inheritance or gift have higher possibilities to become self-employed. The wealth that they own reduces financial barriers to be an entrepreneur and also eliminates risk aversion.
Palich and Bagby (1995) indicate that entrepreneurs and non-entrepreneurs do not differ in their risk 22 propensity with evidence, which is quite different from previous researches. Furthermore, Simon, Haughton and Aquino (2000) apply empirical research and find that risk-taking of entrepreneurs is not due to difference in risk aversion but to other factors such as overconfidence in knowledge or skills. Hayek (1945) states that risk taking come from entrepreneurs‟ optimistic attitude towards the outcome of their expectations.
It is generally accepted that risk taking is a basic quality shared by entrepreneurs while there are various explanations. In our following research, we will explore how female entrepreneurs perceive risk taking, which is usually considered lacked in women.
3.3.5 Opportunity recognition
Bygrave and Hofer (1991) cited in Hills and Singh (2004) define an entrepreneur as an idividual who perceives an opportunity and establishes a company to pursue it. Opportunity recognition or business sensibility is the first stage of entrepreneurship. This condition seems to be the core of entrepreneurship since without it the stream of information would flow without being framed as a cue, without causing any impact or making sense (Weick 1995).
According to some scholars, opportunity recognition has so much to do with intuition rather than a rational and structured analysis. Hills (1996) finds out that surveys or market investigations are not considered as important as „gut feel‟ when it is time for assessing opportunities (Hills & Singh 2004). Those ideas that come „by accident‟ tend to be more valuable for some entrepreneurs. Bhave (1994) indicates that several entrepreneurs do not perform a formal opportunity scan, instead they recognize a demand and create a business.
The recognition of opportunities in business has been seen as a process by some scholars. Hills and Singh (2004, p. 261) cited the research of Hills (1996) and conclud that for most of entrepreneurs identifying opportunities is „several learning steps over time‟ rather than one only event. He has developed an interview program with successful entrepreneurs and they affirm that when they consider one opportunity, it leads to other opportunities to enactment. This means that when an opportunity is identified, the actions taken by entrepreneurs would influence its environment and therefore, new opportunities would be presented. Long and McMullan (1984) state that an opportunity, once spotted, needs to be prepared or customized in order to make it unreachable for others.
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Nonetheless, Hills and Singh (2004) indicate that to spot an opportunity depends on controlled factors (studies, lifestyle, etc.) and uncontrolled factors (social, cultural, economic, etc.). Additionally, the elaboration phase or „strategic planning‟ is taken as a second step, where the new opportunity is shaped and evaluated to make it unique and less likely to be imitated.
In our research we have decided to study how opportunity recognition or business sensibility has taken place for female entrepreneurs in different industries.
3.3.6 Working experience
A series of studies have been conducted to determine the correlation between previous working experience and entrepreneurship. Some researchers conclude that if the entrepreneur has a related previous working experience, the new venture would be more likely to achieve success while others affirm that previous working experience would not be relevant for an outstanding performance.
Studies elaborated by Cooper, Gimeno-Gascon and Woo (1994) indicate that entrepreneurs who open a business in the same industry where they have worked previously reach better performance in their new companies. As a contrast, Bhide (2000) affirms that a previous knowledge may not be determinant for future success of a new company in fast growing business.
According to Gasse (1982) previous working experience could bring two results in new ventures. On one hand it could be beneficial for a start-up company since knowledge could be applied to reach a better performance, and on the other hand, previous practices could be transferred representing barriers to obtaining better results in new organizations.
In order to expand our outlook about this condition and its impacts into entrepreneurship, we will explore whether previous working experience has been important to setting up a new business in our empirical research.
3.3.7 Capital
Capital raising has been a condition broadly analyzed in entrepreneurship. McNeill Stancill (1999) indicates that every entrepreneur encounters the same difficulty to determine how much money is needed to start up a company. Stouder and Kirchhoff (2004) indicate that small companies have a
24 different approach to fund rising since they do not access to public markets due to their size and high costs. Small firms tend to spend more in order to access financial information.
A common belief is that new entrepreneurs tend to avoid leveraging their ventures through external sources. In case personal capital is insufficient, they would utilize resources from the financial markets available. Barton and Matthews (1989) suggest that financial decision-making should be better studied from a strategic viewpoint.
The capital invested by female entrepreneurs tends to be lower than their male peers, due to „wage gap and lower levels of business loans‟ (Carter & Brush 2004, p. 16). According to Harris (2000) women tend to receive 75% of the salary of their male colleagues. Coleman (2000) indicates that women tend to have further collateral requirements, disparities in the interest rates and other conditions for accessing to capital. As a contrast, a study conducted by Fabowale et al. (1995) cited in Ahl (2002) indicates that female businesses are smaller and mainly in services, with low collateral but higher risk classification by banks. Ahl (2002) indicates that this may have led the author to affirm that women had the same access to credit but under unfavorable conditions. A research conducted in Canada (Fabowale, Orser & Riding 1995 cited in Ahl 2002, p. 103) states that factors for refusal such as „small size of venture, low liquid assets, sales and sales growth‟ are linked with women-owned businesses. This study finds that female entrepreneurs are not satisfied with the service provided by the financial institutions dealing with their requests.
To conclude, several studies in this field affirm that female entrepreneurs face discrimination when they decide to raise funds for their ventures. Nevertheless this may be caused by structural factors instead of gender issues (Ahl 2002).
3.3.8 Network
Zoltan and David (2005) indicate that network deeply affects the capability for entrepreneurs to organize scarce resources during the process of discovering and exploring entrepreneurial opportunities. About the influence of network to entrepreneurial activities, most scholars agree that network is a vital condition for entrepreneurs to start up their businesses. Nevertheless, they apply researches from different approaches. According to Burt (1992), entrepreneurs with good networking skills have higher possibilities to be successful because the network will provide them with better
25 information access; with more information they can better evaluate business opportunities. Shane and Cable (2002) argue that the networks of entrepreneurs will influence the financial decisions of potential investors. They find that if an entrepreneur is unknown in the investor‟s network, it is less possible for him or her to get the investment. Leonard and Swap (2000) declare that with networks, entrepreneurs could enjoy more opportunities to find business possibilities and to collect resources. They give an interesting case happened in Silicon Valley and describe how entrepreneurs receive entrepreneurial mentoring from their social networks. Higgins and Gulati (2001) address the importance of network for an entrepreneur from their point of view at team level. By analyzing more than 3,000 executives with over 5-year industrial working experience, they find that a network with experienced employees could better predict future success in obtaining financial support and offering popular products.
Some scholars also study the channels that how entrepreneurs gain their networks. Aldrich (1999) finds that entrepreneurs maintain their old network from previous social environments instead of building new networks after they start their businesses. Gulati and Gargiulo (1999) also think that networks of organizations merge from previous alliances between companies since „trusted contact‟ is very important for any firm.
From these previous studies, we find that network is definitely one vital condition for an entrepreneur to start up a business since he or she needs to organize resources. Although we find some arguments on the origins of such networks, we are still not sure of how entrepreneurs obtain their networks. Do they have networks and then start up businesses, or they start up their businesses and then build their networks? We will examine this question during our empirical research.
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4. The narratives of female entrepreneurs: Bloomed orchids
Having mapped our journey and obtained necessary tools, we are ready to explore the vast forest. Bloomed orchids firstly come into our eyes since they are quite attractive and outstanding among the rest. With the theoretical sensibility gained from literature review, we decide to start our empirical research with three successful companies established by female entrepreneurs. In this chapter, we will describe their entrepreneurial stories and share our findings emerging from these three inspiring ladies.
4.1 Anita Roddick
“If you do things well, do them better. Be daring, be first, be different, be just.” (Icelebz 2011)
Anita Roddick was the founder of The Body Shop, a cosmetics company producing and retailing beauty products that shapes ethical consumerism. The company is one of the first to prohibit the use of ingredients tested on animals and one of the first to promote fair trade with third world countries. Furthermore, Anita was a human rights activist and environmental campaigner (Wikipedia 2011).
1. An extraordinary personality
A born rebel “I was a natural outsider, and I was drawn to other outsiders and rebels.” (Pagnamenta & Jagger 2007)
Anita‟s rebellious personality could be tracked through her whole life. She used to be expelled from school because of a prank incident in 1962 (Top Business Entrepreneurs 2011) and when she went to school in South Africa, she was expelled again after going to a jazz club on black night, violating apartheid laws (http://entrepreneurs.about.com). Such personality is also reflected in her business. With her legendary energy and continuous efforts, she always tried to challenge the beauty industry. She once said: “I hate the beauty industry. It is a monster selling unattainable dreams. It lies. It cheats. It exploits women."(Bird 2009) Her company offers a way of putting up solutions, not only oppositions but demonstrating a new, responsible and caring way of doing business. „Business has the power to do good‟. „Social responsibility, respect for human rights, environment and animal protection and absolute belief of Community Trade‟ have been values of The Body Shop. (The Body Shop 2011)
Anita Roddick was a provocateur. When her company was recognized as the Company of the Year in
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1987 by the Confederation of British Industry, she delivered a speech criticizing big companies, their orientation towards making profits and their lack of commitment towards society (Roddick 2008) that big corporations were „stuck in the past‟ and they were „dinosaurs in pin-striped suits‟ (Roddick 2008, p.3). Moreover, the most important event occurred in 1998, when Anita launched the “Ruby Doll Campaign” (http://www.anitaroddick.com). Opposite to the perfect Barbie Doll, Ruby was a middle aged, red-haired, fat and naked woman. Ruby was always with a smile, demonstrating that she was happy with the way she was. Anita Roddick was intended to challenge stereotypes of beauty and rebuild women‟s self-esteem, along with the slogan, "There are 3 billion women who don't look like supermodels and only 8 who do." Furthermore, Ruby was launched to say „if you feel gorgeous you‟ll look gorgeous.‟ (Roddick 2008, p.101) Mattel (the largest toy company, owner of Barbie) threatened to sue The Body Shop „because they claimed Ruby was denigrating the image of Barbie‟ (Roddick 2008, p.85) and posters were banned in Hong Kong‟s Mass Transit Railways „because authorities said she would „offend‟ passengers‟ (Roddick 2008, p.103). This campaign strongly countered the pervasive influence of the cosmetics industry and distinguished The Body Shop from other competitors.
Anita Roddick firmly believed that customers wanted „honest information‟ (Roddick 2008, p.81). Therefore, her approach was sending the message that The Body Shop was a business with a strong commitment through the store designs, billboards, staff uniforms, and other non traditional means, with a clear desire of providing all the information from ingredients, processes and values. The products were presented with a story about how they were conceived, where the ingredients come from and what has been behind it. The aim has been „to promote health rather than glamour and reality rather than the so-called „promise of eternal youth‟.‟ (Roddick 2008, p.82)
An adventurous explorer "We entrepreneurs are loners, vagabonds, troublemakers.” (Allen 2011)
From an early age, Anita Roddick loved drama and set her sight on acting, but she was turned down by the drama school. After this, she attended a teacher training course and started to teach English and History. But the freewheeling ethos of the Sixties and her inner adventurous spirit exerted their pull on her and she decided to quit her job to travel around the world. Her views of life had been shaped by her trips and exposure to different cultures. During the following 18 months, she worked in Paris as well as Geneva and spent some time among the islands of Polynesia. Even after married, she could not
28 stop searching. Firstly she opened a hotel and then restaurant with her husband. She struggled quite much in this period and what she learned from this stage was that „when you make a mistake, you have to face up to the fact and take immediate steps to change course.‟ (Roddick 2008, p.35) During the ten months when her husband took a horse-riding trip from Argentina to the United States, Anita Roddick opened her fist The Body Shop, and took care of her daughters at the same time. This business used to be the only source for her to support her family. She affirmed that „no one talks of entrepreneurship as a survival but that‟s exactly what it is and what nurtures creative thinking (Roddick 2008). Ten months later, she opened the second shop and from then on, The Body Shop has been continuously expanding worldwide and up until now it covers nearly 2,400 shops in more than 60 countries (Wikipedia 2011). 2. A spark from coincidences and forward-sight "Entrepreneurs see opportunities that others don‟t. If there is a problem, while other people are just moaning, entrepreneurs will say: "OK, what can I do about it?” (Famous Women and Beauty 2011)
It was questioned whether or not The Body Shop stole a business idea, the name and marketing concept from The Body Shop founded in 1970 in Berkeley, California, which started six years before the foundation of Anita Roddick‟ s The Body Shop. Even though Anita Roddick bought the name of “The Body Shop” from the Berkeley Company in 1989, this event still caused a great controversy (Wikipedia 2011). Interestingly, even though many people passed by the original store of The Body Shop every day, nobody but Anita Roddick took the chance of coincidence and successfully turned this idea into a competitive business. Moreover, many of the most appealing ideas that The Body Shop has been using until now have been originated by coincidences. For example, Anita Roddick painted the walls of her first shop green to cover the cracks because she did not have enough money instead of the intention to deliver the message of an environment friendly store. She reused and recycled the bottles and refilled them again at the very beginning of The Body Shop simply because she could not afford to buy new bottles. Furthermore, this frugal period also gave birth to the handwritten labels to save money. Therefore, as Anita Roddick wrote in her book: „every element of our success was really down to the fact that I had no money.‟ „I ran my shop just like my mother ran her house in the Second World War – refilling, reusing and recycling everything – and what we did in that first year was a thumbprint for the differences that would set the company apart.‟ (Roddick 2008, p.38) Her inner flair and forward sight
29 contributed to develop all these small coincidences, eventually turning them into unique hallmarks of The Body Shop that embody rich marketing information on social and environmental concerns, the most eyes-catching bang.
3. Romantic approach “I‟m the dreamer.” (The Times 2007)
Born in an Italian immigrant family, Latin-looking Anita had the romance gene in her blood. Her romantic love story was an example. She fell in love with her husband at first sight and they got married after the birth of their first daughter. To describe her business logics, we believe that “romantic” is a more suitable word than “creative”, which is generally used to describe entrepreneurs. The Times (2007) remarked Anita Roddick as an outstanding business woman who „brought informality to company management‟ and she was „a pioneer of green issues‟. For the past thirty years, The Body Shop has built a quite distinct public image, compared to other formal companies in the cosmetic industry.
The products and the marketing concepts are romantic. The Body Shop states that „there is only one way to be beautiful, nature's way‟ (The Body Shop 2011). From the very beginning, Anita Roddick had devoted herself into finding natural ingredients to present natural beauty of women. She refused to do what conventional industry applied as a normal process of animal testing and the lack of environmental orientation. Furthermore, she decided to avoid selling the ideal of beauty generally transmitted by the industry giants. In this sense, getting old or fat is considered a natural way and there is no need to over-worry or to resist. She launched Ruby Doll Campaign (mentioned previously) to demonstrate her unique perspectives about beauty, which were rebellious and captivating.
Moreover, the way that Anita Roddick perceived the relationship among corporate, society and environment is much more romantic. Anita Roddick started contributing to society and environmental issues long time before corporate social responsibility became a buzz word. In order to connect her business with the community, she adopted different approaches. For instance, community involvement was not about placing a logo and message on a lorry but putting pictures of missing persons and phone numbers for assistance. Another important instance is that in 1985 The Body Shop started a campaign with Greenpace to „demand an end to the dumping of poisonous waste materials in the North Sea.‟ From this moment on, The Body Shop became a company with „attitude‟, according to 30
Anita Roddick herself. The Body Shop paid gigantic posters with the picture of the Greenpeace ship stating „Thank God someone is making waves‟ with a note indicating that people could support Greenpeace by becoming members and registering at The Body Shop branches. (Roddick 2008, p.182) As an additional example, Anita Roddick started “Trade not Aid” program in the 1980s to help less-developed community farmers making money by purchasing their natural ingredients for cosmetics instead of doing direct donations. Later, she developed this program into a “Community Fair Trade”, which has been well known by the public. While she was conducting such romantic actions, The Body Shop was achieving great success. She wanted to „nurture a revolution in kindness‟ (The Times 2007), and just as Anita once said: “The end result of kindness is that it draws people to you.” (Icelebz 2011)
4. The right timing for a social agenda “One of the interesting things is once we started to get smarter and understand the issues more, and when we realized that we were going to be a real voice, then we ventured out with an extraordinary social justice agenda.” (Icelebz 2011)
Although “natural products” and “green business” concepts are romantic enough to attract public attention, The Body Shop would have never achieved so much without catching the opportunity at the right time. Before the 1970s, people had been enjoying the great development of industrial civilization and there were rarely people talking about green issues. The appearance of “natural products” from The Body Shop successfully caught the right time when people felt so tired of chemical cosmetics. Moreover, the germination of environmental movements during the 1970s made it possible for this company to create this legendary story.
5. The moment of truth “But the minute we went public on the stock market, which is how our wealth was created, it was no longer how many people you employed, it was how much you were worth and how much your company was worth.” (Icelebz 2011)
Anita Roddick‟s adventurous spirit, extraordinary personality and romantic thinking created the huge success of The Body Shop. During the first eight years of The Body Shop, Anita designed the exciting business as her willingness and aspiration. Nevertheless, to finance the expansion of her business, The Body Shop was listed at the stock market in 1984 and since that moment, Anita Roddick had to seek the balance between The Body Shop‟s public influence and her personal visions of this company. The share price became a major issue. During another eight years since The Body Shop became public, it kept a record of 10,944% increasing rate and kept increasing almost 100% annually
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(www.fundinguniverse.com). Checking the stock records, such achievement was a triumph while Anita herself was rather not satisfied with this impressive record (referred to her quotation above).
6. Dangerous visibility “If you think you're too small to have an impact, try going to bed with a mosquito.” (Icelebz 2011)
The 1980s was the golden period for The Body Shop, while in the first half of 1990s, The Body Shop began facing more and more intense competition and media criticism. In 1990, Estee Lauder Inc. introduced Origins, a product line with natural ingredients packaged in recycled containers; Leslie Wexner, owner of The Limited, opened Bath & Body Works in the United States in autumn of 1990; in 1994, L'Oreal entered the natural-styled product market with its Planet Ushuaia line of deodorants, shampoos, and other personal care products. Like Bath & Body Works, L'Oreal copied the bright coloring of The Body Shop packaging and emphasized exotic ingredients; the same year, Procter & Gamble, with its vast resources entered the fray by their purchase of Ellen Betrix, a German company that had introduced Essentials natural cosmetics early in 1994 (www.fundinguniverse.com).
Moreover, in September 1994 an investigative article "Shattered Image: Is The Body Shop Too Good to Be True?" written by Jon Entine and published in Business Ethics magazine, created an international brouhaha and led to dozens of stories in the international media, including articles on The New York Times' business section front page and on ABC World News Tonight. A flurry of news reports led to a temporary 50% drop in the stock market value of the company, which until that point had been considered a model of "socially responsible" company. The writer not only revealed that Anita Roddick stole the business idea (mentioned previously), but also claimed that Roddick's "natural" products contained extensive amounts of artificial colorings, scents and preservatives (Wikipedia 2011).
7. The end of Anita era “The hard thing when it grows larger is that you lose intimacy.” (Icelebz 2011)
In the late 1990s, it appeared that Anita Roddick was unable to concoct a strategy strong enough to overcome increased competition in the industry. As a result of weakening sales--especially in the United States--and faltering profits, The Body Shop spent much of the late 1990s and beyond restructuring and revamping business operations. In 1997, the firm announced that it would discontinue certain lower-priced merchandise in an attempt to attract a more upscale clientele. Then in 32
1998, Patrick Gournay was named CEO while Anita Roddick became co-chairman with her husband. The company commented on the management changes in a 1998 WWD magazine article, claiming that „the task of realizing our strategic plan and developing the brand without losing the non-negotiable surrounding its philosophy and business ethics will be challenging‟ (http://www.fundinguniverse.com). Then The Body Shop exited the manufacturing sector to focus on its retail operations. It also sought to improve its product time-to-market, slash operating costs, and decrease the number of franchise-owned stores. Management was also reorganized into four main geographical segments including the United Kingdom, Europe, the Americas, and Asia. In her book, Business as Unusual, Anita reflected that when a business grows, the tendency to be unwilling to change is more settled. She used to question herself „how to get a mature organization to act in a delinquent way, to jeep that sense of entrepreneurship, that sense of derring-do?‟ (Roddick 2008, p.39) Until this moment, The Body Shop lost her original appearance and began to follow the path that every “boring” company is walking on. This meant the end of Anita‟s era (www.fundinguniverse.com).
8. Dissolution in the ocean “I do not believe that L‟Oreal will compromise the ethics of The Body Shop. That is after all what they are paying for and they are too intelligent to mess with our DNA. But it is also the way the world is going.” (http://www.anitaroddick.com)
In March 2006, one year before Anita Roddick‟s death, The Body Shop agreed to a £652.3 million takeover by L'Oréal, the giant monster in cosmetic industry with more than ten percent of the market share. This acquisition was not well accepted by the public even though Anita Roddick saw the selling „as an opportunity to change business from inside‟ (FT 2007). The main area of concern was The Body Shop's strong ethical stand- a key feature of the company that has helped to bring about an image of a progressive and socially responsible business. As a result of this stand, the testing of ingredients on animals has always been out of the question. On the other hand L'Oréal has been criticized for continuing to test certain ingredients on animals. Animal rights groups have protested relentlessly on this issue, saying that the company should be doing more to stop the practice ahead of a total ban on animals‟ test, proposed in 2008. However, it is said that The Body Shop brand would be kept and the company would continue to be based in and run independently from its head office in Littlehampton, West Sussex (www.cosmeticsdesign.com). No matter the public attention or Anita herself (referred to her quotation above) had to admit that the acquisition dissolved the “DNA” of The Body Shop in a vast
33 ocean of the cosmetic industry.
4.2 Zhang Yin
"It was my hard work that helped me achieve my success." (Cheng 2007)
Zhang Yin is the founder and director of the family company Nine Dragons Paper Holdings, the biggest paper maker in China, which is a recycling company that buys scrap paper from the United States, imports it into China, and mainly turns it into cardboard for use in boxes to export Chinese goods (Wikipedia 2011). She is the self-made richest Chinese woman. She was ranked the 5th on the list of
China‟s Top Richest, according Forbes, 2006 (Flannery 2006).
1. The restless young lady
"When I lost my job, I had a choice." (Cheng 2007)
Zhang Yin was born as the oldest of eight children in a military family. During China‟s brutal Cultural Revolution, which began in 1966, her father was sent to prison, like millions of others who were branded “counterrevolutionaries” or “capitalist roaders.” And because of this, although Zhang Yin had a very good academic record at school, she was deprived of the right for college education. When the Cultural Revolution came to a close in 1976, her father was released from prison and “rehabilitated.” She got a chance to learn her beloved accounting and then she worked as an accountant.
After China‟s economic reforms got under way in the early 1980s, she moved to the southern coastal city of Shenzhen, one of the first areas in China allowed to experiment with capitalism. There she started working for a foreign-Chinese joint venture paper trading company. In 1985, when she was 27 years old, she gave up her nice-paid decent job and ventured to Hong Kong with her own savings 30,000 RMB to launch her scrap paper collecting business.
2. Acute market insight "Other people saw scrap paper as garbage, but I saw it as a forest of trees." (Barboza 2007)
In the 1980s, China‟s fast-growing economy faced shortages of raw materials. China‟s own paper products were poor quality, often made from grass, bamboo or rice stalks. This represented a disadvantage against waste paper derived from wood pulp. Therefore, the country began looking for scrap metal and used paper overseas. Zhang Yin was an early mover, one of the first to sell scrap paper
34 to China (Barboza 2007).
After 5 years‟ successful practice in Hong Kong, Zhang Yin realized that Hong Kong could not meet the booming scrap paper demand in the future. So she and her husband went to the USA and registered America Chung Nam Company in 1990. Until now no other company from the United States has sent so much material to China in as many containers as America Chung Nam, which was named the top exporter to China by volume for the sixth consecutive year in 2005, the most recent ranking, according to Piers Global Intelligence, which tracks import and export data (Flannery 2006).
In the meantime China's insatiable appetite for paper convinced her to open a paper plant back home. "The domestic paper-and-packaging industry at that time was not developed, and almost everything was imported," she said (Cheng 2007). Nine Dragons, whose name implies "highest fortune," was founded with a bank loan in 1995, another five years later when she entered the market of the United States, in expectation of ever-rising demand for packaging for exports (Huang 2006).
3. Perfect timing “At the right time and the right place, I did the right thing.” (Huang 2006)
Because of China‟s Cultural Revolution, Zhang Yin missed her opportunity of college education, while, in her later life, she caught the most two vital events in the history of China‟s economic development. In 1976, the second chairman of China, Deng Xiaoping, ended the Cultural Revolution and demonstrated his concentration on economic development. Two years later, the reform and open-up policy was formulated and carried out. Tracing the wealth stories of the current richest Chinese, it can be found that most of them started their businesses in the 1980s, which was the golden time for China‟s first generation of entrepreneurs. Under such situation, Zhang Yin went to Hong Kong in 1985 and started her wealth legend.
In December 1991 the Soviet Union collapsed, and in January 1992 the ageing Deng Xiaoping declared in a tour of Guangdong, China's most pro-capitalist province, that since the international communism was dead the only way for Chinese communism to survive was to embrace pro-market reform. In particular it should welcome inward investment from foreign companies with know-how and technology. It was glorious, he said, to be rich (Hutton 2006). This speech inspired many Chinese people to start their own businesses and since many privileges were given to foreign companies who opened businesses in China, many overseas Chinese chose to come back to invest in their homeland. 35
After all, China's booming exports would need to be wrapped in paper and paperboard. Guangdong's exports have grown phenomenally; so have sales of paper and paperboard. Just three years after Deng Xiaoping‟s speech, Zhang Yin established her first factory in Guangdong province.
4. Incredible persistence “Someday, I‟d like to be known as the queen of containerboards.” (Barboza 2007)
Zhang Yin‟s business was started from dealing with scrap paper. Back to the 1980s, this job was not respected and not understood by people, especially for a woman with a decent job and salary at that time. Yet as Hong Kong‟s biggest circulation English daily newspaper, The Standard, commented, „US trash has made Cheung Yan (Zhang Yin‟s Cantonese name) China's richest person‟ (Cheng 2007). As a traditional industry, the paper making business is not as profitable as other emerging industries. Within just 20 years, Zhang Yin created her wealth story in this unrespectable and traditional industry and according to an interview she said she will continuously concentrate her paper business in the future (translated from the KU 6 video online interview program by the author, Wang, http://v.ku6.com/show/kRCPpSvNW32bElF-.html).
When she firstly started collecting scrap paper in Hong Kong, she faced great difficulty that others cannot imagine. At that time, in order to make more money, it was almost an “invisible regulation” to mix water with scrap paper. Yet Zhang Yin did not appreciate such regulation and she insisted fair trade with her clients. Therefore, when she got more clients because of her honesty, she received blackmails and threats from her competitors. As a young lady, although Zhang Yin admitted that it was a suffering time, she never gave up. She finally won respect from her clients and even her competitors. When she decided to leave for the USA, her clients and even competitors tried to persuade her to stay but Zhang Yin thought Hong Kong‟s limited market was too small for her ambition.
The start of her business in the United States was not easy. When reminded of this experience, she recalled that “I had to learn from scratch. The business was just my husband and me, and I didn't speak a word of English." (Cheng 2007) Six years later, this non-English speaking lady not only learned how to effectively communicate with people, but also became the biggest American scrap paper exporter, accounting for one seventh of American scrap paper exporting business (Sina 2006).
After raising initial capital from industrial manufacturing, many Chinese millionaires quit from their original businesses and step into real estate or invest in stock market since it is more profitable and 36 faster to make money. Unlike them, Zhang Yin always concentrates on the paper industry. With enough cash flow, Zhang Yin invested large amounts of money into the basic infrastructures of her factories, which facilitate Nine Dragons Paper Holdings with its own power supplying plant, pollution processing factories, and even its own dock to transport its products.
5. Forward insights “The one, who does physical exercises in economical winter, can run the first in the recovery when it comes to economical spring.” (Sohu 2009)
In 2006, for the first time Zhang Yin was the first woman to top the list of richest people in China, according to the report published by Hurun (the Chinese luxury magazine and events group). Two years later in 2008, because of the financial crisis, she was kicked out from the top 50 richest in the same report. Dramatically, in 2009, Zhang Yin turned back to top the list again, with her personal fortune valued at approximately US$5.6 billion (Sina 2006).
Nevertheless, Zhang Yin never cares the ups and downs in the list and from her perspective, the development of Nine Dragons Paper Holdings is a well-planned process. At the very beginning of the company in the middle of 1990s, when she invested US$11 million to build the modern factory in Guangdong province, many people questioned if her dream would come true. It took a few years for people to believe that it was a worthy investment. During the financial crisis, when the share price slumped in Hong Kong stock market, there were rumors around, that Nine Dragons Paper Holdings was facing bankruptcy. Only one year later, excellent performance of this company scotched such rumors. During this year, Nine Dragons Paper Holdings upgraded its ERP (Enterprise Resource Planning) system and completed the transition from exporting to domestic sales, which successfully decreased the influence of financial crisis.
6. Pragmatic billionaire “If I only have the capability to build a three-star hotel, I will never build a five-star hotel to attract people‟s eyes.” (Wangyi 2006)
Despite her glory as China‟s super billionaire, Zhang Yin‟s private and business car is only worthy of 470,000 RMB. And also, she has no fabulous luxury mansion. Her pragmatic personality is reflected in every aspect of her enterprises. Concentrating on paper business, Zhang Yin constructed a whole value chain for Nine Dragons Paper Holdings, from raw material to delivery service. In finance, three companies she owned in greater China, Hong Kong and the USA, keep economical independence
37 from each other, running dispersed and clear business by their own. With her pragmatic working style, Zhang Yin is drawing her business blueprint for her paper empire.
4.3 Beatriz Canedo Patiño
„A fashion designer is like a writer, a painter, a composer, and we obtain inspiration from a note, an image, a remind, a scent.‟ (www.cineconcristal.blogbspot.com)
Beatriz Canedo Patiño is a Bolivian fashion designer and she has been the first designer offering haute couture in alpaca fibers. As a pioneer in the design with these fibers, she has been denominated “The Alpaca Queen” by the New York Times and she occupies an important space in the world of fashion (Magazine My Land 2007). Beatriz Canedo Patiño has been designing for Queen Silvia of Sweden, Queen Sofia of Spain, Pope John Paul II, Hillary Clinton, Princess Sayako of Japan, among others. In 1994, she was invited to design garments for Barbie celebrating 35 years of the iconic doll. The collection has been displayed in the United States, Japan, China and several countries in Europe (WRadio 2005).
1. The bridging phase: art lead to fashion „I call fashion an Art. To take a piece of fabric and shape it, and create a garment is an Art.‟ (www.cineconcristal.blogbspot.com)
Beatriz Canedo Patiño was born in La Paz, Bolivia. She moved with her parents to California when she was thirteen years old. Influenced by the love of cultural expressions within her family, she decided to study art in Paris. She thought that studying painting would allow to express herself and to bring out her artistic side. She indicated that although her parents have been elegant and used to dress up very well, she loved simplicity, comfortable jeans and did not know much about fashion designers. This opinion changed dramatically when she arrived in Paris. She was delighted by the shapes that could be obtained from fabrics and how much creativity could be developed. Without thinking about it twice, she registered at the Academy of Design in Paris, maybe without knowing that this decision would completely change her life.
2. Inspirational phase: beyond borders „Most people think of alpaca as ethnic-looking patterned sweaters; I want to show that it can be of the couture level, that it‟s not just outwear.‟ (Schiro 1990)
Beatriz indicated that even though she defines herself as a person in love and passionate about the 38 culture of her country, she discovered the value of camelid textiles while she was an intern at Michel Daniel‟s atelier in Paris. This designer used to work with camelid textiles and although she thought that these fabrics were rustic, she was „fascinated by the softness, fineness and natural shine‟ (El Mercurio
2008). Once she concluded her studies and training with Michel Daniel, she had the vision of opening her own business based on camelid textiles in New York.
Born in a country with strong traditions of camelid wool knitting and influenced by her education in Paris, she spotted this business opportunity, which had been discarded by people without forward sight to transform it into fabric. As a fabric, more applications in the design and a broader palette of colours could be obtained and this was a great opportunity for her business.
3. Envisioning phase: opportunities through skills „We are attracting a lot of ladies who used to wear furs, and you have to give them something just as rich and warm as fur.‟ (Schiro 1990)
When she returned to the United States and with her clear vision, she founded the company denominated Royal Alpaca Inc. based in New York. Her inspiration to use fine textiles of alpaca and vicuña and her elegant designs distinguished her from others. She confessed that the beginning was not an easy trail. She used to design and elaborate her samples at her department and carry them for display every time she had appointments with boutique owners and stores‟ fashion representatives. Gradually she gained space at small but exclusive boutiques and all this changed when by the end of the 1980‟s Bloomingdale‟s, a prestigious department store in New York, immediately accepted her collection in their catalogues after meeting her.
Soon she was displaying her designs in boutiques such as Bergdorf Goodman, Sak‟s Fifth Avenue and Neiman Marcus, since her garments were as fine and as luxurious as fur. This was certainly an advantage for her firm in a period when the use of fur by the haute couture was criticized by environmental and animal rights organizations. Her name was consolidated at the New York‟s fashion scenario and she received the denomination of “The Alpaca Queen”. She opened a showroom on the Seventh Avenue in an emblematic building with renowned designers such as Ralph Lauren, Oscar de la Renta and Donna Karan (El Mercurio 2008). Beatriz indicated that it was not only about expanding her business into fabulous boutiques but also to demonstrate the quality of her designs and materials to a board of specialists. This has been an important reason for her to be proud of her achievements since she is
39 offering high quality products.
These new opportunities would have not been presented if Beatriz did not take actions. Her creativity, business sensibility and designing have been matched with story-telling and selling. At the first stage, Beatriz displayed her designs and garments directly to owners and agents of renowned stores and linked her products to the message of “100% natural fibres as fine as fur”. As we could find from our readings, her perseverance and determination have been decisive in creating these new opportunities, and even though it was not an easy path at the beginning, the results of her efforts were soon showed when she started to sell in prestigious stores and boutiques and opened her own showroom.
In January 2010, Beatriz Canedo Patiño presented her designs at “EcoChic”, a fashion exhibition celebrating the International Year of Natural Fibres and the International Year of Biodiversity organized by the United Nations and Green2greener (EcoChic 2010).
4. Consolidation phase: concretized vision and values „I like working in a team, to listen to the contributions, new ideas, opinions and suggestions.‟ (Nueva Economía Magazine 2008)
After seven years of success in New York, she decided to move back to Bolivia in 1994. The main reason was that the volume of orders was growing and her business was expanding from small collections of haute couture to a prêt- á -porter, higher volumes maintaining high quality garments. Therefore, the natural decision has been down to Bolivia considering the provision of these Andean fibers and highly skilled tailors.
Once in Bolivia, she founded BCP Alpaca Designs S.R.L. and in an interview she affirmed that she did it „without external capital, family or network.‟ Later she added: „I invested every dollar of income.‟ Through times, her company has been nationally and internationally recognized as a synonym of quality and elegance. This growth has been reached in a sustainable phase since Beatriz considers human resources as „the most important asset of every company‟. She stated that she has been working with more than fifty people and that her business has been growing every day. Furthermore, she has been able to gather a competitive team work in all levels, sharing strong values and culture (Nueva Economía Magazine 2008).
Beatriz has the reputation of being very pragmatic and demanding. She emphasizes the importance of client‟s satisfaction arguing that „the meaning of her company relies on their customers and the best 40 product possible must be delivered, according to Nueva Economía Magazine (2008). She thinks that „the fashion industry demands a real vocation, high levels of discipline and good organization. It is not always glamour and beauty. There are long days of work, especially if you are more demanding with yourself in regard of the details of garments.‟ (El Mercurio 2008) In another interview, she commented that she „rather be demanding than mediocre‟ (Mira Bolivia Forum 2008). Therefore, building a strong team work, ensuring effective customer services and self-discipline have become the core values of her company and key factors for her success.
5. Self confidence phase: blooming „I can tell that my company creates products with the same quality of haute couture firms such as Chanel or Armani‟ (El Mercurio 2008).
After establishing her firm in Bolivia, she has been currently running her atelier-showroom and two boutiques in the main cities of this country. Beatriz has been offering „excellent quality, strict environmental policy and almost 25 years of national and international renown as an exporter company leading the fashion industry in Bolivia‟ (www.beatrizcanedopatino.com). Through her company‟s steady growth, she could be able to establish international clientele, mainly from New York, Canada, Australia, Japan and Europe (Mira Bolivia Forum 2008).
Beatriz affirms that for her it has been „an enormous pride‟ to export her products with the „Made in Bolivia‟ tag (El Mercurio 2008). Since Bolivian products had been perceived as low quality, her actions to improve quality embodied strong emotions in Bolivian and Latin American markets. Additionally, camelid wool has been deeply linked to centuries of rich tradition culturally connecting the Andean countries in one common identity.
6. Recognition phase: public exposure “To be elegant, a man does not necessarily need to wear a tie. The real elegance comes from within.” (Emol 2006)
In January 2006, Evo Morales, a former coca grower and leader of a strong indigenous movement had been elected president of Bolivia. In official occasions, his dressing code caused many national and international media comments since he did not wear a necktie, nor a suit but a red, blue and white stripped jumper in most of his public appearances. Newspapers were reporting about his outfits and a big attention was oriented towards what he would wear during his official inauguration.
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Beatriz received the request of designing the outfit for Evo Morales to wear in this official ceremony. The request had been submitted one week before it took place and the most important detail was that he would not wear a tie and native details should be included in the design. That day finally came and Evo Morales surprised the public with a black Alpaca jacket with sober details of Andean textiles embroidered. This represented an important success for Beatriz. She could renew Evo Morales‟ appearance without taking aside the principles and values built before the elections. Furthermore, it consolidated her image as the most important Bolivian international designer. Beatriz stated that „I respect that he does not put on a tie, but there are things that can do to dress for the world.‟ (El Mercurio 2008). She indicated that she wanted to include „something Aymara‟ (Forero 2006) therefore she used an ancient textile, of eighty to ninety years with twenty natural colours. At an interview Beatriz affirmed that „he is the first indigenous president in 500 years of history that assumes in Bolivia and this is something very important.‟ (El Mercurio 2008)
7. A unique style “I obviously have my own originality, my individuality and style. This is a style that I have for twenty-two years. I would denominate it „a subtle elegance‟ because I don‟t like over elaborated designs.‟ (http://issuu.com/bebe25122001/docs/bcp)
Through all these years, Beatriz Canedo Patiño‟s style has been recognized as delicate and elegant. In her own words, it has been defined „a subtle elegance‟, and this has been a strong characteristic of her designs. Currently, her business idea has inspired new designers to use camelid fabrics. For instance, Liliana Castellanos, a new Bolivian fashion designer has opened her business addressing the use of these fabrics. Furthermore, her business has been expanding rapidly since she adopted a corporate orientation. Nowadays her boutiques have been opened in five different countries and retailers are selling her designs in other eight locations. Nevertheless, Beatriz Canedo Patiño is still recognized by this „subtle elegance‟, through simple and at the same time exquisite designs.
Beatriz‟s business has not grown very fast, but it has been developing steadily and sustainably. As she maintains the control of her business, she is able to ensure high quality designs and to offer personalized services to her clients. Her love for art and fashion as well as her passion and perseverance have determined her success and will also lead to future glory.
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4.4 Findings of the three cases
In this section we will analyze certain aspects about condition-building that emerge from those businesses established by these three outstanding female entrepreneurs: Anita Roddick, Zhang Ying and Beatriz Canedo Patiño. Additionally, we will also present our interpretation of the key conditions that we find they have in common.
1. They refuse mediocrity and keep searching.
Back to 1970s and 1980s, when our targeted three female entrepreneurs started their businesses, to open a company was not a popular option for females, no matter in Britain, China, or even the United States. However, it seems that our female entrepreneurs refused mediocrity and started their adventures in business world, which used to be absolutely dominated by males.
Anita Roddick was a rebel. She used to be expelled by her schools twice since she questioned and provoked. She was an explorer, looking for adventures and challenges by travelling around the world. Even when she got married, she did not stop her searching. She tried several businesses and finally opened The Body Shop which turned to be a great success.
Zhang Yin was not able to attend school due to political restrictions in her country, even though she was an outstanding student; as soon as she had the opportunity she enrolled to accounting, a subject that she really loved. Later she got a “dream job” where she could build a prominent career. Nevertheless, her restless spirit dragged her to resign and to venture into a business by carrying her own savings to Hong Kong. Later when she realized that this market could not meet China‟s demand, she decided to move to the United States. After five years she became the largest exporter of scrap paper. Nevertheless, she was not satisfied with this achievement and she went back to establish her own producing plant in China. This continuous search reflects her restless personality.
For Beatriz Canedo Patiño, her main motivation was her personal interest towards arts. She firstly wanted to study Arts in France, with painting as her first choice. When she moved to Paris she realized the artistic side of fashion and garment design. During this period she could understand the value of camelid fabrics and with this in mind she wanted to open her own company for haute couture in New York. She achieved a big success in the United States. With her willingness to expand, she decided to establish her business in Bolivia mainly due to the provision of materials and renowned tailors‟ skills.
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2. They catch the good timings.
All these three companies we studied have already existed for two or three decades so through such a long period, we could find the influence of timings to their businesses. Being aware of changes happening in their times, they all skilfully built a connection between their enterprises and preceding situations. Because of their efforts to turn popular events into impulse for their ventures, now we could call these events “good” timings.
Anita Roddick‟s The Body Shop was linked to social, ethical issues at the timing when big corporations were subject to fierce critics because of their lack of social commitment. The truth that cosmetic products were tested on animals and the fact that the beauty industry was overexploiting female‟s ideal of beauty were publically exposed. Realizing this, Anita Roddick constructed the corporate image as socially responsible and rebuilt the self-esteem of females. Moreover, the need of fair prices for commodity producers as well as fair wages for workforce was delivered through the implementation of projects that would guarantee fair relationships in their value chain.
The scenario in China was favourable for Zhang Yin to start up her business. Firstly China‟s Cultural Revolution was over in 1976 and further reforms were exercised to encourage the economic development of the country. Secondly, in 1978 an open-up policy was established. In this period, the first generation of highly successful entrepreneurs was blooming. Later in 1991 the second chairman of China Deng Xiaoping declared the province of Guangdong as the most pro-capitalist province, encouraging international investment through fewer restrictions. Zhang Yin took these changes as opportunities because the exports were growing and products needed paperboard to be transported. This inspired Zhang Yin to launch her company in Hong Kong, to search more scrap paper in the United States and to establish Nine Dragons Paper Holdings in Guangdong.
For Beatriz Canedo Patiño, the story was similar in its essence. Organizations such as PETA (People for the Ethical Treatment of Animals) supported big campaigns strongly criticising the use of fur in the fashion industry. This represented the right time for her to build her brand in this industry, offering an alternative as delicate, soft and luxurious as fur. Campaigns to promote the use of natural fibers have been encouraged by the United Nations and highly promoted worldwide since 2010 and BCP has been part of these promotions.
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3. Forward sight helps them build sustainable development.
To see the opportunities and possibilities that others cannot see is a basic requirement for entrepreneurs. It is hard to see the direct and immediate results of every decision they make. Nevertheless, within the period of twenty to thirty years, we could find how these female entrepreneurs used their business sensibility to gain sustainable long-term development, which we call “forward sight”.
For Anita Roddick‟s The Body Shop, the coincidences such as painting the walls of her shop in green colour, handwritten labels and recycling containers, would have not been considered opportunities but limitations if she did not foresee how all these small chances would make her company succeed. Moreover, these coincidences would have been diluted when issues such as fair trade and environmental responsibility were put on scene.
The shortage of sources for high quality paper as well as the increasing trend of exports in China provided great opportunities for Zhang Yin to start up and to develop her business. In this context, Zhang Ying established her first firm in Hong Kong to collect scrap paper and she was one of the first entrepreneurs selling it to China‟s market. With her projection of market growth she could foresee that Hong Kong would not provide enough sources, and then she moved to the United States. Later she expanded her business to paperboard production since she predicted the blooming demand of packing to export Chinese goods. Nowadays, Zhang Yin owns a conglomerate of firms which mainly focus on sourcing, recycling and processing paper.
For Beatriz Canedo Patiño, her studies in France opened her mind and there she learned the value and quality of camelid fibers, as well as its transformation to fabric and multiple uses. When she concluded her studies she saw the potential in this material and possibilities to open her own business. With her business sensibility, she went through several changes that allowed her to reach international expansion.
4. Action is the only way to turn an idea into reality.
Numerous bright ideas are born everyday but only a few become businesses. Through actions and good use of resources, these ladies made their ideas come true. During our readings, a series of proofs emerged on how they emphasize the importance of actions. We find that one essential condition,
45 possibly the most vital one, is taking action. Making things work and transforming an idea into reality is what makes the difference between an entrepreneur and a dreamer.
From Anita Roddick we could know that she was an idealist, a rebel, a dreamer, coming up with romantic ideas. While her husband, Gordon Roddick was a real doer, a businessman to contribute to the outstanding growth of The Body Shop. They used to be the perfect combination from idea to actions.
In the case of Zhang Yin, she is pragmatic, always taking actions and making things happen. After quitted from a decent job as an accountant, she ventured her business idea in several locations: from Shenzhen to Hong Kong, from Hong Kong to the United States and then, back to China mainland. Every step has been marked by her decisive actions to construct Nine Dragons Paper Holdings as a well-planned and sustainable business.
For Beatriz Canedo Patiño, once decided to open her business after studies, she moved from California to New York, starting to design at her apartment. By displaying her works to different agents, her sales began to grow. Beatriz immediately took actions to establish her own company and then to open her own atelier and showroom. With the increase of market demand, she set a new company in Bolivia for better access to materials and skilled workforce. Her distinguished selling and marketing skills are reflected in her efforts to build this international renowned brand.
5. Their feminine traits are reflected in their businesses.
The businesses established by these female entrepreneurs have been partly influenced by their feminine side, although they do not share the same traits. It somehow has given us a sense of human touch. In this part, we are intended to present what kind of influence their feminine characteristics bring to their businesses. We cannot conclude that the achievements of these companies are the result of having females on top.
As of Anita Roddick, her romantic vision led to an authentic concern towards environmental aspects, fair trade and sustainable development of suppliers in different latitudes. Her vision of building up a community where the company would not solely search for profits but would contribute to the society, getting involved and participating actively was one of her main commitments. For Anita Roddick, it was important that a company provide community service and welfare instead of investing in “empty”
46 marketing campaigns. Furthermore, her campaign with the doll Ruby had the objective to make all women feel beautiful, despite their shapes and ages, emphasizing the message that if you feel wonderful, you will look wonderful. We think that these are examples of female traits linked to a business.
As the mother of two sons, Zhang Yin had to split her time between mother and businesswoman. From her interviews and statements we could tell that she demonstrates a tough temper. For instance in one of her interviews she stated that „no one would give you any privilege just because you are a woman; you have to work as hard as a man‟. In one occasion she commented that sometimes her sons have been closer to their nannies instead of her. She has to accept it since she could not give more time to take care of every detail. Zhang Yin added that she would intervene if something really important occurs (translated from the KU 6 video online interview program by the author, Wang, http://v.ku6.com/show/kRCPpSvNW32bElF-.html). Actually we find quite few female traits from her; she has been running her business as firmly and pragmatically as a “man”.
For Beatriz Canedo Patiño, her passion for art, beauty and elegance is presented in every garment she designs. We can tell that she could be perceived as a designer who understands what a woman wants when it comes to elegant clothing because she knows how to sculpt female‟s shapes. As she affirmed, she wants to capture female‟s spirit through sensual, sophisticated and classic outfits in fabrics that are a caress for the skin. Furthermore, we would track several female traits from her interest in building up a team at work, considering her employees as assets and valuing their contribution and ideas.
Concluding comments on the three cases
As we were approaching more and having a profound understanding of each one we find that these female entrepreneurs have to overcome a series of challenges and face several shifts to write a marvellous story; with shared strong motivations, decisive actions, forward sights and excellent business sensibility. However, these findings could not cover all the most important conditions for female entrepreneurs to start up their businesses, such as financing, the influence of previous working experience, networking, risk-taking and especially the capability to deal with women‟s social pressures. These aspects will be further developed through the dialogues with several new female start-ups, in the next chapter.
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5. The narratives of female entrepreneurs: Blooming buds
Once we got fascinated with those bloomed orchids with perfect balance of shapes and colours, we become more curious about the conditions for those charming orchids to grow. So naturally we put our attention on blooming buds to find out more. We think the three famous cases are like orchids on its plenitude and when we study these three cases, it was hard for us to explore enough about the conditions during the start-up stages. Therefore we decide to conduct face-to-face dialogues with more female entrepreneurs during the early stage of their businesses. We perceive these female entrepreneurs as orchids in bud, just about blooming and showing their colours to the sun. In this chapter, we will present stories of three Swedish female entrepreneurs and illustrate our findings achieved from these conversations.
5.1 Sofia Hagelin
Sofia Hagelin was born in Stockholm and has lived in several places during her childhood, including Amsterdam, Frankfurt, Ljungby and Vimmerby. In 1995, she was granted a MBA degree from Stockholm School of Economics. After working for a leading media group in Northern Europe for a few years, she was authorized to start up Resfeber within the media group in 1998 and she had worked with this company until 2008. Resfeber is currently the Scandinavia's fifth-largest travel agency, after Wing, Leisure Travel, Kuoni and Sol- travel. In 2008, Sofia quitted from Resfeber and started her own company denominated Heart of Lovikka. Before she opened her own business, Sofia got married and is mother of three children.
Heart of Lovikka
Heart of Lovikka, started in 2008, is a brand of women‟s fashion inspired by the ancient knitting tradition of Lovikka, a village located in Northern Sweden, within the Arctic Circle. Lovikka is renowned within Sweden by its warm and soft mittens. Heart of Lovikka designs modern garments exquisitely decorated with embroidery and braid details that represent the essence of Lovikka in high quality materials.
1. Artistic temperament “I want to create something beautiful that I can touch.”
In our dialogue, Sofia mentioned that although she is a business educated woman, she has always
48 dreamed about something related to arts. She loves singing, designing, sewing and creating beautiful things by herself.
After graduation from Stockholm School of Economics, Sofia worked for Resfeber for almost 10 years. When she reflected this experience with us, she said she worked very hard at that time. She had a lot of responsibilities and she really enjoyed her job. When asked why she stayed such a long time in this company before she started up her own business, she said it was partly because she got married and gave birth to three children. After her third child was born, Sofia was kind of tired of big organizations and she wanted to create something by herself, something beautiful and some real products that she can touch, with her own money.
Sofia‟s grandmother, Märta Vilhelmina Holma was from Lovikka. In 2007, the only Lovikka mitten knitting factory went bankrupt. Most of knitting ladies got retired and there have been rarely young girls fond of this traditional handicraft. Sofia visits this village almost every year and when she got this news, she “felt a strong urge to do something, to make sure the century old knitting tradition doesn‟t die out.” Then she had the idea to blend the Swedish knitting tradition with contemporary fashion, to create beautiful garments with a strong heritage. So Heart of Lovikka was born.
2. “Positive” conditions “Everyone told me that 2008 was the worst time to start up (my own company) because of the worldwide financial crisis, while I was determined to do it at that tough time.”
During our dialogue, we were always impressed by her positive attitude about her business and her life. When she started her business in 2008, everyone was talking about the financial crisis all over the world and almost no companies in the fashion industry were willing to buy a new brand, according to Sofia. But she was so convinced to work on it. “If I can manage now, things can only get great.”
As a mother of three children, Sofia does not feel any trouble with taking care of her family. “In the morning, I send them to school; and after work, my husband takes them home. When they get sick or something unexpected happened, we take turns to take care of them. That‟s it.” She told us this in an easy and humorous way. During our talk, Sofia demonstrated gratitude to her family members, her supportive husband, her mother, and her father-in-law. Sofia thinks that if you get such support from your family, to balance between private life and business is not as tough as people imagine.
Talking about her business‟ financing issues, Sofia admitted that at the very beginning, it was quite a
49 tough situation for her family. “We don‟t travel. We don‟t eat out. I wear my own clothes with my brand.” But Sofia said that she would not put her house for mortgage to raise money for business purposes. “Usually I don‟t think about risks. The worst thing I can imagine is that I lose thousands of kronor and get back to work for others. It‟s not the end of the world. At least I tried.” The good news is that now is the third season for Heart of Lovikka and the company is growing at a slow but stable pace. The profit is getting better and the third year will be the turning point for her company, in her eyes. There are several agencies trying to make business with Heart of Lovikka and Sofia is selecting her clients very carefully. She hopes to manage her business in a sustainable way rather than at a fast growing speed.
3. Network of fun “I will never miss the poker game. So much fun! ”
Transferred from an on-line travel agency to a fashion company, Sofia said that she had no social network in the fashion industry at the very beginning. Yet it does not mean that social network is not important. Sofia worked hard to build her network from scratch. She obtained information on relevant people in this industry from fashion magazines and tried to invite them to have a dinner or just a coffee, asking them for advice and opinions about her business. Now she works with some senior and experienced consultants and specialists. Additionally, she thinks she obtained a lot of help from other entrepreneurs owning similar businesses. They encourage and support each other in many ways. They share their opinions and inspirations, helping each other in business, for example, to find new retailers. During our talk, Sofia showed us her nice boots, which are designed by another female-started company that works on maintaining Swedish traditions in a fashionable way as well.
To work with passionate people is another fun part of her business career. Now Sofia is working with two designers and she also designs by herself. Talking about her designers, Sofia told us she shares the same passion with them. One of her designers is a girl who just graduated from school and their friend in common introduced each other. Just after the first dinner, the girl immediately called her because she could not wait to communicate her new ideas with Sofia. Now they are cooperating very well. With the gradual development of her business, Sofia is also considering to hire more people to work for her company, as she said, the third year will be the turning point in many ways.
While her business is growing, Sofia has been developing some contacts with marketing and sales
50 agencies. Sofia said that she is learning how to work with them now. This will be a new network for her business. She wants to focus on one market at a time and currently she is concentrating on an agency from Japan while agencies from Norway, Switzerland and Germany are still under consideration.
Interestingly, Sofia shared with us another network full of fun – PokerFace, a society in Stockholm constituted by almost forty female entrepreneurs. These female entrepreneurs gather on Thursday nights every three months to play poker games and the winner will get a huge trophy as a prize (soon we saw this trophy at the office of Jeanette Gorosch, another interviewee of us and the founder of Nannynu! ). Sofia said that this is a very good network for those female entrepreneurs. They help each other in every possible way and also, they get so much fun from it. Sofia told us that she would never miss the poker game.
4. Story-teller and good seller “You are not only selling your products; you are also selling the stories.”
As a new started company, Sofia thinks that no matter how wonderful your business idea and your business concepts are, selling is always the most important thing. Sofia stated that selling is not only about your products, but also about the stories behind your products. As an entrepreneur, she or he must be both a story-teller and a good seller. Talking about her original business idea, Sofia said “I feel someone is calling me, maybe my grandmother in heaven.” From her company‟s website, we could read many stories about her grandmother as well as the story of the village of Lovikka. We believe that such stories deliver strong messages about her brand. Now, Victoria, Crown Princess of Sweden and the rising political star Elisabeth Strand are wearing her clothes in public occasions. Sofia is very excited and proud of her brand being known by the public.
5. Working for others versus working for yourself “I am doing the right thing.”
Back to 1995 when Sofia graduated from Stockholm School of Economics, she said that opening her own company was not even an option. She thinks that there were two reasons: one was that she had no good business idea; another was that at that time, she had “nobody to look up to.” Fifteen years ago, there were rarely people talking about entrepreneurship, not even female entrepreneurship. The timing is a key factor for her business to start. Although she already fell in love with Lovikka knitting in 1995, she did not think this love would form a business idea in the future. When more and more people
51 discussing the lost Swedish traditions, Sofia realized that she had to do something to save and keep the traditions that she loves.
After working for herself for three years, Sofia said that she could not imagine to go back to work for others. The amazing part of operating her own business is to see the results at once. She feels that she is doing the right thing. Back to the days when she was employed by others, she said that she was really devoted to her work but she did not feel she was doing the right thing all the time, although she admitted that there were a lot of lessons she learned from her previous working experience that could be applied in her enterprise. Now the freedom to make decisions is a strong motivation for the business development.
5.2 Linda Krondahl
Linda Krondahl has a M.Sc. degree in chemical engineering, specializing in technology management, from KTH Royal Institute of Technology. During 2000 to 2008, she had been working as a management consultant at a world‟s top management consulting company. After eight years of management consulting experience with organizational development and project leadership in various industries, Linda invented a new portable solar lamp with charging functionality- HiLight, and opened her own company- HiNation.
HiNation
HiNation was founded by Linda Krondahl in 2008. The company‟s main product is HiLight, a portable 100% solar lamp and charger. It is adapted to suit users with lighting and charging needs, (mobile phone, MP3 or similar) for customers lacking electricity at home, on trips, camping and so on. Now the market covers European countries, the Asian market and some African nations.
1. From consultant to entrepreneur “Making money and saving the world.”
Linda had worked in one of the top management consulting companies in the world for eight years. Although highly paid by this company, Linda felt that all that she had done was to help the company to grow bigger and she did not see the results of her own efforts. She said while her colleagues were buying or investing in nice houses or cars, she was just saving but not intended to open a company with this money at that time. In 2008, she decided to quit her job and create her own business. When she 52 resigned, she had no idea about the type of business or what kind of company she wanted to establish. Nonetheless, she was sure about one thing: she wanted to make money and save the world at the same time. This became her original motivation and inspired her to search and explore.
Linda said that just a few days ago (before our dialogue), she was told by one of their testers, a teacher in northern Tanzania that at a boarding school of Africa, twenty-four kids died in a fire produced by candles as light supply. She was very sad when she told us this story and she believes that her products would bring great convenience and help improve the quality of life in countries where there is not enough electricity but are plenty of sunshine. It is a big encouragement for her to see that her product is changing people‟s life in a positive way.
2. The invention of the product “I thought there would be something there (the current solar energy market) but when I looked around, there was nothing as I expected.”
As a chemical engineer, she had thought for a long time on the solar cells, a technique that she is convinced has a great future and is friendly to the environment. Linda tried to find such products to work with but unfortunately, she could not find anything as she expected. By her research and analysis, she found that the solar lights that previously existed in the market had often been dependent on a cable between the solar cell and the lamp. Additionally, many were still in the lead-acid batteries stage. Therefore, she decided to invent a new product by herself. That is how the product- HiLight was born.
Linda Krondahl shows her consideration about every detail in the design of the product. HiLight is a rugged, easy-to-use, portable device. It is made of a few materials, which are easy to separate for recycling. Water and dust proof built-in solar cells make it ideal when used in tough environments such as in the desert or under the heavy rain. The LED lights are proved as a good source of light as well. The lamp can charge mobile phones and devices via USB connection. Overall, this product has a long life of at least three years with daily use, which exceeds many competitors' products.
3. Unexpected customer groups “Everyone could be our customer.”
Linda started searching for consumers from on-line sales and she thinks that it is a great trial especially when you are not clear who will be your target customer group. Linda firstly thought that outdoor enthusiasts would become her main clients. Nonetheless, when she got in touch with her on-line
53 purchasers, she found some surprising customers which were totally beyond her expectations. There are some business people buying her products since sometimes they have business trips to districts where there is a lack of electricity. Additionally, some people buying her products send them as a present to their friends in Africa, where there are many mobile phone users but no enough electricity access.
Such information inspired Linda and she made further research about those markets where there is lack of electricity. During her research, Linda learned more about the world power supply in general. She found that 1,7 billion people, about 25% of the world's population, lack access to electricity in our planet. Instead, they get light from open fires, kerosene lamps or battery flash lights. The results are unhealthy emissions, affecting the health of people locally and the environment globally, as well as the risk related to fires in areas where water is often a scarce resource. Linda found another interesting phenomenon in Africa that although most people have mobile phones, they have to pay around 8 SEK to charge their phones each time. This cost consists of 2.5 SEK for the person who collects the phones from the village and then walks for almost four hours to reach the nearest charger station, and another 2 to 3 SEK to pay the charging fee. The worst case could be 20 SEK if it happens in remote areas.
Initially, Linda‟s business focus was on the outdoor market, where customers have enough purchasing power to afford a high-quality product. Currently, Linda thinks her final target is to reach part of the 1,7 billion people who do not have access to electricity around the world. Half a year ago, Linda and her team started testing her products in Africa, in countries such as Tanzania and Zambia. The test was very successful and they already see people using their products to make money by charging mobile phones for others. Nowadays, besides their local agencies in Africa, some non-government organizations and mobile phone operators in those countries are positively cooperating with HiNation to discuss the possibility to work together.
4. Price Challenge “We have to find the people willing to pay and have the ability to pay.”
For Linda and her company, the biggest challenge is the price of their product. Although Linda believes that her product has a good quality and deserves 2000 SEK, it is not easy to find a large volume of customers who are willing to pay and have the possibility to pay. In Western countries, the
54 outdoor enthusiasts can afford the product but most of them have access to the electricity and this is a reason why the sales volume could not raise very fast. Even though there is a lack of electricity in African countries, 2000 SEK is still a luxurious price for them. The price of the product in some African countries is not as high as in European countries, since neither VAT nor import taxes are charged on solar cell products. Nevertheless, the price is still a challenge for Linda to overcome if she wants to expand the market in that region.
Currently, cutting down the price and finding the right customers seems to be the feasible ways to raise the sales volume. Linda used to think about producing her product in emerging countries such as China, to reduce the cost. However, she still chooses a Swedish company with production in Poland to start the manufacture considering the technology and knowledge rights involved in her product. “We are not big enough to protect ourselves, so we have to be careful”, Linda said.
5. A tomboy in the male-dominant industry “I see more positive benefits as female, rather than negative effects.”
Talking about her business in this male-dominant industry, Linda joked herself as a tomboy. She thinks that as entrepreneurs, females have more advantages than males since women are more responsible, careful and considerate about their businesses. In her eyes, guys usually love big numbers and big companies, just like they are fond of big houses and big cars, which is not very realistic when you just start up a business. She told us that the energy industry is definitely dominant by males, which is something good for her since “maybe my potential clients or investors have already seen twenty guys and then they see me as a girl, I will be easily remembered and hard to forget.”
Besides, Linda talked about her working experience as a management consultant and she thinks that she considerably benefits from it. Nevertheless, since big companies are better structured rather than efficient and efficiency is very important for start up businesses, Linda has to learn everything from scratch, about production, sales and so on. She told us that when you operate your own business, persistence is extremely important. Sometimes, it will take longer time and more money than you expected and “you have to believe in yourself and never give up.”
5.3 Jeanette Gorosch
Jeanette Gorosch worked in the professional development department at a top management
55 consulting company in charge of consultant training. Jeanette started her entrepreneurial journey with a business in the field of IT; later she decided to set Nannynu! to provide babysitting services for modern families. Jeanette used to work as a babysitter when she was younger and this working experience helped her to develop this business idea. She met Therese Gustafsson, her colleague in the same department of the consulting company and joined Nannynu! since November 2008, one year after the company‟s foundation.
Nannynu!
Nannynu! was established in October 2007 in Stockholm to offer babysitting services with reliability and responsibility. The company started operations with Jeanette as the CEO for the first two years. Therese worked as an account manager for a year and she was appointed as a CEO for another year. Later they decided to assume the positions of Co-CEO for better organization. Nowadays, Nannynu! has operations in Stockholm and Gothenburg. They are currently considering expanding their business to Malmö, Uppsala and in the future, to develop international markets.
1. Working hard and enjoying it “Everything is more or less new for everyone but it also brings a lot of obstacles that you have to go through.”
Therese indicated that big companies have their own rules and procedures on how things should be done. After working at this top consulting firm, she stated that it takes time to make your ideas work and it needs approval at different levels within the organization. As a contrast, working at a small company would give her the „chance to influence and be part of something that was growing‟. She told us that „you think about something in the morning and the afternoon you have it‟ as an illustration of how changes are put into practice. New challenges are exciting because there is no fixed solution or a single way of going through them.
To carry on a business idea and see it grow, a strong motivation is necessary; Therese added that „you need to have something that you know about or that you extremely care for; that makes things easier‟ because „it demands a lot of efforts and time‟. Furthermore, „you need to be eager and stubborn; don‟t give up because you will meet many obstacles‟; but it also has to do with „the support from people around you‟, she told us. For Jeanette, her parents have been very supportive and she has built a network of specialists who provide advice to her business.
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2. A critical moment “We started half a year before (2010 Swedish General Elections) to plan and develop different strategies about what would happen.”
The Swedish General Elections of 2010 represented a determinant point for Nannynu! . The company applies a VAT deduction allowing clients to pay 50% of the price of the services and the government cover the other 50%. This scheme was favourable for Nannynu! since it allowed the firm to attract more customers. In this context, the Swedish Social Democratic Party (Socialdemokraterna - Red) purposed to remove such scheme while the Liberal People‟s Party (Folkpartiet liberaterna - Blue) was in favour of maintain it. Therefore, a big question was in the air: who will win the elections? the Blue Party or the Red Party? Therese affirmed that they planned ahead about what to do in case the circumstances would change. The results of the general elections represented a positive condition for the firm to grow. Therese indicated that „we have good times in front of us.‟ Therefore, the company has another four years to develop their business and prepare for changes.
3. More challenges in a booming market “We want to see how long it would take to start up in other cities.”
Nannynu! is currently dealing with challenges that are decisive for its expansion. The company started operating in Gothenburg since February 2011. Therese shared with us that this is a different market for Nannynu! ; Gothenburg is smaller than Stockholm, with fewer people moved from other cities and fewer double-salary families. Given this, families have the possibility to receive support from their relatives to look after their children. Nannynu! did not open an office in Gothemburg because they do not have a big market yet. They decided to assign personnel to travel back and forth to conduct daily operations, do surveys to evaluate if they need to establish an office in that location.
Another challenge is how to have enough babysitters to meet the blooming demand. This is a key issue if the company grows faster. Therese told us that the company ensures that their personnel is aware of how significant their role is and the responsibility that their work demands, because they are taking care of children, the most important members for a family. Furthermore, Nannynu! wants to ensure that families feel comfortable with the babysitters. Additionally, finding a match between them is a process that takes time. 4. A new paradigm about home services “My generation is more like seeing it as a positive thing to have someone taking care of my 57 kids instead of me being stressed.”
Therese affirmed in our dialogue that there is a shift in the way of thinking about services like the one offered by Nannynu! amongst younger families. She indicated that for instance her parent‟s generation has been more oriented towards looking after their children by themselves or by close relatives while her generation is more open to employ services of babysitting, cleaning and other related home solutions. Therese stated that Swedes who may request their service and benefit from the deduction are mainly in Stockholm, Gothenburg, South Sweden and Uppsala and these markets represent a great opportunity to expand Nannynu!
To ensure a suitable match between the babysitter and the family, Nannynu! meets the customers to know about their requirements and specific needs. Next, the company determines which babysitter would be more suitable to the family; the customer receives videos of introduction of the selected babysitters regarding their previous experience. If there is a match, the babysitter starts working with the family as requested. Families have one week guarantee; if they are not satisfied within this period, Nannynu! searches for another one without charging fees. The company communicates their employees that their work is delicate since they are taking care of children; they become a part of the family and this represents a good start to gather working experience. This process works very well since only one family out of four hundred has requested this guarantee.
Nannynu! has not been using advertising campaigns to reach its customers; instead, current clients have been recommending its service to their contacts and this way of marketing has been effective. This is a great achievement for Nannynu! since it reflects their clients‟ satisfaction.
5. More than a nanny job “We want to give our babysitters something for their future.”
Babysitters at Nannynu! attend a training that grants a nanny certification as well as CPR (cardiopulmonary resurrection) training. This process runs very well and is suitable for their business model; nonetheless, the company is committed to deliver more for their employees. Therese indicated that the group age of babysitters is ranged from 18 to 25 years old and to most of them, it is their first job; at this stage of life a series of questions and uncertainties come up in regard of life, career plans and work expectations. In order to give some guidance and to help build their future, Nannynu! is planning to create a platform where employees will be able to access online information about career
58 orientation, CV elaboration, interview tips and other topics that are useful and interesting. 6. Women on top “Most companies are focused on „we have to have a female leader‟ but they should focus for the right person for the job.”
Therese affirmed that companies should focus on the right person rather than the gender; the fact that a female assumes a leadership position should be based on her capabilities instead of considering a quota, then this decision would be more genuine.
Female entrepreneurship is more common nowadays and this fact makes women think that this is certainly a feasible alternative; therefore examples of women who opened their businesses and reached success are surely inspiring others. Therese added that these examples demonstrate that the female role should be balanced between spending time at home with the family and the fulfilment of their professional and personal aspirations. Furthermore, Therese thinks that female entrepreneurs are blooming nowadays in Sweden, and this is more than great news. 7. Infinite amount of Optimism “Our future will be extremely good!”
Jeanette and Therese are very optimistic about the future of Nannynu! „I see great opportunities ahead‟, Therese said. „The need of these services is only growing; the number of families is increasing, so I see we have quite a good potential.‟ Furthermore, it is expected that once the company advertises its service, the demand will grow in Stockholm and it will expand to other cities. Nannynu! has been conceived to be not only a company that provides babysitting service but also offers additional products and services that are related to children care. Furthermore, the company will subscribe agreements with institutions to engage and actively participate in community issues.
Nowadays the company has been employing more people, increasing its number of staff five times since autumn 2010. Therese affirms that they have a structured plan of growing and every person has a goal to achieve. Their accomplishment is continuously evaluated; therefore the future will be nothing else but bright.
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5.4 Findings of the three dialogues
In this section we will analyze certain aspects about condition-building that emerge from those start-ups established by these three new female entrepreneurs: Sofia Hagelin, Linda Krondahl and Jeanette Gorosch. Additionally, we will also present our interpretation of the key conditions that we find they have in common.
1. They know how to work with people around.
It is not necessary for a female entrepreneur to be aware of everything about her business. To know how to work with people around in order to push the business forward is much more important.
Taking Sofia Hagelin, the founder of Heart of Lovikka as an example, she worked ten years in a giant media group, including five years at an on-line travel agency; she told us that she had no experience in the women‟s fashion industry. And since she did not receive any formal education or systematic training about design and clothes production, we deduct that she did not gather enough knowledge about design at the beginning. When she was transferred from the on-line travel agency to the female‟s fashion industry, she did not have enough resources that were thought necessary to start up a business; for instance, the social network and working experience in this industry. Nonetheless, when we take a closer look at her business, it seems it does not lack any functions that a company may need. In our previous story, we described how she builds connections with experts and designers and how she works with them.
Not only Sofia Hagelin, the female entrepreneurs that we met have their own different approaches to work with people. Linda Krondahl, the founder of HiNation, is working with her business partner Kristina Linhardt, who used be to be her mentor in the project PreIQube, and later she joined HiNation. Linda told us that when she ended her business consultant career and entered the solar energy industry, she was almost blind about production and sales, although she had experience to work in this industry and she studied chemistry. Jeanette Gorosch, after establishing her company Nannynu! , she appointed Therese Gustafsson as Co-CEO, who used to be colleague at her previous employer.
All these female entrepreneurs started their ventures alone, although they are not working on their own anymore. Now they cooperate and work with various people to develop their businesses. No one could expect that female entrepreneurs know everything about their business and related industries. Those talented female entrepreneurs definitely know how to cope with people to build a well-round
60 business network.
2. They have excellent business sensibility.
In our previous case studies about Anita Roddick, Zhang Yin and Beatriz Canedo Patiño, since we have no chance to explore the original stage of starting up, we see more results than processes. In our writings, we used words like “the right time” and “long-term perspective” to describe the conditions and personal qualities of those female entrepreneurs. After conducting the four dialogues with the rising female entrepreneurs, we obtained another approach to perceive this issue. We think their excellent business sensibility is the basis to catch “the right time” and to gain “long-term perspective”.
As Sofia said, she has known Lovikka, the small village with Swedish tradition since she was a child. During almost thirty years of her life, Lovikka has been just the name of a charming village, rather than a business idea. While in recent years, with more people talking about traditions, dressing clothes with cultural heritage and old tastes, she could connect her beloved Lovikka village with fashionable clothes and finally constituted a business idea. She is catching “the right time” when people miss traditions. Without this business sensibility, it is not realistic to get a business idea from dreams.
Before our talks, we searched information about Linda Krondahl and we were quite impressed by this lady who has created and currently is selling a portable solar charger to countries in Africa where there is enough sunshine but without enough accesses to electricity. We assumed that Linda must be a very smart lady who found the needs there and met them later. Surprisingly, Linda told us that at the beginning of her business, she never thought that Africa could become one of her markets. She started her business by on-line selling and then she tried to get in touch with her customers to find what she could improve for her product. One of her clients told her that he bought this product for a friend in Africa as a gift since it is not convenient for him to charge his phone in a vast desert. Linda was quite surprised by the user in Africa and then she started to search information about African markets. Soon, she started doing business in Tanzania. We guess most readers would think that Linda Krondahl has a “long-term perspective” or an “international business vision” to sell her products to Africa. Such comments are true although we want to argue that at the beginning of a business, such excellent qualities come from business sensibility.
Objectively saying, Jeanette‟s idea to provide nannies for families is not a business idea that is appealing enough to attract our eyes at the first beginning. Perhaps most people think that this idea is common 61 and not fresh at all. Yet Jeanette‟s business sensibility helped her find a blue ocean with numerous opportunities in this “common and not fresh” business. More working families are facing the universal problem of taking care of their babies. Jeanette found exactly a smart way to solve the problem. Her business sensibility also lies in that she found the Swedish government has related policies to support working families, which largely cut down the cost for a working family to hire a nanny from Jeanette‟s company. Now she is expanding her business to more locations and planning to develop it in a broader range of children-related services.
3. “Freedom”, “the right to make decisions” and “see the results” are the three most common words when they were talking about the motivations to start up a business.
Based on privacy consideration, it is not appropriate for us to reveal their previous employers. But we can take the full responsibility to say that perhaps they are the most desirable companies that every college student is willing to work for after graduation. They had nice positions in these most desirable companies, enjoyed nice salary from their work, and also had high possibilities to be promoted. In one word, “tired of big companies” seems not an enough excuse for them to quit a “perfect job” and start fresh.
When we try to figure out their motivations to start up, we found that “freedom”, “the right to make decisions” and “see the results” are the three most common words mentioned by them. Sofia said it is fantastic to see her ideas to become real products immediately and she could not imagine to go back to work for others. Linda said when she realized what she had done is to help a big company make more money and grow bigger; she decided to do something meaningful to the world. Then she opened her own business and chose to make decisions by herself. “Making money and saving the world” became her vision to move on. For Jeanette, she really enjoys the freedom and the efficiency when she can do business in her way. “You make the decision in the morning, you can see the results in the afternoon”, Jeanette‟s business partner Therese told us with excitement.
4. They do benefit from previous working experience, but not much.
We asked every interviewee to talk about how they benefit from their previous working experiences. From our conversations, we noticed that these female entrepreneurs all admit that they benefit from previous working experiences but they did not benefit much. We cannot simply conclude that previous working experience is not necessary for female entrepreneurs to start up since we assumed that
62 perhaps it has an invisible influence about the ways they think and the ways they act. To confirm our presumption, we asked our interviewees the same question: if time goes back to the year when they graduate, would they choose to work for others or to start up their business (if working experience is not that important)? They all answered that they would choose to work for others, not because that working experience is very important, but because back in the nineties and even the beginning of 21st century, here in Sweden there was almost nobody talking about entrepreneurship and even less about female entrepreneurs. For them, when they graduated from university, to be a female entrepreneur was not even “an option” or at that time, they had “nobody to look up”. Such answers could not help us to measure the importance of working experience, but this gives us another point of view to see female entrepreneurship as a social phenomenon in different times.
5. They are never constrained by social pressures.
Our society used to exert more social pressures on females (compared to males). Although great advancement was gained by social feminist activities for the last few decades, there are still some constraints for females to enjoy the equal opportunities in social life. To be a good wife and a good mother is no more than the only standard to measure achievements of a female nowadays but its influence will not disappear for a long run. During our previous researches, we constantly read information about the social pressures that females face when they want to start up a business. Therefore during our talks, we carefully explored their perspectives about this topic.
Perhaps Sofia is the best choice to talk about females‟ social roles. She is the mother of three children. When she started her business in 2008, her three children were respectively one, three and five years old. To take care of a family may be the main responsibility for some women, but not for Sofia. Quitted from her previous job and determined to do “something beautiful that she can touch”, Sofia made the decision to give the first shot. Like most people, we assume it must be a tough decision. But she told us that it was just the best time to start up since once started, maybe there will be limited time for her to slow down her business and give birth to her babies. The role of wife and mother of three children did not stop her steps on the way to be a female entrepreneur. Before we conducted our dialogues, we presumed that females‟ social roles and pressures could be a big challenge for them to start up. While for those determined females who have a strong desire to open their own businesses, it seems that nothing will stand in the way.
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6. They all present passion, persistence, determination and other excellent qualities shared by successful people, not only business elites or entrepreneurs.
Many people are curious of female entrepreneurs‟ personalities or at least personal qualities, so do we. We know that it is not easy to objectively analyze their personalities or qualities because it involves too much personal interpretation. Nevertheless, we would like to share our observations and studies about our interviewees.
We think “passion” is the best word to describe the most important impression when we met them and when we reflected about our dialogues. Talking about the future of their businesses, everyone became excited to tell us their bright vision and prospects in the long run. It is a passion from within, from their hearts and far beyond the word “confidence”. We could not measure what kind of influence that such passion brought into their business development and we could not imagine without such passion how far their business would move forward.
During our writing, we try our best to use a positive way to state what we find and what we think. At the same time, we try our best to present actual facts reflected by these female entrepreneurs. One of these facts is that it is never easy to be a female entrepreneur. Our interviewees seemed quite positive about their businesses and their efforts but this does not mean that female entrepreneurs have neither troubles nor problems. During our dialogues, almost everyone mentioned the importance of “persistence”. As Linda told us, “It would take longer time and more money that you expected (when you are doing your business)”. Our interviewees told us that some occasions were quite tough and sometimes determined if their businesses would survive or not, like the situation in Jeanette‟s company during the political election (mentioned in the part of Jeanette‟s case). There are so many troubles that could not be predicted or avoided; persistence will play its role when things happen, rather than luck.
It is not possible for us to give a full description about their personal traits. We leave this issue for our readers to consider and to explore.
7. They are not capital consumers or risk chasers.
Capital is one of the most important issues to address during the process of starting up a new business. For new starters, how much money to invest usually means how much risk to take. Worried about the capital and the possible risks, some potential female entrepreneurs are still hesitating whether to start
64 or not. It is known that capital is a necessary condition and risk-taking is a basic quality generally shared by entrepreneurs. During our conversations with these female entrepreneurs, we tried to find out how much capital is needed for their businesses and what kind of risk they are taking.
Sofia Hagelin told us she never thought about risks before, not only because she is always optimistic and looking forward, but also because the biggest risk she could imagine is to lose thousands of Swedish kronor and get back to work for others. Her target for the third year is to achieve the sales that would be the total of the first two years. Without big need for capital, Sofia would like to grow her business at a slow pace rather than expanding her business fast while facing the risk of losing control.
Linda Krondahl‟s business is in the solar energy industry. Linda did not invest a large amount of money to build her own factory in order to produce her products, as most big companies usually do in this industry. She chose a Swedish company to outsource the production process. For one unit product, Linda will pay a little higher price than to produce by herself since she has to pay extra commission for the producing factory. But in this way, Linda does not need to take the risk to build a plant with a huge fixed cost. In the future, when the sales volume reaches a certain level, Linda will consider whether to open her own factory or not. Just before our appointment with her, she told us she just had a meeting with some venture capitalists. Now she is working with some potential investors to share the risk as well as to support the future development for her business.
Jeanette‟s business is to provide services for their customers and usually for such services capital is not a big issue to consider. Her business is expanding now. She just opened the market in Gothenburg in the beginning of this year. To avoid risks and large investments, Jeanette did not establish any office in Gothenburg. Therese told us that now they have one person travelling between Gothenburg and Stockholm. If they predict that market will grow very well, they will decide to invest in a local office. For now, there is no need to take extra risk and hire more local staff.
From the three cases, we could find that those female entrepreneurs are not big capital consumers or risk chasers. On the contrary, they are developing their businesses with realism and delicacy in a sustainable way. We cannot say that to avoid risks and to think in a well-round way is typically a feminine trait. Nevertheless, we would like to share such findings with those females who have the desire to open their businesses and are still concerning about the issues of capital and risk.
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8. They work hard and at the same time, they enjoy their lives.
Quitted from their office work that sometimes demanded more than the usual schedules of nine to five every day, those ladies are enjoying flexible working schedules and the freedom to make decisions. While this does not mean they are working less hours and having more relaxing time. Actually, they are spending more on their businesses and there is no official off-work time. When regarded about more pressures to take and more time to work, they did not deny the fact while they delivered one important message, which is when you are working on something from your interest and you love, you are willing to spare more time and meanwhile, you get fun from working hard. Nevertheless, they are not workaholics who see business as the only task of their lives. Besides work, they are enjoying their fabulous lives.
Sofia, Jeanette and Therese are members of the female entrepreneur association – PokerFace. They gather on Thursday night every three months to play poker and the biggest winner will get the big trophy, which is currently displayed at Jeanette‟s office since she was the champion of the last competition. Sofia told us that the first time they played poker together, nobody knew the rules of the game. Then they decided to challenge themselves and now everyone became an expert and they started to compete. PokerFace is not only an association for fun but also a good network for those female entrepreneurs. Besides the games, they encourage each other and help each other in many ways. Both Sofia and Therese told us that this is the best network they have ever had, both for fun and for business.
9. Our observation of their feminine traits in their businesses and in our talks
During our research, we have never intended to compare male with female entrepreneurs and we never tried to distinguish their feminine traits from general entrepreneurial traits. Yet we do find something interesting and something that we feel could be female related. Here we will show readers our observations without judgment. We feel these traits presented by those female entrepreneurs could be interesting both for our readers and our future research.
Sofia Hagelin loves beautiful things by nature. She loves art, design, singing, as we described before. After getting tired of big companies and invisible service offered on-line, she was strongly determined to create something beautiful that she could touch. We think this is probably a typical feminine thinking. The day that we conducted our talk, she wore all her clothes from her own brand and shoes 66 from another new company who tries to save and keep Swedish tradition in the fashion industry. She was always smiling and playing jokes with us during our dialogue. We had a very relaxed and enjoyable talk with her. We could also feel her feminine traits as a wife and a mother when she talked about her supportive husband and family.
Linda Krondahl told us she is a tomboy. She said when she was a child, she played with the same toys as boys rather than dolls. She is happy that she is a female in a male-dominant industry since this will make her easily remembered by her investors, clients and partners. Linda is engaged and she said she is not planning to have a baby now. Her focus in the near future will be her business. With the background of chemical engineer and previous working experience in management consulting, we could feel that Linda Krondahl is quite serious when she talked about her business. She explained her business in a well structured way to help us understand. She gave us enough time to learn everything we wanted to know about her and her company. During our talk, we could feel her persistence and confidence as a female entrepreneur in a bright industry.
About the two female partners working at the children care industry, we could say their business is definitely full of their feminine traits. They believe that they are absolutely doing a great job in this business. Jeanette started her first company in the IT industry and the reason she quitted is not because she did not do a good job but because she found something more interesting. After she started Nannynu! , she felt that she is doing the right thing and she is really good at it. Since we could not meet her face-to-face, we are not able to give some traits from our observations. But she tried to help us in every possible way. She has been very supportive for our research.
Concluding comments on the three dialogues
When asking the conditions for these female entrepreneurs to start up their businesses, we suppose that they must have numerous answers to share but surprisingly, our interviewees could not give an immediate or direct response. It seems that they never think about what conditions are necessary. To continue our talk, we have to enlighten our interviewees to talk about “social network”, “previous working experience”, “capital”, “risk”, “motivation”, “personal qualities” and other factors that are indicated important in previous academic research.
The results are quite unexpected. Some conditions we presume very important turn out to be not very important, for example, previous working experience. Some conditions we presume necessary before 67 starting a new business turn out to be unnecessary, for example, business network within related industries. Some conditions we seldom think turn out to be extremely important, for example, strong self-motivation. The adventure of our research turns out into a suffering but surprising journey. During this process, we continuously destroy and rebuild, to destroy our stereotypes and to rebuild our fresh understanding about the conditions.
We wish we could provide a recipe to tell those women who have motivations to open their own businesses that “you need this, this and this ingredients to cook a dish named female entrepreneur” so when all the conditions are ready, they could start up. But there is no such a situation. However, this does not mean we failed our research. We do find something important and definitely meaningful. As a female entrepreneur who has the strong motivation to create something that she is always dreaming of, she needs to define the conditions for her individual business and at the same time, devote herself to build these conditions during the process of starting up, instead of preparing all of them before the adventure. Then the world will make the way for those who know where they are going.
In the next chapter we will give a detailed empirical analysis about all the conditions we have studied from previous research and from the six cases presented in our thesis. After that, we will provide our concluding interpretation about the self-conditions for female entrepreneurs to start up.
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6. Conditions that favor female entrepreneurs: The ecosystem of orchids
Having taken a close look at those bloomed orchids and blooming buds, we get a picture of the ecosystem of orchids. As we know, a plant needs water, sunshine, air, soil, fertilizer and room to root, germinate and grow (as illustrated in the figure 4). So what is the ecosystem for female entrepreneurs to start up and to grow a business? In this chapter, we will structure the conditions we find in our empirical research in order to develop our understanding about the interaction amongst them. Furthermore, we will provide our contribution of knowledge by answering our research question. Figure 4 The ecosystem of a plant
Motivation is the seed.
Previous studies argue that dissatisfaction with previous positions and strong sense of self-achievement are the two main sources of motivation to start up a business. We agree with such arguments. For female entrepreneurs, the importance of motivation cannot be over exaggerated. As we know, women are assumed to take the roles as a good wife and a good mother for thousands of years in the history of human being‟s civilization. Without a strong motivation to create their own businesses, female entrepreneurs cannot overcome the stereotypes and prejudices that people hold about women. In this sense, we think motivation is the seed. Without the seed, not does the flower exist.
Certain amount of personal characteristics should be highlighted.
Entrepreneurs‟ personal characteristics have great influence on the type of the business to establish, the strategic and daily business operation; therefore, they will have an impact on the performance of a
69 venture (as illustrated in figure 5). We find there are certain amount of personal characteristics shared by these successful female entrepreneurs, which are astonishing passion, strong determination, hard-working spirit, sensible optimism, and impressive persistence. The importance of these characteristics have also been studied and supported by numerous researchers. Figure 5 The influence of personal characteristics
Creativity has a broad meaning.
The creativity of entrepreneurs does not only lie in the process of creation of a business idea. We believe creativity has a much broader meaning. Previous literature states that creativity could be originated from idea, material, organization, relationship, event, inner and spontaneous creativity. Those activities lead to creativity in business models, daily operations, long-term development strategies, and so on. Therefore, we cannot measure the creating skills of a female entrepreneur only by the creativity of the business idea or one single product or service. In fact, we find in our research that the businesses launched by those females are creative in diverse ways. Given this, we believe that female entrepreneurs could be creative in any function of a business. We have seen in our studies that some female entrepreneurs developed a “creative” business from a “boring” idea with their excellent creating skills. Such ideas are often ignored or unseen by others.
Risk management is more than risk-taking.
Uncertainty demands risk-taking spirit. Therefore it is concluded that risk-taking spirit is a necessity to start up a business. Unfortunately, women are usually assumed to have less risk-taking spirit. Nevertheless, risk management is not only about risk-taking, but also involves risk awareness, risk accepting, risk avoiding, and the interaction among those activities (see figure 6). We think although women are risk averse, they develop better skills to avoid them. Therefore they could build sustainable businesses with their carefulness. On the contrary, males are taking more risks because of their fondness of big numbers or great achievements. To launch a war needs courage while to avoid a war
70 needs wisdom. Likewise, uncertainty demands risk-taking spirit while to reduce uncertainty demands risk-avoiding skills, which is exactly what women are good at. Figure 6 Risk management
Opportunity recognition needs sensibility.
Opportunity recognition does not only exist in the primary stage of starting up a business. Strategy-making and long-term development also rely on the continuous opportunity recognizing skills of entrepreneurs originated from their business sensibility (as illustrated in figure 7). In general, women are thought to be more sensitive to details and subtle changes than men. Yet we cannot simply conclude that females have better business sensibility than males. Business sensibility comes from instincts, business education, environmental influence or related experience. During our exploration, we are impressed by those sustainable businesses built by those smart ladies. We try to indicate that “long hair and short wit” is no longer a good description of girls, and they are changing the world in a more stable way with their excellent business sensibility to the fast changing surroundings. Figure 7 Opportunity recognition
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The influence of previous working experience is hard to measure.
There are different opinions among scholars who try to measure the influence of previous working experience to the business creation. Some argue that previous working experience will benefit the business creation while others state that it brings limitations. After studying those female entrepreneurs in our previous context, we still cannot draw a general conclusion about the influence of it. In this sense, we could argue that there are no necessary connections between previous working experience and business creation process; although we think it partly changes entrepreneurs‟ approaches of thinking and doing, which is hard for us to measure.
Capital requirements highly depend on individuals.
According to previous studies, female entrepreneurs face limited alternatives to get financial support. In our research, we find that capital requirements for new ventures highly depend on the type of business, the industrial background, and the demand for start-ups to expand or develop. For service sector, start-up fund has not become a big issue to address since usually large investment is not necessary. For high-tech sector, although the capital requirement is higher, our interviewees do not perceive it as a gap that cannot be filled since during the developing process of a business, to raise more money is a common problem to solve. In other words, how much money to raise cannot be precisely predicted before starting up. Female entrepreneurs could raise a small amount of money to start and then use diverse channels to seek investment, according to their individual business needs.
Network building is a multilevel task.
Different from the living environment of a plant, in order to survive, female entrepreneurs need to interact with diverse people and organizations. In entrepreneurial companies, a female entrepreneur needs to build a good relationship with her business partners and subordinates. Outside the enterprise, not only does she need to build a sound network with her suppliers and customers, but also does she need to cooperate with all kinds of people and organizations because they all have the possibility to bring potential opportunities for supply or demand. Through our research we find that women have excellent skills to build multilevel networks. In personal lives, women have a well-round thought to take care of family members and deal with the relationship among family, community and society. In business career, women are seen to be good at organizing various resources to build their networks. Furthermore, we find in our dialogues that female entrepreneurs have capabilities to connect their 72 personal networks with business networks. (see figure 8). Figure 8 Networking skills
Condition-building is an interactive and ongoing process
After examining all the most often mentioned conditions by previous studies and by our empirical research, we could give the answer for our research question. We think motivation, entrepreneurial characteristics, creativity, risk management, business sensibility, capital raising and network building are all necessary for female entrepreneurs to start up a business and to make it grow. However, the condition-defining and condition-building work is an interactive and ongoing process, which means conditions could only be defined and obtained by doing. To be precise, we suggest that female entrepreneurs should take actions to define and build the conditions at the same time when they launch their business ideas. After started, female entrepreneurs need to redefine and rebuild those conditions according to the business growth as well as the changing surroundings. (See figure 9) Figure 9 Conclusion of the ecosystem
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7. Comprehensive perspective：Helicopter view of the forest
Till now, we have explored and studied the ecosystem of the orchids in the forest. We want to take a helicopter to look at the forest from a general view in order to gain a broader vision. In this chapter, we will approach female entrepreneurship from a comprehensive perspective to develop an understanding about the interaction and transcendence of social and economic aspects. (See figure 10). Figure 10 Comprehensive perspective on female entrepreneurship
Female Entrepreneurship
Females in Society Female Economy
7.1 Females in our society
1. Females are not equally treated concerning leading positions.
Although gender inequality issues have attracted vast attention worldwide and for several decades, people are making numerous efforts to change the situation among all social aspects, the gender disproportion of leaders in corporations has always been on the spotlight. It is known that female CEOs only represent 3% of Fortune 500 and 15% of top executives in international corporations around the world (Carter & Silva 2010). Considering that women account for almost 40% of the workforce, such percentages are extremely low.
Eagly and Carli (2003) affirm that women deal with biased assessment of their capabilities as leaders, mainly in male dominant context. The research performed by Carter and Silva (2010) indicates that even though women are qualified, holding advanced education degrees, and companies are establishing programs to support female leadership, women in top positions are still rare. A study conducted among graduates of MBA programs of prestigious business schools demonstrates that
74 women lag men at every single career stage. From figure 11 we can find that women stay longer at entry level before they get promoted into managerial positions. It is also evident that women account for much smaller percentage at CEO or senior executive level. Through these findings it is notorious that organizations undervalue and underutilize their female talents; therefore companies need to notice this failure and establish more effective programs to support skilled women to advance their professional path. Figure 11 MBA graduates current jobs
Source: Carter & Silva (2010)
2. Public administration does not pay enough attention to promote female entrepreneurship.
Nowadays entrepreneurship has been considered an answer to social issues such as unemployment and lower economic growth. Countries have been establishing programs to encourage entrepreneurship in order to transform them into start-up nations. For instance, the government of Barack Obama launched a program denominated Start Up America at the beginning of 2011. This program links successful entrepreneurs, corporations and private sector leaders to work together towards encouraging high-growth companies in the United States. Additionally, the United Kingdom also launched Start Up Britain, which is backed with changes in regulations, reliefs on taxation and alternatives to fund access (Schumpeter Column 2011).
Even though governments have established various programs to promote female entrepreneurship, their effectiveness has been questioned. According to Moules (2009), women-owned businesses represent 16% of the 4.7 million companies in the UK, while female participation in high growth-industries is still scarce. One interviewee in this study, Glenda Stone, who co-chairs women‟s enterprise taskforce in the UK, states that this is because female entrepreneurs with higher potential of growth have not received enough support from governments and financial institutions. This situation occurs in the United States as well. Sharon Vosmek, another interviewee, chief executive of Astia, Silicon Valley incubator program for female entrepreneurs, indicates that this could be explained to
75 some extent due to the venture capitalists‟ demographics. Most investors are men and they tend to make their financial decision from „natural investing instincts‟, which is largely influenced by their male-centerd networks. It is tracked that governments are rarely aware of such problems therefore they have not provided effective solutions.
3. Female entrepreneurs are making respectable contribution to our society.
As stated in our previous review, women have not received deserved attention when female contribution and economic growth are debated. From our research, we find that females have demonstrated outstanding performances within organizations and the businesses established by female entrepreneurs have positively influenced our society. Figure 12 illustrates that on average, female CEOs in Finland are practically more profitable than male CEOs. Figure 12 Profitability differences between companies led by women and men (adjusted return on assets; limited companies employing at least 10 persons and operating in Finland in 2003)
Source: Kotiranta, Kovalainen & Rouvinen 2008
Furthermore, Smith, Smith and Verner (2002) elaborated a research among 2,500 Danish firms and it suggests that the proportion of women on top positions brings positive results on performance, and this would depend on their skills and competences. Several studies indicate that female leadership represents an advantage since this style provides more effective results nowadays. Scholars have been suggesting assigning women to determinant positions within companies to move organization towards current social changes.
In regard of social contribution of female entrepreneurs, their approaches to structure their
76 businesses are different. They interact with communities by sharing their organizations with stakeholders through commitment (Brush 1992). Female entrepreneurs apply a cooperative and sustainable way to exert their social impact through community construction, beyond economical growth (profits, tax, employment, etc.). According to Jia, Xiao, Junyan and Zhong (2008, p.3) female entrepreneurs tend to place priority on „interpersonal connections, interdependence, and cooperation‟.
Silverstein and Sayre (2011) indicate that women will reach more achievements by their hard work in regard of the development of education, profession and leadership in the next ten years, and these are fundamental aspects for deep social shifts.
7.2 Female Economy
1. Rising female purchasing power
According to Silverstein and Sayre (2009) potential women consumption market is bigger than China and India together. Their income is expected to grow from US$13 trillion to US$18 trillion in 2014 (see figure 13). Women make most of the expenditure decisions within a family and companies that provide products and services beyond changing their appearance by „making it pink‟ and offer real solutions are more likely to succeed in this growing global market. From this research we can conclude that females are becoming and will continuously be the mainstream of future consumption which represents numerous opportunities for future entrepreneurs who can better understand and meet female tastes. Figure 13 Projected growth of female global income from 2009 to 2014 (in US$ trillion)
Sourece: Siverstain& Saire 2009
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2. Forthcoming opportunities to meet female demand Although we have seen a rapidly rising female purchasing power, the current companies have not well recognized the need to flatter their female customers. The study conducted by Silverstein and Sayre (2009) has collected data from a sample of 120,000 women in 40 different locations and suggests that women are more likely to spend on „food, fitness, beauty, and apparel‟. Additionally, women do not feel satisfied with financial services and health care since available services have not been provided with large consideration of their needs and demands. Moreover, women struggle with time constraints and the balance among work, home and family. Therefore, the need of products and services oriented towards saving time and providing utility are on demand. Silverstein and Sayre (2009) denominate this market trend as “female economy”. The female economy represents unique opportunities for female entrepreneurs to develop innovative and creative solutions for this highly potential market, since female entrepreneurs understand what women need and want given that they have experienced these constraints by themselves. An example of female entrepreneur who makes a good use of such advantage is Joy Vick‟s business which answers environmental and practical issues of disposable nappies (Southon 2010). Vick created a company that provides reliable laundry services for conventional nappies in London with the name of Nappy Ever After. At the beginning she used to bike to offer her services. Nowadays her firm has been growing rapidly, and currently is studying the possibility to develop a franchise. In the future, we believe there will be more and more female entrepreneurs offering related products or services to meet special demands of customers, particularly women.
To conclude this chapter, the helicopter view illustrates a great potential market for female entrepreneurs to establish their sustainable businesses in the forthcoming female economy despite of the current unequal social treatment that females face.
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8. ‘Femesh’ prospect: The journey is not over!
After having explored both micro and macro living environment of orchids, our „virtual‟ journey is over, while we still have obtained additional interpretation that deserves sharing. As we reflect the whole research, we anticipate a bright future for the blossom of female entrepreneurs, which we denominate as „femesh prospect‟. We perceive that „female mesh‟ (short for femesh) is the best expression to describe female, female thinking, female social contribution, and female entrepreneurship. Every female is a mesh, connecting families, communities and societies together under her care; the way that females think is a mesh, taking account of many factors and thinking well around; the social network that females establish is a mesh, building a bridge between personal contacts and business relationship; the business that females create is a mesh, integrating widespread resources and meeting particular demands. All those excellent qualities and skills are highly demanded in the rapidly shifting business world. Therefore we strongly believe our female entrepreneurs have the capability and power to reshape the future world!
Together with us, we suggest pending studies target the following topics:
1. Globally quantitative data collection about the economic contribution from female entrepreneurs.
2. To cover the aborted female-started business cases, in order to derive some lessons or find out the limitations.
3. Solutions to promote female entrepreneurship internationally, both in quantity and quality.
We look forward to working with increasing talent people for the bright femesh prospect!
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Appendix
Prevalence rates (%) of entrepreneurial activity across countries by gender 2007.
Established Overall Male to Early Stage Business Owners Business Owners Female Ratio Male (%) Female (%) Male (%) Female (%) Male (%) Female (%) Argentina 17,52 11,34 15,78 4,16 33,30 15,50 2,15 Austria 3,06 1,84 7,25 4,78 10,31 6,61 1,56 Belgium 4,30 1,98 1,86 0,93 6,16 2,91 2,12 Brazil 12,73 12,71 12,70 7,24 25,43 19,95 1,27 Chile 16,45 10,43 11,89 5,59 28,33 16,02 1,77 China 19,27 13,43 9,66 7,04 28,93 20,47 1,41 Colombia 26,91 18,77 15,49 7,84 42,40 26,61 1,59 Croatia 9,44 5,13 5,79 2,67 15,23 7,80 1,95 Denmark 6,21 4,56 8,54 3,43 14,75 7,99 1,85 Dominican Republic 18,91 14,50 8,96 6,12 27,87 20,62 1,35 Finland 8,96 4,81 10,31 4,80 19,27 9,61 2,01 France 4,14 2,21 2,52 0,95 6,66 3,16 2,11 Greece 7,96 3,46 14,59 12,04 22,56 15,51 1,45 Hong Kong 14,33 5,82 7,51 3,75 21,84 9,57 2,28 Hungary 9,29 4,52 5,88 3,81 15,17 8,33 1,82 Iceland 17,40 7,44 13,43 3,98 30,83 11,42 2,70 India 9,51 7,49 8,69 2,18 18,21 9,66 1,89 Ireland 10,57 5,87 12,66 5,38 23,22 11,25 2,06 Israel 7,12 3,75 3,61 1,10 10,72 4,84 2,21 Italy 6,69 3,30 8,87 2,17 15,56 5,48 2,84 Japan 3,47 5,22 8,72 8,57 12,20 13,79 0,88 Kazakhstan 11,17 7,64 6,80 4,80 17,97 12,44 1,44 Latvia 7,70 1,41 4,90 2,02 12,60 3,43 3,67 Netherlands 6,64 3,70 8,59 4,07 15,24 7,77 1,96 Norway 8,59 4,28 8,20 3,50 16,79 7,78 2,16 Peru 25,74 26,06 18,07 12,40 43,80 38,46 1,14 Portugal 11,70 5,92 9,79 4,44 21,49 10,36 2,07 Puerto Rico 3,16 2,97 4,05 0,89 7,21 3,87 1,86 Romania 4,95 3,09 3,34 1,70 8,30 4,79 1,73 Russia 3,79 1,64 1,63 1,73 5,41 3,37 1,61 Serbia 12,11 5,06 7,74 2,83 19,85 7,88 2,52 Slovenia 6,84 2,68 6,84 2,31 13,69 4,99 2,74 Spain 9,75 5,48 8,17 4,57 17,92 10,06 1,78 Sweden 5,78 2,47 6,87 2,48 12,65 4,95 2,56 Switzerland 7,59 4,92 8,56 4,60 16,15 9,52 1,70 Thailand 27,78 25,95 23,22 19,47 51,00 45,42 1,12 Turkey 8,65 2,41 9,47 1,32 18,12 3,73 4,86 United Kingdom 8,65 2,41 9,47 1,32 18,12 3,73 4,86 United States 11,98 7,25 6,47 3,48 18,45 10,73 1,72 Uruguay 17,33 7,19 8,63 4,54 25,96 11,73 2,21 Venezuela 23,50 16,81 5,87 4,90 29,37 21,71 1,35
Source: Global Entrepreneurship Monitor (GEMS), 2008
88
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