Investing in Women-Led Startups Shows Strong ROI

Recently I had the distinct pleasure of speaking with Allyson Kapin and Craig Newmark about the Women Startup Challenge, an initiative of the nonprofit organization, Women Who Tech. The organization works with talented women breaking new ground in technology to transform the world and inspire change.

As I’ve written in the past, hiring women is smart business. And, women also make exceptional entrepreneurs. I believe that women need to continue to rise to the top in all industries to ensure that we have more open, innovative and thriving organizations.

The upcoming Women Startup Challenge Emerging Tech competition features ten of the best early-stage, women-led Emerging Tech startups, focused on Agriculture, Augmented Reality, Biotech, Health, Energy, IoT, Robotics, and Virtual Reality.

Allyson Kapin is the founder of Women Who Tech and has been named one of the Most Influential Women in Tech by Fast Company. She is also the co-founder of Rad Campaign, a web agency that works with nonprofits to fight the world’s toughest problems, ranging from climate change to health care reform.

Craig Newmark, a member of the Advisory team for Women Who Tech, is the founder of craigslist, the web-based platform that has fundamentally changed classified advertising. Craig is also the founder of Craig Newmark Philanthropies, which works to advance people and organizations that are “getting ‎stuff done” in the areas of women in technology, veterans and military families, ‎trustworthy journalism, and voter protection.

On March 6, 2018, the Women Startup Challenge Emerging Tech finalists will pitch their innovative ventures to a panel of tech industry investors on stage at Google, in New York City. The grand prize-winner will be awarded a $50,000 cash grant for her startup. Additional prizes include $280,000 in Google cloud services. Meet the ten women-led startups that are finalists for the sixth cohort.

Melissa: “What inspired you to launch the Women Startup Challenge three years ago?”

Allyson: “We originally created the Women Startup challenge because of the dismal amount of funding available to women-led startups. The latest data shows that less than 2 percent of VC money goes to women-led startups. That number has barely budged in ten years, and we wanted to find a way to shake up this culture and economy that has made it very difficult for women entrepreneurs to access capital. 

We’re on a mission to find the best early-stage women-led startups and put capital, mentoring, and resources behind them. I’m happy to report that we’re moving the needle. The startups that have gone through our cohorts have succeeded in collectively raising over $20M.”

Melissa: “And Craig, what inspired you to get involved with the Women Startup Challenge?”

Craig: “One of the first principles that I live by is that I feel that you should treat people like you want to be treated and that means fairness for everyone. You need to give people a break. 

I grew up in Jersey, and what people told me is sometimes you’ve got to put your money where your mouth is. Craig Newmark Philanthropies supports the Women Startup Challenge so that people take this extra seriously–and that seems to work.”

Melissa: “It seems as though you have both genders supporting the Women Startup Challenge, so it isn’t just women supporting the Women Startup Challenge, but you have men also supporting it.”

Craig: “That’s why that first principle I think is real important. Treating people like you want to be treated is something we all learn as kids and forget–but now I’m in the process of reminding people, particularly my male peers, to practice what they preach.”

Allyson: “To echo what Craig is saying, and one of the reasons we love working with Craig, is he’s been such an ally to us and to the women in tech community. I think that for us to solve these issues, with the lack of diversity and the lack of funding for women in tech we need male allies at the table.”

Melissa:  “What is it that prevents women from getting funding?”

Allyson: “What we have found through our own research, and other research that validates ours, is that both unconscious and conscious biases play parts in preventing women from getting funding. The gatekeepers of the investor world are primarily men–white men–and they rely on their own networks for warm leads. Investors need to diversify their networks, and we want to help them do that.

Craig: “In plainer terms: Sometimes people don’t get something good when others present it, and we can be real jerks sometimes. That may be too plain of language for you, but that’s the gist of things. Sometimes we’re short of empathy.”

Melissa: Would you say women present themselves, that is, pitch differently than men do?

Craig: I’ve seen some of the pitches, and the results are good, but I think that has to do with the training that Women Who Tech provides on how to give an effective fundraising pitch. You have very little time to pitch investors. The less time you have, the more focused your presentation has to be, and people respect that.”

Allyson: “I don’t see much difference between men and women pitching. But I do think there are unconscious biases that men and even women investors can have that can impact how the pitch is received. A key part of our program is our emphasis on training and coaching for all of the founders who are raising money for their next round.”

Melissa: “What’s the business case for investing in women-led businesses?”

Craig: “The bottom line is that if you invest in a women-led startup, you’re going to make more money. The research shows that women-led startups have a 35 percent higher return on vestment (ROI.) Investors want a better return on investment, so they should go where the return is better.”

Allyson: “This isn’t about charity. There’s a big business case for investing in women-led and racially diverse startups. If investors want to make billions of dollars, they need to start funding more diverse led startups that have game-changing products. And the time to do that is right now because we’re missing out on major innovation by not funding them.”

Tips For Pitching Your Start-up Business to Investors

  1. Identify the problem or challenge your product is solving.
  2. Clearly layout how your product is the solution to the challenges you highlighted.
  3. Show traction to date and have a clear go-to-market strategy.
  4. Demonstrate why your team is the one to bring this product to market and generate a huge return on investment.
  5. Keep the pitch simple, stupid aka the KISS principle. Don’t use insider jargon that investors who aren’t familiar with your product won’t easily understand. 
  6. Know your financials backward and forward
  7. Highlight what the funding your raising will be used for and how you will use it to scale
  8. Condense your pitch. You will have only minutes to make your case 
  9. Work with a coach to prep for your investor pitching opportunity

I look forward to seeing continued greatness from Women Who Tech in the future! And if you’re looking to start a business, I offer an impactful coaching program for female entrepreneurs. Contact me.

Inside the Quirky Habits of Albert Einstein, Elon Musk, and Other Genius Inventors

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Inside the Habits of Albert Einstein, Elon Musk, and Other Genius Inventors

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This Software Works Just as Accurately as Your Lawyer–Only 200 Times Faster

Watch out, attorneys. The bots are coming–and they’re getting good at your job.

For some lawyers, contract review takes up a huge chunk of time and it can be extremely tedious. 

That’s why the co-founders of LawGeex began their company in 2014. The Tel Aviv-based startup creates software that uses artificial intelligence to study contracts, flagging any language or stipulations that seem out of the ordinary.

LawGeex released its software to the public early last year. Recently, though, the company decided it wanted to truly put it to the test. In a study overseen by attorneys from Duke University and Stanford University, the startup had 20 experienced lawyers separately study five new non-disclosure agreements, while the AI did the same. 

The results: The lawyers came in at a solid 85 percent accurate. The software? Ninety-four percent. What’s more, while the average lawyer took 92 minutes to complete the task, the company’s AI did it in just 26 seconds–so in addition to being more accurate, it was 200 times faster than its human counterparts.

Noory Bechor, Lawgeex co-founder and CEO, spent six years as an attorney at Israel’s largest law firm before deciding to pursue the new venture. “I had a growing frustration with how inefficient the legal world is,” he says. “It’s very repetitive and mundane, and there was no real technology that helps lawyers do their jobs better and more efficiently.”

In his early professional days as a paralegal, Bechor had spent much of his time reviewing documents. “Once you’ve seen hundreds of examples of a specific contract type,” he says, “the concepts keep repeating themselves. I said, if this is so repetitive, it can be automated.”

Through an acquaintance, Bechor was introduced to Ilan Admon, a tech industry vet. Together they developed a proof of concept and raised more than $8 million from angel investors and VC firms including Recruit Co. and EverythingMe.

LawGeex’s software compares incoming contracts with a set of standards that can be preset by the user. It then identifies clauses that might need altering before the contract can be approved. The product has already gained traction with in-house legal teams: LawGeex counts Sears, Deloitte, Skyview Capital, and Key Energy among its early clients, and it says that list also includes major banks and insurance companies.

Developing AI that can study contracts for uncommon language or clauses isn’t quite as straightforward as it might sound–the software wouldn’t be very useful if it flagged every uncommon piece of information. Someone signing a lease in Chicago, for example, probably doesn’t need to be alerted to the fact that their landlord’s address is in Michigan, but they would want to know about a stipulation that charged them five months’ rent for breaking the lease.

To solve that, LawGeex used attorneys to help train its AI. That helped give the software the ability to distinguish between information that’s not just uncommon from a quantitative perspective, but from a qualitative perspective as well.

Which raises the question: Did those lawyers just play a part in rendering themselves redundant? Bechor says no. “We really try to focus on the value this solution creates in terms of efficiency, making business move faster, saving money and saving time,” he says. Repeating the popular Silicon Valley talking point, he says he sees the software as giving workers time for more interesting, creative tasks. Although, he admits, “If I’m a person that only reviews these simple contracts for a living, I’m going to have to adapt.”

Bechor sees the software as useful to businesses, which can often bypass legal review for the sake of speed or cost efficiency. “When they do that,” he says, “they end up taking on increased legal risks.”

Like with any technology, the software has its limits–so for most lawyers, their jobs are safe for now. “We’re not claiming to be more accurate than lawyers all the time and in any type of work,” Bechor says. “What we are showing is that on the mundane, repetitive, simple stuff, technology can actually do a better job that humans.”

Stressed About Turning Your Idea Into A Product? Read This.

The toughest part of being an inventor or an entrepreneur is all of the unknowns. There are no guarantees and there is a lot of room for failure. One of my goals, in writing this column, is to talk about the nitty-gritty details, to help entrepreneurs avoid some of the pitfalls, and to be honest about what it takes. This year, I am launching Q&A sessions with start-up entrepreneurs and growth brands, so you can hear, right from the source, what they did right and what they did wrong, and how it all contributed to where they are in their entrepreneurship journey.

First in the Q&A hotseat is Jason Simmons, founder and CEO of DeadSoxy, a sock brand that came out of personal frustration that the more bold flashy socks didn’t have the quality needed to be dress socks.

How did you decide that your idea was worth pursuing?

“Initially, our team talked to as many people as possible about socks and their experience with socks. Whether it was someone in line at a coffee shop or in a discussion forum like Reddit or Quora, we wanted to learn as much as possible about what people wanted, and what their frustrations were.  Almost everyone had the same frustrations: 1) Their dress socks never stayed up on the leg. 2) Their dress socks always shrunk up way too much after only one or two laundry cycles. In some cases, these people were paying $20+ for dress socks that flat-out didn’t meet their expectations. The frustration was real and compounded by years of socks sliding down, slipping off, and just wearing out.  It was painfully obvious that this was a huge opportunity if we could get it right.” 

What were some of the first actions you took in building your product/brand/company?

“We spoke with enough people to understand the general frustrations with the options on the market. Based on what we learned from potential consumers, we knew there was a general frustration around how dress socks actually performed. Once we had a better understanding of what people wanted, I took the lead on product development and focused on learning the industry and building the right product. That’s all I did for the first 2.5 years (other than my day job). There was no name, no social media, no plan,  just learning and relentless focus on getting the product right.

Today, DeadSoxy’s differentiator is and will always be the product. We are a product-centric brand and that permeates everything we do. Right from the start, I’ve wanted  DeadSoxy’s identity to be built around a strong product through pairing smart design with premium fabric. The company name, social media profiles, business plans, sock design, photo shoots, that’s all the fun stuff. Everyone wants to do that stuff.”

How or where did you find your first sales entry point?

“Our first big sale was a cold call to a subscription box company that I found on Instagram. Initially, I made a few calls to the customer service number on the site to gain more insight on the business. It didn’t take long before I had the names, titles, roles, and some insight into the entire leadership team. After a few days of recon then a two day rest, I called back in and asked to be transferred to the president by name and it worked. That cold call resulted in a $25K order. I’m happy to say they are still a client today, and that one call has generated over $250K in revenue. Even as the Founder and CEO, I’ll never graduate from making cold calls.”

Details + Time = The Perfect Pair

The devil is in the details. That’s to say, the details of a product are its most problematic aspect, and also where there is the most room for innovation and high-risk. In a follow-up call with Jason, we spoke about the landmines that might explode at anytime when you are learning a product category and re-inventing it at the same time. Keys are to be an open-minded continual learner and never get too comfortable with your product, even when they are as soft as DeadSoxy’s, and get a great group of been-there, done-that advisors.

Also, I must add, if you are in a rush to make bank and exit, beware. Business takes time, research takes time, and sustainable success takes time.

This Startup Has Figured Out a Way to Pull Water Out of Thin Air

When the power cut out at the Consumer Electronics Show–the world’s biggest annual tech show in Las Vegas–for nearly two hours on Wednesday, most demonstrators were out of luck.

But not Zero Mass Water. The startup, which relies on solar energy, was set up outside under the bright Nevada sun. So while hordes of attendees tried to figure out what to do next, many of them found their way over to the company’s demonstration.

Zero Mass Water’s premise is both incredibly simple and incredibly ambitious: It pulls clean drinking water straight out of thin air. Founded by Cody Friesen, a materials scientist, the startup’s Source system relies on an ultra-absorbent material that collects water at 20,000 times the concentration of the air around it. The setup is powered by solar panels, so it has no carbon footprint. 

“We want to fundamentally change the way people receive their drinking water,” says Friesen, who also teaches at Arizona State University. He founded the company in 2014, and the product went to market late last year. 

The startup’s standard two-panel system produces about 10 liters of water per day, which amounts to about 20 bottles–usually enough for a family of four. Friesen notes that the water is meant specifically for drinking, since bathing or watering your lawn would blow through the supply in a matter of minutes. The setup costs $4,500, which he says should pay for itself in one to four years when compared to the cost of bottled water.

But the more world-changing use case is in areas without access to clean water. Zero Mass Water works in both humid climates and arid ones. The startup has installed systems in areas of Ecuador, Jordan, Mexico, and the Philippines that lack the infrastructure for drinking water. Following Hurricane Maria, several charities funded installations at a firehouse in Puerto Rico, where local citizens can now come by to refill their containers.

At CES, the demonstration’s six large solar panels and mock kitchen counter continually drew curiosity from passersby. The company also provided interested spectators with samples of Source’s water, which is enhanced with minerals before being pumped into your sink’s plumbing. This reporter tried some, and it was cold and refreshing–certainly better than the tap water at the motel down the road.

As good as the water might be, the cost is likely to be a sticking point before this technology enjoys widespread adoption. Friesen is quick to point out the positive effects that switching from bottled to Source-produced water would have on the environment. He sees the market as enormous, noting that company has performed installations at locations ranging from community centers in impoverished regions across the globe to a Northern California school attended by the children of Silicon Valley elites.

“The point of this is to perfect water for every person in every place,” he says. “Everybody needs water to survive.” 

Luggage You Can Ride Like a Go Kart–and Other Crazy New Travel Products You Need to Know About Now

Away was among the first startups to shake up the luggage industry in recent years, thanks to the mass appeal of its smartly and attractively designed rolling suitcases. As often happens with a breakout product, Away now has a crop of competitors–each with its own take on smart suitcases. They showed up in droves to try to steal the spotlight at the Consumer Electronics Show, the annual gadget fest in Las Vegas this week.

Here are four of these startups that promise to make traveling with your standard rolling suitcase seem obsolete.

1. Travelmate Robotics

Think dragging your luggage is way too much effort? Travelmate’s suitcase traverses the airport on its own. The suitcase autonomously follows you, trailing you like a needy puppy while you strut down the street or through the terminal. It syncs with an app in your phone so it knows who to follow, then combines cameras with ultrasound and infrared to avoid obstacles along the way. And, like any good dog, it responds to your voice and hand signals as well. The suitcase, which starts at $1,100 for the smallest version, has two USB ports to charge your devices, plus a built-in scale to make sure you don’t go over the airline’s weight limit.

2. Modobag

Your gate closes in 10 minutes and you’re all the way on the other side of the terminal. Or maybe you’re just lazy. Either way, Modobag proposes a solution for you: a $1,500 motorized suitcase. Pop out the foot rests, pull out the handlebar equipped with throttle and a break, climb on board, and leave other travelers in your dust. The suitcase supports passengers up to 260 pounds, zooms along at up to 8 mph, and is small enough to fit in an overhead bin. Thanks to the motor, though, the storage space inside is fairly limited–more akin to a medium duffel bag than one of your larger carry-on suitcases. Inc. took this thing for a spin on the CES floor and, admittedly, it was a lot of fun–especially after a company rep advised me to cut corners faster by leaning into my turns. Wide adoption, though, will mean your already anxiety-inducing airport terminal will suddenly look more like a course from Mario Kart. 

3. Lumzag

Lumzag aims to be the smartest backpack on the market. The bag has a built-in WiFi hotspot and a charging bank for your devices, plus a solar bank to pull extra power from the sun. It’s also promises to be incredibly secure: There’s built-in global GPS and an alarm you can activate if it goes missing, and you have the option to receive alerts to your phone when someone unzips it. The backpack has a number of convenient design features built in, like a sturdy frame that stays upright when the bag is set down, and a light inside so you’re not rummaging through blindly. Lumzag debuted at this year’s CES; the company has yet to set a price, and it plans on launching a crowdfunding campaign in the near future, so it’s likely a ways away from getting to market. 

4. Luggage Teleport

Yes, waiting for your bag at the carousel is annoying. But is it so annoying that you’re willing to outsource the task? Luggage Teleport is betting so. Input your flight information and the address where you’ll be staying and the startup sends someone to wait at your designated baggage claim for you, then deliver your goods. It’ll run you $35 for two bags, plus $10 for each additional piece of luggage. You can track the status of your bags in real time via an app. Perhaps the more useful application: The company will take your bags from your hotel to the airport, so if you explore the city after checkout, you won’t need to return to the hotel concierge before heading off to the airport. Luggage Teleport launched in Las Vegas this week.