Not just in Lok Sabha, women absent from startups too; only 2% startups have women COOs

NEW DELHI: India’s new-age companies have an age-old problem. Like their older counterparts, they do not have enough women in leadership roles. The Economic Times commissioned a study of 187 startups in collaboration with talent assessment and analytics firm Jombay on Women in Startups and the findings are revealing.
Of all 500 founders at these 187 startups, there are just 39 women, or 8%. None of these startups has a woman as an externally hired CEO or leader. All the women CEOs in the survey happen to be cofounders or founders of the startup. And only 2% of these startups have hired women as chief operating officers (COOs).

The surveyed companies include startups that have raised venture financing in the past 24 months.

The presence of women improves, but stays low, in leadership roles across functions in startups. According to the study, close to 15% of startups have women heading marketing functions, while 17% have them in charge of sales and business development. About 11% of startups have women leaders in operations and 6% in client servicing. Only about 7% have women heading finance while less than 11% have women leaders in the product and technology divisions. The function that seems to lead in diversity is human resources – close to 24% startups have women as HR leads.

Across corporate India, the percentage of women on average across leadership roles is in single digits – 8% for CEO and COO roles. This improves to about 14% for functional heads.

Startups, headhunters and venture capitalists that ET spoke to offered various reasons for the low numbers of women in leadership positions at startups. These ranged from gender diversity not being a priority for this set of young companies to the startup culture not being conducive to women at work. Things may not change for a while, said one of them.

“Diversity in startups is an issue in Silicon Valley too. India is no different,” said Sandeep Murthy, cofounder of Lightbox Ventures. “Hiring at startups does not yet take into account improving diversity numbers in leadership roles as there is a hurry to rope in talent. Only once the leadership talent pool for startups broadens would the diversity issue get resolved. This may take some years.”

Most Indian businesses are male dominated anyway, and that’s the catchment area startups hire from. Jombay CEO Mohit Gundecha said more than 80% of startups are founded by men, so they will hire those like themselves. Naturally the number of men hired in an early, core team and in turn as CXOs is higher.

“Many startups founded by men include techies and hackers, who tend to subconsciously build a startup culture suitable to men which could be less welcoming to women (i.e., even simple things like no separate washrooms for women),” said Gundecha.

Headhunters said while startups are not overly averse to hiring women leaders, it’s not top of the mind for them. “Diversity is not a priority for these companies,” said Pallavi Kathuria, who leads the Asia-Pacific technology practice for leadership advisory firm Egon Zehnder.

Some like K Sudarshan, managing partner of search firm EMI Partners International, attribute the low numbers to the limited talent pool available to hire from. Startup founders corroborated this. According to Yepme.com founder Sandeep Sharma, marketing and supply chain functions are core to any ecommerce company and there is a need to look at the percentage of women in these areas elsewhere.

“Gender ratio in technology and sales and marketing would not be any different in any industry as compared to the ratio in ecommerce,” he said. “Hence we find the ratio skewed towards men in startups and ecommerce.”

There’s a lack of willingness at the higher management levels, one startup founder said.

“We see a lot of women in the early stages of their careers who want to come work for us, much less so at the senior levels. So effectively it is a top-of-funnel issue for senior leadership positions,” said Limeroad.com founder Suchi Mukherjee.

Also, since the startup ecosystem is centred in cities like Delhi-NCR and Bengaluru, the talent pool becomes even smaller.

“Recruiting senior candidates from other cities into Delhi has been problematic in general,” Mukherjee said. “In some instances, we have seen senior women turn down a role because their husbands couldn’t make the move.”

Some entrepreneurs attribute the low number to perceptions, some true, about startups. "Startups are prone to instability and constant changes, especially in their formative years,” said FabFurnish cofounder Ankita Dabas.