Female-led start-ups embrace Plan B — then C, D, E . . .
The upheavals of Covid-19 forced female founders to make the most of their skills at achieving more with fewer resources than many of their male counterparts.
“We kept revising what the worst scenario would be,” says Joanna McFarland, chief executive and co-founder of Los Angeles-based HopSkipDrive, which she set up as an on-demand ride service for schoolchildren. “We had a plan A, B, C . . . and F.” She shed some of her 118 staff and furloughed others in an attempt to keep ahead of the crisis.
However, when it became clear that schools were not going to reopen for the rest of 2020, she had to rethink the business from scratch: “Our market literally shut down.”
HopSkipDrive was set up to ferry the children of working parents to school, but expanded to serve child welfare agencies and school districts. Before the pandemic, it operated in 14 cities. Then Covid-19 forced it to switch to survival mode, keeping only core staff while looking for new opportunities.
McFarland’s experience is typical of how founders were forced to adapt their business practices to the effects of the pandemic while facing huge uncertainty about the shape of the recovery.
Female entrepreneurs tend to have to work harder than men as they receive lower levels of outside investment. Analysis by data provider Crunchbase shows that just 2.3 per cent of global venture funding went to female-led businesses in 2020, down from 2.8 per cent in 2019.
As head of a venture capital-backed company, McFarland knew she had to be transparent and proactive with her investors. So she adapted HopSkipDrive’s model to serve the elderly, by helping them get to the supermarket at special times and to vaccination appointments. She also pivoted to cater for the new needs of her school district partners by delivering meals and laptops to schoolchildren. But she admits there were “high highs and low lows”.
Masters of ‘bricolage’
Tiantian Yang, an assistant professor at the Wharton School of the University of Pennsylvania, says entrepreneurs who fared better during the pandemic were those who ditched familiar routines to embrace a more flexible approach to the effects of Covid, and experimented to discover what worked.
Female entrepreneurs who are used to making do with what is at hand to solve problems and uncover opportunities are exemplars of the theory of “entrepreneur bricolage”, she explains. As such, they were best-placed to excel at Covid crisis management.
However, Yang warns that “one can’t assume this approach will work for a very long time”.
Working mothers, senior female executives and black women suffered disproportionately during the pandemic with many being laid off, reducing their work hours, or quitting their jobs, according to consultancy McKinsey. Addie Swartz, who founded ReacHire in Concord, Massachusetts, works with big US companies to help professional women return to employment after taking time out. “A career break should not be a career breaker,” she stresses.
But, when offices closed, the return-to-work programmes dried up. The pandemic was like “a pause button and we weren’t sure what would happen”.
As a “tsunami” of women left the workforce, Swartz saw a new opening. She reconfigured Aurora, a digital platform she had set up in early 2020 to help companies fast-track early-career women into leadership roles. The aim, now, was to support women at all stages of their careers — helping employers to retain workers by addressing the challenges of turnover and burnout.
Many women have come to prefer working from home, she explains, so organisations are seeking to be more flexible, as well as offering training and mentorship, and promoting remote workers’ wellbeing.
The labour market also became more competitive as the pandemic progressed, creating new opportunities for her returnship programmes, which restarted in late 2021. Companies have a renewed interest in promoting diversity, equity and inclusion, she explains. Only an estimated 3 per cent of women entrepreneurs make more than $1mn in sales, Swartz says, but “we’re way, way beyond that”.
Sometimes, women find their careers stall without even losing their jobs. That happened to Tia Lyles-Williams, who had become a senior manager but saw little chance of further advancement in the biotech industry. “I was never going to get to the C-suite and they were never going to pay me my worth,” she says.
This led her to start her own company, LucasPye Bio in Philadelphia in 2018 — a contract drugmaker that aims to cut her customers’ manufacturing costs and reduce the time-to-market for drugs. According to the US Bureau of Labor and Statistics, in 2021, black people accounted for 7.8 per cent of staff employed in the pharmaceutical and medical manufacturing industry. Lyles-Williams aimed to change that.
But the pandemic brought immediate problems. Lyles-Williams says she was on target to convert an empty building into a manufacturing facility but, as the US began to lock down, most of her investment fell through. “I had to start over fundraising on Zoom,” she says, adding that she joined two accelerators. She found a greenfield site and now intends to build her factory there.
One constructive outcome of Covid-19 is that the Biden administration announced a plan in September 2021 to invest $3bn in the vaccine supply chain, as it seeks to make the US a leading supplier. Lyles-Williams hopes to win government contracts in this area, which will be awarded to US suppliers. “You have to stay positive, decisive and be ready to pivot at any time,” she says.
Over in Los Angeles, as classrooms opened up, HopSkipDrive found itself even more in demand from school districts, as many bus drivers had retired or moved to better jobs.
Today, it has 134 employees, up by 13 per cent since March 2020. But McFarland admits she has been on a tough rollercoaster ride: “You have to be so passionate about what you are building as it’s so hard,” she says.