I loved interviewing Jo Anne because she has such amazing perspective on how far women have come [not being allowed to work past the 5th month of pregnancy], while still recognizing how far we have to go [Uber anyone?]. With a tech career spanning from the 1970s to today, I find her story remarkable both in frankness as well as optimism. Be sure to keep reading until the end, where Jo Anne offers some great advice to women entrepreneurs seeking funding.
LZ: I think it makes sense to start out explaining to people that you’ve actually had three careers — one as an engineer, one as an entrepreneur and now as an angel investor.
JM: It wasn’t until my youngest was in college that I actually became a growth-stage entrepreneur. But I always like to remind people that Ray Kroc – famous for franchising McDonalds – started when he was 55.
“When I started [in tech], men would actually say to my face, ‘You know the only reason you’re here is affirmative action.”
LZ: So you majored in math at the University of Michigan and that’s how you became an engineer. How did you become an entrepreneur?
JM: I was always interested in entrepreneurship. I started flirting with it back in the 70s when I was working in software development. But then my husband went into the army and it didn’t happen. It wasn’t until after my children were grown and I got my MBA that I had my first entrepreneurial adventure.
It was with a fast-growing consulting business. At the time, I didn’t understand the difference between high-growth entrepreneurship and small business, but it was definitely entrepreneurial.
Later I returned for another round in corporate telcom, but in 1994 a recruiter called asking about joining a very early stage company in the wireless space in Florida. That’s where I made the jump. And then later I came to California to run a startup as a CEO. It was a long gestation.
“The expectation [today] is that there is a level playing field. But there still isn’t.”
LZ: You’ve spent most of your career in software and telcom and you did it way before anyone was calling for diversity in tech. I bet you know a lot about being the only woman in the room.
JM: The most memorable thing my maternal grandmother said to me was, “Jo Anne, as a woman you have to be twice as good to get half as far.” My mother was a feminist as well. When I started my career, you had to expect you were going to get challenges. In the early 1970s some companies wouldn’t let you work past the fifth month of pregnancy so it made them hesitant to hire married women.
I ended up working for Bell Labs because of an affirmative action program. It was 1976, I had just completed my masters in computer science and I had two kids. They found me by going to the university and asking for the grades of the women in the program. I qualified because of my GPA, so that launched my full time tech career.
When I started working there, people would actually say to my face, ‘’You know, the only reason you’re here is affirmative action.”
Generally, there was a tendency to assume that women weren’t as qualified as the men. Later, they asked me to help with affirmative action meetings, asking, ‘Tell us what it’s like to be in a tech workplace with all these men.’ It was actually fascinating because I also got to listen to the guys coming from all male environments talking about how they thought about working with women.
But I expected it was going to be tough. Because there are more women in tech today, the expectation is that there is a level playing field. But there still isn’t. You have to decide if you want to play the way it is. I did and I was able to advance. I have no regrets at all.
After I left Gluon– the startup where I was CEO – I got together with some professors at Stanford and we did a case around my experience. It specifically focused on how relationships are different when a woman is the CEO and the board, the investors and all the other officers are all men. The conclusion was that subtle social things really do make a difference and trust relationships are harder to develop and maintain.
“I thought [women] would be farther along by now, but I’m not willing to give up.”
LZ: How do you think things have changed (or not changed) for women since the 70’s?
JM: There was a time where there wasn’t room for women to support each other. Now there is. In the old days there was only one seat at the table for a woman, so women had to compete. Today those support systems are possible. (We did have support groups back in the 70s, but it was rare to have multiple women in leadership positions.)
It’s a real power struggle. The more progress women have made, the more implicit resistance there is. I’ve been so sad to see the same things that happened to me still happening. It’s been a slow slog. I thought we would be farther along by now, but I’m not willing to give up.
“I think [women founders] can’t underestimate the value of a strong support system…Women need to know they don’t have to run this game alone.”
LZ: So after you were CEO, you wrapped up the entrepreneur phase and moved on to the investor phase. How did you make the transition?
JM: I went to work for Nokia in 2003 with their corporate venture arm doing early stage investing. We weren’t trying to bring new devices into Nokia, but working closely with founders and CEOs to better understand the market and how apps and phones were going to be used.
But in 2006 Nokia changed CEOs. The strategy changed and I was charged with selling the portfolio companies. I flipped from being 100 percent strategic to 100 percent financial. I went from mentoring and connecting founders to saying ok – we have to exit as fast as possible. I learned a tremendous amount over that period.
When it ended, I found I missed working with early stage startups and that’s how I got involved in angel investing.
LZ: One of the things I admire about you is that you’ve really focused on funding women founded startups. You invested with and been on the board of both ASTIA and Golden Seeds. Both organizations support and invest in women led ventures.
JM: As I got involved in angel investing I saw this was an area where women were not getting a fair share. I’ve invested in a number of companies without women, but given the choice I’d rather invest in women founders and leaders. Particularly women in tech. I’m a lifelong feminist and proud of it. It’s been a tough haul to get the same kind of enthusiasm and support for women entrepreneurs that we see for men. It’s better now.
“The women I’ve been most happy investing in have had diverse teams.”
LZ: Can you talk about your experiences of being a woman CEO of a venture backed company vs. being a woman investor?
JM: Initially, I thought the VC community was terrible – unfair vultures. When I started in corporate venture, I got a different perspective. When investing other people’s money, you discover what rules of road really are. I never would have thought I would be comfortable working as an investor. But as much as I love building products and teams, there’s a limit to your impact. As an investor I can leverage my skill set more effectively.
LZ: You’ve been in a lot of closed-door conversations about whether or not to invest. When it comes to leadership and women’s capabilities – are there things you look for and on the flip side, what concerns come up?
JM: With women, one question we often end up asking is, ‘is the vision big enough’. I never worry about women being able to tightly manage resources and move things forward. But ‘big enough vision’ is one I often see with women that I don’t see with men. I think women are more cautious. They want everything to be perfect and everything right. So they pitch what they know they can deliver vs. the vision of how big this could get.
Recently, with some of the millennial women I’ve seen, coachability has been a concern. Some seem to be not as interested in taking advice. They seem to be on their own plan. The naiveté is large there.
On any team I like to see a balance of skills. Women I’ve been most happy investing in – have had diverse teams. I’m prejudiced in favor of diverse skills and thinking.
LZ: What needs to happen within the eco-system to funnel more money to woman-led startups?
JM: We need more women investors so that when decisions are made, there’s diversity around the table. The team at Nokia was 50 percent women and led by a woman. We didn’t seek to invest in women, but I know women got a fair hearing. Women also need to work on being willing to take the risk. Women will often try to self-fund which limits the number of high-growth opportunities.
“Think about what you want from investors besides money.”
LZ: What needs to happen to get more women funders?
JM: I’m always trying to get more perspective on how to get more women into the funnel. We need more women who have completed the cycle –leaders and entrepreneurs who are able to become investors. Or women coming out of Google and Facebook who have had success and want to invest. I think a lot of women don’t feel comfortable investing. But we can educate them.
What I haven’t seen is how folks are coming into the venture investor pipeline. I see MBAs without operating experience coming into the model. I think investors should have operating experience. But women have to have been on the startup leadership ladder in order to get that.
LZ: You’re right. It’s kind of a no-win situation. If being the CEO of a venture-backed startup is the prerequisite to becoming an investor or being on a board, it’s very difficult for women to break into that model. What advice do you give women trying to raise money?
JM: They need to make sure they understand their business from a financial perspective and that they have a good story. They should also have experienced advisors. The more you build that out better off you’re going to be.
I believe in getting traction before you go for a big raise. Go after a milestone or two and prove that it works in small pieces. Start with friends and family money. Don’t go to the VCs right away.
They also need to think about what they want from investors besides money. Can they get you the connections you need? Some investors can be super helpful and strategic and bring you customers.
And when you get money, get enough and don’t worry so much about valuation. Valuation is not a grade you’re getting.
I also think you can’t underestimate the importance of a support system. Take the time to build and maintain a support network that includes women and men. Women need to know they don’t have to run this game alone.