The Worst Start-Up Advice I've Gotten
By Sallie Krawcheck, Co-Founder and CEO of Ellevest, Chair of Ellevate Network.
I spent the past couple of decades of my career at big companies and am now an entrepreneur. My team and I are in the midst of building Ellevest, a digital investment platform for women.
As I’ve made my transition, I’ve gotten a lot of advice, all of it well-meaning. And some of it bad. Some of it really bad. Here’s the worst of it:
“Don’t start Ellevest. You don’t want to limit your business to a niche market.” Women? A niche? Seriously?
“Don’t start Ellevest. If you do, you won’t be able to come back to corporate America once you leave it.” First of all, so what? And since when did expanding one’s skillset and experiences become a negative?
“Don’t start Ellevest. You will fail. Other people have tried, and they have failed. If it were possible to get women to invest, one of those other guys would have been successful.” Um, seriously?
“Ok, now that you’re going to start Ellevest, raise money at a high valuation, because you can.” That may work, up until it’s time to raise the next round. And then it might have been a terrible decision. This doesn’t take into account a more important factor – I would say a much more important factor – which is who the investor is, whether they buy into the vision, and what their time horizon is. I took money at a lower valuation than was on offer by others, in order to partner with the group I felt like was the right lead investor for us, Morningstar.
“You know ‘everybody’ in the investing industry. Go hire the best of them.” Yes, I do know a lot of folks. But my old industry has been successful in doing things in a certain way – and if that way worked well for women, it would have already worked well for women. So I hired just a few people from my old industry – and I spent a lot a lot a lot of time with them making sure they could embrace a different approach. I hired many more from outside the industry, in order to bring new thinking to bear on the issue of how to build an investing experience that women will embrace.
“You know the answer to this, Sallie, given your experience in the business. Move fast, build the product and get it out in time for the new year.” Going in, I had about ten hypotheses as to what holds women back from investing. Each of the ten was as strongly held as the other ten. My team and I committed to testing each of them – my new mantra is “Why debate something when we can test it?” We started down one road – that women would want to learn about their investing style before investing – and changed course quickly when the women told us that was not the case. Also nixed: that women would want to be part of an investing community. So we won’t launch by the new year, but we strongly believe co-creating this platform with the women themselves will drive a much, much better product and experience.
An edited version of this article appeared on FastCompany.com.
Have more questions? Follow up with the expert herself.
Sallie Krawcheck’s professional mission is to help women reach their financial and professional goals (or, put more bluntly, to get more money into the hands of women), thus enabling them to live better lives and unleashing a positive ripple effect for our families, our communities and our economy. To that end, Krawcheck is the Chair of the Ellevate Network, a 135K-strong global professional women’s network; she is also the CEO and co-founder of Ellevest, a... Continue Reading
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