Web3 is here, but where’s the diversity?

In the age of artificial intelligence (AI) available for all, women business founders may have the most to gain—and lose—by understanding how to leverage the new technologies. AI is already replacing employees in many industries and, with some jobs more easily automated than others and existing gender distribution in the job market, women are often getting the short end of the stick due to AI. At the same time, amid a boom of Web3 companies leveraging AI and blockchain, only 7 percent of these companies’ founders are women.

As a professor of entrepreneurship, I have been on a mission to understand which startup lessons have staying power, which have faded, and which may have contributed to the severe entrepreneurship gender gap that we still see today. DePaul University has supported Chicago’s aspiring entrepreneurs and small business owners for decades. Digging into the files describing collaborative programming DePaul and the U.S. Small Business Administration provided in the 1980s has been eye-opening. Much has changed, but still less than you might think.

Advising entrepreneurs on how to use the latest technologies to their advantage has always been a cornerstone of entrepreneurship training. Today, we can share AI-based tools that help entrepreneurs research ideas, develop company logos and names, and create websites. In the 1980s, the technology training sessions addressed different topics: “Telemarketing: How to attract more customers by telephone?” and “What are the advantages and pitfalls of owning a computer?” Even when men and women entrepreneurs learn similar facts about the latest technologies, we know that women’s self-efficacy may lower their ability to successfully marshal this new technology.

A 1990s advice booklet urges founders to solicit customer feedback early, which continues to be taught in our classrooms. While the emphasis has moved from probing a description of an idea in the decades past to building an early version of the actual product or service for testing today, the essence of the advice is still the same: you need to build what your customers want to buy, and you’d better figure that out fast.

Today, entrepreneurs can use language AI tools to learn from customers. For example, if a company concept is about solar panel installation, an entrepreneur could tell a tool like ChatGPT or Microsoft Bing to pretend it is a commercial property owner in Chicago with 20 years of experience. Then the entrepreneur can interview this AI property owner, instead of bothering to find actual property owners to interview.

Indeed, the ways of uncovering customer needs change with technological progress, but the basic idea of entrepreneurs responding to real customer needs is alive and well. In this area, there is no evidence of women entrepreneurs lagging behind men. In fact, 60 percent of marketing jobs are filled by women, suggesting that women are drawn to roles that require understanding customer needs. 

What surprised me the most is how little has changed from the entrepreneurial finance topics covered in the 1985 “Financing for the Independent Business” seminar at DePaul to the entrepreneurial finance classes held in the same building today, almost 40 years later. “First source of capital is you” was the starting point back then, as well as today. Nobody invests in you unless you are all in yourself.

In the 80s, this session was followed by learning about alternative money sources—something that we still discuss with entrepreneurs today, albeit with an emphasis on technology-enabled sources such as crowdfunding. After this, the list of entrepreneurial finance sources has virtually stayed the same: venture capitalists, SBA loans, supplier financing, bank financing, and possibly government financing. It is this area of financing entrepreneurship that has traditionally seen the largest gender gap, and the current underrepresentation of women in Web3 startups will likely further widen this gap as the largest investments always go to startups at the forefront of technology. Among Web3 companies, all-male founding teams raise nearly four times as much equity capital, on average, as all-female teams.

However, not everything has stayed the same. In the 80s and 90s, entrepreneurs needed more hands-on support to start home-based businesses. Today, most modern, small-scale entrepreneurs first operate from home with the assistance of online technology.

Similarly, some of the underlying gendered and wealth-related assumptions evident in the materials from earlier decades would not fit well into today’s entrepreneurship training. This advice from 1997 entrepreneurship training materials claims: “People have to see what you look like, how you carry yourself, how old you are.” Advice like that reflects societal bias that makes us think entrepreneurs should have a stereotypical look and demographic profile to fit the mold of success. It is good we have moved on. 

Owners of active businesses that opened in recent years show considerably greater diversity than those of older businesses. As of 2023, non-Hispanic white men owned over 50 percent of active businesses that were established prior to 1990, but only 22 percent of businesses opened since 2020. Black women in the U.S. are now more involved in entrepreneurship than any other demographic group.

The trip through the archives holds value, and new technology has the power to further democratize access to opportunity. Web3 companies are shaping the future of digital society. Educators, policymakers, and tech executives alike need to create systems that ensure that diverse entrepreneurs, including women, are shaping this future so that we don’t perpetuate biases and stereotypes of the past.

Maija Renko, PhD, is a professor and the Coleman Chair of Entrepreneurship at DePaul University, where she conducts research and teaches entrepreneurial students how to build their companies.

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