How the Not-Bro Tech Companies Are Quietly Thriving (SWWC, vol 3, issue 63)
Hello!
Buckle in: I have things to say about the way tech companies aimed at female customers get treated relative to so-called "mainstream" tech companies.
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Apps, technology and Silicon Valley are presented as a bro landscape, with pampered manchildren making apps for other cosseted men, venture capitalists and founders living the nerd revenge fantasy of dating models and actresses and inflicting Lord of the Rings-themed weddings on everyone, and women relegated to the roles of whistleblowers or industry consciences pointing out that any industry that fails to account for everybody ultimately has nobody for a customer.
(For more on this last point, by the way, read the freshly-released Technically Wrong: Sexist Apps, Biased Algorithms, and Other Threats of Toxic Tech by Sara Wachter-Boettcher.)
However, it's worth noticing the quietly robust financials and steady success of three tech companies whose userbase is strongly female -- and who are often the punchlines of jokes belittling specific and feminine ways of being in the world. Pinterest (with a 60% female userbase), Etsy (with an 80% female customer base and an 80% entrepreneur base) and Stitch Fix (which only recently began offering services to men) are all doing quite well.
Pinterest -- a name synonymous with a certain type of hyper-crafty or design-conscious woman and a generator of anti-domestic backlash comedy -- has approximately 200 million users per month, strong international growth prospects and bullish revenue prospects. As the Financial Times reported:
Rohit Kulkarni, an analyst at San Francisco-based research group SharesPost Financial, wrote earlier this year that based on forecast user growth, he expected “Pinterest’s revenue to grow between $1.2bn in 2019 and $1.6bn in 2020, expanding at 40-45 per cent year on year”.
A 40-45% revenue rise might actually be slow for Pinterest: it tripled its revenue from $100 million in 2015 to $300 million last year, and some people assume it'll double that number to $600 million this year. That is a lot of ad revenue for what is basically a visual search engine with a user scrapbooking feature.
Etsy -- a craft marketplace and punchline for jokes about DIY or men emasculated by women who like to play the ukelele and crochet -- has wobbled since going public. It's worth looking at the financials anyway. In 2014, the company made $195.6 million in sales; in 2015, it made $273.5 million, or 40% more in sales than the year before; in 2016, it made $365 million, or another 33% rise in sales. Note that these sales rose in the same two years when the company's been battling Amazon's Handmade at Amazon. How many other Amazon competitors have clocked chunky double-digit sales gains while also fending off Amazon? And now that CEO Josh Silverman has shaken up the company in a reorganization, the financials are looking tighter and the company may be headed for a turnaround.
And Stitch Fix is headed for an IPO, meaning the company is about to offer stock for public trade. The numbers are very good for a business that is essentially "We put some clothes in a box for you, you decide whether or not to buy them." Try $977 million in revenue in its most recent fiscal year and a remarkably low amount of funding owed to outside investors -- for a company valued at $3 billion, the fact that they took less than $50 million in funding is a big deal.
So what? None of these companies command the "This is changing the world!" press that many other tech startups get. They get office-makeover profiles.
Part of it may be cultural bias -- Tech Crunch once dismissed Pinterest as "a colorful haven for Midwestern mothers and Mormons," which certainly lacks the vigorous bro-locity of disruption or moving-fast-and-breaking-things. Stitch Fix was designed to appeal to that least sexy of all Americans, the time-crunched, price-conscious woman. (It has since begun aiming for a wealthier target, perhaps because MM LaFleur pushed price points north with some success.)
Granted, none of these companies are doing Facebook-style financials yet. But they're not losing money at an Uber-like pace -- and the hows and whys of what they do are going largely unremarked-upon.
Who cares? People who want to make money do. The track record of VCs funding businesses founded by women or aimed at women is really, amazingly, overtly bad. It probably doesn't help that 94% of investors at these firms are male and tend not to get the market demand.
What they end up missing is the fact that Stitch Fix is effectively a data science company; the retail service offered to customers is an excellent way to gather a rich pool of data which can then be streamed into everything from logistics management to trend forecasting to demographic profiling. Pinterest is effectively a visual search company, and the tools to accurately search, label, sort and analyze sets of visual data don't just work for selling cute coasters. They can be used in everything from medical imaging to surveillance work to genetic analysis to inventory management. Etsy developed a sustainable model for small-scale, geographically independent e-commerce where there is little to no physical overhead required for inventory and scant logistics considerations compared to a multichannel retailer. Forget the ex-Googlers who wanted to reinvent bodegas in your living room; Etsy did the exact opposite by giving local artisans a means to build a global customer base.
But again -- ask the average person about Pinterest, Etsy or Stitch Fix and you don't hear, "Good lord, they're building out a sophisticated suite of data discovery tools!" You might get comments about someone's so-extra Pinterest-perfect birthday party for their six-year-old or someone will talk about how Stitch Fix is really refreshing her wardrobe.
And that's the overlooked genius of these companies. They've managed to become part of our cultural landscape, while their transformative tick quietly ticks on, making money for the handful of people who have been paying attention.
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Your pop culture recommendation for the day: Literally nobody who has been following Taika Waititi's career is surprised by how funny and well-done the latest Thor movie is. But if you still need convincing, watch the closing sequence from his 2010 outing, Boy, in which Waititi leads an army of children in a combination zombie-Thriller/haka dance -- all while dressed like Michael Jackson.
Also, Boy is available via U.S. Netflix and I highly recommend it. If you want to get an idea for what the whole movie feels like, watch his Oscar-nominated, 11-minute long Two Cars, One Night on YouTube. Or listen to his 18-minute-long TED Talk on creativity.
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