Scrappiness, Cargo Biz, & The New CEO 📍

In 1972, women owned only 4.6% of all US businesses, most of which employed less than five people and generated $7.2 billion in revenue. These figures may not look impressive. However, keep in mind that they accomplished this despite being unable to apply for a business loan or credit. It wasn't until 1988 that Congress passed a law allowing women to take out business loans in their name.

As a result, the numbers look quite different today. Women now own 42% of all US businesses, employing 9.4 million workers and generating $1.9 trillion in revenue.

Today, women owned and founded startups outperform all-male companies by 63%. A BCG and MassChallenge study found that women entrepreneurs generate 10% more revenue with less than half the funding.

Reason? Gender perception has a lot to do with how women perform. 

Despite their very public accomplishments, women are 63% less likely than men to receive venture capital, according to Columbia University research. As a result, women feel they need to be more prepared when asking for money. Harvard Business Review reports that female led businesses come to the table with stronger business plans to counteract the heavy pushback from investors who often assume that women don’t have technical knowledge.

Sesha Kadakia, co-founder of Tangify, a startup that makes it easy to determine if an idea can be patented, has an interesting take on how lack of funding pushes women to do better with less. She says, “It still confounds me that less than 2% of VC funds went to all-women teams in 2022! Women-owned businesses have been forced to get creative, be scrappy, and control burn rates in ways their counterparts haven’t had to. 

This brings us to the question of the hour. Should companies replace CEOs? 

Yes, because…

CEOs make a ton of money at the cost of labourers. Over the past 45 years, the average CEO pay has gone up 1,460%. In comparison, the average worker pay has only gone up 18%

In 2021, Amazon CEO Andy Jassey received a package worth $213m — equal to the collective wages of 6,474 Amazon employees. Clearly without CEO salaries, tech companies’ budgets could have enough breathing space to do away with the draconian mass layoffs. 

CEOs are humans at the end of the day. They can make bad decisions which can land the company in terribly hot soup. 

A robot on the other hand has no room for emotions or gut feeling when making decisions. It uses algorithms, machine learning and data analysis to make decisions with the highest chances of success.  Firms like IBM, Google, and Alibaba have all jumped into the space in recent years.
 

No, because…

Decision making also requires contextual understanding of the world and the complexities of dealing with human employees and consumers. And AI can’t replicate these human emotions. 

AI is good for automating time consuming tasks. It’s a great assistant, but not a leader of the people. Oded Netzer, a professor at Columbia Business School, estimates that current AI tools could probably automate “a good 30%-40%” of executive tasks.

SVB’s collapse is the second-largest bank failure in American history. But what does its collapse means for startups and venture funding? 

As venture funding reached record highs in 2020, startups looked for secure places to store their cash during the pandemic. Before its collapse, SVB was trusted by half of all tech and life sciences companies in the US. Tech startups deposited nearly $200 billion in SVB in Q1 of 2022.

But what did SVB do with all that money and trust? It poured it into the wrong places. SVB's major misstep was investing much of the startup cash deposits into mortgage bonds that offered slightly higher returns but locked the money up for longer periods. Unfortunately, this decision became a significant issue when liquidity dried up.

Word on the street is that Uber is considering separating its freight division from the rest of the company, either by selling it off or creating a new public company.

Back in 2017, Uber started the "Uber Everything" initiative, which included its freight business. Basically, the idea was to use Uber's technology to transport anything, not just people from point A to B. Uber Freight has already been growing rapidly by connecting carriers with shipments in a way similar to how the rides business operates. With the acquisition of Transplace in 2021, Uber's logistics arm has become a massive $1.5 billion-per-quarter business, making up 18% of the company's total sales.