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Feb 17, 2021

Could more women-led tech companies make the internet less awful?

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Bumble wanted to make online dating more accessible to women, partly via strong moderation. Could that sort of approach improve the internet ... for everyone?

The dating app Bumble swiped right on its initial public stock offering last week, making its CEO, Whitney Wolfe Herd, the youngest female CEO to take a company public. Not only that, but eight of the company’s 11 board members are women.

And that has more than just symbolic power: Bumble has styled itself a women-first dating app. The platform encourages them to send the first message. It also moderates the photos on profiles and the ones sent through direct messages so users won’t get any revealing content they didn’t ask for. I spoke with Sarah Kunst, the managing director of Cleo Capital, who advised Bumble on its venture capital arm. I asked her if all of that translates into more women on the app than men. The following is an edited transcript of our conversation.

A headshot of Sarah Kunst, the managing director of Cleo Capital.
Sarah Kunst (Photo courtesy of Cleo Capital)

Sarah Kunst: You know what’s funny? There are more men, because it turns out that when you empower women and when you give people dignity and equity in their relationships, that it helps everybody. It’s not just women.

Meghan McCarty Carino: And how much of that do you think is because of the type of content moderation it does, like not allowing photos of shirtless men, or worse?

Kunst: I think that’s a huge part of it. When you think, “Oh, maybe I’ll go meet the love of my life today on a dating app,” and instead you see something that you really did not want to see, it’s disappointing and it makes you less excited to do it. And so Bumble has done a ton of work in making sure that one, people are who they say they are, with things like photo verification. [And] two, that they’re not doing creepy, mean, rude things. And if they do, then the company has taken a really firm stance, that it’s really kind of one strike and you’re out. With everything from people who want to body shame to people who are sending lewd images. That’s not OK. And certainly the legislation that they’ve been able to work on and push through in the state of Texas, to make sending a picture that exposes yourself illegal, it makes so much sense. Those are the kinds of things that are so obvious in retrospect, but nobody in the dating app world or in the online dating world had taken that stand yet. And I think it’s pretty clear from the market debut that there’s a lot of success in helping people just treat each other better.

McCarty Carino: Given that success, do you think you’ll see more companies kind of taking that same path of moderation?

Kunst: Yeah, and I think this is happening kind of everywhere right now in our world online. When you look at everything from Twitter’s tussles with the last president to the Facebook review board, there is starting to be this understanding that you can’t be the Wild West. You build roads in the real world, but then you put up speed limits. I think we’re seeing that happen a lot right now in the digital world. And I think companies like Bumble that had the vision and that had the real kind of character to stand up and say, “This isn’t OK. We’re not doing it,” I think that really, really matters. And so that, I think, is something that we’re going to see more of, not less of. And it certainly hasn’t escaped my notice that it seems like women-led companies in particular are really leaning in, in that way.

McCarty Carino: Now, this good news for Bumble comes on what looks like maybe bad news for other women-led tech companies. With so many facets of life, the pandemic seems to have exacerbated certain inequities, including with venture funding. The share of venture capital dollars for companies founded by women declined last year to 2.3%, according to Crunchbase. So what happened, and what do you think needs to happen to change that?

Kunst: Yeah, I mean, the good news is, it is a frustrating problem with a very simple solution. The solution is to fund more women, and fund more women because you either fundamentally believe that somehow men are just so much naturally better at running companies and raising money that they take up 90%-plus of all venture funding, or you think that there is some inequity and there’s a problem to be solved there. And the reason to solve it isn’t the social mission, it’s because if you are leaving that much money on the table by not funding women, then you’re not going to make as much money as you should. And it is your job as an investor, as a venture capital investor, to make money. And so by only looking at a tiny sliver of the population, that’s a lot of money you’re not making, and that’s not good. So that’s the solution. Why is it a problem? I mean, the reason for this problem is always the same. The reasons never change. It’s always sexism, it’s always bias. It’s always the concept of homophily — that every human is generally drawn to people who remind them of themselves. And when you don’t have enough diversity on the investing side of the table, you’re very unlikely to see that diversity take place on the founder side.

McCarty Carino: Bumble obviously had a really successful IPO. Do you think that will make a difference in all of the stuff that you’re talking about?

Kunst: You know, the success of Bumble’s IPO and being the youngest woman to ever take a company public reminds me of the success of Katrina Lake in Stitch Fix a few years back. And it is certainly helping to move that needle. If you can’t be what you can’t see, shortly after Bumble’s IPO came to market, Alyson [Watson], the CEO over at Modern Health, a company that recently became a unicorn [a private company valued at $1 billion or more], said openly that she looks at that as a real inspiration to think about how do we get an even younger woman to IPO her company next? And so now they’re looking at that. I think that that deeply matters, both on the founder side and on the investor side. Because when you start to see that, it becomes a lot easier the next time a woman walks in your office building a company that you might not 100% understand because it’s not fixing a personal pain point for you, and say, “Well, I mean, if there’s been all this success in the market and this person seems interesting and credible, why wouldn’t they be next?” And so I think it’s incredibly, incredibly important.

Related links: More insight from Meghan McCarty Carino

Sarah Kunst also mentioned a study about diversity at venture capital firms and how partners’ children influence their investing and hiring choices. It was written by Harvard’s Paul Gompers and the Wharton School’s Sophie Wang. It found that the more daughters a VC partner had, the more women they tended to hire at their own firms and the more profitable the firm’s investments turned out to be.

Also, in service of the goal of greater diversity in venture capital funding, Kunst’s own company, Cleo Capital, debuted a fund a couple of years ago to invest in women to act as VC scouts to track down those future Bumbles and Stitch Fixes of the world while they’re still in a garage or dorm room somewhere.

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