Learning and Change - Catherine Muther

"The question you have to ask is 'Who cares if this succeeds?' " Muther says. "We've created a partnership of interests." It's a principle of technology business development: You're only as strong as the interests that have a stake in you. The companies that have contributed capital not only have a philanthropic stake in the Cluster -- they also have a vested interest. Their business interests are aligned with the success of the startups in the Cluster; they want to see these new companies grow -- they become partners as the companies in the Cluster move from incubation to maturity.

Developing new companies is the bread and butter of Silicon Valley. But the way that the Women's Technology Cluster is doing it takes on two of the Valley's most complex and perplexing social issues. First, why aren't more women playing key roles in high-growth, VC-backed startups? In 1998, only 4% of all high-tech companies that received venture funding -- including Internet companies -- had a woman CEO, according to VentureOne, a Silicon Valley investment-research firm. "For the first time, there's a whole generation of women with management experience in technology companies who are ready to found companies and to lead companies," Muther says. "And yet women are underutilized."

Muther's approach is to create a pool of promising startups and network them to potential funders, mentors, and each other. But her approach is no less disciplined for having a cause: More than 300 companies have applied to join the Cluster, but only 10 have been accepted and have decided to join. The Cluster has room for as many as 20 startups in its 22,000-square-foot space. But Muther has made sure that the screening process will create a pool of startups, each of which stands out from the sea of new, risky startup companies. By getting into the incubator, they've already passed one hurdle.

The second issue addressed by the Cluster: With such enormous wealth being created by Internet companies, why isn't more of it being donated to the community? A 1998 study by the Community Foundation Silicon Valley found that 45% of the highest-net-worth households in Silicon Valley gave less than $2,000 to charity annually. Muther doesn't only want to get more money into the hands of women who are starting companies; she also wants to see more successful women pouring their personal resources and talents into solving social problems. Her own vision for the Women's Technology Cluster is "a learning laboratory for future business leaders who will give back to the community."

As much as it is a boot camp for startups, the Cluster is also a training ground for philanthropists. To become part of the Cluster, each entrepreneur must agree to contribute a 2% equity stake in the form of a warrant. "It's not a fee for services; it's a commitment to giving back," Muther explains. The idea is that as companies mature over the next 5 to 10 years, this equity will become a liquid portfolio -- a body of wealth that can later be reinvested in the Cluster and contributed to other philanthropic endeavors. The goal is to make the Cluster self-sustaining, to ensure that other entrepreneurs have the same opportunities. But it's also to learn philanthropy. Muther's approach makes the Cluster not only an incubator for new companies but also an incubator for social change.

For Muther, social change is about seeding the future that you want to see. Take the Springboard 2000 Women's Venture Capital Forum, for example. A year ago, when the National Business Women's Council, a federal agency, contacted her about holding a conference to discuss why women entrepreneurs weren't winning more venture- capital funding, Muther recommended direct action: Why talk about the problem when you can facilitate deals to help solve it? Instead of another conference, why not hold an event that would put women entrepreneurs in front of venture capitalists -- a venture fair, so to speak?

Muther put the National Business Women's Council in touch with the Forum for Women Entrepreneurs in Silicon Valley, an influential network. And on January 27, 2000 the first venture conference for women will take place at Oracle, in Redwood Shores, California -- with the Three Guineas Fund serving as one of many sponsors. Some 25 to 30 women seeking seed or first-round investments of $1 million to $15 million will present to VCs from some of the Valley's top firms: Accel Partners, Draper Fisher Jurvetson, and Softbank Technology Ventures. Kleiner Perkins Caufield & Byers's star John Doerr -- perhaps the Valley's most famous venture capitalist -- is on the conference's guest committee.

"I've learned that complex problems require more than one point of view," Muther says of her approach to making change. "The command-and-control model of management is fired!" Just as a product-development team includes people from many different parts of a company, Muther believes that the best way to attack a social problem is to draw people from different spheres -- nonprofits, government, and the private sector.