Despite its newness to the industry, web3 is already suffering from gender inequality; damning new research suggests.
Only 13 per cent of founding teams in the web3 industry include women and only three per cent of companies work with a team that is exclusively female; according to the most recent findings of BCG X, the technology build and design unit of Boston Consulting Group (BCG) and People of Crypto Lab, a creative and innovation studio that aims to boost diversity, equity, and inclusion in the web3 ecosystem.
Web3 companies are on the precipice of shaping the future of the digital world in their development of new applications involving the metaverse, blockchain technologies and cryptocurrencies. Experts anticipate that this innovation will have a far-reaching impact across many global industries.
Yet despite the evidence of forward-thinking in their solutions, companies operating in the industry remain stuck in the past regarding one pivotal area of operation: the presence and involvement of women.
This concern remained central to BCG X’s latest study. Titled ‘Web3 Already Has a Gender Diversity Problem‘ and based on Crunchbase‘s data of 2,800 participants, the study analysed the gender diversity of founders and investors within the web3 industry, finding significant disparities in areas of funding, founding and representation.
Is web3 working for women?
Turning the attention to gender representation, the study explores the employee demographics of web3 companies. In this light, it found among all employees at top web3 startups, the share of female employees is actually higher, at 27 per cent.
However, companies typically cluster these women in non-technical roles, such as human resources and marketing. Alarmingly, this gap is greater than in the overall workforce in science, technology, engineering and math (STEM)-based fields, where women make up a third of the workforce, with a quarter filling technical roles.
Concerning disparities in funding, the study uncovered how all-male founding teams in the web3 industry raise nearly four times as much capital as their all-female counterparts. While all-female founding teams in the web3 industry, of which there is only three per cent, raised around $8million in funding, this figure was far-surpassed by companies with all-male founding teams who raised closer to $30million.
Alarmingly yet, the number of web3 companies to raise more than $100million with all-female founding teams is zero.
Online representation
Jessica Apotheker, chief marketing officer, BCG
“The numbers are alarming. This is an economic as well as a diversity crisis, with opportunities being missed to back and scale businesses designed with female customers in mind,” reflects Jessica Apotheker, BCG’s chief marketing officer, and a co-author of the study.
“The gender gap in web3 is an even bigger problem than what we’ve long known about in STEM companies overall. With web3 we’re not just talking about tech—we’re talking about tech applied to every industry and every aspect of life,” continues Apotheker.
“Web3 companies will shape how people represent themselves online, transact business, and interact with each other. BCG research has found that companies with diverse leadership teams are better at innovation and more profitable. Web3 companies that do not embrace and leverage diversity from the start will forego a huge business and monetisation opportunity,” she concludes.
Room for improvement
The web3 industry is still in its early days, a factor strongly recognised throughout the study. But with its publication, BCG has seized the opportunity of the study to put forward a series of recommendations to web3 companies in early-stage development.
The authors have outlined a series of measures they would like to see implemented in the development strategies of web3 companies.
These recommendations include:
Measure everything – A critical first step is granular, objective measurement and reporting about the representation of women and other aspects of diversity; across the entire ecosystem of company founders, employees and investors.
Put women on investment teams – There is clear data showing that unconscious bias can sway funding decisions, and all-male investment teams are more likely to back all-male founding teams. To address this, some venture capital firms now require that investment teams include at least one woman.
Design brand experiences to be inclusive – Companies creating a digital presence in web3 should ensure that they are creating the widest range of experiences for the broadest possible base of consumers.
Build a supportive ecosystem – Companies need to invest the time and resources in ensuring that female founders and investors in the web3 space can tap into strong networks that are diverse and inclusive. Mentorship, from women and men, is especially important in opening doors for aspiring female founders and investors. Web3 summits and conferences should commit to sponsoring events that work toward ensuring gender parity among speakers, with a commitment to at least 30 per cent of women speakers as a start.
Partner with regulators – As governments and nonprofits focus more on environmental, social and governance (ESG) issues, they are developing stricter reporting requirements and other measures regarding the gender makeup of companies and industries. Companies and investors have an opportunity to proactively collaborate and help shape those regulations, rather than simply waiting for them to emerge.
An opportunity to lead the way
“Web3 will revolutionise how we interact, transact and monetise as a society, but this can only be achieved if women are equally involved in its development,” sees Simone Berry, co-founder of People of Crypto Lab and a co-author of the study.
“Despite the current ecosystem being biased towards men we are very early in development with an incredible opportunity to not repeat past mistakes and ensure that women have the resources and funding they need to lead the new digital economy.”
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