Lisa Stone, former BlogHer CEO and now at Ellevest, explains why traditional retirement planning fails women and how to fix it. Over 90% of Wall Street traders and VCs are male, yet women-led teams deliver higher valuations and lower risk. She shares concrete steps for hiring diversity: acknowledge bias, set measurable KPIs, use Rooney Rule hiring, and recruit at affinity conferences.
Chapters
Hey! Oh! Hey everybody! Hey! Welcome to Oakland. Welcome to HustleCon. I am not Sally Krawcheck. I am Lisa Stone. I'm a serial entrepreneur, probably best known for BlogHer, as they shared, but I am also very happy to be the Chief Strategy Officer at Ellevest. Let me tell you a little bit about how I came to be speaking with you this morning. Sally sat in traffic for 3 hours last night, missed her plane by this much, and called me and said, "You know what? You know better than anybody how we hire from outside our network. You go tell 'em." And I said, "Okay, thanks, boss. I'll do that." So Ellevest is a financial planning and investment platform created by, for, and with women. We offer a full series of financial services from private wealth management through premium planning that includes certified financial planning and career coaching. Since most of us earn our nest eggs paycheck to paycheck. And we also have a digital platform with a $0 minimum. The single most important thing you should know about investing in women, whether you are a woman or just have them in your life, is that if you save for retirement using guy math, you will never save enough. Wall Street uses guy math. That's the default. Why is this a problem? Because women live longer, We make less for the same jobs. We tend to take career breaks to take care of children and loved ones, and those hit us in the wallet hard from salary and opportunity. So we decided to form this company, and it is a big business. The women control 51% of private wealth in the United States. It's a $14 trillion business. The majority of women under 40 do not have a financial advisor, and the majority of women of all ages fire their financial advisors as soon as they have a divorce or their husband dies. So, big business, big opportunity, and this is all happening because we were the biggest financial technology platform out of the gate because Sally hired outside of her network. Our chief product officer, who is on the founding team, Alexandra Street, is from Weight Watchers. Specialists in changing behavior. Our chief design officer built Vogue.com, and I've spent the past 25 years building huge communities of women who talk about everything from parenting to politics. So, let's talk about what this means for you as entrepreneurs. When we think about the ultimate meritocracy, for a long time, people have thought about the United States, right? Mom, apple pie, capitalism, sky's the limit, Horatio Alger. And let's unpack that a little bit. Particularly, let's look at two industries that affect us as entrepreneurs. Let's look at Wall Street and at venture capital. You would expect, given that these industries are tracked by ROI, very carefully calibrated, that they would be watching how people were performing and hiring only the best, right? Well, let's look at, is the fact that these, interestingly, tend to be the least inclusive of all the industries. 90% of traders are male. 90% of hedge fund managers are male. 95% of mutual fund managers are male. 86% of financial advisors are male, and 95% of VCs are male. And by the way, white, white, white, white, white. And most of the people who get into these businesses as women also tend to look a lot like me. So, how are they performing? According to my boss, Sallie Krawcheck, the typical female investment advisor outperforms men. Less likely to panic in a rush, less likely to think like a lemming. In addition, the— In addition, when you look at the performance of Wall Street over the past 10 years— remember the financial crisis? Pretty terrible what we learned about the way business was done. VC is doing a little bit better, although it's important to note that they're not outperforming the public markets, and the risk is astronomical. So, actually not so great. Whereas if you look at all the studies that have come out from McKinsey Company's "Why Diversity Matters" to Babson College's "Women in VC," you see that if you want to increase returns, lower risk, improve employee engagement, really improve customer engagement, and get overall better returns, you'll have diverse and women-involved leadership groups. I'll be specific. According to Babson College, if you're an entrepreneur and you have women on your leadership team, your valuation in your first round will be 64% higher, and your valuation at your exit will be 49% higher. The challenge is finding a VC who will invest in you if you do have a woman on your team. But the returns are there, and the truth is same for publicly traded companies. So let's talk about what to do about that. How can you actually impact your own, uh, company in a way that will improve performance like that? Here's what I recommend, and I'm gonna talk a little bit about Ellevest's experience and also BlogHer's. Number one, I think it makes a lot of sense for you to own, whoever you are, whatever your background is, that you have unconscious bias and you're gonna hurt your company unless you unpack it. Let's just acknowledge it. We've all got it. So what I recommend that people do is think hard about how to put in place a couple of things. Number 1, if your CEO cares about inclusivity, and I mean serious inclusivity, of course race, of course gender, but also gender preference and age and neurodiversity. How about socioeconomic background? The people we survey about our digital platform who have student debt think a lot differently about how they want to invest their money than people who are in our private wealth business, right? The very best thing you can do is to have your CEO write about it and/or consider doing a Q&A between— if your CEO happens to be a great white guy, put him in conversation with people in front of the company to demonstrate what his values are and what he wants the company's values to be. There are also a ton of people online that you can follow, friend, and recommend. I'm really impressed by the work that Blake Irving does did to change GoDaddy's brand and make sure that the women in his company were paid what men are before he left that job. I'm really impressed by Rick Klau at Google Ventures, who has unpacked his network on LinkedIn and unpacked his network on Twitter and made a very conscious decision to follow many more women. But there are plenty of women doing this too. Look at what Aileen Lee and crew are doing with AllRaise and Founders for Change. Jess Lee was really instrumental in that. You know, there are any number of people you can follow. But the bottom line is what you need is KPIs. At BlogHer, when I was CEO, we made a decision that we wanted to create a duocracy, not a hypocrisy. And we didn't want 3 mostly white chicks to just recreate a conference in our own image. So what we did was decide that we were gonna have 85% turnover in speakers every single year. That was a commitment. But wait, there's more. We decided that when we did turn them over, we were going to make sure that we had 30% or greater representation of underrepresented groups on a given topic. And interestingly, what that meant was that in our Food Network, we worked really hard to involve men, because we felt, and the community voted, that cooks who are guys just don't get the same fair shake that the Paula Deens and the Ree Drummonds of the world do. It was a big success. I think that the other thing that I just have to emphasize a ton is that we networked like honey badgers, okay? We worked like the dickens. We were at, on the founding teams and sponsors of Blogalicious and Blogging While Brown. There are so many conferences you can attend to recruit, from the National Black MBA Association to Blavity and AfroTech to We All Grow Latina, I mean, the list is truly endless. And if you really wanna recruit excellent talent, you'll go there. Because if you then put into place a Rooney Rule, which the Philadelphia Eagles coach got started, fantastic initiative, if you follow that and you work to be inclusive every time you hire or every time you pull together a working group, it will have a fundamental change. And if your team doesn't do it, I will tell you as a former CEO, just tell them no. When they bring the next candidate that looks exactly like them, whoever they are, you just say no. It's very effective. So I think that the last thing I wanted to share is how well this has worked for Ellevest. When I sat down for breakfast with Sallie Krawcheck the first time, you know, I expected to meet one of the 1% of the 1%, right? She ran 2 of the 5 largest investment banks on Wall Street. I did not expect a scholarship student from Charleston, South Carolina, who's absolutely passionate about saving the financial futures of women to show up at that breakfast like she did. And I think that's one of the reasons that at Ellevest, 50% of our engineering and product teams are women, and 40% of my colleagues are people of color. It can be done. You can do it. And I will personally help you if you cannot find technologists or product developers or engineers who are women or people of color. Just reach out to me on Twitter @LisaStone or LinkedIn I swear, I know a ton. I've been in the Valley for 100,000 years. The last thing I would just offer up is this. When I think about what's gonna happen next and where we need to go in the era where we are, as a— I'm a third-generation American, and I'm really concerned about what's happening in this country and the way people are treating themselves and each other. I want you to think hard as entrepreneurs entrepreneurs about the leadership you're showing, I really salute it, and you need to take care of yourselves financially. I want you to go onto the Google and Google Ellevest and SEP IRA, S-E-P IRA. Entrepreneurs typically do a pretty terrible job of taking care of their own financial futures. Yes, I want every woman here in the audience to figure out a way, either through Ellevest or another robo-advisor, put some dollars on auto deposit every single month and invest in your futures because women are 80% more likely to be impoverished in our senior years. You don't want to be in that apartment with 6 of your best friends fighting over the goldfish crackers, ladies. That's ridiculous. But guys, you need us too, because it turns out while you're pouring money into your companies and your time and your love and your effort into your employees, you really need to be saving for yourselves as well. So, at the very least, go on to NerdWallet, search best robos of 2018. Yes, Ellevest is on that list, and take care of yourselves, even as you're working to change the culture and innovate in ours. Thank you so much. Yeah, yeah, yeah, yeah.
