05/22/12 | Uncategorized

Facebook Is Missing Something Obvious

Companies with women on their boards have been proven to lead to a higher ROI.

By Shaherose Charania (Co-Founder & CEO, Women 2.0)

To continue its explosive growth, Facebook needs to innately understand and cater to their most lucrative user: women. The best way to do that is to add a woman to their board.

Let’s look at the facts about how women rule the web: 71% of Facebook’s daily active users are women (58% of total users are women). That’s almost three-fourth’s of their user base. Women are clearly Facebook’s #1 customer.

And, it’s not just on Facebook. Women are driving activity on Twitter (59% are women), women dominate Pinterest (83% are women) and even Instagram skews female (though not confirmed).

Package that together with the fact that we’re the ones making most of the purchasing decisions: women control 80% of household spending. Online and offline, women are consuming, purchasing and recommending – driving social activity (conversation) and commerce (transactions).

It’s hard not to conclude that Facebook needs to innately understand women. We are Facebook’s most lucrative customer. To drive higher engagement and more advertising dollars, Facebook needs to build and design products with women in mind.

Why women on Facebook’s board of directors matter

While they’ve done a good job of filling their ranks with women in product, operations, engineering, design and other parts of the business, there’s a gaping hole at the top of the organization where the highest-level strategy is decided – the board of directors.

Diversifying the Facebook board will bring another perspective to the table and further strengthen the company’s innovation, big picture objectives and product development. Facebook has already come a long way by appealing to the female demographic (as evidenced by the gender makeup of their user base) but to secure and continue to exponentially grow their stronghold, Facebook requires more female input at the highest level. Consumers are not loyal to technology: they’ll jump ship as soon as they find a better solution. Companies that stop innovating where it matters die quickly on the Internet. Facebook has an opportunity to build sustainability today.

It’s simply good business to have women on your board. Companies with women on their boards have been proven to lead to a higher ROI: they enjoy a higher return on equity by over 53%, a higher return on sales by over 42%, and a higher return on invested capital by over 66%. By these numbers, any company without at least one woman on their board is missing a key strategic advantage.

As Facebook is missing out, companies are seeking women as an advantage for their business.

A number of sustainable brands have recently clued in to women as a strategic advantage:

  • Starbucks added young innovator Clara Shih to their board in December 2011.
  • Walmart brought on Google’s VP of Location & Local Services Marissa Mayer to their board in April 2012.
  • LuluLemon added Facebook executive Emily White to their board in November 2011.
  • eBay brought on Facebook executive Katie Mitic on their board in September 2011.

These companies understand the power of having strong women innovators at the highest decision-making level. They realize that they had been missing opportunities to innovate on the dimensions that are important for women.

Next Gen Women Innovators

Companies in the Facebook orbit have recently made acquisitions with some killer talent and, notably, each with a female on the founding team:

  • Apple acquired Chomp, which was co-founded by CTO Cathy Edwards. Chomp was acquired by Apple for $50 million in February 2012.
  • LinkedIn acquired SlideShare, co-founded by CEO Rashmi Sinha. SlideShare was acquired by LinkedIn for $118M in May 2012.
  • Dropbox acquired Cove, co-founded by Facebook’s first female engineer Ruchi Sanghvi. Dropbox acquired Cove in February 2012 for an undisclosed amount.

These female founders drive the vision, strategy, design and engineering of their successful tech companies.

We at Women 2.0 have been watching the female founder network grow explosively over the last decade. Not only are women important to Facebook as users and decision-making board members, but also as targets for growth through M&A.

We’re big fans of Facebook – in fact, it was in Facebook’s office where the co-founders of Women 2.0 met for the first time in 2006. Facebook is where our community has grown – and we want to see Facebook continue to innovate. At this unique time and juncture with tremendous opportunity to revolutionize the way we communicate, Facebook can reach even greater heights and we can’t wait for them include women at the highest decision-making level for the best chance at disruptive innovation.


Thanks to Semira Rahemtulla for reviewing versions of this article.

Editor’s note: Got a question for our guest blogger? Leave a message in the comments below.

Photo credit: Esther Vargas on Flickr.

About the guest blogger: Shaherose Charania is the Co-Founder and CEO of Women 2.0. She is passionate about open innovation in mobile and telephony startups. She is currently running Founder Labs a pre-team, pre-idea incubator for new mobile startups. Follow her on Twitter at @shaherose.

Anne-Gail Moreland

Anne-Gail Moreland

Anne-Gail Moreland, an intern with Women 2.0, was on the StartupBus. She studies neuroscience at Mount Holyoke College, where she is trying to merge a passion for tech and the brain into a new wave of cognition-based technology

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