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How the 20 Companies Were Selected
When I started doing preliminary research for this book, I expected the pool of eligible women-founded web businesses to be around 40 or 50, and that narrowing this number down to 20 would be a piece of cake. Little did I imagine the flood of email I would receive after putting out the word that I was looking for promising women-founded web companies. My email box was clogged with messages from women eager to tell me about their own web business or the business of a colleague or friend. The selection process was clearly going to be more involved. I spent weeks brainstorming about how to narrow the pool and zero in on the 20 companies to profile in this book.
I decided to first limit the universe of women-founded web companies by considering only "pure play" web companies -- those offering their content, services, or goods over the web, or selling a web-based technology. Brick-and-mortar operations with online components were excluded from consideration, as were web design shops, consulting firms, and hardware companies. I also limited the field to companies with large market opportunities. I excluded those whose ability to scale seemed dubious and those that weren't experiencing high growth in revenue, traffic, or customers. After applying these criteria, I still had more than 200 companies from which to choose the 20 -- a loud and clear signal that women entrepreneurs are key players in the Net economy.
In further narrowing down the universe of eligible companies, I didn't limit the pool to the most profitable ones. Let's face it: With Internet companies burning through cash on big media campaigns in hopes of building their brand and grabbing market share faster than their competition, traditional metrics like profit can prove a futile way to evaluate the success of companies. Counter to intuition, some web companies that are posting profits could be doing so at the expense of investing in marketing and advertising that would help their longer-term prospects. In cases like this, profit, while important, is not necessarily the best and only indicator of the success and staying power of a company.
I considered filtering companies on the basis of their valuation or market capitalization, but most pre-public companies choose to keep this information confidential. Moreover, valuation for startups is fuzzy and somewhat arbitrary. According to Joanna Strober of Bessemer Ventures Partners, "Valuation really depends on supply and demand -- on how many VCs are interested in a particular deal. If an entrepreneur can create a lot of hype and excitement around their deal, they can create a higher valuation. There are very few 'real' metrics."
I also considered ranking the 200 companies by revenue and going with the top 20. But this worked to favor more established ones and exclude promising fledglings. Moreover, revenue data wasn't available for several of the companies that seemed to deserve a place in this book.
After considering these options, I became wary of going with a straight quantitative measure since it wouldn't guarantee a complementary and varied mix of companies. I wanted the 20 companies to highlight the various sectors of the new economy and the diversity of achievements by women web entrepreneurs.
To narrow down the list of 200, I excluded companies with male co-founders unless the woman co-founder was at the helm in the role of CEO, chairman, or president. I then grouped the companies into four categories that roughly map the terrain of the web economy:
- Web portal, content, and community
- Web-based services
- E-business applications and web technology
From there, I selected a mix of companies using both quantitative metrics (revenue, traffic, and transaction volume for instance) as well as my subjective sense of the company's promise. Maximizing variety and choosing inspiring stories were my final filters when selecting the twenty companies.
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