Businesswomen developing value propositions targeted at female consumers often face significant challenges in marketing their ideas. One of the main obstacles is their tendency to stay within familiar boundaries, lacking the entrepreneurial experience needed to accurately assess the commercial potential of their ideas.
An article published by researchers from Bocconi University and the University of London examines whether a scientific decision-making approach can serve as a useful tool to help these businesswomen overcome such limitations. The new research, published in Organization Science, suggests that female entrepreneurs adopting a scientific approach to decision-making are more likely to find new uses and target markets for their product or service, increasing the chances of transforming their ideas into real businesses.
Background
It is common for entrepreneurs, particularly less experienced ones, to develop value propositions for audiences they are familiar with or are part of themselves. These so-called “user entrepreneurs” generate ideas based on specialized knowledge of a market need, such as young parents developing products or services to meet parenting needs. The advantage of doing this lies in their deep understanding of the target market.
However, such specialties can also lead to inertia and incorrect assumptions about a target audience. This often results in overlooking the best ways to integrate an idea into a value proposition or reluctance to accept that a product might meet the needs of a broader audience.
Similarly, female user entrepreneurs often lack the business acumen required to accurately evaluate the commercial potential of their ideas. This can lead to incorrect assumptions about the target audience or to missing the optimal integration of their innovative ideas into strong value propositions.
The article explored the impact of training in strategic decision-making on businesswomen with value propositions aimed at female consumers. This training encouraged them to clearly articulate the logic behind their business proposal and validate it with evidence.
Methodology
The study used a combination of data from three randomized controlled trials involving 172 businesswomen based in Italy and the UK, as well as LinkedIn data. The treatment group received training that encouraged them to develop theoretical maps of their business proposals and validate them with evidence.
The value propositions included initiatives such as coaching for women or online travel platforms targeting female clients. A control segment of this sample was also exposed to business training and evidence-gathering techniques but was not actively encouraged to use the material to articulate their business logic, formulate hypotheses, or validate them.
Results
The results show that exposure to training on the scientific approach prompts more radical changes in initial ideas compared to businesswomen without a value proposition targeting women. Treated businesswomen with a female-focused value proposition who made radical changes performed better in launching and sustaining their ventures than those who did not change.
The key findings of the study included:
- Businesswomen treated with female-targeted value propositions were more likely to make a radical change to their value proposition or customer segment (a “pivot”) after exposure to the training guidance compared to those without female-targeted proposals.
- Treated businesswomen with female-targeted value propositions who pivoted performed better in launching and sustaining their ventures than those who did not pivot.
- Businesswomen with limited experience benefited more from guidance on scientific decision-making than those with higher levels of prior managerial experience.
- Results were replicated across different groups of user entrepreneurs and value propositions, such as ethnic businesswomen targeting ethnically-focused audiences.
Professor Novelli stated that the study had several key implications for businesswomen and policymakers. “Our study demonstrates the real difference that scientific decision-making training can make in improving business performance,” she said.
“User entrepreneurs possess deep knowledge of a very particular audience segment, but learning to articulate and validate the logic behind their business proposal can help them identify blind spots and open new avenues for business ideas. This could include new use cases and audiences for a product or service.”
Conclusion
The study contributes to three main areas of research: the performance implications of a scientific approach to decision-making, the literature on female user entrepreneurs, and research on democratizing entrepreneurship by supporting businesswomen from underrepresented demographics. The results suggest that a relatively brief intervention can lead to substantial changes and improved performance for female entrepreneurs with female-targeted value propositions.
“Our study also contributes to research on the importance of supporting entrepreneurs from underrepresented demographics, such as women. While previous research has discussed how they can effectively pitch their ideas to receive more favorable evaluations, our study highlights a mechanism that can help them address potential limitations and enhance the commercial value of their proposals,” Novelli concluded.
Reference (open access)
Gagliardi, L., & Novelli, E. (2024). Female entrepreneurs targeting women: Strategic redirection under scientific decision-making. Organization science.
