Author: Jim Hopkins, USA TODAY
January 21, 2002

SAN FRANCISCO — Catherine Muther has often been one step ahead of the crowd.

The granddaughter of a Boston suffragette, Muther landed at Cisco Systems as head of marketing in 1989, when the company was still young and women were rarely seen in the executive suite. Nearly five years and one Cisco initial public offering later, Muther left with millions of dollars' worth of stock. She plunged into the relatively new field of venture philanthropy — taking an active role in the causes she supports.

But unlike other New Economy philanthropists, Muther poured $2 million of her Cisco stock into a charitable foundation that created a non-profit business incubator for a neglected niche: technology start-ups launched by women. The Women's Technology Cluster, housed in a state-of-the-art building in San Francisco, is home to 16 software, wireless and other information technology ventures.

Participating start-ups must have a woman among the principals. Ventures can stay in the incubator for up to two years. In return for support, start-ups pledge 2% of their stock to the cluster's Venture Philanthropy Fund to support future entrepreneurs.

Twelve companies sheltered in the incubator have left, putting Muther, 54, at the center of efforts nationally to boost tech businesses founded by women. Three of the 12 have been sold. An additional five remain in business and have more than 100 employees.

The number of female-owned companies has been growing twice as fast as the number owned by men. Yet they are concentrated in low-growth sectors, such as retailing, instead of fast-growing fields, such as tech. That makes it less likely that they'll become future economic engines churning out jobs and tax revenue. Muther aims to change that with an incubator that gives women access to venture capitalists, lawyers and other key players in entrepreneurship.

Born to privilege; giving back

Born in 1947, Muther was reared in the upper-crust Boston suburb of Newton. Her father was a labor lawyer, her mother a social worker. Their three boys and one girl were born over just five years, so they were very close. They did everything — including getting newspaper carrier routes — together. "We were kind of this pack," Muther says.

She was one of the very few girls delivering The Boston Globe. Walter and Ruth Muther taught their children about the importance of work and giving back to the community. Muther traces these values to her paternal grandmother, a turn-of-the-century community activist who once dressed as the Statue of Liberty in a campaign to give women the vote.

Muther's interest in foreign cultures drove her academic career. She got a bachelor's in anthropology at Sarah Lawrence College, where she is a member of the board of directors, and a master's in social anthropology at Cambridge University in England. But a job at Wellesley College, managing the Center for Research on Women, pushed Muther toward entrepreneurship. "I really liked running things," she says.

In 1976, she enrolled at Stanford's Graduate School of Business in the heart of Silicon Valley. Women made up about 20% of her graduating class. That was a huge increase from the 3% to 4% of just a few years before, but well under current rates of about 40%. There was a bonus to being a pioneering female MBA student: no established career path. Muther didn't get pigeonholed into a limited number of jobs.

She joined consulting firm Arthur D. Little, where she landed a federal government contract to help minority-owned companies grow. In her first broad contact with entrepreneurs, she learned that start-ups weren't for slackers. "It's not a fun job," she said in an interview at the Women's Technology Cluster building in San Francisco's Potrero Hill neighborhood. "The people who are engaged in creating and building businesses have a real passion and commitment for it."

By 1983, when she left Arthur D. Little, Muther wanted to be on the other side of her desk — working in business management, instead of just giving advice. It was clear that technology was the future of business. That led to a job as head of marketing at Bridge Communications, a computer networking company.

Three years later, Bridge merged with 3Com, where Muther became vice president of corporate marketing. By 1989, she'd gone from being a tech outsider to overseeing marketing at a company with $250 million in annual revenue.

The Cisco years

Around this time, a group of Stanford computer scientists had started Cisco. In 1989, when co-founder Len Bosach recruited Muther to lead marketing, the computer networking company had just $25 million in annual revenue and was still privately owned. During the nearly five years she was there, Cisco's growth exploded to more than $1 billion in annual revenue.

In that male-dominated company, Muther pushed for change. She gave other executives electronic "zappers" with flashing red lights. They were used to make a buzzing sound whenever someone made a sexist remark during management meetings, says Cisco Chairman John Morgridge. "She certainly was a major factor in bringing the gender issue to Cisco," he says.

The company went public a year after Muther joined. Its stock, adjusted for splits, skyrocketed from pennies a share to more than $80 at its peak in 2000.

Early insiders, such as Muther, did very well. "As I realized I was becoming a wealthy person," Muther says, "I asked myself questions: What does this mean? And what am I going to do about this?" Morgridge had an answer. Bounding into her office one day, he talked about donating some of his wealth to a college scholarship program for minority students. "Oh, Cate, you have to do this! It's so much fun!" Morgridge said.

They collaborated on a proposed gift to Stanford meant to increase the number of female faculty members in the business school. Their idea hit more than a few obstacles. The experience gave Muther an eye-opening lesson about philanthropy: It's hard for established institutions to change, even when they're receiving money as an incentive.

Muther left Cisco in 1994. She started her foundation, the Three Guineas Fund, a year later. Its mission — expanding opportunities for women and girls in education and the economy — combines her parents' lessons about work and self-sufficiency with Muther's own interest in helping women. The fund, which has $5 million in assets, takes up most of Muther's philanthropic time. She receives no salary.

A major venture of the fund is the Women's Technology Cluster, which is in an industrial neighborhood favored by dot-commers. The 30,000-square-foot building has office suites with fireplaces, giving a homey feel to the start-ups housed there. Some rooms are decorated with artwork Muther has collected. Like many business incubators, the cluster offers cut-rate office space, support staff and links to a network of accountants, lawyers, marketers, venture capitalists and others in finance.

Focus on women

Recently, in a meeting room overlooking the Three Guineas office in the building, Muther laughed as she recalled details of her childhood. To illustrate a point, she leaned over a coffee table to sketch details of the plan to increase female faculty at Stanford.

While other philanthropists have used businesses to advance their mission, Muther is one of the very few who have focused on women. Her Cisco background is a huge asset. "It increases her credibility and her network," says Andrea Silbert, CEO of the Center for Women & Enterprise, a Boston training program for female entrepreneurs. "She was a pioneer in the sense that she knew the technology sector. She knew women were entering it. And she knew that the change she could make was at the entry point."

Muther has an armload of honors for her work — from speaking at the first White House Conference on Philanthropy to winning Ernst & Young's 2001 Supporter of Entrepreneurship award in November.

Morgridge, traveling the nation, says he is amazed by the number of people who devote their lives to philanthropy. "Cate Muther is one of those kinds of people," he says. She "has really taken on an issue and made it very visible, and in that, has become a role model for women looking at philanthropy."

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