Saturday, February 25, 2012

Are You a Young Failure?

Are you young, but have not yet founded your multi-billion dollar business? It turns out you may not be a failure, just yet. Economist magazine reports:
It is time to do for enterprise what such ageing rockers have done for pop music: explode the myth that it is a monopoly of the young. This idea has been powerfully reinforced by the latest tech boom: Facebook, Google and Groupon were all founded by people in their 20s or teens. Mark Zuckerberg, aged 27, will soon be able to count his years on earth in billions of dollars. But the trend is not confined to tech: Michael Reger was a founder of one of America’s most innovative energy companies, Northern Oil and Gas, aged 30.

The rise of the infant entrepreneur is producing a rash of ageism, particularly among venture capitalists. Why finance a 40-year-old (with a family and mortgage) when you can back a 20-year-old who will work around the clock for peanuts and might be the next Mr Zuckerberg? But it is not hard to think of counter-examples: Mark Pincus was 41 when he founded Zynga and Arianna Huffington was 54 when she created the Huffington Post.

Research suggests that age may in fact be an advantage for entrepreneurs. Vivek Wadhwa of Singularity University in California studied more than 500 American high-tech and engineering companies with more than $1m in sales. He discovered that the average age of the founders of successful American technology businesses (ie, ones with real revenues) is 39. There were twice as many successful founders over 50 as under 25, and twice as many over 60 as under 20. Dane Stangler of the Kauffman Foundation studied American firms founded in 1996-2007. He found the highest rate of entrepreneurial activity among people aged between 55 and 64—and the lowest rate among the Google generation of 20- to 34-year-olds. The Kauffman Foundation’s most recent study of start-ups discovered that people aged 55 to 64 accounted for nearly 23% of new entrepreneurs in 2010, compared with under 15% in 1996.

Experience continues to count for a great deal, in business as in other walks of life—or, to borrow a phrase from P.J. O’Rourke, age and guile can still beat “youth, innocence and a bad haircut”. It is one thing to invent a clever new product but quite another to hire employees or build a sales machine. And even when it comes to breakthrough ideas, age may still be an asset. Benjamin Jones of Northwestern University’s Kellogg School of Management and Bruce Weinberg of Ohio State University examined the careers of Nobel prize-winners in chemistry, physics and medicine. They found that the average age at which these stars made their greatest innovations is now higher than it was a century ago. Mr Wadhwa speculates that many of the most promising businesses in future will result from the mating of two subjects that each take years to understand—robotics and biology, say, or medicine and nanotechnology.

Experience may be nothing if it is not linked to mould-breaking creativity. But there are plenty of older people who are capable of breaking moulds. Ray Kroc was in his 50s when he began building the McDonald’s franchise system, and Colonel Harland Sanders was in his 60s when he started the Kentucky Fried Chicken chain. David Ogilvy worked as a chef and a spy before turning to advertising in his late 30s...
It is more difficult than ever to start a business in many sectors because of growing regulation. Further, education sucks the entrepreneurial instincts out of most youth. The youth I talk to tend to have no idea as to what it means to be an entrepreneur. The only way to get those instincts back is to get a job with an entrepreneur. It's better getting a job sweeping the floors of a firm run by a great entrepreneur than to pursue a college degree, these days.

The world is swamped with unemployed college graduates. If there are no great entrepreneurs where you live, then move.

Great entrepreneurship requires experiences so that you see more and more. It's the only way to spot entrepreneurial opportunities. You are not going to find these in your room, moping and cursing a world that sucks.

The world is pretty tough these days, but if you are clever and curious you can still carve out an amazing life. Just get off your butt and get experiences. The more the better. Work for one entrepreneur, quit after a year and work for another. Keep doing that until you find an entrepreneurial opportunity that you see for yourself that you can execute.


  1. yes, I am 18 years old and feel like I should have 100k. A pretty modest goal I would say.

  2. "David Oglivy worked as a spy..."


    You know what the biggest advantage is for entrepreneurs? When Central Intelligence thinks your idea will help them with their mission. Just ask Zuckerberg or Schmidt. Their venture capital didn't just happen.

    Very little happens happens by accident in America today.