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Why Great Entrepreneurs Are Older Than You Think

Why Great Entrepreneurs Are Older Than You Think

Jan 15 2014, 8:22am CST | by

How old do you think someone should be for the best chance at entrepreneurial success? If you said 20, or 22, or 25, you are not alone. It wasn’t that long ago that age signified wisdom. But in the...

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27 weeks ago

Why Great Entrepreneurs Are Older Than You Think

Jan 15 2014, 8:22am CST | by

How old do you think someone should be for the best chance at entrepreneurial success?

If you said 20, or 22, or 25, you are not alone.

It wasn’t that long ago that age signified wisdom. But in the last decade Silicon Valley routinely, even systematically, has overlooked the old in search of the youthful. A couple of years ago, entrepreneur and TechCrunch founder Michael Arrington wrote a blog post called, “Internet Entrepreneurs Are Like Professional Athletes, They Peak Around 25.” The average age of a Y-Combinator founder is only 26.

Today’s digital natives are as adept at consuming new technologies as they are unencumbered by old ways of thinking. My friend Tom Chi, a former Yahoo! executive and prototyping guru for Google X Labs, likes to say, “Knowing is the enemy of learning.” Certainly being young and inexperienced is one way to approach new ideas with a beginner’s mind.

But research debunks the myth that youth is the key to entrepreneurial success. And by investing our resources only in the young, our society is missing a huge opportunity.

Youth superiority is a myth

My colleagues and I did a study , funded by the Kauffman Foundation, that surveyed 500 successful high growth founders. Against all stereotypes, we found that the typical successful founder was 40 years old, with at least 6-10 years of industry experience. Twice as many successful entrepreneurs are more than 50 as under 25.

You may say, “Ok, but when it comes to disruptive, billion dollar Internet ideas like Facebook, surely the young must have a leg up on founders with gray hair!”

Let’s take a look at some recent analysis by Aileen Lee of seed stage fund Cowboy Ventures. She studied U.S. software start-ups that sold for billions of dollars over the last decade, which she called “unicorns.”

“Inexperienced, twentysomething founders were an outlier,” explains Lee. “Companies with well-educated, thirtysomething co-founders who have history together have built the most successes.”

The founders of LinkedIn, the second most valuable unicorn in their study, averaged 36; founders of the third most valuable, Workday, averaged 52. The average founder on the unicorn list was 34. So even the biggest hits, on average, have emerged from experience.

Why are older entrepreneurs more likely to succeed?

Studies have shown that for entrepreneurship, unlike typical markets, information networks are inefficient; this means founders identify different opportunities based on their unique prior knowledge.

While a 20-year old may have little more experience than going to classes, using their mobile apps, and pursuing their hobbies, a manager from a manufacturing company might recognize the need for new logistical software, or a technician in the energy industry might see the opportunity for a better ceramic filter. These opportunities are not sexy nor obvious to someone fresh out of college, but they can make a unique and compelling value proposition and the basis of a successful company.

And of course, ideas are only ideas until you execute. More experienced leaders tend to have deeper networks, experience managing teams, and better business savvy and skills for delivering on their vision./>/>

Some investors are catching on; for example, German entrepreneur Rolf Herken is tapping into experienced talent with his two new organizations , Mine Innovation Engineering and Reality Ventures. But in the meantime, the rest of us are worshipping at the altar of youth entrepreneurship.

The cheated generation

I constantly meet millennials whose only ambition is to start a company. They say they don’t want to work for The Man; they want to pursue their own dreams. They have been drinking the Kool-Aid of entrepreneurship.

In response to the demand, universities are falling over themselves to provide new courses and programs in entrepreneurship. And students are spending a lot of energy coming up with startup ideas

and entering business plan competitions. Billionaire Peter Thiel took things a step further when in 2011 he started enticing students to skip college for his 2-year, $100,000 Thiel Fellowships .

But are we cheating this next generation out of viable careers? Not everyone can be a successful founder. Given that most startups fail, in five to ten years will we have a generation of self-employed 30-somethings that were chasing their dreams, but were left with not much more than a few failures under their belts?

Don’t get me wrong; students do need to take charge of their careers, and entrepreneurial skills will be critical for success. But whenever a student without a startup idea asks me for advice with that panicked look in their eyes, I tell them not to worry. If they

want to explore the startup world, they can join another startup founded by someone with real industry experience. They should pursue their curiosity and build up their own unique series of experiences to draw from in the future. I assure them that they can always start a company when they have a compelling idea worth focusing on.

The key to entrepreneurship and success

So what does this mean for policymakers and the business community? If we want to solve youth unemployment or to stimulate economic growth, we need to ask ourselves, “Where will these companies come from, and who will have the skills to work for them?”

To really reach our entrepreneurial potential, we must create an environment that encourages experienced talent to recognize new business opportunities and spin out new ventures from their existing corporations when it makes sense. For example, my colleagues and I just release a new study that shows health insurance availability is an important factor for fostering entrepreneurship, and this is especially true for those who are older, married, and have children. Startup programs should cultivate entrepreneurs in older industries ripe for disruption, from transportation to manufacturing and beyond.

Older entrepreneurs can be role models for the next generation, who should first learn real technical and creative skills that are in short supply in the real world. Although it’s commendable for young innovators to try their hand at a start-up if they have a compelling idea, they shouldn’t be enticed away from developing a foundation that they can build on later.

No matter where he or she ends up – as a founder, a policymaker, or an employee at a big company – someone with a strong set of entrepreneurial skills plus a set of unique knowledge and experiences will be primed for a career of making impact and positively contributing to society. And it’ll never be too late to start that company one day.

Follow me on Forbes here and on Twitter (@krisztinaholly ) for more insights on the future of creativity, innovation, and entrepreneurship.

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Source: Forbes Business

 
Update
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7 weeks ago

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Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the Dewan Rakyat w ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
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7 weeks ago

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Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

KANGAR: A gold shop owner lost almost RM1 million after after the safe on in his shop was broken i ...
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Update
8

7 weeks ago

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Jun 9 2014 3:39am CDT | Source: Business Times Malaysia

KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rejected by ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
7

7 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Minister, ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
6

7 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Selatan’ in the south ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
5

7 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
4

7 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Minister Datuk Seri Must ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
3

7 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year invol ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
2

7 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan Bazaar Sch ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
1

7 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion K ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

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