Do Entrepreneurs Get Better With Age?
HBO’s new hit show, “Silicon Valley,” provides an iconic view of the tech startup. The hero, Richard Hendricks, is a socially awkward twentysomething software developer who has developed a hyperefficient compression algorithm for music. He creates a new company at the beginning of the series with other software geeks of the same vintage, and they are on a tear to make billions of dollars for themselves and “change the world.”
Those in and around the tech world will recognize many Silicon Valley archetypes: The starry-eyed young, the slick VCs, the egoist billionaires still out to prove themselves, the over-the-top parties …
Art imitates life. The startup phenomenon has become a bigger part of pop culture and our national consciousness because entrepreneurialism is no longer a fringe activity. It is hot, trendy, a particularly rewarding and fashionable form of work. High-profile successes like Instagram, Nest and WhatsApp fuel the fire. The Economist recently described the new gold rush in startups as a “Cambrian moment,” and goes on to say that “the prolonged economic crisis that began in 2008 has caused many millennials — people born since the early 1980s — to abandon hope of finding a conventional job, so it makes sense for them to strike out on their own or join a startup.”
The gold rush is on, and the message from “Silicon Valley,” the movie “The Social Network,” the press, and even much of the startup community, is that it is being led and peopled by young geeks. If you happen to be over 25, it’s easy to feel that you are missing out.
Pop culture and the press have it wrong, though. Millennials are not the only ones who have noticed, and not the only ones exploiting the opportunity.
The company I founded a few years ago, TeamSnap, is a classic Internet startup. The company grew out of an idea that there had to be a better way to manage sports and other activities. The original intergalactic headquarters were in my house, and there was no payroll for several months. Fortunately, TeamSnap has grown from zero to nearly seven million users, and we just secured a $7.5 million B-round.
The only wrinkle in the picture? I am not a millennial, my kids are.
Another example: I fondly remember a good friend, Frank Waldman, telling me a couple of years ago about a cool speed-reading technology that he was going to commercialize. His company, Spritz Inc., is one of the hottest new companies around, and just landed a $2.5 million seed round for its innovative speed-reading technology. Frank also has millennial children.
Frank and I are not outliers. According to a report issued by the Kauffman Foundation, “the average and median age of U.S.-born tech founders was 39 when they started their companies. Twice as many were older than 50 as were younger than 25.”
People of all ages, in other words, are starting successful companies.
Why, then, does the perception persist? Why would a prominent venture capitalist, quoted in a TechCrunch article, say that “Consumer Internet entrepreneurs are like pro basketball players … They peak at 25, by 30 they’re usually done.” Why does Vinod Khosla, one of the most successful VCs ever, say, “People over 45 basically die in terms of new ideas”?
Part of the reason may be that younger people are more malleable — less set in their ways. Not only are they able to adapt to new technology, but they are often early adopters and champions. They were the first, for instance, to embrace Twitter, Tumblr and Snapchat. They also pick up new things faster, though there is a flip side to the story. As Philip Ross puts it in IEEE Spectrum, “The raw ability to grasp new things — or fluid intelligence — begins to fall in the 20s, while the mastery of familiar things — or crystallized intelligence — rises for almost as long as a person stays in harness. That’s why older people famously substitute craft for cleverness in sports as diverse as boxing and swimming.”
Another reason often given for the superiority of young entrepreneurs is their ability to focus, and the relatively lower risk they face as unmarried individuals. “They have great passion,” according to Sequoia Capital’s Michael Moritz. “They don’t have distractions like families and children and other things that get in the way.” This perception belies, however, some of the economic and demographic trends that have been gathering speed for decades. First of all, the security of a long-term job has dramatically declined. My grandfather worked for one company, Texaco, for 43 years. That world is long gone.
Second, we live longer and healthier. Life expectancy in the U.S. has increased five years for men and three for women in the last 20 years. People are not just living longer; they are doing more. Ride a bicycle up one of the mountain roads outside Boulder, Colo., on any given Saturday, and chances are pretty good that you will get dropped by a “white hair.” Even if children and family were “a distraction,” most people are “empty nesters” by their mid-50s, and able to focus — maniacally, in some instances — on their career again. Combine that with the sheer numbers of aging baby boomers, and you have a potent entrepreneurial force.
The point of all this is not, to quote the T-shirt, “Old Guys Rule.” It is simply that entrepreneurialism, which we usually identify with swashbuckling and risk-taking youth, is available to all of us, regardless of our age.