One of my very bright young friends in his early thirties occasionally worries that he’s let too much time go by and that he should have started his own company several years ago. It’s a very prevalent idea, but it’s pure myth. So what is the average age of the typical entrepreneur when he/she starts the business?
Debunking the entrepreneurial myth.
With all the hype about successful 20-somethings, you’d think that they had entrepreneurialism all sewed up. Mark Zuckerberg with Facebook, Paul Allen and Bill Gates with Microsoft, as well as Steve Jobs and Steve Wozniak with Apple are often touted as typical entrepreneurs. And that once you break 30, it’s all over for you. Sorry, but that’s not at all the case—and those innovators are not the typical.
Vivek Wadha is the VP of Academics and Innovation at Singularity University in Silicon Valley, a unique institution whose stated aim is to “educate, inspire and empower leaders to apply exponential technologies to address humanity’s grand challenges.” In 2009, he and his team set out to determine the average age of a successful entrepreneur in high-growth industries: industries such as computers, health care and aerospace. Their research revealed that the average age of such entrepreneurs is 40. Furthermore, they found that twice as many successful entrepreneurs are over age 50 as under age 25. Perhaps more surprising, there are twice as many successful entrepreneurs over age 60 as under age 20.
Why are older entrepreneurs more successful?
Two Wharton faculty, Jerry Wind and Colin Crook, asked the same question. Their study resolved the issue. On the one hand, young people have high differentiation, meaning that they are able to see the world through fresh eyes. But on the other hand, they have far fewer capabilities for action. Their lack of street smarts, business relationships and processes have a chilling effect on new ideas, processes and products.
Crook and Wind argue that that flexibility and openness to new ideas are more common in young individuals. I’ll buy the openness to new ideas, but I’m not so certain about youthful flexibility. I think that’s questionable. However, what’s not questionable is that start-ups, which are still formulating their processes and mindsets can be very flexible—on occasion, too flexible. Indeed, start-up flexibility can lead to a tendency to run from fad to fad, chasing new models merely because they’re new. Still, more mature individuals typically opt for the status quo approach, leading to a tendency to dismiss both new opportunities as well as new mindsets.
What twenty years of experience can bring to the party is a vast number of business processes, models and relationships, all of which make for the ability to get things done—successfully. The downside to experience, however, is that many attempt to make new things fit into old models and old processes. New objectives or strategies become increasingly difficult to achieve, and demise follows.
What makes for successful entrepreneurialism?
When individuals and organizations have looked at the world through the eyes of customers, it’s possible to get a fresh view of products and services. The flip side of that issue is that sometimes customers get in the way, and a new product or service comes solely out of organizational creativity. Both Apple and 3M work that way. But, don’t kid yourself, both 3M and Apple also pay very close attention to the customer.
The other major step is to avoid a leap in the dark by the use of adaptive experimentation. In other words, run a pilot process or program for the product or the service. People often present their options in terms of stark, binary positions. But the fact is that as in much of life it’s not either/or, but both/and. You can adopt a new mental model (for products and processes) without tossing out the baby with the bathwater. So it’s possible to conduct experiments, monitor, modify or adapt your model as needed.
So why, for example, did Zuckerberg hire Sandberg? Simple: he needed her ability to get things done with both the organization and the customers. (Ummm. Yeah. She’s 46 years old. And Zuckerberg? He’s 31 years old.) All of which suggests that age and experience should never be ignored. That may not be politically correct, but it sure is smart.