Are you too old to be an Entrepreneur?

Finally, research finds the best age for successful Entrepreneurship

I’ve been asked:
How old are you?

Thirty-X, I replied (not that I do not want to disclose my age, but with time I do not want to keep updating this article!)

Then, I’ve been told:
Did you know that Zuckerberg and Bill Gates made successful companies when they were just 19 years old, almost half of your age?

Me again:
So?

Them:
If that is the case, then you have missed the bus.

If you’re an entrepreneur who is over a “certain” age, you must have had the same conversation in various shapes or forms.

So, what is the right age for entrepreneurship? If you’re not in your early 20’s (or younger), have you really missed the bus?

In this article, we piggyback on the research done by J. Daniele Kim who has written a paper titled “Age and High Growth Entrepreneurship”.

Before we do that though, here’s our reasoning why starting really early with entrepreneurship might not be the best step.

1) Zuckerberg, Gates, Jobs – Supremely successful, indeed. But let’s be honest, these are anomalies and not the norm. The right person being at the right place at the right time with the right idea for that time. Using these anomalies and trying to set them as a norm is not a prudent thing to do. Such instances will continue to happen in every generation. These are actual disruptions that completely changed how things are done, but it is a fact that most businesses are not disruptive at all. They are either filling a gap, taking advantage of a situation, removing inconsistencies, bridging demand & supply and many others. Being disruptive does not mean that you are successful and being non-disruptive does not mean you are not successful.

2) Getting on the entrepreneurship bandwagon is extremely easy (though some would say that taking the first step is the toughest one; I say that is BS, suits a sticky note or your wallpaper more), getting out of it is tricky. Either you succeed or you fail and leave, there is no middle ground here, yes, the definition of success might differ in each case, but more than 90% fail.

3) Being your own boss is a myth, if you think that you are going to lead a life where you will be dictating your own terms, then sadly you are mistaken. Your customers, employees, channel partners, accountants dictate your life. If not following to 9 – 5 (varies with different cultures/demographics) is what leads you to jump into entrepreneurship, then sadly you are just being stupid!

4) Freelancing is not entrepreneurship, more on this in detail in another article, but the points I will make is the vision and objectives of both are very different, and should never be mixed with each other. I think some of the blame should go to these Co-working spaces which create pseudo ecosystems. (Again, this deserves a separate blog in itself.)

The above pointers can help differentiate with the wannapreneurs and entrepreneurs, clearly stating that there is a level of maturity that is needed to be successful. Yes, age may play an important role in being hugely disruptive, but making money is not only about disruption.

Now let us look at the research of Dr. Kim to bring in some data and facts to support our case (sharing some relevant pieces, for more information refer to the paper using the link – https://www.kellogg.northwestern.edu/faculty/jones-ben/htm/Age%20and%20High%20Growth%20Entrepreneurship.pdf)

“Our primary finding is that successful entrepreneurs are middle-aged, not young. We find no evidence to suggest that founders in their 20s are especially likely to succeed. Rather, all evidence points to founders being especially successful when starting businesses in middle age or beyond, while young founders appear disadvantaged. Across the 2.7 million founders in the U.S. between 2007-2014 who started companies that go on to hire at least one employee, the mean age for the entrepreneurs at founding is 41.9. The mean founder age for the 1 in 1,000 highest growth new ventures is 45.0. The most successful entrepreneurs in high technology sectors are of similar ages. So too are the most successful founders in entrepreneurial regions of the U.S. While the prevalence of the highest-growth companies having middle-aged founders is due in part to the prevalence of entry by the middle-aged, we further find that the “batting average” for creating 5 successful firms is rising dramatically with age. Conditional on starting a firm, a 50-year-old founder is 1.8 times more likely to achieve upper-tail growth than a 30-year-old founder. Founders in their early 20s have the lowest likelihood of successful exit or creating a 1 in 1,000 top growth firm. ”

“Even when looking at the zip codes with the most growth-oriented new ventures, the mean founder age is 40.8, or approximately 1 year younger than the U.S. population average. One interpretation of this result may be that, even in entrepreneurial regions, most new firms are not in technology or growth-oriented sectors. However, reading across columns and rows in the table, we can further examine the intersection of geography with technology or growth-orientation. Remarkably, we see only modest differences in age. Mean founder ages rarely dip much below age 40, let alone ages 35, 30, or 25. The only category where the mean ages appear (modestly) below age 40 is when the firm has VC-backing. The youngest category is VC-backed firms in New York, where the mean founder age was 38.7. More generally, across the various narrow cuts in Table 2, the mean age ranges from 38.7 to 45.3. Put another way, even when reducing the set of 2.7 million founders to the 1,900 associated with firms that are both in entrepreneurial hubs and receive VC backing, the mean age at founding is 39.5. Meanwhile, founders in high-tech employment sectors tend to be slightly older than the U.S.-wide average, and founders of patenting firms are the oldest of all, with an average age of 44.3 in Silicon Valley and 43.8 in the entrepreneurial hubs”

“We see that more successful startups have, if anything, slightly older founders on average. For example, the 1,700 founders of the fastest-growing new ventures (the top 0.1%) in our universe of U.S. firms had an average age at the founding of 45.0 (compared to 43.7 for the top 1% and 42.1 for the top 5%). Regardless of the measure of technology-intensiveness chosen, we see older founders as we move toward upper-tail performance, especially for the top 1 in 100 or top 1 in 1,000 firms, as well as for founders with successful exits. This evidence is at odds with the conventional wisdom that successful founders skew younger.”

Starting early probably gives you more shots at being successful as you end up learning from your failures and use that learning to move further in your journey – through that is something still being researched.

In short, if you are 50 and want to give it a shot, the chances of you being successful in your vent

Rishi Rais