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Age and High-Growth Entrepreneurship

242 points| dalek2point3 | 8 years ago |nber.org

87 comments

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jknoepfler|8 years ago

I honestly can't understand why this would shock anyone with experience in engineering. As a senior developer, I'm vastly more able to realize ideas than I was even three years ago. I also know vastly more. I'm able to understand cutting-edge systems and language research that I couldn't before. I'm able to design systems quickly and more reliably. I'm able to separate good ideas from bad ideas more reliably. I'm better with people and managing my own ego, and therefore able to navigate interpersonal situations more reliably.

I'm also financially stable and have deep savings, so I'm able to take time off to pursue ideas more reliably.

After a few more years, particularly as I gain leadership experience, I expect to be even more effective.

There's literally no down-side to getting older in terms of my ability to bootstrap a successful company.

shubhamjain|8 years ago

I think you're missing the bigger point. Most people work on problems that they've seen or experienced. For the young, it tends to be dating, social media, or some sort of e-commerce. They chase trends and hype. When you gain experience, you get exposed to an entirely different set of problems—problems with workflow, business processes, and general efficiency. Problems where you can deliver real value.

This was brilliantly expressed in this blog post [1]. Both the young and the old, stand at a disadvantage. Experienced folks have a better idea about worthy problems, but they're shackled with liabilities and lack of time commitment. Young people have a lot more freedom, but they don't have a good idea about the problems that are worth it.

[1]: http://000fff.org/the-problem-with-problems/

austincheney|8 years ago

The youth buzz has nothing to do with engineering potential.

Young people tend to be more free of external responsibilities: marriage, children, job contracts, consumer debt, professional associations, expensive educational entanglements, and so forth. This makes young people more available to take giant risks with less apprehension (they have less to lose).

There is also giant marketing buzz when an uneducated 18 year old female creates something vaguely interesting, but nobody cares when a 45 year old man creates something absolutely revolutionary until they old it in their hands. Case in point: Elizabeth Holmes.

sleet|8 years ago

I agree but there's probably a limit on that sentiment.

If you start a family you are likely to become more risk adverse, this would increase again as you approach retirement.

wellboy|8 years ago

Yes, but you also already have a more limited idea space, because you are not really trying crazy ideas, while the young think everything's possible.

leonroy|8 years ago

One thing to note is that 'young college drop out makes billions' is a more compelling story than 'middle aged, well educated person with good savings makes billions'.

The former sells more clicks and hence advertising dollars - it conjures the notion that anyone can do it. The latter suggests at least a decade of work experience, probably an education and some money.

It's clear which story is going to end up trending on the news and the public's consciousness.

gitgud|8 years ago

'young college drop out makes billions'

*Translates to: "someone made a lot of money + no effort required!"

TheSpiceIsLife|8 years ago

> 'young college drop out makes billions'

> 'middle aged, well educated person with good savings makes billions'.

Do we know if anyone has A/B test these two headlines?

Finding fault with middle-aged-well-educated-person-with-good-savings*, who became a billionaire in under 10 years, shouldn't be too hard for the media, and therefore plenty of things to whip up a scandal about.

volgo|8 years ago

I think there's a little bit of confirmation bias mixed with a bit of jealousy toward younger developers.

The fact is, technology doesn't really matter that much to the success of a business. Business sense, ability to spot what's next, and a fair bit of risk taking attitude are what matters. Older engineers don't fare better than younger engineers in starting a business not because they're worse at engineering, but that after a certain point engineering skills simply don't matter.

SAP, Adobe, IBM, all have terrible engineering culture, but rake in money. Facebook started with janky PHP. There are only rare instances where the technology itself was the differentiator in business. Maybe if you're working on advanced AI or weapon design or something

sharemywin|8 years ago

I think the point was there aren't a lot of young developers/entrepreneurs working on how to make the property casualty preferred vendor relationships work better. Because that type of business would take years of time in that industry to both understand the problems and make the contacts.

tibbetts|8 years ago

Weapon design is all about government contracts, which generally require experience. Even Iron Man was using his dad’s existing corporate vehicle.

Advanced AI usually depends on finding a business model, which requires experience. And places like Deep Mind were started by researchers who had been at it a few decades.

montrose|8 years ago

If this result is surprising to HN readers, it is probably because this list of the last 100 IPOs is also surprising:

https://www.iposcoop.com/last-100-ipos/

Only 19 of the 100 most recent IPOs are classified as "technology" companies. The rest are in categories like "health care" and "oil and gas."

There are a lot of high-growth companies that are not startups in the classic sense of starting from nothing and winning by building a better mousetrap. E.g. pharmaceutical companies commercializing research, where the founder is a PI and probably a tenured professor who's at least 40.

kozikow|8 years ago

I would like to see the data broken down by startup profile. I suspect that the ideal age differs between B2B and B2C startups.

B2C have smaller chance of success, but the success is bigger. Ideal B2C founder is young. Most of enormous tech successes (e.g. Facebook, Google) are B2C companies founded by founders before 30.

B2B have higher chance of success, but the success is smaller. Ideal B2B founder is middle-aged. There are more succesfull B2B startups than B2C starups, what increases the total mean.

AstralStorm|8 years ago

Please provide examples of B2C success that are other than Apple, Google or Facebook founded by people under 30. (No, Microsoft is B2B.)

redm|8 years ago

As I've gotten older (ironically) I've felt this should be the case; key decisions have such an impact on the success or failure of a startup, it's much more likely you make the right key decisions the more experience and wisdom you have.

thisrod|8 years ago

PG has written about that. He made the point that, in 1998, the people with experience and wisdom all agreed that the world had enough search engines already.

deuslovult|8 years ago

I don't think this is surprising, but I'm also not surprised that VCs and accelerators still trend toward younger founders.

It makes sense to me that older (successful) founders likely leverage their own experience and network to a greater extent, but this isn't necessarily what seed stage investors are looking for. I think investors are more in the game of betting on people/teams, injecting their own experience and network as leverage. Older founders have less need, therefore less leverage- and older founders without these support networks are poorly positioned anyway.

Theres a big difference between running a successful small business and architecting a tech startup.

tibbetts|8 years ago

Venture capital is a hits business, and if you want to invest in an entrepreneur there is benefit towards getting them the first time. Marc Benioff has 13 years of Oracle experience when he started Salesforce, and he already had plenty of access to capital and expertise.

digi_owl|8 years ago

Age also makes one less susceptible to the snake in the expensive suit.

Bucephalus355|8 years ago

In art the term for this is “young geniuses and old masters”. We are all familiar with the trope of a ‘young genius’ but I think it says something that art, a field older than any language or building, has a specific category carved out for those who reach distinguished success in old age...

mrkstu|8 years ago

This aligns with my observation and current impulse. I've been extremely hesitant to do my own startup- imposter syndrome maybe, but more likely healthy skepticism about the odds for success.

Now that I'm in my mid-40s I'd be much more comfortable taking on the task. Wide life experience, learning to interact with and observe human tendencies, and learning to overcome internal and external obstacles seems like fertile ground for business success.

smoyer|8 years ago

I dug up the links for two past age polls on HN to see what the average age of the HN reader might be:

* https://news.ycombinator.com/item?id=5536734

* https://news.ycombinator.com/item?id=517039

PG's comment suggests that you shouldn't trust self-reported data on HN but it's interesting that polls taken in 2009 and 2013 are at least "eyeball correlated" (the top 5+ age brackets are in the same order). I have a few more thoughts that are probably more like wild guesses (since you can't assume an even distribution of start-up founders over that population) but my gut is telling me that if you're here you're more likely to be a founder than say Slashdot.

Since the last poll was so long ago, here's an updated one for 2018 with categories for founders versus non-founders in each age bracket:

https://news.ycombinator.com/item?id=16809398

blawson|8 years ago

The paper doesn’t appear to be able identify more than the age distribution of the founders from the dataset, unfortunately.

Would be interesting to know how many of the successful older founders were unsuccessful younger founders previously.

tibbetts|8 years ago

Or moderator successful younger founders. Using the first startup as a launching point is even easier when you clear a few million than when you “fail”.

mcbreezy|8 years ago

There would be another important lesson: don't give up! (it's a true cliché, yes)

Russell91|8 years ago

4 of 5 of the biggest tech company founders were in their early 20s. So the biggest ideas clearly slanted towards young visionary founders, but the statistics do skew back towards older founders for all but the largest companies.

jknoepfler|8 years ago

One also expects the most variance at the tail-end of the success curve, because the sample size is so small. Give it a few centuries and we'll have some data about that part of the spectrum of success stories.

johnny313|8 years ago

This seems to redefine the question away from "what does a successful entrepreneur look like" in an attempt to maintain the narrative that "young visionaries" are the most successful.

sv12l|8 years ago

That is only if you think only 'tech' companies are big and they are the biggest ideas and they are the majority in Fortune 2000, but it's not. There are lot of companies that have much smarter ideas and are clearly big enough to be considered as 'successful', they are mostly skewed towards older founders.

nunya213|8 years ago

Shocking I know, but there are many industries besides tech.

dkural|8 years ago

Apple's true success came with Second Steve i.e. mature Steve, not first Steve. Amazon, Oracle, Intel founders weren't in their 20s.

Microsoft, Google, and Facebook indeed were started by young founders. Twenty years later Google might be the only meaningful one standing. Time will tell.

hn_throwaway_99|8 years ago

I think this is very important, basically that if you look at the data by something like market cap it would probably skew very young. E.g. AirBnB and Dropbox are (IIRC, may have changed by now) the majority of total valuation for ycom, and those companies were both started by early 20-somethings.

s2g|8 years ago

What were these people doing at 25/30/35/40?

drenvuk|8 years ago

Short answer: becoming experts at their craft, building business relationships and filling their coffers.

Trying to start a successful business is much easier when you know how to get stuff done, have access to people who can get stuff done in areas you can't, and have enough money to buy time, help and resources to get stuff done.

Young people typically are lacking in one or more of those areas but sometimes it works out.

mcbreezy|8 years ago

I'm 37. I constantly remind myself that Craigslist, Wikipedia, Salesforces, Intel, etc. were founded by someone >=35 years of age[0], and that, since I live a healthy lifestyle have at least 30 great years ahead of me (on average).

https://readwrite.com/2013/09/27/jimmy-wales-to-silicon-vall...

zootam|8 years ago

jan koum was ~31, brian acton was ~35 when they started Whatsapp

s2g|8 years ago

If you want to waste it working.