On one hand you have Jim Goetz, partner at Sequoia Capital, lamenting the lack of enterprise startups and on the other you have Sequoia’s Michael Moritz, “an incredibly enthusiastic fan of very talented twentysomethings starting companies. They have great passion. They don’t have distractions like families and children and other things that get in the way.”
Other things such as experience.
The shallowness of so many of today’s startups makes a great deal of sense if you remember the advice given to every aspiring writer, i.e., write about the things you know; write from your own life and experiences.
Investors give entrepreneurs similar advice, which is probably why you have an abundance of hook-up apps, gossip apps, games and social time-wasters.
And then there is the question of what purpose our economic growth actually serves. The most common advice V.C.s give entrepreneurs is to solve a problem they encounter in their daily lives. Unfortunately, the problems the average 22-year-old male programmer has experienced are all about being an affluent single guy in Northern California.
Monday we looked at the economic dangers from Silicon Valley’s generational gap highlighting the incredible waste of talent engendered.
But the real stupidity in the rush to fund the young is that their success is a myth and not backed up by any kind of hard data.
A 2005 paper by Benjamin Jones of the National Bureau of Economic Research studied Nobel Prize winners in physics, chemistry, medicine, and economics over the past 100 years, as well as the inventors of revolutionary technologies. Jones found that people in their thirties contributed about 40 percent of the innovations, and those in their forties about 30 percent. People over 50 were responsible for 14 percent, the same share as the twentysomethings. Those under the age of 19 were responsible for exactly nothing. One study found that even over the last ten years—the golden age of the prepubescent coder, the youth-obsessed V.C., and the consumer Internet app—the average age of a founder who could claim paternity for a billion-dollar company was a rickety 34.
Everybody in tech focuses on the importance of “data driven” decisions—until the data doesn’t support the decision they want to make.
That’s when they start talking about the importance of “gut instinct” and “unconscious pattern recognition.”
Data only matters when it supports prevailing prejudice.
Flickr image credit: Deryck Hodge