Data Says Older Entrepreneurs are More Successful
by Miki Saxon
Yesterday’s Golden Oldie ended with my sarcastic comment about tech’s distorted and manipulative approach to data a la “gut instinct” and “pattern recognition,” especially when it comes to age and gender equity.
Data only matters when it supports prevailing prejudice.
A couple of years later I linked to articles that clearly showed that age was more a mental state than a physical one, including this one.
Vivek Wadhwa, a Duke University researcher, worked with the Kauffman Foundation in 2009 to explore the anatomy of a successful startup founder. That survey of more than 500 startups in high-growth industries showed that the average founder of a successful company had launched his or her venture at the surprisingly high age of 40. The study also found that people over 55 are almost twice as likely to launch high-growth startups than those aged 20 to 34.
In March, Forbes again focused on the fact that older entrepreneurs are more successful.
…late-career entrepreneurs benefit from the kind of deep domain expertise that younger counterparts lack. The more intimately an entrepreneur knows their particular industry, after all, the better positioned they are for success. A newly published study of hundreds of companies confirmed just this: the startups most likely to succeed have technically savvy founders who know their space inside and out. A classic example is Garmin, maker of the ubiquitous GPS devices. The company was started in 1989 by two career aerospace contractors (in their 40s and 50s, at the time) who pooled their technical know-how to turn military-grade technology into consumer tools. Today the company is worth more than $10 billion.
Even Brian Acton was almost ancient when he founded WhatsApp at 37.
Earlier this month, KG sent along an article from TechCrunch that added more data.
What they found is that the average age of a startup founder is about 41.9 years of age among all startups that hire at least one employee, and among the top 0.1 percent of highest-growth startups, that average age moves up to 45 years old. Those ages are taken from the time of the founding of the company.
The researchers broke down the population of founders along a number of lines, including geography and industry. They found little difference in their results between subcategories, and, in many cases, the subcategory definition actually increased the average age. For instance, industries like oil and gas can have average founder ages as high as 51.4 years old. The researchers wrote that “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.”
One interesting dynamic in the data is that older entrepreneurs appear correlated with better startup performance. “For example, the 1,700 founders of the fastest growing new ventures (1 in 1,000) in our universe of U.S. firms had an average age of 45.0 (compared to 43.7 for the top 1% and 42.1 for the top 5%),” the researchers wrote.
As you mull these numbers, stay aware that these are companies with actual, and often substantial, revenues, as opposed to valuations based on fundraising and hype.
Image credit: Hawking.org
