News

MIT study shows the most successful entrepreneurs are in their forties

The tech world can sometimes feel like Logan’s Run. If you haven’t made your start by the end of your twenties, you’re officially past it. Daniel Ek founded Spotify when he was 23. Steve Jobs launched Apple when he was 21. And Mark Zuckerberg found the time to launch Facebook amidst a busy schedule of breast feeds and playdates.

Where are all the old people? Y’know, the people with spouses and kids and gray hair and bad backs? The ones with cassette collections and landlines, and whatever other ageist stereotypes you can think of.

According to a working paper from MIT Sloan professor Pierre Azoulay and PhD student Daniel Kim, they’re busy starting companies — and are arguably doing a better job of it too.

Azoulay and Kim crunched data from the Census Bureau’s Longitudinal Business Database, and from the Internal Revenue Service. The pair discovered that the average age of a founder that went on to hire at least one other person was 45.

This was especially true for companies in the high-tech “knowledge economy.” Per an article on MIT.edu, from Meredith Somers:

The researchers broke out the data into high-tech employment, VC-backed firms, and patenting firms. Across the entire United States, the average founder ages were 43, 42, and 45, respectively for those divisions.

The team looked at ages and startups in areas like California, New York, Massachusetts, and specifically Silicon Valley. The closest any founder age got to “young” was in VC-backed firms, where the average age was 39 in New York.

Similarly, the average founder age for one of the “youngest” technology sectors — in this case wireless telecommunication carriers — was 39 years old.

The secret sauce behind the success of these older founders is experience. According to Azoulay and Kim, entrepeneurs are 125 percent more successful if they have previously held employment in the industry they’re operating in.

That makes sense. If you’re going to “disrupt” an industry — or at least exist within it — it helps to actually know what you’re doing. And if you’ve worked in an industry for some time, you’re best placed to see any gaps in the market that could be filled by an innovative new startup.

And I imagine older founders would have some innate advantages over their younger counterparts. For starters, they’d probably have access to more start-up capital, either through savings they’ve built up over time, or through assets they can sell or mortgage.

Age allows you to build connections and social networks. It follows that older founders would have the guanxi needed to find investors and customers, where younger entrepreneurs might struggle.

Azoulay and Kim are both very explicit in that they don’t want to discourage younger founders. In the aforementioned MIT piece, Azoulay pointed out that there are young people who have founded “very robust, very large successful businesses.” The likes of Zuckerberg and Ek are living proof of that.

But it’s worth remembering they are outliers. We know their names because they’re exceptional people, who have created exceptionally world-changing companies.

The real picture of success isn’t the cliched hoodie-wearing millenial wunderkind, but is in fact much, much older.

The Next Web’s 2018 conference is just a few weeks away, and it’ll be 💥💥. Find out all about our tracks here.

Read next: Binance to create employment opportunities for Uganda’s youth in blockchain

Tags

Related Articles

Close
%d bloggers like this: