The Economist: Enterprising oldies
Founding new businesses is not a monopoly of the young, even if it seems so nowadays
... It is time to do for enterprise what such ageing rockers have done for pop music: explode the myth that it is a monopoly of the young. This idea has been powerfully reinforced by the latest tech boom: Facebook, Google and Groupon were all founded by people in their 20s or teens. Mark Zuckerberg, aged 27, will soon be able to count his years on earth in billions of dollars. But the trend is not confined to tech: Michael Reger was a founder of one of America’s most innovative energy companies, Northern Oil and Gas, aged 30.
The rise of the infant entrepreneur is producing a rash of ageism, particularly among venture capitalists. Why finance a 40-year-old (with a family and mortgage) when you can back a 20-year-old who will work around the clock for peanuts and might be the next Mr Zuckerberg? But it is not hard to think of counter-examples: Mark Pincus was 41 when he founded Zynga and Arianna Huffington was 54 when she created the Huffington Post.
Research suggests that age may in fact be an advantage for entrepreneurs. Vivek Wadhwa of Singularity University in California studied more than 500 American high-tech and engineering companies with more than $1m in sales. He discovered that the average age of the founders of successful American technology businesses (ie, ones with real revenues) is 39. There were twice as many successful founders over 50 as under 25, and twice as many over 60 as under 20. Dane Stangler of the Kauffman Foundation studied American firms founded in 1996-2007. He found the highest rate of entrepreneurial activity among people aged between 55 and 64—and the lowest rate among the Google generation of 20- to 34-year-olds. The Kauffman Foundation’s most recent study of start-ups discovered that people aged 55 to 64 accounted for nearly 23% of new entrepreneurs in 2010, compared with under 15% in 1996.
Experience continues to count for a great deal, in business as in other walks of life—or, to borrow a phrase from P.J. O’Rourke, age and guile can still beat “youth, innocence and a bad haircut”. ...
... This is not to say that the rise of young entrepreneurs like Mr Zuckerberg is insignificant. The barriers that once discouraged enterprise among the young are collapsing. Social networks make it easier to build contacts. Knowledge-intensive industries require relatively little capital. But the fact that barriers are collapsing for the young does not mean that they are being erected for greybeards. The point is that the creation of fast-growing businesses is now open to everybody regardless of age. ...
... The evidence that older people are if anything becoming more enterprising should help to calm two of the biggest worries that hang over the West (and indeed over an ageing China). One is that the greying of the population will inevitably produce economic sluggishness. The second is that older people will face hard times as companies shed older workers in the name of efficiency and welfare states cut back on their pensions. ...
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