Saturday, August 2, 2014

Lesson #184: Does Age Matter for Entrepreneurial Success?

Posted By: George Deeb - 8/02/2014


& Comment

For years, people have tried to correlate an entrepreneur’s age when they launched their startup, with the ultimate success of that startup.  Many studies have been done on the topic, including reports by the Kauffman Foundation, Duke University and the Founder Institute, to name a few.  So, I am not going to try and rehash those studies.  But, the collective summary of their learnings was the average entrepreneur is 40 years old when they launch their startup, and people over 55 are twice as likely as people under 35 to launch a high-growth startup.  The average age of a successful startup with over $1MM in revenues was 39.  It was determined age was less of a driver to entrepreneurial success than previous startup and industry experience.

Out of curiosity, I cherry picked a few successful entrepreneurs, to see how old they were when they launched their companies.  The ages were as follows, from youngest to oldest:  Facebook (20), Microsoft (20), Apple (21), Google (25), Twitter (30), Amazon (30), Tesla (34), Oracle (35), Netflix (37),  Zynga (41), Walmart (44) and McDonald’s (53).  So, as you can see, it runs the full gamut, and although past experience is certainly a key driver for many of these entrepreneurs, it is not required, as seen in the success of Facebook, Microsoft and Apple.

I have been an entrepreneur most of my life.  I founded five companies over the years: (i) an odd jobs business at age 18; (ii) a collectible comic books business at age 20; (iii) an adventure travel website at age 29; (iv) a growth consulting firm at age 41; and (v) a startup excubator at age 44.

If I was going to summarize how my success was impacted by age over the years, I would say the following.  First, success was directly correlated with how many hours I invested in the business.  Second, success was directly correlated with how passionate I was about the business. Third, success is how you define it, as each one of these businesses accomplished the goals I set out for it, regardless of how big they got.  Fourth, my largest revenue business was one where I had no past industry or CEO experience, which is counter to the logic described above.  And, fifth, I would consider myself most experienced and worthy of making a startup bet today at age 45, with 15 years of CEO experience under my belt and tons of lessons learned along the way.

One of my old venture capital investors said he would never invest in a first time CEO, as they make too many mistakes along the way.  I think there is some truth in that, given the learnings gathered from first hand experience.  But, that does not have anything to do with age.  There are plenty of examples of entrepreneurs who have achieved success at very early ages, including Emerson Spartz who launched Mugglenet, the largest Harry Potter fan site with over 10MM unique visitors per month, at the ripe old age of 12.  You can read his story here.

As it relates specifically to age, I would say the following about myself.  My appetite for risk is clearly different at age 45 than it was at age 29.  As an example, you start thinking about things like not risking the kids’ college funds with your capital.  And, most of the best entrepreneurs are not afraid to throw all their chips onto the table, and bet big on their idea, regardless of other concerns.  And, my energy is clearly a lot less, where I am no longer burning the midnight oil.  But, I think that is offset by the fact, I am materially more efficient today, and know how best to invest my working hours to get an even higher return on that investment.

So, to answer the question posed by the title of this post:  does age matter for entrepreneurial success?  No, age in itself does not matter in trying to forecast entrepreneurial success.  But, experience does, and often times, that comes with age.  And smart entrepreneurs that lack experience, can offset that by surrounding themselves with experienced mentors.

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