I’ve recently written about how idolizing the risk-taking daredevil image perpetuates myths about the rewards of high risk. Another example of misleading imagery, however, is the notion that successful startup companies have relatively young founders. Like the myth of high risk, high reward, the image of prosperous young Silicon Valley tech company founders paints a misleading picture of the importance of youthfulness in the success of business startups.
But, contrary to the popular imagery, younger founders are not necessarily the ones who build the most successful new businesses. This is discussed in the September/October 2019 MIT Technology Review article “Don’t fear the gray tsunami” by David Rotman. The article is primarily about how the demographic shift to a much older population will not “doom the world economy and make life miserable for everyone” because “aging societies are not worse off”. However, the article does briefly describe how successful companies often have older founders.
The article says, “In a rigorous study that looked at 2.7 million company founders, economists at MIT, the U.S. Census Bureau and Northwestern University concluded the best entrepreneurs are middle-aged.” “A fifty-year-old founder is 1.8 times more likely to create a highly successful startup than a 30-year-old founder.” According to the study, “The fastest growing startups were created by founders with an average age of 45.” And, “it turns out that industry experience was a significant positive in predicting success.”
As I see it, based upon my 25+ years researching business success and failure patterns, the above findings are explained by the ever repeating pattern that businesses succeed by building on strengths. Older founders have had a greater opportunity to develop the strengths and expertise required for the success of their startup. So, it is not surprising that industry experience is a significant positive because that is a way for founders to build on their strengths. After all, building on strengths is a powerful success pattern. And, based upon my research, the pattern of experience underlying successful growth is quite common.
However, it’s important to remember that industry experience can be a double-edged sword, as I explain in my previous writing about industry experience and corporate boards. In some cases, industry experience can be less important than experience with key target markets or with much needed skills picked up in another industry not too different from the founder’s startup.
For example, Steve Jobs had industry experience with computer hardware after he left Apple and founded his startup called Next, which developed sophisticated computers targeted at large organizations at the high end of the market. Next was not very successful and might have done better if its founder had experience selling big ticket items–not necessarily computer hardware–to universities and to other large, sophisticated organizations that Next computers could be suitable for. Steve Jobs’ prior computer hardware industry experience was not oriented toward the specialized markets Next products could serve. In other words, it’s important to have the needed strengths, and those often come from industry experience, but not always.
Getting back to the myth of the youthful founders, the patterns associated with business success clearly identify the importance of building on strengths. And, as I said, older founders have had the chance to develop the needed strengths. So, just as is the case with the myth of high risk, high reward, the myth of the youthful founder should not be perpetuated merely because imagery from Silicon Valley misguidedly portrays successful founders as youthful.
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