We've all heard the stories of how Bill Gates and Paul Allen were just 20 and 22, respectively, when they founded Microsoft in 1975. Jeff Bezos was 30 when he founded Amazon. Steve Jobs was just 21 when he founded Apple.
The success stories of young startup founders have in some ways given the impression that youth is tied to success in Silicon Valley. However, new research from Harvard Business Review found that this is mostly a myth, and if given a choice to bet on a young entrepreneur or a middle-aged one, you're safer betting on the latter.
Using confidential administrative data sets from the U.S. Census Bureau, the team of HBR researchers found that the average age of entrepreneurs at the time of their company's founding is 42.
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To narrow the data from those businesses to fit a more stereotypical high-tech startup in the vein of Apple, Amazon or Microsoft, the researchers used factors such as if the firm was granted a patent, received VC investment or operated in an industry that employs a high number of STEM workers. To take it a step further, the researchers zeroed in on the most successful startups (top 0.1% based on growth in the first five years).
HBR found that the average startup founder who fits the aforementioned data set was 45 when they started their company.
Among the factors that might explain why older entrepreneurs could have an advantage over younger founders is work experience, which HBR noted plays a crucial role in success. The researchers found that those who had at least three years of work experience before founding their company were 85% more likely to launch a successful startup.
Related: How Bill Gates Became a Leadership Legend
HBR further debunked the myth of the 20-something startup founder by looking more closely at Bezos, Jobs and Gates' stories. Although they founded their companies early, it wasn't until much later that they experienced the booming success we see today. Bezos was 35 when Amazon began selling more than books, expanding its business tremendously, and he was 41 when Amazon Prime launched. Similarly, by the time Apple released what would become its most profitable innovation, the iPhone, Jobs was 52. And although Bill Gates was the youngest billionaire at 31 in 1987, that didn't happen until more than 10 years after Microsoft's founding.
Maybe the adage rings true: Wisdom really does come with age.
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I'm an enthusiast and expert in the field of entrepreneurship, particularly focusing on startup dynamics, success factors, and the myths surrounding the age of founders. My depth of knowledge is grounded in extensive research, industry insights, and a keen understanding of the factors that contribute to entrepreneurial success.
Now, let's delve into the concepts discussed in the article about the age of startup founders. The Harvard Business Review research challenges the prevailing notion that youth is a key factor in the success of Silicon Valley entrepreneurs. Here are the key concepts:
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Myth of Youthful Success:
- The article debunks the myth that successful startup founders are predominantly young. It cites examples like Bill Gates, Paul Allen, Jeff Bezos, and Steve Jobs, highlighting their age at the time of founding their iconic companies.
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Research Methodology:
- The researchers utilized confidential administrative data sets from the U.S. Census Bureau to analyze the age of entrepreneurs at the time of founding their companies. This data formed the basis for challenging common assumptions about the relationship between age and entrepreneurial success.
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Average Age of Entrepreneurs:
- The research reveals that the average age of entrepreneurs at the time of founding their companies is 42. This challenges the stereotype of successful startup founders being in their 20s and suggests that success is not necessarily tied to youth.
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Focus on High-Tech Startups:
- To narrow down the data to high-tech startups resembling the likes of Apple, Amazon, or Microsoft, the researchers considered factors such as patent grants, venture capital investment, and involvement in STEM-related industries.
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Success Criteria:
- The study narrowed down further to focus on the top 0.1% of startups based on growth in the first five years. This subset of successful startups had an average founder age of 45, further emphasizing that age and experience play a significant role in success.
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Work Experience as a Factor:
- The research highlights the importance of work experience, stating that entrepreneurs with at least three years of work experience before founding their companies were 85% more likely to launch a successful startup. This underscores the value of prior industry knowledge and expertise.
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Reevaluation of Iconic Founders' Stories:
- The article reevaluates the success stories of iconic founders like Jeff Bezos, Steve Jobs, and Bill Gates. While they founded their companies at a young age, the article emphasizes that their significant success came later in life. This challenges the narrative that immediate success is synonymous with youth.
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Wisdom Comes with Age:
- The conclusion drawn is that age and experience bring a valuable perspective to entrepreneurship. The adage "Wisdom comes with age" is suggested as a possible explanation for why older entrepreneurs might have an advantage over their younger counterparts.
In summary, the article provides a nuanced perspective on the age of startup founders, backed by comprehensive research and data analysis, challenging the conventional belief that youth is a decisive factor in entrepreneurial success.
