When we picture what an entrepreneur looks like, many of us (me included) envision a 22-year old developer eating Ramen noodles, drinking Mountain Dew, working from home, and cranking out 20-hour days to bring their dream to life. Kinda like Stammy – only before his now-famous startup diet. But the reality of today’s entrepreneur is radically different. Based on research completed by TechDrawl friend Vivek Wadhwa, the age and life circumstance are significantly different than you’d think. In fact, the average age for company founders was 40, the majority have 1-3 children, the majority have 6-15 years experience in their field and not finding a traditional job had zero impact on founding their startup.
So why is this worth noting? Because perception often diverges from reality in startup land. If you read TechCrunch or Mashable regularly, you’d swear every CEO is 26 and working on their third funded startup. Sure there are guys like Shawn Fanning of Napster and Mark Zuckerberg of Facebook, but you can almost single-handedly thank Ron Conway of SV Angel for betting on the youngest-of-the-young idea guys. If you look at the commonality of these young guns, they tend to build products that define a category. Before Shawn, nobody even thought of trading MP3s in real-time (to the great dismay of another archaic industry). Before Mark, it didn’t occur to anyone to update a status to hundreds or thousands of your friends at once. And the advent of seed-investment tech incubators like Austin’s Capital Factory, Atlanta’s Shotput Ventures, TechStars or YCombinator is doing everything possible to isolate and cultivate the next generation of these ninjas (and probably lowering Vivek’s average age on a quarterly basis).
But for most startup towns (and especially those across the South), there’s a strong value placed on an experienced management team. I think of the recent move by JouleX that added the CEO title to investor Tom Noonan – yep, the big-exit ISS veteran tapped to lead a high-flying greentech startup. When there’s a defined market to chase, most non-Silicon Valley investors will insist on deep experience in the industry. The simple reality is business experience and personal networks built over a 15-year career matter when you’re taking a run at starting a company from scratch – either with your money or especially with someone else’s.
So who’s right? If you’re under 25, I’d contend it’s the idea first and the team second – and you’d better have the ‘I can change the world’ mentality. (By the way, I fully subscribe to the notion that not all startups are fundable, but let’s not ignore a dynamic like Atlanta where ‘what gets funded’ has a direct effect on what entrepreneurs conceive.) The young guns like Fanning and Zuckerberg prove this theory out, and show that even if you don’t know how to scale a business to 500M users it can be accomplished (usually not without big, ugly growing pains, but accomplished nonetheless). But these are the few and far between. That’s why Ron Conway works so hard to find youngest ones, and then hopes to fund the most successful ones in whatever ventures they come up with over a startup career. Think about that dynamic from an entrepreneur’s perspective: hit the first one right, and you’re teed-up to have multiple cracks at whatever you can dream up. That’s a sweet place to be.
For the other 90% of startup founders, they’ll have a max of one or two cracks at building the company of their dreams – and in this case, it’s more about the team than the idea. This is the group I believe is most represented in Vivek’s research – and an average founder age of 40 is absolutely believable. These are often companies that build into existing markets, and skew more toward B2B solutions. They also are over-represented in segments like biotech, greentech and medical devices given the huge start costs in these areas. Look at a company like Suniva as a great example; big dollars raised, university-level technology transfer and global markets. Not exactly a business you’re going to hand to a 24-year old. While there are literally thousands of stories of B2B exits in the triple-digit millions, few have changed the lives of the average American computer user like Facebook. At the same time, I’d bet these companies have a slightly better batting average given the founder’s experience level and already-defined markets.
The reality is the tech startup world needs a healthy balance of both types of founders and companies. I’ve written at-length about the Golden Age of consumer Internet startups, but I don’t think this comes at the price of big greentech plays like Suniva. Each of these segments has their own universe of investors and startups, so coexistence isn’t an issue. And I think it’s fair to say any startup has a better chance of success as the experience level of the founder(s) increases.
So where do you fit on the continuum? If you’re in your late 30s and considering your first startup, then go ahead and jump in. It shouldn’t be hard to find a peer group, and your experience will absolutely give you a leg-up.