What do all established entrepreneurs have in common? If I embody these traits, will that make me successful as well?
Does that sound familiar to you?
Researchers, investors, entrepreneurs all strive to figure out the key characteristics that can consistently predict the chances of one’s success in the business field. It’s like trying to find a missing puzzle piece, that once discovered, provides the key to success.
Amongst the long list of highly desirable traits such as intelligence, charisma, leadership, etc., there may be one particular trait that many people have just overlooked.
Bias in the Industry
“Young people are just smarter,” Mark Zuckerberg, founder of Facebook
You probably have formed a solid mental image of what an entrepreneur should look like. Motivated, idealistic, and passionate… and with good reason to believe in their abilities. Bill Gates, Steve Jobs, and Mark Zuckerberg started their business ventures in their early 20s, creating brands, services, and products which have now grown into multi-billion dollar industries. We come across their inspiring stories and profound quotes every day on social media, and it is unavoidable to connect them to the larger myth-making surrounding entrepreneurs. We are under the impression that young people are energetic, creative and innovative, and unafraid to take risks.
“The cutoff in investors’ heads is 32…after 32, they start to be a little sceptical.” – Paul Graham, Venture Capitalist & founder of Y Combinator
This has led to a form of discrimination in the business incubator sector that may be one of the more underreported symptoms of the entrepreneur boom – “Ageism”.
Is this form of discrimination justified?
The truth is, in fact, the opposite.
A study conducted in 2018 by the Massachusetts Institute of Technology (MIT) shows that the average age of a founder amongst the top 1000 fastest growing new ventures in the United States is about 45 years old. The data is similar across different industrial sectors, from tech companies to mass production factory owners.
Herbert Boyer was 40 years old when he founded Genentech, which would eventually be acquired for USD 47 billion. David Duffield was 64 when he established Workday, which is currently worth USD 28 billion. Their success stories are equally as inspiring as any other young celebrity entrepreneurs; however, most of them are undermined outside of their respective industries.
This study explicitly rejects the notion that youth is a crucial part of being a successful entrepreneur. In fact, the stories from celebrity entrepreneurs that we have gotten used to may be misinterpreted.
On the outside, we saw the success of Elon Musk’s Tesla and SpaceX but forgot about his
earlier ventures into Zip2 and X.com. Jeff Bezos has made Amazon the world’s leading online store but the global behemoth powering the world’s richest man started off as a e bookstore. Steve Jobs and Apple Inc found great success with the iPhone, launching them into becoming one of the wealthiest companies in the world. But the underwhelming entry that was the Apple II computer from decades ago was swept under the rug.
Does that mean that entrepreneurs are more likely to be successful if they are in their mid-40s? To be honest, we can’t know for sure because there has been a lack of research conducted in this area.
If age is not the catalyst of success, what is?
Environment, culture, peers and mentality are factors that play a more significant role in determining the likelihood of success than age itself. In reality, every age group comes with its own unique advantages and disadvantages. A smart entrepreneur would leverage whatever strengths they have to grow their businesses further, so let’s take a closer look
at the possible advantages these strengths impart.
Young Whipper Snappers
Less Influenced by Existing Paradigms/Practices
A lack of experience, traditionally, is considered a severe disadvantage. However, being inexperienced in a particular field allows for more freedom of experimentation, as stated in Planck’s Principle. Younger entrepreneurs may have the unique advantage of seeing things from an outsider’s point of view, bringing new and fresh insights to the table.
Room for Failure
In typical elderly fashion, my grandfather once sat me down and told me “Young man! You have a whole life ahead of you! Don’t be afraid to run into the walls in life, because every time you hit your head, you will learn how to overcome and walk around it the next time.
After all, what do you have to lose?”
This story may seem familiar to many of us. Entrepreneurs in their 20s are given room for failure because they are able to recoup their losses quicker. What they have is plenty of time and an excessive amount of passion and energy, so why not leverage that to explore external opportunities instead? Which brings us to our next point:
The more we age, the more responsibilities and commitments we bear on our shoulders. Starting a family and servicing a home or car loan can anchor down a person. A younger entrepreneur can have the freedom to experiment with his finances because he has only himself to care for. But when you are responsible for the life of others, there is little wiggle room to play around with when it comes to time, effort and money.
Understanding of Trends
The Financial Times published an article stating that Millenials are currently the most influential consumer demographic amongst all the age-groups. The lifespan of consumer trends has also trickled down to a few weeks, or a month or two maximum.
We have all seen failed attempts from old-fashioned companies trying to emulate outdated trends. Remember the rise and fall of fidget spinners? To capitalize on rapidly cycling consumer trends, one must have a deep understanding of it. Who better to tap into the Millennial market than a Millennial themselves?
The Grizzled Veterans
Knowledge & Experience
Depending on the industry, having some form of “market knowledge” can provide a tremendous headstart when starting a business. Market knowledge consists of technicalities specific to the sector, industry culture, understanding of regulatory constraints, strategic opportunities and many more extraneous yet interconnected factors. Thus, it is essential for an entrepreneur to have a deep understanding of the existing problems in the market.
Greater Social Capital
It is hard to run a business effectively by yourself. Down the road, gaining access to certain connections and social capital is necessary to grow your business. Knowing the right people at the right time can propel the company forward and have a stronger foothold in the industry.
Deep, trustworthy connections can only be built through time and effort, which gives the older folks a unique advantage in this regard.
Younger individuals have less time to build up the initial capital needed to start a business, and even less time to build a decent credit score to be eligible for a business loan. For startups, the amounts of capital funds will determine the ceiling limit of the company’s growth in the early stages. A good idea without the proper funding would eventually run itself into the ground due to the inability to properly execute business plans.
Younger entrepreneurs can overcome their limitations by assembling effective teams, accessing third-party financing and tapping into social media. With the birth of the Internet, people are more interconnected than ever before. The Internet has given rise to peer to peer crowdfunding, seed incubators, a cheap way to market your products and services. Starting a company right now is easier than ever before.
In an ideal scenario, entrepreneurs can partner up with someone from a different demographic and psychographic to compensate for their own shortcomings. But partnerships also comes with its own problems and we should reserve opening this can of worms in a future article.
In any case, age should not be a factor when it comes down to starting your own business. Challenges are inevitable, and overcoming these problems is part and parcel of being an entrepreneur. Being an entrepreneur is being able to create something amazing and outstanding with a limited amount of resources on hand.
To quote Sun Tzu’s ancient teachings, “Know your enemy and know thyself, and you will win a hundred battles”. There is no secret to running a successful business. Being diligent, having self-awareness, and maximizing your resources is how you stay in the game. In the end, age is nothing more than a number.