The legends of Bill Gates, Steve Jobs, Mark Zuckerberg and other high-tech entrepreneurs have fed a stereotypical vision of innovation in America: Mix a brainy college dropout, a garage-incubated idea and a powerful venture capitalist, stir well, and you get the latest Silicon Valley powerhouse. That’s Hollywood’s version of technological innovation; unfortunately, it’s also the one that venture capitalists try to fund and government planners seek to replicate. But these individuals are not America’s typical entrepreneurs. To find them, first let’s dispense with some major misconceptions about where our best ideas comes from.
1. America’s typical tech entrepreneurs are in their 20s.
My research team at Duke University has studied the backgrounds of the country’s entrepreneurs, and our findings debunk this popular notion. Our 2009 survey of 549 company founders across a dozen fast-growth industries found that, in fact, the average and median age of these founders when they started their companies was 40.Twice as many were older than 50as were younger than 25; twice as many were over 60as under 20. Seventy percent were married when they launched their first business; an additional 5.2 percent were divorced, separated or widowed. Sixty percent had at least one child, and 43.5 percent had two or more children.
Entrepreneurs are motivated to take the risk of starting a venture because they get tired of working for others, have ideas for new businesses based on the experience they gained working for others or want to strike it big before they retire. The mythology of the kid in the garage is grounded more in Hollywood than in Silicon Valley.
2. Entrepreneurs are like top athletes: They are born, not made.
Silicon Valley investors such as Jason Calacanis proudly proclaim that successful entrepreneurs come from entrepreneurial families and start off running lemonade stands as kids. After meeting Wharton Business School students last year, venture capitalist Fred Wilsonblogged that he was shocked when a professor told him that you could teach people to be entrepreneurs. “I’ve been working with entrepreneurs for almost 25 years now,” he wrote, “and it is ingrained in my mind that someone is either born an entrepreneur or is not.”
They’re wrong. Our research on successful entrepreneurs revealed that 52 percent were the first in their immediate families to start a business — as were Bill Gates, Jeff Bezos, Larry Page, Sergey Brin and Russell Simmons. Their parents were academics, lawyers, factory workers or bureaucrats. Only about 39 percent had an entrepreneurial father, and 7 percent had an entrepreneurial mother; some had both. Only a quarter caught the entrepreneurial bug in college.
3. College dropouts make better entrepreneurs.
Today, Silicon Valley is debating the Thiel Fellowship, which offers students $100,000 to drop out of college. The logic? That higher education is overpriced and unnecessary, and that budding entrepreneurs are better off building companies than studying irrelevant subjects.