When you hear about start-ups and entrepreneurs, whom do you picture? For many, it’s the 22-year-old genius techie with the Stanford degree who also happens to be a Level 100 Fortnite gamer. If that’s what you think, I’ve got surprising news: That’s not the person you should be imagining. In the real world, that person is a lot different … and a lot older.
A professor and a doctoral student at the Massachusetts Institute of Technology, along with a Northwestern University professor, say their research shows that the average entrepreneur who has started a business and then hired at least one employee is not 22 years old and probably has never heard of Fortnite. That person is 42.
Researchers Pierre Azoulay, Daniel Kim and Benjamin Jones determined this by combing through data on 2.7 million people who founded businesses between 2007 and 2014. The data came from the Census Bureau and the Internal Revenue Service, and enabled them to pinpoint the founders of a company from Day One and track whether and when other employees were added to the organization. The researchers also honed their data to include those companies that had “ambition to grow” (i.e., tech firms, venture-backed companies, patenting firms), as opposed to dry cleaners and pizza shops.
From all of this they learned that the typical business founders are not only older than the popular whiz kid types but also that founders of the companies with the highest growth had an average age of 45. Hear that, kids (and potential investors)? Age really does bring wisdom!
So does experience. The research also revealed that company founders were 125 percent more successful if they had worked previous jobs, particularly in a similar industry. For what it’s worth, that’s what I always recommend to young people interested in starting a company: Work at and learn from another similar company for a few years; figure out how you want to do things better; and then start your own shop and go for the kill.
“In theory, we know that with age a lot of benefits accumulate,” Kim, the PhD student, said in a blog on MIT’s website. “For instance you get a lot of human capital from experience, you also get more financial resources as you age, as well as social connections, all of which will likely boost your odds of success as an entrepreneur.”