Research: The Average Age of a Successful Startup Founder Is 45
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If I were to start a new company today, I would probably lack the carefree creativity of a 23-year-old, not to mention the energy to work crazy hours. But everything about execution would be better, and as it happens, assuming you have a decent idea at the right time, execution is everything.
But, from our two hour meeting I could tell that he wanted to make all of those same mistakes I now know not to make.
Your point about building complex shit is exactly his main problem, and I problem I suffered from at that age too. Yes, it might be complex one day if that's what the market needs, but simple can be so much more and it's especially the right move for an MVP.
To some degree, I don't blame him and he doesn't know me well enough to trust me to guide him away from those pitfalls, but man I wish he had a little more humility -- we'd be a couple months away from an MVP at this point.
Many startups fail because they're actually not innovative. Nobody needs another database from a tiny company that is just tiny bit better. No matter how good rest of your offering is, bigger does often mean better.
Other fail due to entanglements, especially hardware ones. Their supply chain fails and that's that. No amount of media will help and you cannot afford to hedge this kind of risk.
If you're already bringing the technical skills, you probably want to partner with someone that has the skills you lack. In particular you'd probably want business development skills, but you'd also want them to be able to jump in and get involved with designs/mockups so you can focus on the technical side.
As an aside, maybe I just don't 'get it' or maybe I've just met bad examples but this scenario always reads to me like "guy wants someone to do the work for him so he can be the boss".
Good ideas are cheap. Execution is the hard bit.
If the product is not innovative or much better than competitors, you will fail in a later round and best exit you can hope for is an acquihire.
This is why many startups fail, their ideas are meh and/or the execution does not follow.
Hiring? Ensuring funding? How long can those two last without a truly superior product?
Other non-technical factors, besides the ones you mentioned, are related to company culture, sales, HR and talent retention. Just a few examples that I can think of right now, there are many more of course.
In the end, the system that a company is built from will be complex.
Execution is about knowing which parts of the system should be complex and which parts should be simple.
I'm in my mid 30s. If my brain was quicker and my memory better when I was 21, it's certainly not enough of an effect to be noticeable. This corresponds to what more current studies say about when cognitive decline tends to become perceptible.
What has changed, is the demands on my time. Also, as you said, endurance. I can't sit at a computer for hours without stretching or something will start hurting.
When time and energy feel infinite, the perceived cost of wasting either feels low; the real cost remains the same.
The cost is actually much higher when you’re younger because of the time-value of money. It just doesn’t feel that way because the immediate consequences are lower.
> My brain was quicker at 21, memory was slightly stronger (slightly faster, easier recall), and I had greater endurance at working productively in very long stretches.
> I'm a dramatically better entrepreneur across the board. My patience has improved quite a bit, and my understanding of how to build for simplicity, reducing things down to only what they need to be, is leaps beyond what it was in my 20s.
> The single most important improvement I've seen, is building up a belligerent ruthlessness when it comes to complexity and general bloat. My 21 year old self just loved to build unnecessary, complex shit.
It's possible but selection bias could also be playing a huge role here.
I can't imagine a more risky period to step out of a 'career' and become a founder than 45. So it's possible people making the leap at this age are a lot more certain about their chances of success before taking the plunge than younger (and much older) people who have less to lose.
Why? What makes age 45 more risky than 40 or 50, or 35 or 60? Or are you just comparing "age bracket where people probably have a family" vs. "people probably too young to have a family"?
Would execution ability have been sufficiently improved by reading/observing more? What makes you now better at executing?
Fundamentally I think there's limited value in drawing lessons from these stories because you're probably your own best judge of whether you should quit your job or not. Your risk tolerance lowers as you get older but your skills will improve so it's up to you to decide what's the sweet spot. That said there is an age threshold where you'll be treated like an old man at a big company so may as well demonstrate your expertise on your own company before that happens.
Which is why one of the strongest criteria I have now with a company, is whether or not they would consider doing a joint deal.
You are far more likely to be treated as a peon, or someone to rob, (or beat down with lawsuits) in todays corporate climate. Most of the executive staff, is straight up sociopathic bootlickers.
I cannot tell you how many times I correctly called, major market shifts (what would now be called "disruptive") only to have it fall on deaf ears and watch some competitor rise to new heights months to a year later (and eat their lunch).
Seems to me youth or age are probably less relevant questions than whether you see an opportunity (and to what degree it's proven), what domain expertise is necessary to address it (and whether you have or can get access to that), and what resources you have available.
And as you noted, there are risks to simply settling into corporate comfort.
At first I started to learn by reading Computer Science 101 textbooks. The intro MIT textbook is in python and has more depth than other CS101 books. (Guttag, John. Introduction to Computation and Programming Using Python.)
I then went practical, I learnt Ruby on Rails via https://www.railstutorial.org/. It was good to provide me with mental framework of how websites are built... html, coding and database.
For the actual CanadaPups project, I switched from Rails to Django because I found Rails to be too confusing (maybe due to my inexperience at the time).
I think it provides an interesting contrast to the idea of young-genius unicorn-startups in that it underlines that yes, these companies exist and get a lot of coverage but most innovation still comes from people experienced in their field who had time to learn the appropriate skills for leading a company.
It's an "average" not a law.
1. Apple: $570.7B explained
- Jobs: 21
- Woz: 26
- Larry/Sergey: 25ish
- Gates: 19
- Allen: 22
- Bezos: 29
- Zuckerberg: 19For someone who is 18 and very creative, the facts you posted could be helpful to say that they have a chance to be insane lucky if they have the aprox 1 in a billion set of skills and timing required to make it to market.
On the other hand, the stats in the article point out that for someone in their 30s or 40s, they have 1/(10? 50?) chance to be able to found a successful startup, for some definition of the word startup. This in general seems a much more useful message to push.
A similar story is around education. Some of the richest people in the world did not attend college. However, for 99.9999% of the people - going to to college and getting a science or other hard degree is going to lead to a much nicer life then to go straight from high school to the working world.
Cool to look at the 1 in a billion case, it is not always as useful for a case study.
It’s funny that we understand this hit-based reality for music, tv, movie, and sports stars, but can’t seem to grasp it when it comes to startups.
The difference is that far, far fewer people have a moderately successful entertainment career compared to the many people who have successful software development careers.
With startups the distribution would be less like software developers but still not as extreme in terms of outcome as for entertainment. Ff you have a company that you sell for 5M or whatever that you own a quarter of you've done very well by normal standards but barely feature in value with the huge tech companies.
- Benioff: 35
- Reid Hastings: 37
Oh well pt II
In the majority of all other cases - experience combined with additional ingredients leads to success.
People always seem to forget this fact!
These statistics should certainly be interesting for investors, but there are so many more factors of the equation (like personality, drive, grit, access to capital through friends, etc) that are probably much more significant (even in a rigorous statistical sense) to the outcome of a company, that founders themselves are better off just ignoring it. And besides, a founder is a high agency individual, are you really going to let age (whether it be too old or too young) stop you?
I think it's pretty normal to stereotype young people, especially having in mind that most of us were impatient and lacked focus / direction at our younger age as well.
Exceptions do exist. My wife is 22 and has to be the most patient and level-headed person I ever met. But those exceptions are very few and far between.
Again, it's a pretty safe bet to stereotype young people.
Like most NBER articles, it’s quite long, but you can skip to the end for the figures and get a lot out of it. Figure 1 is the main thing being reported, but I found Figure 4B to be the most important: founders over 30 have a higher likelihood of success.
[1] https://www.kellogg.northwestern.edu/faculty/jones-ben/htm/A...
There were more in the 70s, 80s, or 90s (E.g. Jim Clark) because the industry was still forming, but even then the wunderkind college dropout drove most of the value creation.
In the modern era, Peter Gassner, founder of Veeva was 42. Diane Greene founded VMWare at 43. Brian Acton was 38. You start falling into the 30s fairly quickly.
And if we look in terms of value creation, the crazy outsize wins come from founder founders. E.g. the GAFA companies were all founded by sub-30s.
This study, like most of the Kauffman Foundation studies, tend to rely on obscure methods to reach these counterintuitive results. It's not to say 45-year-olds can't build great companies, but if you made a list of the 150-200 most notable tech startups of the last few decades, you'd see an average age closer to 33 than 45, even lower if you don't include the 2nd or 3rd startups of some founders.
The 30 companies that have famous founders are far outweighed by the ten thousand that you don't know of. On more than one occasion I’ve found myself working for absolutely massive companies (public in many cases) that I’d never previously even heard of. I’ve definitely had a lot of those, “Holy shit, how is this the biggest company I’ve never heard of,” experiences. There are a lot of companies in finance, telecom, and infrastructure that you don’t think about because they don’t have an app that sits on your home screen.
Although you might be right on statistics, I am 100% sure 10 years ago I wouldn't have had the maturity or the experience or the grit to face this day, the way I do right now.
Also, don't forget that today's returns are huge, compared to 10-20 years ago, and that today's entrepreneurs start earlier than their equivalent of 20 years ago.
It's hard to make sense of these numbers without bias or without any risk of misinterpreting things.
The article seems to make a fairly solid case:
"Our team analyzed the age of all business founders in the U.S. in recent years by leveraging confidential administrative data sets from the U.S. Census Bureau. We found that the average age of entrepreneurs at the time they founded their companies is 42. But the vast majority of these new businesses are likely small businesses with no intentions to grow large (for example, dry cleaners and restaurants). To focus on businesses that are closer in spirit to the prototypical high-tech startup, we used a variety of indicators: whether the firm was granted a patent, received VC investment, or operated in an industry that employs a high fraction of STEM workers. We also focused on the location of the firm, in particular whether it was in an entrepreneurial hub such as Silicon Valley. In general, these finer-grained analyses do not modify the main conclusion: The average age of high-tech founders falls in the early forties."
What's the counter-argument? That the famous founders of the 20-so most known companies are young?
There are thousands of tech companies founded, even on SV, not just the household names (and the household names are a tiny sample anyway).
The criteria of this study isn't bad, but I'd much rather just see a list of companies they're defining as startups. Is there a big biotech contingent? Are consulting companies included? B2B vs. B2C? Inc. Magazine published a list of the 500 fastest growing companies every year, and there's very little overlap between that list and what we'd consider the world of tech startups. This methodology feels more like Inc.
This is a straw man fallacy. I think you're conflating the definition of "successful startup" with a cohort of "famous tech" founders, which has some merit (lower age yields higher risk).
The broader definition of "successful startup" is more about "fast growing" or "economic impact". The emphasis is on founders of “growth oriented” firms that can have large economic impacts and are often associated with driving increasing standard of living.
An MIT Sloan study found the mean founder age for the 1 in 1,000 fastest growing companies is 45.0.
http://mitsloan.mit.edu/uploadedFilesV9/180325%20Age%20and%2...
Besides VMWare, some tech companies with over-40 founders are Adobe, Craigslist, Zynga, Xiaomi, Netscape, Akamai, SanDisk, McAfee, Seagate, the list goes on (you can find even more examples in a comment by user "adventured" in this same thread [1]).
I think part of this is the fact that young founders are in the game longer. A 20 year old will have 20 years of high-growth compounding on their wealth over a 40 year old just getting into the game. When you're using market cap as the measuring stick, it will usually favor those who've been in the game longer.
Wouldn’t the median be more representative of how old the common founder would be?
In a very simplistic example with a data set of two people aged 20 and 70 you would get 45 as the average age when in fact that doesn’t reflect the reality.
I always struggle when thinking about average vs median.
I find it interesting that 45 was the average age when starting a top company, and since this was a 5 year mark survey they were all 50 at the time.
Are they equating successful startups that are worth a million to trillion dollar companies like apple and amazon?
> I always struggle when thinking about average vs median.
Median takes away the bias of the extremes that averages can include.
For example, if 9 people make $1 and 1 person makes $1000000, the average is about $100,000 while the media is $1. The $1 is more representative of the sample.
But in this "research", there are far more data to unpack. Like the quality and quantity of "successful".
Did you... read the article?
Fourth paragraph:
"Among the top 0.1% of startups based on growth in their first five years, we find that the founders started their companies, on average, when they were 45 years old. These highest-performing firms were identified based on employment growth. The age finding is similar using firms with the fastest sales growth instead, and founder age is similarly high for those startups that successfully exit through an IPO or acquisition. In other words, when you look at most successful firms, the average founder age goes up, not down. Overall, the empirical evidence shows that successful entrepreneurs tend to be middle-aged, not young."
You can _disagree_ with their definition of success, but they certainly have one.
What sort of extremes do you expect to see in age data for starting a business?
There will be no 10 years olds, and likely no 90 years olds.
>But in this "research", there are far more data to unpack.
Why the quotations? Do you not believe this is research? This is a 1000 word summary of their work; do you think these researchers, from some of the best schools on the planet, didn't consider the sorts of questions you pose?
Measures of central tendency worth keeping in mind when talking "averages":
mean - what people usually mean by "average"
median - central point on a number line (ie, the same number of items are greater, and lower, than the median)
mode - the number which is most common in the set
Seems plausible, but is it true? Anyone have experience to back it up? There are obvious downsides of a better deal with worse odds.
I’ve certainly heard this theory before, so maybe there’s something to it. I’ve heard a few stories of more experienced founders failing to get a term sheet after negotiating well. It’s hard to ever know the reasons, and from what I’ve seen founders tend to take VC rejections personally and/or jump to negative conclusions about VCs when they don’t close, so I tend to take rejection stories with a grain of salt.
Your statement rings so true. VC, in this case Sequoia capital, tried to drive an emotional wedge between the two original founders of Cisco and exploited them. Its a fascinating podcast about the culture of VC money. Im sure there are far worse stories now.
Now if they invest at a company founded by experienced entrepreneurs that has same traction as the previous company, they might have to put-in $1mil at a $10mil cap and they’ll need the company to have an exit of $100mil to 10x their money.
I haven’t looked at the data personally but my hypothesis is inexperienced founders and $30mil exits are more likely than over $100 mil exits with experienced founders. It’s far more likely to sell for $30mil than it is to have an exit upwards of $100mil. So while a n experienced entrepreneur will be more likely to have an exit at $30 mil than an inexperienced one, it won’t produce the same returns for the investors
https://www.npr.org/sections/money/2018/05/02/607815836/agin...
Meteoric rises are difficult to keep in the air because of the lack of foundational skills.
Staying a little foolish and hungry (paraphrasing Steve Jobs) seems to be very good long term advice.
As noted in TFA, it seems likely the IT industry would heavily skew the results.
I did a quick search and got a lot of different answers, but the overwhelming number I got was that "over 90%" of startups fail in the first 3 years. With that, the number of possible common variables is going to be overwhelming.
However, it does potentially answer the question of why successful founders tend to be in their 40's. If you have a 90% chance of failing in the first 3 years, if you start 10 startups, perhaps you have a good chance of succeeding ;-)
Success might happen in 45, but I'd wager most of those 45s have a few companies under their belts.
Success itself is whether the idea had merit and a solid team is built.
Even the concept of an idea being meritable is relative -- it depends on who is making the assessment.
Fred Wilson didn't think AirBnB had merit, in fact he thought the whole thing was ridiculous [0], no matter how hard pg tried to convince him otherwise [1].
> Our team analyzed the age of all business founders in the U.S. in recent years by leveraging confidential administrative data sets from the U.S. Census Bureau. We found that the average age of entrepreneurs at the time they...
So they do answer your question in the article.
Ages of founders:
Paul Graham (31, Viaweb), Jan Koum (33, WhatsApp), Brian Acton (37, WhatsApp), Ev Williams (34, Twitter), Jack Dorsey (30, Twitter; 33, Square), Elon Musk (31, SpaceX; 32, Tesla), Garrett Camp (30, Uber), Travis Kalanick (32, Uber), Brian Chesky (27, Airbnb), Adam Neumann (31, WeWork), Reed Hastings (37, Netflix), Reid Hoffman (36, LinkedIn), Jack Ma (35, Alibaba), Jeff Bezos (30, Amazon), Jerry Sanders (33, AMD), Marc Benioff (35, Salesforce), Ross Perot (32, EDS), Peter Norton (39, Norton), Larry Ellison (33, Oracle), Mitch Kapor (32, Lotus), Leonard Bosack (32, Cisco), Sandy Lerner (29, Cisco), Gordon Moore (39, Intel), Mark Cuban (37, Broadcast.com), Scott Cook (31, Intuit), Nolan Bushnell (29, Atari), Paul Galvin (33, Motorola), Irwin Jacobs (52, Qualcomm), David Duffield (46, PeopleSoft; 64 Workday), Aneel Bhusri (39, Workday), Thomas Siebel (41, Siebel Systems), John McAfee (42, McAfee), Gary Hendrix (32, Symantec), Scott McNealy (28, Sun), Markus Persson (30, Mojang), Craig Newmark (43, Craigslist), James Goodnight (33, SAS), John Sall (28, SAS), Diane Greene (43, VMWare), Mendel Rosenblum (36, VMWare), Bill Coleman (48, BEA Systems), Evan Goldberg (35, NetSuite), David Sacks (36, Yammer), Jack Smith (28, Hotmail), Sabeer Bhatia (28, Hotmail), Chad Hurley (28, YouTube), Andy Rubin (37, Danger; 41, Android), Rodney Brooks (36, iRobot), Jeff Hawkins (35, Palm), Niklas Zennström (37, Skype), Janus Friis (27, Skype), David Bohnett (38, Geocities), Bill Gross (40, GoTo.com/Overture), Subrah Iyar (38, WebEx), Min Zhu (47, WebEx), Pierre Omidyar (28, eBay), Rich Barton (29 for Expedia, 38 for Zillow), Jim Clark (38 for SGI, and 49 for Netscape), Charles Wang (32, CA), David Packard (27, HP), John Warnock (42, Adobe), Robert Noyce (30 at Fairchild, 41 for Intel), Rod Canion (37, Compaq), Jen-Hsun Huang (30, nVidia), Eli Harari (41, SanDisk), Sanjay Mehrotra (28, SanDisk), Al Shugart (48, Seagate), Finis Conner (34, Seagate), Henry Samueli (37, Broadcom), Henry Nicholas (32, Broadcom), Charles Brewer (36, Mindspring), William Shockley (45, Shockley), Ron Rivest (35, RSA), Adi Shamir (30, RSA), John Walker (32, Autodesk), Halsey Minor (30, CNet), David Filo (28, Yahoo), Jeremy Stoppelman (27, Yelp), Eric Lefkofsky (39, Groupon), Andrew Mason (29, Groupon), Wilfred Corrigan (43, LSI), Joe Parkinson (33, Micron), Aart J. de Geus (32, Synopsys), John Moores (36, BMC Software), Vivek Ranadivé (40, Tibco), Michael Baum (41, Splunk), Suhas Patil (37, Cirrus Logic), T. J. Rodgers (34, Cypress Semi), Scott Scherr (37, Ultimate Software), Ray Stata (31, Analog Devices), Ross Freeman (36, Xilinx), David Hitz (28, NetApp), Brian Lee (28, Legalzoom), Demis Hassabis (34, DeepMind), Tim Westergren (35, Pandora), Martin Lorentzon (37, Spotify), Ashar Aziz (44, FireEye), Kevin O'Connor (36, DoubleClick), Ben Silbermann (28, Pinterest), Evan Sharp (28, Pinterest), Steve Kirsch (38, Infoseek), Stephen Kaufer (36, TripAdvisor), Michael McNeilly (28, Applied Materials), Eugene McDermott (52, Texas Instruments), Richard Egan (43, EMC), Gary Kildall (32, Digital Research), Hasso Plattner (28, SAP), Robert Glaser (32, Real Networks), Patrick Byrne (37, Overstock.com), Marc Lore (33, Diapers.com), Ed Iacobucci (36, Citrix Systems), Ray Noorda (55, Novell), Tom Leighton (42, Akamai), Daniel Lewin (28, Akamai), Michael Mauldin (35, Lycos), Tom Anderson (33, MySpace), Chris DeWolfe (37, MySpace), Mark Pincus (41, Zynga), Nir Zuk (30, Palo Alto Networks), Caterina Fake (34, Flickr), Stewart Butterfield (31 for Flickr; 40 for Slack), Kevin Systrom (27, Instagram), Adi Tatarko (37, Houzz), Brian Armstrong (29, Coinbase), Pradeep Sindhu (43, Juniper), Peter Thiel (31, PayPal; 37, Palantir), Jay Walker (42, priceline.com), Tom Gosner (40, DocuSign), Shay Banon (31, Elastic), Beerud Sheth (29, Elance), Arkady Volozh (36, Yandex), Hiroshi Mikitani (34, Rakuten), Morris Chang (56, Taiwan Semi)
It has also largely held true in China:
Pony Ma (27, Tencent), Robin Li (32, Baidu), Liu Qiangdong (29, JD.com), Lei Jun (40, Xiaomi), Ren Zhengfei (38, Huawei), Cheng Wei (29, Didi Chuxing), James Liang (29, Ctrip), Zhang Yiming (Toutiao, 29), Wang Xing (30, Meituan-Dianping), Wang Zhidong (32, Sina)
Elon founded Zip2 right out of undergrad, Garrett Camp founded StumbleUpon while in grad school, and Kalanick left UCLA undergrad to found Scour and then kind of expanded on that with Red Swoosh right after.
Most of these are still accurate and it's really cool data, so thank you for posting; just figured it was worth commenting on nonetheless. :)
I don't think there is something biological, or even social that makes it hard to be a late-bloomer in tech entrepreneurship. It's just hard to develop an entirely new skillset and network in later-middle age. I think we'd mostly be skeptical of a doctor who started medical school at 45, and while the stakes for founders aren't as severe, the same principle applies.
You probably wouldn't be sceptical of a managing director of a medical research company who'd dropped out of med school when they reached 10+ employees.
To leave age out of it, the study shows that those who successfully founded growth companies already had the skillset and network to draw on. (Perhaps the older ages were due to the years it takes for someone build their skillset and network?)
Musk could build Zip2 at 24. I would say there's zero chance he could have successfully built Tesla or SpaceX at 24 (ignoring the capital requirements). I think that far more often than not, to start and build great companies, requires a small lifetime of accumulated experience and mistakes.
The media myth of the tech industry and its important companies being founded by 19 year old Zuckerbergs, is just that, a myth. The media loves that story because it sells, it's just not real.
I'd like to think that most successful founders fail at their first few not so noteworthy "side-projects" before finding success and sticking to it. Just building a crappy version of something not-so-cool can teach you a lot about tech, business and design, which then helps you build better products in the future.
It would be nice if you put it up as a table in Markdown on your GitHub so others can contribute additions or corrections, along with citations.
I've met billionaires who know the "what" and the "how" but can't give me a meaningful "Why". Their "Why" always translates in the fact that they will disrupt the world. I believe that something is missing.
I am absolutely positive but one's more and even living an eternal life I can not help myself find meaning and wellbeing in starting up a business and human existence in general. If we do not include social entrepreneurship, why devote so much time for a belief to change the world without knowing that the world actually needs that change and it is not wasteful. We should re-define the "Why" before starting a business. Otherwise, we ended up doing business for the sake of business.
Life is certainly worth living and changing the world at young or older age is absolutely helpful for humanity. But the paradox is that we find the worth of life by finding our own true worth first. Transcending all the illusions of limitations, and realizing oneness with nature's consciousness maybe is the ultimate purpose of human life.
To conclude, I'd say at a young age develop self-awareness, define you in relation to the universe and then at an older age share your inner value with others(or keep it yourself). Don't just iterate the norms. Think out of the box!
well, they're not the 'founders' in most cases.
It's also hard to ignore the fact that the 'sexiest' companies in that list are the aforementioned 5 started by young founders.
In my own startup experiences, whatever founders goals may be, startups are successful (only?) when they exit their startup phase with goals achieved.
What evidence is there that a startup's founders age is a determinate of success? What does it mean to be successful in this context? in general? What other properties of a startup founder might contribute to the startup's success? How are those properties related to her/his age.
About 29. A lot of people think it's younger because the press especially like to write about young founders.
That would be a more relevant statistic
At what point do we, as technical people, wake up and go "hey, maybe all this bullshit lingo, youth fetishism, digital isolation and community destruction is bad as a whole?"
I'd rather see content about a founder who actually helped people somewhere solve some problem, and it made things better for regular people - those outside the tech bubble.
It seems like all everyone wants to do is blast off with like minded people.
I come back to it now, and the culture, is complete crap, and to be blunt, delusional.