The term ‘entrepreneur’ often conjures up an image of a young, enthusiastic risk-taker or computer whiz-kid, hungry to make a fortune from the next big thing.
Reprinted from business2community.com. Written by Rachel Craig.
Starting a successful business, on the other hand, requires a little more savvy. But the best age? That matter is up for debate and the focus of a great deal of authoritative research. Sure, some of the most famous successful entrepreneur businesses were created by individuals in their 20s – Mark Zuckerberg, Steve Jobs, Bill Gates, Richard Branson, to name a few – but this is not representative of the majority: the middle-aged professional with know-how, wisdom and vision is now the typical entrepreneur of the high-growth venture.
The benefits of ageIt’s not such a surprising notion when you think about it. People over the age of 40 are now proving to be the most successful entrepreneurs for a number of reasons – people are living longer, the job market is saturated, redundancy is high, the retirement age just keeps increasing, the baby-boomers developed the age of technology we now rely on, birth rates in this age group have declined, they are more likely to have financial resources with a reliable credit rating, and the knowledge and experience of this age bracket is far greater than those under 30. Whilst there may be ageism in employment based on the assumption that with age comes out-dated skills and a lack of innovation, the middle-aged generation is challenging this aversive, stereotypical attitude through successful entrepreneurship.
Who has the advantage?Liz Kammel’s article in Forbes, Start a Company When You’re 25 – Not 52, suggests younger entrepreneurs hold the advantage in start-up ventures because they are less likely to have responsibilities, they’re probably not making very much money anyway, they are used to working late and surviving on little sleep, and they’re more likely to want to challenge existing standards with new ideas. These are all relevant and logical points but Whitney Johnson’s article in Harvard Business Review cites empirical data and a number of examples that suggests quite the opposite. Research conducted by the Kauffman Foundation shows that those aged over 55 are almost twice as likely to succeed as successful entrepreneurs than those aged between 20 and 34, and high-growth start-ups are also twice as likely to be launched by those over 55 than the younger age group. Similarly, Vivek Wadhwa, renowned scholar and entrepreneur, studied 549 successful entrepreneurs and discovered that “Twice as many successful entrepreneurs are over 50 as under 25. The vast majority – 75 per cent – have more than six years of industry experience and half have more than 10 years when they create their start-up”.This is not only excellent news for the higher age bracket, but the younger generations will also benefit from the surge in the job market created by the high-growth ventures typical of the over-40 entrepreneur. Furthermore, there’s a tendency with younger individuals to be more focused on quick gain for their own benefit. This self-concerned trait is not so much a bad thing or a recent development; it’s simply a natural aspect of being young. Older, mature individuals are more likely to have outgrown such characteristics, choosing instead to use their experiences to create a business that counts and benefits future generations as well as themselves.
Age is not a ruleWhilst the research points strongly toward the advantages of having more years under your belt, a good business idea can strike at any stage of life so don’t be put off by age – there’s no hard and fast rule. Achieving success as an entrepreneur depends on so many factors – the viability of the idea, the industry you’re targeting, timing, talent, drive and commitment, access to financial resources, networking with the right people. The 20-something entrepreneur generally has more energy to burn, is less risk-averse because they have nothing to lose and is less likely to be tainted by ideas about the way things should be done. Starting a business when you’re young is no doubt much easier but arrogance and lack of experience are often problematic in the long run. However, one way to overcome this hurdle would be to co-found a business with an experienced individual or find a valuable mentor whose experience and knowledge you could use to your benefit. The over-40 entrepreneur may be less inclined to risk their financial security, they are more likely to have commitments and may be giving up a lucrative, secure career for an uncertain new venture – but the more you have to lose, the more likely you are to think things through and ensure the viability of a new business before making the leap. Paired with maturity, experience and knowledge, this is no doubt a key factor in the souring number of older entrepreneurs achieving such great success.