A slight topic change from the usual, but Marc Andreessen has stirred the pot on the age and entrepreneurship question in the tech blogosphere. My personal take is that being young does not make one more likely to be successful, but instead being successful at a young age makes one more likely to be super successful. Here’s why….
Marc Andreessen has brought up an old question from the tech blogosphere and asked if entrepreneurial achievement is like mathematical achievement (peaking early and declining sharply) or more akin to achievements in history (ramping up gradually until 40s/50s and slowly declining). He ends his post by asking how age affects entrepreneurial achievement. This last question takes a number of interacting factors and combines them into one question. As other bloggers have started to tease apart the question a more complex reality has started to emerge (read the trackbacks to his post).
The target audience of Marc’s blog is a more web-centric crowd, and his average reader’s question may really center on, “Who is a better web entrepreneur”. Fred Wilson correctly points out that the people who grew up with the web understand it better. This makes sense, as the brain of a growing human is designed to quickly absorb information about the environment to successfully adapt. And while adults always continue to learn, the rate at which they learn decreases with age. It would therefore take them longer to understand an emerging trend, capitalize on it and launch a new company.
However, I don’t think entrepreneurship is exclusively about ideas or the web. Instead, it contains two parts: the idea and the execution of the idea. Already pointed out is the role-played by the entrepreneurs chosen industry. Younger people grew up with the web and can more easily spot opportunities whereas research academics may have greater success with industries that require large amounts of capital. Tying this back to the original question…
Marc’s blog, and the research paper both assert that there is a constant probability of success and that those who contribute the most start early and work for a longer period of time, putting out more works because of the relative length of career. Compare this thought with one of the charts that fueled the debate showing some of the most successful tech founders and the age when they started. All of them are in, or close to, their 20s, and even though this sample is definitely biased, it’s still interesting. Notably because the super successful entrepreneurs stuck with their companies, or had founders that stuck with the companies, for long periods of time. This gave them more time to make more successful decisions.
Most companies fail because they run out of money. Successful entrepreneurs, then, have either hit upon a great idea early on (improbable but not impossible) that gave the company more time to survive and thus come up with even more good ideas, or they raised enough money to find product/market fit and continue to operate and come up with more good ideas.
Successful entrepreneurship and company growth is not just about an idea but also the execution, which should improve with experience. Knowing how to set up the right team, take the right steps and bring a product to market improves with experience and makes it easier to avoid past mistakes, improving the odds of success. This contrasts with one’s capacity to take risks and devote time to a new venture, which declines with age, family, and friendships.
Of course, it’s important to note that entrepreneurs that were previously successful are in a greater position to take risk, and are better able to solicit help to from others who can <a href=”http://www.startupboy.com/journal/2007/8/8/the-aging-entrepreneur.html”reduce parts of the burden. Larger companies can devote more resources to intrapreneurial ventures, divide up resources and time and shift some of the burden from the entrepreneur to the employees. Thus, once again, companies, or entrepreneurs, that were successfully early on have a longer “career” and are more likely to products success.
Successful entrepreneurship, like creativity and productive output, seems to follow a power law with most of the success driven by a small percentage of people. Professor Barabasi’s book on networks provides an explanation for the power law phenomenon: fitness, preferential linking and growth. Stronger, fitter companies will outlast weaker companies giving those companies more time to reap profits and continue to grow. Successful companies will attract more money and talent (preferential linking) continuing to fuel that company’s success. And growth of the market will push more profits to those previously successful companies.
Starting young is not a prerequisite for successful entrepreneurship, but being successful at a young age ensures a longer career, which will lead to out sized success of the type seen by Microsoft, Apple and Google.