Very young entrepreneurs get a lot of press. But research shows 40-somethings are the best positioned to start a business.
- A common myth is that successful business founders launch their companies in their 20s. However, most founders find success in middle age.
- Studies have shown that middle-age business founders are two to three times more likely to succeed than those who are under the age of 30.
- Although a few famed tech entrepreneurs like Mark Zuckerberg launched companies in their 20s, many successful businesses were started by entrepreneurs in their 40s.
"We have a myth in our heads of what the prototypical startup founder is, and myth is an early to mid 20s male who studied computer science at an elite school and dropped out," said Roy Bahat, of the Bloomberg Beta investment fund, as quoted in The New York Times.
The only problem is that what most people think happens to be wrong, Mark Zuckerberg notwithstanding.
According to OnStartups, the median age of company founders when they started their current companies is 40. And far from being college dropouts, some 95% of 549 company founders surveyed graduated from college, and nearly half held advanced degrees.
That sounds about right to Lottie O'Connor of the Guardian, who writes: "For many, being a twentysomething is characterized by career uncertainty and debt, while a lack of experience working for other companies could make starting your own a risky business. Your 30s is the era of children and mortgages: a combined responsibility that could rule out taking a leap into the unknown. Forties, on the other hand, represents an attractive combination of financial security and business experience."
Why middle age is the best time to start a business
According to a study from Northwestern University, businesses tend to be more successful in the tech industry when started by those in middle age. The study concluded that the most lucrative tech companies had a founder with a medium age of 45. On average, those in middle age are two to three times more likely to find success when compared to those who are 30 years old or younger.
The reason behind the high success rates is that the founders have more experience. They have already made mistakes in their careers and potentially learned to avoid common pitfalls. In addition, older founders may have access to more startup funds and have a larger professional network. At middle age, you feel comfortable in your market and can spot up gaps you can fill.
The over-40 bunch
Here's a by-no-means-comprehensive list of successful business owners who started their companies in mid-life:
- Vera Wang (fashion designer)
- Gary Heavin (founder of Curves fitness, a franchise noted for tremendous growth in the 1990s)
- Jack Weil, Rockmount Ranch Wear (he started the company at 45 and died with his boots on at 107, still acting as CEO)
- Tim and Nina Zagat (yes, the Zagat of restaurant review fame)
- Ray Kroc (bought his first McDonald’s in 1954)
- Henry Ford (started Ford Motor Company after designing and manufacturing automobiles for other companies)
- Brian Halligan (Hubspot inbound marketing and sales platform)
- Manish Chandra (Poshmark, a mobile and online marketplace for women’s fashions)
- Arianna Huffington (The Huffington Post)
You could make the argument that times are different now compared to when many of these people started their companies. Depending on how old you are, you may be perturbed by venture capitalist Vinod Khosla's remarks in Venture Beat that only younger people can start innovative companies because "people over 45 basically die in terms of new ideas."
The problem with such a broad remark is that it ignores the evidence. A Kaufmann Foundation study of 5,000 start-ups shows that the firms that survived after four years typically had a primary owner older than 45. And while Steve Jobs may have launched Apple while he was in his 20s, the iconic products for which the company is known – the iMac, the iPhone, the iPad – were introduced under his leadership after he was 45. Time reports that high-growth startups are near twice as likely to be launched by older entrepreneurs as those aged 20 to 34.
What characteristics do over-40 entrepreneurs have that their younger counterparts might not yet have fully developed?
While there's something to be said for the arrogance of knowing what is right regardless of anyone else's opinion, an unbridled ego takes it toll on employees and investors. It can also lead to poor business decisions, Dave Lavinsky explains for Growthink: "The foundation of a good business is a good business opportunity. As an entrepreneur, you want to fill a need in the marketplace. Unfortunately, many businesses are started solely to fulfill an entrepreneur's ego (or, to put it less harshly, to satisfy one of the entrepreneur's interests). This can often be seen in the restaurant and] bar industry, where too many entrepreneurs open shop because it's a 'cool' thing to do. Such businesses rarely succeed."
Older entrepreneurs know the ropes, they have had their failures and have learned from them. Younger entrepreneurs still have their failures ahead of them.
An established network
More people know you, more people trust you (especially with their money). When you need help opening a door to whatever your business needs, there are more resources willing to open theirs for you.
If you're thinking of starting a company and are worried that you might be too old, think again.