Thursday, June 7, 2012

Why age matters for startups - it's not a young person's game

When it comes to startups, and especially tech startups, there is always buzz about the breakthrough startup companies that have made it big.  Everyone knows that the founder of Facebook is a young man who's now a bazillionaire before he's even turned 30.  And there are many more stories of young people, usually dudes, who have made millions in their twenties.  Even awards for inventors and entrepreneurs are often limited to those under age 30, for example, the Alva Emerging Fellowship, and the Inc Magazine 30 under 30.  While certainly commendable for the individuals featured in these prestigious awards and publications, all this focus on youth can seem daunting to the over-30 crowd.

But fear not - Looking at successful CEOs and heads of engineering and product development at technology companies, a research team at Harvard and MIT found that twice as many successful tech entrepreneurs had started businesses in their 50s as did those in their 20s. 

Why are older entrepreneurs more successful?

It shouldn't be surprising that older entrepreneurs are more successful than younger entrepreneurs.  Tthe longer you're around, you've had more time to build up your personal network of people who are able to support you in your startup, whether financially, instrumentally, or just with plain old advice.  Pierre Bourdieu, a famous sociologist, called this "social capital," and it's thought of as a sort of bank account that gets built up depending partly on age, but also on other factors like level of education, wealth, and work experience.

Social capital helps to explain why college dropouts (particularly those from Harvard and other prestigious institutions) can make it big in tech startups.  The very same social capital that helped them get into the college in the first place is the same social capital that enables them to connect with investors and obtain other kinds of support that startups need to survive.  There's a reason we don't see many students from economically disadvantaged backgrounds dropping out of college and giving up their scholarships to start businesses - they don't have access to the social capital that young people from a more privileged background have.

Another important concept is "cultural capital."  This is the social knowledge you need to get by in a particular type of social situation, such as knowing whether to shake hands or kiss on the cheek as a greeting.  It's knowing that wearing a three-piece suit to an interview at a tech company means you're probably overdressed and look like you're trying too hard - where's your 5 o'clock shadow?  Or that certain words should not be used in certain company.  This is the kind of capital that also enables success in multiple areas, and why those who blend in with the kinds of people already in the field have a greater chance of obtaining venture capital.  Do you talk the talk and walk the walk?  Come right in!

So don't think of your age as an impediment, think of it as an asset, a form of capital that can be used to obtain the kind of capital that really matters for your startup, whether cash or guidance or access to people who can help you.

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