Startups which are founded by older -- but not necessarily more experienced -- entrepreneurs have more chance of success and are more likely to hire employees and achieve high levels of growth, a study from MIT researchers has found.
In addition, the average age of entrepreneurs, across 1,000 high-growth startups in the US, is 45, shattering the myth that most startups are founded by young people in their 20s or early 30s.
That said, startups being founded by twentysomethings is a common occurrence in the 21st century, as millennials want control over their jobs and futures. This goes back decades, to when Steve Jobs and Bill Gates, with their co-founders, were founding Apple and Microsoft. Jobs was 21 when he co-founded Apple with Steve Wozniak, who was 25, and Ronald Wayne, who was in his 40s, but quit after two weeks, selling his 10% share back to Wozniak and Jobs for $800.
Likewise, Bill Gates was 20 when he founded Microsoft along with Paul Allen, 22.
In the 21st century, Mark Zuckerberg co-founding Facebook at the age of 19 may be the most visible example of the young-Turk startup entrepreneur. It's fair to suppose that the release of the film The Social Network in 2010, six years after the founding of Facebook, may have spurred many prospective entrepreneurs on to either found a company or want to found one in the future.
Facebook co-founder Mark Zuckerberg is seen by many as the poster boy for tech startups and tech entrepreneurship. (Image: Robert Scoble, Flickr)
However, as the MIT researchers found, the startup twentysomethings are the exceptions to the rule. The researchers found that, in a survey of 1,000 high-growth US companies, the average age of the founding entrepreneur(s) was 45. This is obviously at odds with the image of the young entrepreneur, but a drill-down into the data reveals more detail. While a "classic" or traditional SME, such as a retail business or restaurant, may be founded by someone "in the late 30s or 40s," what many see as a "tech startup" is more likely be founded by someone in their 20s, or potentially even younger.
The latter, say the researchers, is likely to be more focused on high growth -- think the traditional tech startup, with digital marketing strategies and content plans comprising blog posts and videos. Meanwhile, the former is more likely to be run without that need for high growth, such as expanding to new locations, opening new branches, or going online for sales.
The reason for this seems to be fairly simple: young people -- in this case, millennials, but it's always been people in the 20s -- are more "up-to-date" with the technology of their time. This means that, in 2018, people in their 20s understand how to market something on social media or create the content they need to succeed, while people in their late 30s or 40s may not be as familiar with this, opting to go for what they see as more traditional approaches.
There is a myth that most startups are founded by millennials working from coffee shops, but the MIT study suggests this may be a distortion of the truth. (Image: Rawpixel, Unsplash)
Growth, however, is easier to achieve the older you get -- to a point. As part of their study, the researchers looked at the likelihood of achieving high growth, finding that a 50-year-old founder is 1.8 times as likely to achieve growth compared to a 30-year-old. Furthermore, founders in their 20s "appear disadvantaged" compared to older founders, with the mean entrepreneur age of a company founded in the US and hiring at least one employee in 2007-2014 being 41.9.
Check out the full study to learn more about how age affects growth prospects, investment, entrepreneurship and overall success, and let us know in the comments your own anecdotal findings on these topics.
—Phil Oakley, Site Editor, TechX365