Are the best startup founders young or old?

I recently heard a University lecturer say “entrepreneurship is a young mans game”. Investors do prefer younger founders.  The well-respected startup investor Yossi Vardi: “I generally invests in young entrepreneurs”. The average Y-combinator or Seedcamp winner tends to be in their 20’s.  However there is no best age to be an entrepreneur.  There are benefits and draw-backs to both young and older founders. Being  a successful entrepreneur is derived from the ability to  learn, having  an inner driver and maintaining the right attitude.

Our web app startup operates from a student/post grad startup incubator. I see alot of young startup entrepreneurs coming through. Most startup founders at the incubator are either young or middle-aged.  A recent US report showed that the average age of startup founders is 39! There are benefits and draw backs to both young and old founders:

1. Energy – Youth brings an abundance of energy. Startups require alot of energy. You have to work hard, often and late. However startups are more of a marathon than a sprint. They  require long-term mental and physical stamina to succeed.
2. Enthusiasm – The danger with enthusiasm is it does not always last  in the young and inexperienced. Startup projects can be dropped as enthusiasm wanes and reality kicks-in. It is important to be committed on a path whether young or older.
3. Experience –  A younger entrepreneur is often eager to learn and has fresh ideas untainted by working as an employee. Whereas an older founder often has great industry knowledge. Research shows that companies are more likely to survive if the entrepreneur is older, and has previous business experience.
4. Money – Older startup founders tend to have more capital to invest than younger entrepreneurs. However older founders outgoing’s tend to be much higher with kids, houses, etc..
5. Risk – Younger entrepreneurs are often less risk averse than older founders because they haven’t got so much on the line i.e. outgoings and responsibilities.
6. Time – Without responsibilities a young founder can focus just one  thing – working hard on the startup. Sequoia Venture’s Michael Moritz.:  “distractions like families and children…that get in the way of business” . They also have time to make mistakes that can be learnt from and then try again.
7. Innocents – The young tend to be more naive on how hard startups can be. Whereas the older tend to be more worldly-wise.

VC’s prefer more youthful startup founders because they have  fresh ideas and can more easily be managed. The best founders are probably older serial entrepreneurs with both startup know-how and market experience.  However they can suffer from destructive excessive egos at times.

There is no best age to start a company. Age plays both ways. It can be a strength or a weakness in either age group. Attitude and an inner driver, with a sprinkling of luck, is more crucial than age. An entrepreneur is  made by building upon an individuals fundamental personal qualities, including determination, and not age.

Does your CEO really believe “our employees are our greatest asset”?

Susan Scrupski had some strong words in her post about GenY and the self-serving behaviour of management 1.0:

“we excelled at the selfish art of Machiavellian achievement, in the end it took my generation down a path that led to, well, the S&L scandal, Enron, one-dot-oh greed, and now, the subprime meltdown. Our narcissism is our legacy.”

The caricature Gordon ‘Greed is good’ Gekko has become a real living nightmare reeking havoc on the economy. Is our current management of business now changing with the arrival of the next generation and their affinity with social media?

The social spark of Web2.0 is igniting Enterprise 2.0 and fanning the fire of management change. In addition Gary Hamel is banging the drum of a much needed management change with his trade marked term Management 2.0 and latest book. Many others must be in agreement with Hamel as he’s been propelling to the status of the most influential management guru.

Google has been put on a pedestal by academics such as Hamel because of its innovation model, flat management structure and people centric approach. Hamel recently interviewed Google CEO Eric Schmidt at the future of management conference, it’s long but if you ‘listen’ below there are some insightful pearls of wisdom from a seemingly un-egoistical 2.0 Manager.

Jeffrey Hollender and Keith Sawyer who were both at the event have produced good reports.

The similarities between Google and Opensource are strong. Both are increasingly challenging some of the world’s most profitable software business models and our current approach to organisational management. Neither Google or Opensource has a management hierarchy, they both carefully select the best employees/contributors and then engage and empower them. Interestingly this moves much of the managerial power from the self serving individual to the shared decision making of the collective.

However the Google and Opensource models are not without weaknesses. Most Opensource developers or contributors to projects such as Wikipedia have day jobs which pay them enough so they CAN contribute to a community as a hobby. Interestingly one of the motivations of Opensource developers is based on the ego. As for the Ad model, it breaks down when Ad revenues top out or if Ad’s are strongly rejected by visitors.

As examples the Internet poster child Facebook has been unable to fully capitalise on Ad revenues because of user kick back. In the case of Wikipedia, they are too worried introducing Ad’s in case of alienating their unwaged contributors.

Like the Google and Opensource models the next generation are challenging the norm, however they maybe warn down by management hierarchy and copitulate to make money and progress careers. Like many of us GenYers want to be happy and satisfied at work. They are increasing looking for firms like Google which give them the chance to have a real say in decisions so they can make a difference.

Scott Gavin’s GenY ‘Meet Charlie’ deck is a must see

If firms that embrace fundamental management change gain greater economic performance then most firms, through survival, will evolve this way. It is important to attract talented GenYers but they alone unaided are not going to be able to change a 100 year old engrained management hierarchy. However GenY and the catalyst of Social Media are critical parts of the jigsaw of change.