Great post Jay! I am really not surprised to see the statistics. In the age of abundant capital and media hype for entrepreneurship, it is easy to imagine many founders join the ranks because it is the “hip” trend of the day. One of the core success factors for any company is solving a painful customer problem and yet I set through countless of pitches last summer listening to ideas that were based on trends rather than problems. In one example, a founder sought funding for a picnic basket delivery business (the baskets would have been delivered empty) founded on the premise young people are “into the whole sharing economy stuff”. I would venture to say the success of such endeavors is questionable.
Fantastic post! Thank you for the thoughtful and data driven analysis.
As an “old” person in his 30s, I naturally fall on the “strongly supporting” side of the age argument. The media hype around entrepreneurship and startups has created a false image many people hold true: the successful founder is in his or her 20s and works out of a garage. That image, although true 10-15 years ago, is now completely outdated. With its growing popularity and world penetration, the Internet has changed the game. Nowadays, the cost of starting a company or just trying an idea has tremendously decreased. The change has opened the door for “older” people to try out the founding path in a much more efficient and effective manner. One no longer really need to quit his or her job (unless you see the traction you want) to put together a website or write a quick and dirty MVP. Therefore, it is only natural the success stories are evenly spread across the different age groups.
I founded a company when I was eighteen and can honestly say, I sucked at being a founder. I knew technology and how to build a product but lacked any other managerial skills. Building a team, scaling, money management, hiring, the list goes on. I found myself figuring out everything as I went through the motions. Although possible to overcome, this steep learning curve is a major risk factor for both the firm and its investors. People like Paul Graham would say they want to back a 25 year old but what they don’t mention is the fact this young person is twice as likely to be fired from their own firm once the “real game” of scaling begins.
I would like to think having a some actual experience in another company prior to starting your own venture is quite useful. It might box your creativity to some extend but it would also give you confidence and expertise to solve the problems ahead and avoid the common pitfalls.
Spot on Julisa!
The key to every successful enterprise is solving an actual problem, offering a solution that people would readily pay to acquire. If you start off with that premise, it is easy(-er?) to build passion and create a sense of purpose within your firm. It allows you to make internal decisions that reflect a clear mission and could easily be translated in a language understood across your organization.
Your point on hiring is quite on point. Many entrepreneurs and even seasoned executives often forget the low hanging fruit of customer satisfaction. They claim to focus on it but at the end, it is an unquantifiable expense that only serves to keep you at par with the competition or give you a nice slogan to put on a billboard. Founders should never forget understanding and mitigating customer needs outside the core problem they solve yields enormous benefits. It is a source of competitive advantage and often serves as the “secret sauce” of successful enterprises. However, to achieve it, companies need to hire people who closely align with the passion to serve the client. Without aligning incentives and objectives and most importantly aligning corporate and personal purposes, employees would rarely go above and beyond.