Boomers Who Start Businesses: The Next Great Generation Of Entrepreneurs
Don't be fooled by baby-faced Mark Zuckerberg: Contrary to popular opinion, 20-somethings aren't the only ones responsible for successful startups these days. Sure, we may be obsessed with youth, but don't forget, it's also wasted on the young, which is why a growing number of people are starting businesses in their 50s, 60s and even 70s. For baby boomers, with newfound free time and either financial freedom or financial insecurity on their hands, the entrepreneurial path has become more appealing, more viable and more rewarding.
"When people become middle-aged, they have experience, knowledge, savings -- they just have this fire in the belly to create something, to make it big before they retired," says Vivek Wadhwa, an academic, writer and entrepreneur. "They worry if they don't start something now, they'll be left out, so they take the plunge."
In 2008, at the height of the entrepreneurial youth renaissance, Wadhwa released breakthrough research that showed the number of founders older than 50 was double the number of founders younger than 25, and the number of founders over age 60 was also twice the number of founder under 20. The average age of male founders was 40, and female founders' average age was 41. In fact, Wadhwa's research revealed that the highest rate of entrepreneurial activity had shifted to boomers in the 55-64 age group. That trend continued through 2009, according to a Kaufmann Foundation study released last year, and Wadhwa says he expects the boom in boomer entrepreneurship to continue through 2012.
"We suspect the age of entrepreneurs is actually increasing," Wadhwa says. "When we did the study, it created a lot of controversy, because it went against the stereotypes in Silicon Valley. The perception here is that only the young can innovate and that any kid out of school can build a Facebook. People here believe it's all about youth, but we found that isn't the case."
Ageism in the entrepreneurial community is a fairly recent development. Wadhwa points out that Ben Franklin discovered electricity at 46 and invented bifocals after age 70, Sam Walton built Walmart in his mid-40s and Ray Kroc built McDonald's in his early 50s. Wadhwa finds it ironic Silicon Valley may scorn boomers, while its very icon of innovation, Steve Jobs, introduced the iMac, iTunes, iPod, iPhone and iPad all after age 45. "When he was young, he got kicked out of Apple," and some of his greatest innovations came "with age and maturity," Wadhwa says.
'Fifty Is The New 30'
Rather than the dominion of the young, innovation is a product of young minds, and the baby boom generation has that to spare. "Fifty is the new 30," says Rieva Lesonsky, founder and CEO of GrowBiz Media and a member of the HuffPost Small Business Board of Directors. "Boomers don't feel or act their chronological age. We have a lot of good years ahead of us, and we don't want to sit idly on the sidelines. We'd be bored -- and many of us would simply run out of money."
"Part of the baby boomer mentality is to think younger and break out of the box as much as possible," says Steve Strauss, columnist, author of "The Small Business Bible" and also a member of the HuffPost Small Business Board of Directors. "People are living longer and healthier. I'm not surprised that boomers are changing the way we look at retirement."
The increase of boomer startups, according to Lesonsky, has been fueled by the recession, which has created a number of "reluctant entrepreneurs." "Many boomers lost their jobs in the recession," she explains. "While hiring is picking up again, it's not likely boomers are going to get hired. Due to their experience and age, they simply cost employers more to hire, both from a salary and cost-of-benefits perspective."
Outright age discrimination in a competitive job market may also be pushing those over 50 toward entrepreneurship. "For many boomers, self-employment is the best or the only option," Strauss says. "Getting a second or third job later in life is not an easy thing to do, and the economy changed a lot of plans for a lot of people, whether they thought they were going to have a 401(k) or sell their home and cash out their equity."
Even if they started businesses out of necessity, many boomers are finding entrepreneurship to be a good fit. According to a survey by MBO Partners, which provides services to the independent contractor market, 30 percent of the booming independent worker market are boomers, and 10 percent are even older. Only 8 percent of independent contractors ages 50 to 64 and fewer than 1 percent of those 65 or older are seeking traditional employment, and 86 percent of boomers and 96 percent those who are 65 or older are highly satisfied or satisfied working independently.
While it has been four years since Wadhwa's study popped a hole in the youth bubble, the effects have been like a slow leak, and he believes boomers still have not gotten their due respect. "In Silicon Valley, it's gotten even tougher," he says. "It's probably why the Silicon Valley venture-capital system is in decline, because they are missing the target. And we need all the innovation we can get right now."
In fact, the support of this demographic may be the key to economic recovery. "It's 'cool' to talk about young entrepreneurs, so yes, I think older entrepreneurs don't get the attention they deserve," Lesonsky says. "I do believe Gen Y is inherently the most entrepreneurial in U.S. history, but I think a lot of that interest was planted by their entrepreneur parents. Once the economy starts picking up for real, I think boomer business owners will get a bit more attention, especially if the businesses they start, grow and contribute to the economic recovery.
"This era of entrepreneurship being embraced by the mature and the young is new territory," Lesonsky adds. "Both age demographics have a lot to learn from and share with one another. If we do this right, we could be entering another 'golden age' of entrepreneurship, where smart, educated people embrace business ownership partly out of necessity, partly fueled by their dreams, and partly to grab control of their lives."