In May, Facebook CEO Mark Zuckerberg caused a stir after he showed up for an investor meeting wearing his signature attire: a hoodie. Besides drawing the ire of Wedbush Securities analyst Michael Pachter -- who told Bloomberg TV, "I think that's a mark of immaturity" -- Zuckerberg and his fashion choice reinforced the widely held view of what an entrepreneur is: male, based in or around Silicon Valley and young.
However, recent Kauffman Foundation research contradicts this stereotype. Entrepreneurs age 45 and up comprised 49 percent of all new entrepreneurial activity in 2011, while 45-to-54-year-olds showed the biggest increase in entrepreneurial activity rate. In fact, over the last 15 years, the Kauffman Foundation discovered that the number of 55-to-64-year-olds participating in entrepreneurship increased significantly, from 14.3 percent to 20.9 percent.
This makes sense to Dane Stangler, a researcher at the Kauffman Foundation, who told Business Horizon Quarterly, "You would expect the 55-plus group to have a growing proportion of businesses because their proportion of the population is going up." But the type of businesses these seasoned entrepreneurs are forming is perhaps more unexpected. While Business Week notes many "are better known as 'Schedule Cs,' businesses established by an aging accountant, a laid-off middle manager turned consultant or an outsourced specialist," Stangler sees plenty of tech startups -- subverting the widely held notion that all tech entrepreneurs are young hotshots.
"In the tech fields, where you expect a lot of younger entrepreneurs, we do find the average for someone who starts a business is around 39, but is also true that there are more over 50 than there are under 30," he says.
As the president of nonprofit venture development organization that has 65 companies in its portfolio and hundreds of business assistance clients, I can attest to this diversity -- especially within Northeast Ohio's tech startup scene. We've worked with everyone from 21-year-olds (such as the founder of Quixby, a computer-building company) to people who started companies as a second career (John Steidley, CEO and founder of cloud-based mobile support company Intelligent Mobile Support, founded the company using his 25 years of marketing experience). A 56-year-old with some startups on my résumé, here's what I see as the pros and cons of being an older (or seasoned) tech entrepreneur.
They know how to run a business.
When it comes to a startup's success, being able to contribute experience and insight is almost as valuable as a unique idea or substantive funding. "What a seasoned entrepreneur has is more time to make mistakes," says Cleveland Whiskey CEO Tom Lix, whose company has developed technology to accelerate the distillation of whiskey. "We've had our failures; we've learned from them; we've gotten better; and hopefully, we don't make the same mistakes as often."
They have an established support system.
As I said in Fast Company, more mature entrepreneurs don't just bring experience with them -- they bring a whole network of resources and contacts, which they've cultivated over a long period of time. Possessing a broad, varied rolodex--both inside and outside of your industry -- maximizes your chances of knowing (or being able to find) someone who can help your startup thrive.
Don't underestimate the built-in support of an encouraging family, either. "That's not a hindrance to you," says entrepreneur Lix. "That's a real positive. My wife supports me; my kids support me. That's a plus in my book."
They have unique resources available to them.
More organizations are directing help and assistance to entrepreneurs over the age of 50. For instance, the Small Business Association (SBA) is partnering with AARP to offer free training, access to mentors and online courses in areas such as finance, digital skills and marketing. In conjunction with LinkedIn, AARP is also launching the social network Work Reimagined to help older workers find employment. And, of course, older entrepreneurs may be able to cash in their 401K and put that money toward starting a business--as Joyce Kane did when she opened a franchise of virtual-administrative assistant placement firm Cybertary. In addition to 401K resources, they may also have savings built up, equity in their home and access to Angel capital from older, successful people they have come in contact with over the years. Younger entrepreneurs may also have access to these people, but it's always an advantage if there is an existing relationship built up over time.
They have more to gain.
Many older entrepreneurs re-enter the workforce in a startup space due to financial necessity -- perhaps because they lost their jobs, took buyouts or were forced into early retirement. Some retirees start a business because they missed the challenge of being in the workforce. In addition, HispanicBusiness.com notes that a July 2012 AARP Public Policy Institute report found "once [older workers] are unemployed, they are out of work longer than their younger counterparts." It's clear seasoned workers have an incentive (if not urgency) to see their startup succeed.
They can transform their accumulated knowledge into new innovations.
The best entrepreneurs are those that see an opportunity tangential to the space they're in. In many cases, these ideas occur to workers after years (if not decades) of experience in the field. For instance, only someone who knows an industry inside and out might have an idea on how it can be improved -- or might see a niche worth filling.
Often, after approaching their employer with an idea for a product, these workers might end up negotiating a license for that company's IP to commercialize it on their own -- and become an entrepreneur in the process.
They focus on functionality over form.
The innovations of older entrepreneurs might not always be sexy -- but they do tend to be more utilitarian, potent and crucial to progress. As Stefan Theil wrote in a 2010 Newsweek article, "Part of the reason that companies started by older workers don't get much recognition is because they don't generally produce hot Web apps or other easily understood products. Instead, they tend to involve more complex technologies like biotech, energy, or IT hardware. They also tend to sell products and services to other businesses, which consumers rarely see but which do most of the heavy lifting in powering innovation and economic growth."
Of course, being an older entrepreneur isn't all sunshine and roses. Risking your pension, your retirement, your savings, your home equity and your 401K for a startup--at a time when you should be considering adding to your bank account--can be scary, and the startup world doesn't provide safety nets. Plus, obtaining funding can be difficult, according to a ReadWriteWeb article: Young tech entrepreneurs work in industries and create products which appeal to a younger demographic -- the same industries often favored by investors--leaving older entrepreneurs behind.
Then again, being an entrepreneur isn't always for everyone. And in a sense, whether you're starting your first business or forming your fifth startup, you're always a first-time entrepreneur. As Tom Lix puts it, "I was an entrepreneur when I was young, too. It just means that you've done it a couple different times. It's about learning from your mistakes, I think. And that's a good thing -- and a wonderful thing."