There’s a bit of a myth around the 20-year-old entrepreneur in Silicon Valley. A boy genius (it’s always a boy) starts off a tech company, takes it to great heights, and ends up changing the world, while making himself fabulously wealthy in the process. There are plenty of examples that seem to fall into the mould — there’s Mark Zuckerberg, who’d started Facebook from his dorm room, Bill Gates, and Evan Spiegel of Snapchat, who’s not yet 30.
But an MIT study shows that the myth around the twenty-something founder might be just that — a myth.
Less than 1 percent of high-performance startup firms were founded by 20-year-olds, says the study by MIT Sloan professor Pierre Azoulay and PhD student Daniel Kim. Instead, the duo found that the mean founder age for the 1 in 1,000 fastest growing new ventures was a rather long-in-the-tooth 45.
The average age of entrepreneurs who’ve started companies and gone on to hire at least one employee — a measure of startup success — is 42 years, the team found. The average age if one only looked at the fastest growing startups was 45. “If you knew nothing else, and you had two identical ideas, one proposed by a very young person, one proposed by a middle-aged person, and that’s the only thing you have to go on, you would be better off — if you wanted to predict success — betting on a middle-aged person,” says Azoulay.
To arrive at their conclusions, the team looked at data around the 2.7 million people who founded businesses between 2007-14 and went on to hire at least one employee. The researchers broke out the data into high-tech employment, VC-backed firms, and patenting firms. Across the entire United States, the average founder ages were 43, 42, and 45, respectively for those divisions.
The duo found that added experience helped startup founders. “In theory, we know that with age a lot of benefits accumulate,” Kim said. “For instance you get a lot of human capital from experience, you also get more financial resources as you age, as well as social connections, all of which will likely boost your odds of success as an entrepreneur.” The team also found that experience in a particular sector helped — found that entrepreneurs were 125 percent more successful if they were previously employed in a particular sector in which they are starting a business.
The researchers say that their results are also borne out by the careers of famous entrepreneurs. Steve Jobs founded Apple at 21, but he was 43 when he created its breakthrough product, the iMac. Apple’s stock multiple also increased as Jobs’ age increased, showing a positive correlation between the value he created and his age. Microsoft’s valuation peaked when Bill Gates was 40.
The study should bring some cheer for entrepreneurs who’re in their late 20s or early 30s, and haven’t quite hit upon their world-beating idea yet. The trick, it would seem, is to keep trying — entrepreneurship is a long game, and its benefits might accrue over time. And if you keep at it long enough, the data shows that the rewards are likely to soon follow.