Six years ago, 21 years old entrepreneur Catherine Cook sold her social network, MyYearBook.com, for $100 million. She founded the company when she was 15, together with her older brother, Jeff Cook. At her 16th birthday, she had already managed 12 software developers and worked a full-time job on the development of new features such as games and quizzes. She held two “careers”, with the second one as a regular high-school student studying for her final exams, frequently sent to the principal’s office reprimanded after missing classes.
“Looking back, I only now realize I slept 2-3 hours a night”, she told me few weeks after she had sold the company to QuePasa. “It was difficult, but I understood it only after finishing school. Before that, I had no idea about the price I’m paying in my personal life. I had a supporting boyfriend but when college time arrived, it was clear to me that my website was in top priority”.
“There is no risk in building a company at 15”, said Cook. “If that fails, you’re still be living at your parent’s house, but a little more experienced. Besides, it is always better to be a 16 years old entrepreneur, than a grown-up entrepreneur with a family to take care of.”
Catherine Cook. “It is always better to be a 16 years old entrepreneur, than a grown-up entrepreneur with a family to take care of”
Catherine Cook is one more entrepreneur in the long chain of young people who founded and managed a successful startup. She is joined by big names such as Mark Zuckerberg (founded Facebook at 19), Bill Gates (Microsoft, at 20), Steve Jobs (Apple, at 21), and Evan Spiegel (Snapchat, at 21).
Are better startups founded by younger entrepreneurs? Peter Thiel, the first investor who believed in Facebook in its early days, thinks that a great, revolutionary company can be built only with a very young entrepreneur, preferably a drop-out. Thiel is not only a fierce advocate of his own hypothesis. He is testing it for years with “Thiel Fellowship,” an entrepreneurship program that grants young people under 22 with $100,000, encouraging them to leave college and to build a company.
Since 2011 more than 60 companies were funded by the fellowship but none of them became a unicorn yet. According to the fellowship’s website, more than the 60 companies are worth together over 1.1 billion and have created hundreds of jobs. Some great companies have graduated from the program such as OYO Rooms, SunSaluter, and Upstart.
On the other hand, Y Combinator, another high-profile accelerator, doesn’t publish any official maximum age. The accelerator has funded so far companies such as Airbnb, Dropbox, Stripe, Instacart, Docker, Mixpanel, Doordash, and Reddit. The average age of entrepreneurship in the program is 26.
It is reasonable to assume that young people are better in launching social networks. Their products are more easily adopted by their peers and characterized by their age. Zuckerberg built a social network for Harvard students, Cook designed a social network for high-schoolers, and Evan Spiegel created an app that allowed college students to “sext” disappearing messages. On the surface, it does seem that consumer services unicorns such as Facebook, Snapchat, Uber, Airbnb, WeWork, and Spotify were built by people in their twenties or early thirties, boldly transforming entire industries such as advertising, real estates, and hotels. Younger, more connected and tech-savvy people are the “immediate suspects” in creating consumer unicorns.
But a methodological research leads to different conclusions. Harvard Business Review tackled the challenge with almost no available data. Unless a founder has given his or her age in a magazine profile, or maintains a particularly public Facebook account, it’s hard to get age data without actually surveying entrepreneurs. The HBR research team looked at the year the founders received an undergraduate degree, listed on LinkedIn. They then matched it with a dataset of the founders of private, VC-backed companies valued at $1 billion or more, taken from Crunchbase API and WSJ’s unicorns list.
According to HBR’s research, 20-something entrepreneurs are very well-represented among the most successful entrepreneurs. Founders under the age of 35 represent a significant proportion of founders in the billion-dollar club, and most likely the majority. The team had a difficult time to find the entire founders’ group’s age, but even if all of them were 35 or older when they founded their companies, 46% of the entrepreneurs on our list would still have been under 35. Another research done by Cowboy Ventures found an average age of 34 for founders of billion dollar start-ups.
On the anecdotal side, it’s not unusual to see a founder at his thirties managing a successful company. Roni Abovitz, founder, and CEO of Magic Leap established the company the 38, Steve Jobs presented the first iPhone at 52, while Elon Musk introduced the first Tesla car, the Roadster, at 36. Jeff Bezos founded Amazon at 30, Larry Ellison established Oracle at 35, Evan Williams built Twitter at 35, and Zynga was founded when Mark Pincus was 41. Even Huffington Post was established when Arianna Huffington was 54, not to speak of non-tech companies such as Walmart and Mc’Donalds that were founded by people in their 40’s and 50’s.
A Stanford research from 2008 looked at a sample of moderately successful founders and found an average and median age at of 39, with only 31% under 35. And high-growth start-ups are almost twice as likely to be launched by people over 55 as by people 20 to 34.
Adeo Ressi, founder of The Founder Institute and TheFunded.com, led a battery of proprietary personality and aptitude tests on over 3,000 applicants worldwide, and then tracked the progress of nearly 1,000 enrolled founders and 350 graduates from his program. The research has shown that an older age is actually a better predictor of entrepreneurial success and that three other traits also correlate strongly to success: strong fluid intelligence, high openness, and moderate agreeableness.
Older age has shown in the data to correlate with more successful entrepreneurs up to the age of 40, after which it has limited or no impact. “Our take: Older individuals have generally completed more complex projects—from buying a house to raising a family.”, says Ressi. “Also, older people have developed greater vocational skills than their younger counterparts in many, but not all, cases. We theorize that the combination of successful project completion skills with real world experience helps older entrepreneurs identify and address more realistic business opportunities”.
In some cases, older entrepreneurs paired up with the younger founders. Schmidt joined Google as a CEO and chairman, looking over the two younger founders, and Sheryl Sandberg joined Facebook to serve as a COO and to take care of Facebook’s business aspects. Peter Thiel, the investor who advised students to drop out of college, took over Paypal from younger founders when he was age 31 in 1998, after accomplishing a B.A. in Philosophy from Stanford University and a J.D. from Stanford Law School.
Being a young manager does not always mean being charismatic. Evan Spiegel (26), who manages Snapchat alone with Bobby Murphy (28), is often criticized for his style of management. According to Business Insider, Evan Spiegel is depicted as a Steve Jobs-style manager, with an “obsession with secrecy,”. Several employees report a lack of communication and transparency inside Snapchat and about what’s in the pipeline, as well as abrupt termination of development groups and layoffs, excessive control over what employees can say about their jobs and titles, and alienation from Spiegel himself, who is rarely seen in the company.
Adeo Ressi, perhaps, found the best words to describe the age bias towards younger entrepreneurs:
“Age is only one factor among many to predict the success of entrepreneurs, and anybody at any age can break any molds put forward by “experts.” However, it’s clear that the stories of a few “college-dropout turned millionaire” (or billionaire) startup founders have clouded both the mass media and the tech industry from reality. We have romanticized the idea of a young founder because, well, it’s a great story, but these stories are not the norm. In the end, classic biases of gender, race, and age need to be discarded for a real science of success.”
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