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The Mid Life Entrepreneur Crisis
I have two meetings this week with guys in their early to mid 40s that are two of the best entrepreneurs I've ever worked with. Both are asking me the same thing - "what should I do next?"
There are questions of motivations, work/life balance, not needing the money, looking for a big idea, etc.
One of them asked me - do you know any 45 year old entrepreneurs?
Yes I do. But only one of the entrepreneurs in our current portfolio is older than 45. And he'll probably be starting companies until he dies. It's what he does.
But the facts are pretty eye opening. Nine of our eleven entrepreneurs are in their 30s. One is in his 20s, and one is in his 50s.
That says to me that prime time entrepreneurship is 30s. And its possibly getting younger as web technology meets youth culture.
I gotta run to catch a plane to Boston. More thoughts on this later.
May 2, 2007 in Venture Capital and Technology | Permalink
Comments
Hi Fred,
Interesting post. A few questions. Do you think that young entrepreneurs who go to VCs have fewer options than older ones? Older entrepreneurs probably have a larger network of wealthy friends, have the ability to have other businesses invest and have accumulated enough cash to bootstrap. As you get older and survive in business, you get more options.
Also do you think younger entrepreneurs are more willing to accept the terms a VC offers since they have less to loose? I think there may be a number of factors in skewing your informal survey. I would be interested to see the mean and average age of entrepreneurs who start successful companies funded by VCs, funded by other businesses or bootstrapped.
Posted by: Dan Cornish | May 2, 2007 8:37:00 AM
Some of this depends on your interpretation of the word "entrepreneur." It would make sense that that those building off technology and the internet are younger and need VC involvement. There's another segment of people getting into either running or creating franchises or their own small businesses. I heard a stat recently about the ratio of w2 to 1099 workers actually reversing in the fairly near future. If that predicitn holds, sooner or later I think the majority will be considered entrepreneurial to some degree.
Posted by: captain flummox | May 2, 2007 9:03:06 AM
As a 32 year old would-be-entrepreneur I'm happy to see the distribution in your portfolio. I'm afraid I've been reading a little too much of the YC/FaW story and was starting to wonder if I was running out of time.
Posted by: Sean | May 2, 2007 9:26:42 AM
Fred,
I'm a professional business coach and consultant and the vast majority of the entrepreneurs and business owners I interact with are in the 35 - 55 age range.
Admittedly, I attract those who are looking for life balance or who have made a decision to balance their lives, but this is a huge demographic in today's entrepreneurial world.
David B. Bohl at Reflections Coaching
Posted by: David B. Bohl | May 2, 2007 10:36:47 AM
I'm 42 (how did that happen?). However I am very immature.
;-)
Posted by: Erik | May 2, 2007 10:57:41 AM
Eric,
Reading your comment - i realized YET another gender imbalance.
Your over 40 and a boy and therefore immature. Once again, as a female, I'm totally screwed. Soon to be over 40 AND mature.
Dammit. I just can't win.
Posted by: Leigh | May 2, 2007 11:21:00 AM
Excellent topic, I'd like to hear more.
When I started my first business (when I was 24) I couldn't believe the way that the old guys seemed to gang up against me. With the benefit of hindsight (and elderliness) I realize that a lot of that had to do with my lack business socialization skills that I didn't acquire until I was in my mid-30s.
I'm turning 40 in six weeks, I hope this doesn't mean I've hit my expiration date. Now that I'm ancient I am noticing that I can get certain things done much more quickly than I could have when I was in my 20s. But for certain tasks that I can't accomplish in a timely, economical way, I can delegate and outsource. It all works out.
I did code until midnight last night, so hopefully that counts for something.
Posted by: Jeffrey McManus | May 2, 2007 12:07:41 PM
Glad to see that age is not a factor in your line of work. I think the most important thing is drive.
How much do you have? If you have drive and can still function productively, I say the only cut off time is when you DIE.
Period.
Rex
Posted by: Rex Dixon | May 2, 2007 12:39:56 PM
Presumably the main reason for this is that in your 40's you're close enough to retirement that it's harder to recover from an unsuccessful first effort that consumes your savings - that risk probably discourages many who would otherwise give it a go. If there's enough dough in the bank to fall back on, it isn't as much of an issue. I wonder if those who do take a run at it in their 40's and older are those who have a nice nest egg already.
Posted by: Rob Hyndman | May 2, 2007 12:49:51 PM
I'm a would-be entrepreneur in his early-to-mid 40s.
Here's what I think.
1- it's all in your head. Such a majority of people lose their youth before they're 40. You don't need to do this. Staying active and healthy helps, too, but mental state ("I refuse to completely grow up, and will continue to have fun") matters most.
2- you *must* continue to learn and to challenge. Startups are all about innovation (and today is Wednesday, DUH), but most people stop being iconoclasts and start drinking the kool-aid before they turn 40. This is a corollary to #1. Also like #1, it's unnecessary; you just have to fight to stay youthful. I read like a madman and question conventional wisdom out of reflex.
3- it's hard for those of us with spouses, mortgages, and kids to pull off a startup. But I do not believe it's impossible. You just have to love your idea (or at least the idea of doing a startup) enough to figure out how to do it on the side. Startups have been done this way before (read "Founders at Work" by J. Livingston). It would be so much easier if I was 25, but things didn't work out that way for me.
Posted by: sabat | May 2, 2007 1:03:23 PM
Rob H has a going point.
I also think that you are going to see more and more 'older' entrepreneurs in the 'younger' generation. Gen Y change their jobs every 2 to 3 yrs, have less loyalty to large Corporations and come from Boomer families who have the nest egg in place for them just in case.
I will say the downside to being an older entrepreneur? The inability to pull all-nighters without it permanently affecting your complexion.
Posted by: Leigh | May 2, 2007 1:32:37 PM
I was hoping that the myth that the Internet was developed by the young died in the last bubble. Please don't resurrect that annoying trope.
- "May you stay forever young" (Bob Dylan (a famous folk singer))
Posted by: Ted Gilchrist | May 2, 2007 3:52:58 PM
Some other commenters have raised many of the "structural" reasons why 40 somethings may not be inclined to be entrepreneurial, but I can't immediately see that being in one's 40s or 50s should (in and of itself) militate against being entrepreneurial. Do you?
Posted by: John Dodds | May 2, 2007 4:06:52 PM
I don't think it's so much age as will and encumbrances and some luck thrown in. I'm over 40 and can easily see myself being entrepreneurial at 80 from looking at my family history. For me, I have a much clearer picture of what I want to create at this age than I did at 20. The important thing as others said above is to keep reading, creating and challenging assumptions.
Posted by: alexa smith | May 2, 2007 4:37:53 PM
As a 45 year old man who started his first company at 39, I feel I have benefited from seeing some pretty egregious errors in smaller organizations prior to my "leap of faith." The greatest errors I saw were not strategic, but values and action focused. Values, in terms of truly valuing the people who have chosen to spend valuable time in the enterprise, and action, as in reducing the planning and increasing cash flow.
I have not decided if this will be my only start-up -- we shall see. But it has been the more personally rewarding business activity of my entire career, bar none.
Posted by: Mark Price | May 2, 2007 4:44:25 PM
George Bernard Shaw once said that "Youth is wasted on the young." For many people, they reach a point in their lives where the limitless opportunity they saw in their youth has vignetted into limited options and choices driven more by momentum than intent. Despite the wisdom and maturity they have gained, they feel trapped by the course they have set.
They grow old mentally.
Speaking as one of the 'over 45's' in Fred's portfolio, being a serial entrepreneur is like finding the "fountain of youth". Each new venture gives you the same sense of limitless opportunity. The creative rush of being asked to fill a blank canvas. The challenge of starting at the bottom and proving you can make it work one more time.
You get to be young again, but to do all of it with the focus and perspective gained from past efforts.
Is it hard work? Absolutely! But it would be much harder for me to work at something that I wasn't passionate about; something that I didn't feel made a difference.
For me, being an entrepreneur is something that just gets better with age.
Posted by: John Mahoney | May 2, 2007 5:31:01 PM
hey everyone, great comments
but i think many of you misinterpreted the point of my post.
that's the problem doing half a post at 4:30 in the morning waiting for the car to the airport.
i finished my thoughts and they are here
http://avc.blogs.com/a_vc/2007/05/mid_life_entrep.html
Posted by: fred wilson | May 2, 2007 6:01:25 PM
I founded PodTech.net at 39 now 41. My view is that once and entrepreneur always an entrepreneur. You're born with it.
Posted by: John Furrier | May 2, 2007 9:15:21 PM
I was looking at a regional magazine on entrepreneurs. The title read: Top 30 under 30 -- the top 30 companies started and run by people in their 30s. Turned 40 last year. Quit my day job. in January. Cranking on some ideas that have been under my hat for too long. Guess I'll just have to go for the Top 50 under 50 magazine cover.
Posted by: Brad Baldwin | May 2, 2007 10:41:19 PM
I've been a serial intrapreneur for the past 15 years with one organization. Now, in my mid-40s, I find myself looking at how to catalyze the energy and enthusiasm generated by an on-going "start-up" conversation I've been having with another of your readers.
I appreciate your putting the conversation on the table. Sabat had an interesting take (above) about how to stay nimble enough -- he used the word iconoclast -- to take the risks associated with start-ups.
He also points out that it's not impossible to do this work "on the side," which is the situation I find myself in. A good reminder that there may be one path, but there are many trails to get there.
Posted by: The Green Skeptic | May 3, 2007 12:42:31 AM
I think you're biased. There are entreprenuers all around, but only the younguns put up with the system and fill the so-called entrepreneur slots. The rest do their entrepreneuring with more wisdom, off the grid. And that's a self-perpetuating reality as those younguns set the pace for your definition, and the rest enjoy their relative obscurity.
Posted by: john andrews | May 3, 2007 1:11:27 AM
Fred,
true entrepreneurs do not have a mid-life crisis! They have an early-years crisis - "shall I do as my mother says?" or "bugger that, I'll follow my urges?".
A mid-life crisis would be more of a employee quandary when you hit the crossing point from "Yay, here I come and I'm going to climb the ladder fast!" to "oops, I'm stuck, no more hope, have to accept it".
And sometimes you'll see the Employee-mid-life-crisis being flipped into a Entrepreneur-early-years-crisis and you have a freshly minted entrepreneur knocking on your door ;)
Posted by: sig | May 3, 2007 4:50:15 AM
Over the last six months, four of the product manager candidates I've interviewed were late-20s to mid-30s and were leaving a startup they had founded (their company either was defunct, or abdicated to another partner or large investor). I was astounded. Its almost like a rite of passage for a whole new generation.
I'm 40 and have been an early employee, but never technically a founder. So it's a mixed lesson for me seeing all those younger candidates looking to work for me, but who have already had an experience I long for. My conclusion: Don't "wait": constantly keep searching - for the inspiration, the idea, the courage, the connections, whatever it is that will push me ahead to build my own company.
Posted by: Dave | May 3, 2007 12:06:36 PM
"...the Employee-mid-life-crisis being flipped into a Entrepreneur-early-years-crisis and you have a freshly minted entrepreneur knocking on your door..."
Hmm, sig, have we met?
Posted by: greenskeptic | May 3, 2007 4:25:28 PM
The major problem is that you have lots of things to deal with in your 40s. In your 20s, you can focus on one thing. You can still be a entrepreneur if you focus!
Posted by: William | May 4, 2007 12:17:12 AM
John Anderson has a very good point. Older entrepenuers generally have access to more capital and wisdom. Allowing them the knowledge and ability to avoid having to submit to working with egomaniac VCs. Present virtual company excluded of course ;)
Posted by: Habib Wicks | May 4, 2007 11:37:19 AM
Hi Fred - Your gut estimate was actually quite accurate. In a quick analysis of 600+ founders of European Venture Backed companies the average age for these entrepreneurs is the early to mid 40's. Founders of IT and communications companies are also younger than the average across all sectors.
More data and graphs here: http://www.libraryhouse.net/blog/2007/05/08/too-old-to-start-a-business/
Posted by: Scott Eblen | May 8, 2007 6:09:29 PM
was just wondering what blog service you are using as i like how everything is laid out at your blog? tx
Posted by: gmoney | May 16, 2007 6:34:34 PM
The age bias makes sense in tech --- the nature of emerging technology and the demographics of the people who use it (would Twitter come from the mind of someone whose dominant form of communication is the phone and FAX???) are naturally going to bias tech startups towards younger entrepreneurs.
That said ... if I generalize to all of the entrepreneurs in all of the different kind of industries I've played or advised in; the age skews more into the 30s through 50s on up.
As far as I'm concerned, once an entrepreneur ... always an entrepreneur. Just maybe not a VC-backed entrepreneur. ;-)
FWIW, I talked about the issue in today's podcast @ Aggressive Marketing & Entrepreneurship Daily Podcast
Posted by: Michael Cage | May 17, 2007 12:06:06 AM
I think 20's are the best for a start-up, u have a whole life ahead for success and failures
Posted by: warren dsouza | May 17, 2007 4:23:27 AM
Being a website focused on middle age, we not surprisingly have a strong opinion on ageism in the Valley, but maybe not the take you expect.
Posted by: Wesley | May 22, 2007 11:58:20 AM
I just started my first business at 50. But then I keep hearing that 50 is the new 30 - so I guess I fit your demographic!
Posted by: Terry Taillard | May 26, 2007 7:11:31 PM
Hi, I am an aspiring 40 something entrepeneur who made the mistake of wasting alot of time being an attorney rather than pursuing my passions. I have some big ideas for an online business (one that would be in the gaming industry ala World of Warcraft if you know what that is, the other that would exploit the popularity of Youtube with a wider audience and more mature professional looking original content). I have put alot of time into developing both projects on paper and discussing them with a couple of programmers in the gaming industry as to feasibility and marketability. At this point, however, both ideas can't go any farther without capital to at least hire programmers and artists to put together a demo to present the projects to publishers or to develop the projects independently. I am seeking suggestions as to how to find capital to take the projects beyond the well thought out concept stage. Your thoughts would be greatly appreciated. Thanks.
Posted by: Yello1 | Jun 15, 2007 10:14:58 PM
In my observation (and after reading the post and the comments), I think that middle-aged men can keep up with young entrepreneurs, and possibly (mostly) be more successful. The only advantage that the youth has is they have more exposure and access to various technologies, while the older entrepreneur has more valuable things with him - experience and skills learned over the years. And, as Sabat said, it's all in your head. I've seen 30 year-old people and above that who are still youthful.
Posted by: Bootstrap | Jul 12, 2007 11:53:43 AM
I am 37, sold my company. Have a few million dollars in the bank, and remain working for the company as President/ CEO. I still have 10% stock. I am extremely good at what I do, but I can not stand doing what I am doing. ANy thoughts?
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