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The myth of the young entrepreneur
The myth of the young entrepreneur
Oct 9, 2024 2:20 PM

When I tell people the average of age of entrepreneurs is not in their twenties but around 40, they are surprised. Yet it is true; the young success stories that capture media attention, like Mark Zuckerberg, are outliers. The idea that most entrepreneurs are young is a myth.

Once we think about it, it makes sense that people with experience, business skills, and insight would be more likely to start a business than a twenty-something with fewer skills and minimal experience. There are examples of young people with a great idea, but this is much mon than an experienced businessman starting a new venture. As Jeffrey Tucker writes in an article for The American Institute for Economic Research:

The legend of the twenty-something business wunderkind is everywhere in pop culture. Here’s the problem.The data are in. It turns out that the whole thing is a gigantic myth. Young founders of businesses fail, almost certainly, and at a much greater rate that people who are much older, wiser, more skilled, and more knowledgeable about the industry. It turns out that succeeding in business is extremely difficult. It takes maturity above all else to achieve it.

Tucker refers to a new study by Javier Miranda, principal economist at the U.S. Census Bureau; Benjamin Jones, professor at the Kellogg School of Management at Northwestern University; and Pierre Azoulay, professor at MIT’s Sloan School of Management and research associate at the National Bureau of Economic Research.

They conclude that the average age for a successful entrepreneur is 45 years old – even higher than I thought. Tucker explains the study’s findings:

Younger founders appear strongly disadvantaged in their tendency to produce the panies. Below age 25, founders appear to do badly (or rather, do well extremely rarely), but there is a sharp increase in performance at age 25. Between ages 25 and 35, performance seems fairly flat. Starting after age 35, there is increased success probabilities.Another large surge in es at age 46 and is sustained toward age 60.

Tucker argues that the myth of young entrepreneurs has created false hope for young people who don’t realize how difficult business is. As I explain, in most cases it tends to be older people with experience and insight who have the ideas and skills to start a new business. This doesn’t mean young people don’t occasionally succeed in their ventures – and more power to them. But it is not the norm, and Tucker is right that perpetuating this myth can end up hurting the young more than it helps them.

I also think that this is a manifestation of something I call the “Boomer-Millennial problem.” Both baby boomers and millennials are large generations, and they are both highly self-referential (some might say narcissistic). As Tucker notes, Zuckerberg is reported to have once said, “Young people are smarter.” But it is not all their fault. They have been groomed to be self-congratulatory by their baby boomer mentors and parents.

Boomers self-indulge in their affirmation of young people and how they can change the world, etc. But this false affirmation sets up young people for disappointment when e into contact with reality. This is only part of a larger problem with millennials and work. I have worked with a number of millennials and generally like working with them – I have not found them lazy as some claim. My experience is rather that they have been indoctrinated to think too highly of themselves. They think they are ready to take positions of leadership too early. They don’t know what they don’t know; and since they don’t know it, they just assume it doesn’t exist.

Part of their es from the fact that they are digital natives, so when they first got to work, all the older boomers and members of Generation plimented them on their tech skills. Egged on, especially by their boomer elders, they equated their software prowess with wisdom and business insight.

Encouragement is important, and it can go a long way toward helping people succeed in business and in life. But it has to be grounded in reality and not myth. Life is difficult. So is work. So is building a business. Failures are inevitable. We need to encourage persistence and help ourselves and others develop prudence – seeing theworld as it is – and what Aristotle called phronesis – good judgment and wisdom. This is essential for good business, and more importantly, a good life.

As Aristotle wrote almost 2,500 years ago in the achean Ethics:

[A]lthough the young may be experts in geometry and mathematics and similar branches of knowledge, we do not consider that a young man can have Prudence. The reason is that Prudence includes a knowledge of particular facts, and this is derived from experience, which a young man does not a possess; for experience is the fruit of years. (One might indeed further enquire why it is that, though a boy may be a mathematician, he cannot be a metaphysician or a natural philosopher. Perhaps the answer is that Mathematics deals with abstractions, whereas the first principles of Metaphysics and Natural Philosophy are derived from experience: The young can only repeat them without conviction of their truth, whereas the formal concepts of Mathematics are easily understood.)

As Tucker notes, ultimately it is a disservice to encourage young people to e entrepreneurs. He writes:

The bigger problem with urging young people to start businesses is that this advice feeds disgruntlement with an actual path to success, which is not running a cool startup but doing the very thing that entrepreneurship chic implicitly puts down: getting a skill, obeying the boss, gaining wisdom, and developing a solid career bit by bit.

We should stop lying to young people merce and tell the truth that business is hard. Work is hard. Saving money is hard. Serving customers is hard. For some people, just showing up is hard. These are all learned skills. The es once you master them …

“Start a business when you are young?” Tucker concludes. “Sure. Just don’t quit your day job yet.”

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