Am I too old to become an entrepreneur?
A lot of people might think they’re too old to launch a startup. Yet with age comes much-needed experience.
The media has got some sort of strange fascination with young entrepreneurs. Flipping through the papers, it seems like every other business story centres on a teenage tech wizard who’s just sold a revolutionary app to Google for £1bn.
Consequently, this constant news stream of young, hip business owners has got a lot of people wondering if they’re simply too old to launch a startup.
The truth? Age is a huge asset when it comes to business.
According to research by The Kauffman Foundation, the average age of successful startup founders is 40 years old. Meanwhile, high-growth startups are twice as likely to be launched by people over 55 as by individuals in their twenties. And a similar study conducted by Vivek Wadhwa, a renowned scholar and entrepreneur, estimates that there are around twice as many successful entrepreneurs over the age of 50 than there are under 25.
But what makes older startup founders so much more successful?
Here are three key reasons:
1. Older means wiser
The greatest advantage older entrepreneurs have over their younger competitors is simple: experience.
The single greatest advantage older entrepreneurs have over their young, scrappy counterparts is simple: experience. University of Maryland researchers have not only proven that the most successful startup owners middle-aged, but they also say that they’ve also usually got six-to-ten years’ worth of industry experience to help them along. According to Wadhwa’s study, 75% of successful entrepreneurs have got more than six years’ worth of industry experience prior to launching their startup. Around half have got more than a decade’s worth of experience under their belt.
That being said, even if you’re an older person looking to start a business in foreign territory, you’ve still got valuable life experience that younger, more idealistic business owners haven’t got.
By age 50, you’ve accumulated lots of different ideas and experiences. You tend to be more practical about your spending, wiser when it comes to budgeting and quite shrewd concerning potential business deals. All of that life experience plays into your favour when launching a new enterprise, and it will vastly improve your odds of success. Yet it’s also worth pointing out that a lot of individuals still encounter ageism when looking to garner support for a new venture. Some investors are bound to assume that with age comes outdated skills and a lack of innovation.
2. It’s all about who you know
If you’re well into your forties, chances are you’ve already made a few friends in your chosen field.
Another major reason that middle-aged entrepreneurs are more likely to find success is because they’ve already got access to a developed network of business contacts. In most industries, it’s all about who you know. When you’re trying to start a company fresh out of school, networking can be a daunting challenge. It’s especially difficult to know who you should be speaking to and how to get an introduction. Yet if you’re well into your forties or fifties, chances are you’ve already made a few friends in your chosen field.
Not only will your extensive range of contacts help you to establish a list of clients, but it will also serve as an early human resources boost. Another big challenge young companies face is staffing. Brilliant teenage business owners don’t usually know where to find talented individuals or how to attract them. Yet with a bit of business experience under your belt and a lengthy list of industry contacts at the ready, finding talent can be a walk in the park. All you need to do is ask around.
3. Funding isn’t a problem
A third advantage older entrepreneurs have got is funding.The greatest hurdle for any startup is how to find enough cash to start trading. Even as the UK economy continues to stride forward, a lot of small companies are still finding it exceedingly difficult in order to secure financing through mainstream methods.
After all, most High Street banks are going to be a little wary of providing a five-figure loan to a young person without any collateral to speak of. Older, more established startup founders are far more likely to be approved for business loans because they’ve got a longer credit history and tangible assets to offer up as collateral.
That being said, business loans aren’t the most suitable financing option for every startup. Nowadays, more and more companies are finding initial success through bootstrapping — a lean funding method that requires company owners to completely self-finance their new enterprise. By and large, a 50-year-old will no doubt have a much bigger savings to draw from than a young entrepreneur. Likewise, more experienced business owners might be able to rely on some of their old industry contacts to invest in their new venture.
On the other hand…
Okay, so experience is definitely invaluable when it comes to starting a new company; however, age is not a guarantee of success. According to Liz Kammel, an entrepreneur and founder of ZipFit, younger entrepreneurs ultimately hold the advantage over their older competitors when it comes to new ventures. Why?
First and foremost, teenagers and early twenty-somethings tend to have less responsibilities at home. That means they’ve got more time to bury themselves in work. They’re also used to working ungodly hours and surviving on little-to-no sleep, and they probably don’t have a huge income — meaning they’ve got nothing to lose if their new startup isn’t generating a lot of income. Yet above all else, young entrepreneurs are far more likely to want to take on the system.
The voices of young people are often discounted or utterly ignored by the C-level executives of multinationals. Consequently, a lot of astute teens feel like they’ve got something to prove — which drives their motivation to instigate change with newer, trendier ideas. Yet it’s worth pointing out that this desire can easily become tainted by a lack of experience or youthful optimism. Also, the motivation to instigate change works on both sides of the spectrum. After all, in some industries, the voices of elderly consumers are marginalised in much the same way.
So, am I too old to start a company?
Starting a new company is difficult no matter how old you are. There are a dizzying number of new tasks you must learn to juggle and a whole lot of hurdles to overcome. Above all else, startups require a lot of energy. That’s why it pays to be young kid with no roots to tie you down, and it’s why magazines are always reporting about newly-minted, teenage tech wizards.
But you shouldn’t avoid taking the plunge just because you’re no longer a peppy twenty-year-old. Studies show that middle-aged entrepreneurs are far more likely to succeed — and it’s not hard to see why. Between priceless life experience, a lengthy list of contacts and less funding hassles, older entrepreneurs have got all the tools they need in order to succeed.
Rachel Craig is part of the media team at Formations Factory and is responsible for developing and maintaining the online presence of the company. Formations Factory is a company formation service provider in the UK.
