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The Young Entrepreneur Stereotype Bites the Dust

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While there are plenty of 20-something, ramen-eating entrepreneurs coding into the wee hours of the morning, the demographic with the highest rate of entrepreneurial activity consists of those between the ages of 55 and 64, according to a study released today by the The Kauffman Foundation. The study found that folks in the 20-34 age range were the least likely to start companies. The research built on an earlier study that found that average age of entrepreneurs in the U.S. was 39.

Dane Stangler, senior analyst at the Kauffman Foundation and author of the study, says these trends may continue through the current recession. “Recent economic trends—away from lifetime jobs and toward more and more new companies—will thus gain even greater cultural traction,” he writes. I agree, but I’m curious how much of this entrepreneurial activity among the Baby Boomers (or anyone else, for that matter) is voluntary. A quick look at my contacts shows myriad consultants and small business owners who have hung out their shingle after taking a buyout or being laid off.

My fear is that we’re moving toward an era of forced entrepreneurship, in which freelancers, consultants and others work on-demand, and for themselves. This isn’t a terrible thing, but it will necessitate changes in our society around health care and retirement planning for self-employed workers, as well as taxation of startups.


14 Responses to “The Young Entrepreneur Stereotype Bites the Dust”

  1. Hello Stacey,

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  2. Hmm..let me set the cat amongst the gentle pigeons. Real tech entrepreneurs are young, 20 somethings, eating survival food, and cranking up clever code. This is not a myth, it is reality. While age brings knowledge, financial stability, street smartness and whatever goodies that can be claimed, it also brings with it a number of effective blocks to success (for tech entrepreneurs), unless you are into serial entrepreneurship. Statistics, like the report quoted here, have their element of truth, but are based in certain contexts, as rightly pointed out in many preceding comments. If there were really so many older entrepreneurs out there, how come so few of them are successful? (not counting the serial entrepreneurs, of course). Either the law of averages fails in this case, or there are not so many older first-time entrepreneurs, especially in the high-tech world.

    • @vinay – first – not sure what proof you have that older entreprenuers are less successful than younger? Any data to prove this out?

      More importantly – much of this is related to the evolution of the entrepreneurial personality through their life. I think successful younger entrepreneurs likely move into new roles as they get older – meaning often the older entrepreneur personality moves on after a successful (or not successful) attempt at their own company to a new roll such as becoming a VC or angel investor. This allows them to put their hands into many pots. I think many of the roles people play at certain ages isn’t so much because “younger people are more creative” or ‘younger people get the new tech and old people don’t”, but more that there is a generational element to what type of entrepreneurial activity people play as they move through life.

  3. Not even sure the young coder stereotype works anymore. I’ve been working at hi-tech startups since 1999 and by far the majority of the engineers I’ve encountered in these startups have been ages 30-40 with numerous over age 40, very few under age 30. They may have started out as young coders at high-tech startups like Sun and SGI, but Sun and SGI didn’t stay startups and they got itchy feet for a challenge and left. Note, however, that I never worked for a dot-com (I’m not an idiot!) so I have no idea what *their* demographics were…

  4. Artruro Jayson

    I can agree with this. There is no boundary for age, sex, background, whatever when it comes to pursuing the idea. A lot of us seem to focus on the young coder because we’ve been there so recently, or at least watched from the sidelines. This, too, is a form of forced entrepreneurship. You force yourself to want to do something like someone else did, or maybe better, to make an impact where you think it should be made. In this way, all entrepreneurship is forced and a natural necessity, but so could be the restraining forces of such developments.

  5. “Forced entrepreneurship” is ALWAYS a major part of entrepreneurship. Historical studies have shown a high incidence of e-ship among immigrants, former drug dealers, “early retirees” over 50, and persons with criminal records.

    These groups have trouble getting hired and become entrepreneurs by necessity.

  6. I wish people would read Peter Drucker “innovation and entrepreneurship” he defines what it means to be an entrepreneur which is not someone who starts a business like a pizza store or something that has been done before, or independent consultant, etc. Most people don’t use this to define the term, but people should as it is a very defining definition.

  7. There is a big difference between the definition of high-growth startup entrepreneur implied via the ramen-eating example and the definition of entrepreneur used in the report.

    The latter includes independent consultants, self-employed folks, mom and pop corner stores and other ventures that don’t exactly fit the definition of high-growth. This is not at all to knock the lifestyle entrepreneurs, on the contrary, every single venture backed entrepreneur could probably learn a thing or two from the owner of the corner store down the street. I know I have.

    My point is given the inclusion of lifestyle entrepreneurs, I do not believe anything in the report is all that remarkable.

  8. Stacey, I think you are misreading the report. It gives the age with the highest level of entrepreneurship across all industries, which will include a new restaurant owner, a consulting company, etc.

    The stereotype of 20-something code is for high-tech only. Not sure if the report has that info, otherwise the myth continues to hold true.

    • Stacey Higginbotham

      The report does cite info across all industries, but it doesn’t offer any proof that tech entrepreneurs are all young (it doesn’t disprove this either). I use the ramen-eating, coder example because it’s likely the most familiar entrepreneur for our readers.