What Is The Best Age To Start A Business?
Mark Zuckerberg started Facebook at 19. Warren Buffet started his first business as a teenager.
Ray Kroc started McDonalds at 52. Harland Sanders (Colonel Sanders) started Kentucky Fried Chicken at the age of 65.
You can start a business at any age.
But do you have a greater chance of success as a young entrepreneur in your 20s or 30s with energy and enthusiasm and nothing to lose – or when starting a business later in life, leveraging previous experience and capabilities?
Take a guess …
Researchers set out to answer this question.
Pierre Azoulay and J. Daniel Kim from MIT, Benjamin Jones from Kellog’s Innovation and Entrepreneurship Initiative, and Javier Miranda at the U.S. Census Bureau set out to find the definitive answer, using data from 2.7 million people who founded a business in the USA between 2007 and 2014.
(image reproduced from http://notes.fundersandfounders.com/post/79875850310/late-start-quarter-and-middle-life-crisis)
They found that the average age of anyone starting a business – including any kind of small or solo business like a hairdresser or restaurant or dry cleaner or accountancy practice – was 42.
The average age of founders in the high-tech industries is also in their early forties. The specific age varies between industry – the average age of a founder of a software company for example is 40, while the average age of the founder of a biotech company is around 47.
For the most successful top 0.1% of startups (based on growth in their first five years), the average age of the founder was 45.
The most striking finding from this research though is that the older a person is when they start their business then statistically speaking, the better the business is likely to do.
This keeps on being the case, pretty much up to the age of retirement – in the mid 60s.
The research shows that:
- A 40-year-old startup founder is 2.1 times more likely to found a successful startup as a 25-year-old.
- A 50-year-old startup founder is 2.8 times more likely to found a successful startup as a 25-year-old founder.
- A 60-year-old startup founder is 3 times as likely to found a successful startup as a 30-year-old startup founder – and is 1.7 times as likely to found a startup that winds up in the top 0.1 percent of all companies.
But this research does not address the question of WHY businesses founded by older individuals tend to be more successful.
In his book Burn the Business Plan: What Great Entrepreneurs Really Do, Carl Schramm builds on research from the Kauffman Foundation to support and extends the research from Azoulay, Jones, Kim, and Miranda.
Schramm supports the findings from Azoulay, Kim, Jones and Miranda:
“Most entrepreneurs … did not start their companies until they were well along in their careers. The average entrepreneur is nearly forty years old when he launches, and more than eighty percent of all new companies are started by people over thirty-five. More entrepreneurs are between forty-five and fifty-five than any other cohort, and entrepreneurs over fifty-five now create more companies than those under thirty-five.
And—another surprise—the chances of a new company surviving rises with the age of the entrepreneur.”
But he goes further, pointing to a reason why the likelihood of success increases with age – experience.
“The average entrepreneur was an employee for almost fifteen years before launching a startup.”
More mature founders may have one or more of three significant advantages:
- Older founders have accumulated more experience in the industry
- This experience is at an increasingly senior level within the industry, with an increasingly senior network of peer connections
- Some organisations spin off valuable projects that are non-core or a distraction from their main strategic priorities – giving former employees a green light to start a business around valuable tools or technology or systems.
What does this all mean for you?
You can start a business at any age, and be successful. Warren Buffet started when he was a teenager, Mark Zuckerberg built Facebook in his 20s.
But your chances of success keep rising as your experience grows.
If you have valuable experience and you can add value or serve a market, you can start a business at any age, with increasing chances of success, up to and until retirement.