Age seems to make all the difference in an entrepreneur’s success. Indeed, evidence from a new study by Wharton Uni points out that older entrepreneurs are shown to be more successful than their counterparts. In other words, Mark Zuckerberg and Steve Jobs are two outliers, two rare exceptions.
“What we’ve found to be the most supportive in really explaining this link between age and entrepreneurial success was prior experience. The number of years that one spends in the same industry as the startup was predictive of that company’s future performance,” management professor Daniel Kim explains.
“When you look at just the Zuckerbergs and Gates of the world, you’re really cherry-picking the examples that the media likes to show.”Tweet
Many are the underlying factors to drive the age effect, clarifies Kim: “Age reflects many, many things in life. We know that with age, many benefits accumulate, including your social ties — your relationship with suppliers and potential hires and co-founders — as well as financial wealth and human capital that you gain from working in different companies.“
And the VCs?
Why are they most eager to invest in younger firms? It’s all about the bargaining power: “They may know what’s happening, but they also know that there’s greater bargaining power against young entrepreneurs. This is more of a rational bias, if you will,” Kim adds.
The risk for academia.
The question the study solicits is: how does academia promote entrepreneurship? Would the focus on young students led to suboptimal outcomes? In others words, wouldn’t it be better for universities and business schools alike help them secure a job in a safer environment in the first instance for them to put experience under their belts and nurture their networks?
Find out more here.