There Is A Right Age For Entrepreneurship, According To MIT Research
In recent times, entrepreneurship has become a buzzword so much so that it is fashionable for twenty-somethings to be known as entrepreneurs or founders but is that the right age for entrepreneurship? Is there even a correct age to start your own company? According to MIT Sloan professor Pierre Azoulay and PhD student Daniel Kim, there is.
Azoulay and Kim wrote a working paper which concludes that ‘the average age of entrepreneurs who’ve started companies and gone on to hire at least one employee is 42 years old.’ The duo looked at data, of the 2.7 million people who founded startups and employed at least one person in their company between 2007 and 2014, in cities like California, New York, Massachusetts and Silicon Valley.
THE MIT RESEARCH
They approached the administrative data from the Census Bureau’s Longitudinal Business Database, and Schedule K-1 business owners’ data from the Internal Revenue Service to conclude to their age appropriation of entrepreneurship. Apart from these, one more factor that they based their research on was that they categorized the data into three sectors—high-tech employment, VC-backed firms and patenting firms.
One of the findings from this research is that the youngest person to have a firm that also employs at least one more person was 39 years old in New York in the VC-back firm category. For high-tech employment too, the youngest person is 39 years of age and owns a wireless telecommunication carriers business.
Now, this is a US-based research and belongs to a time that was probably the beginning of entrepreneurship becoming a legitimate career choice. In India, there are several successful entrepreneurs who actually started in their 20s. However, 40s is when you know that entrepreneurship is sustainable, says Aparna Saraogi, who founded a mentorship programme for women entrepreneurs called WEE.
IS ENTREPRENEURSHIP FASHIONABLE?
“For good or bad, entrepreneurship is becoming fashionable. Sometimes people don’t get a job so they start a business, while entrepreneurship is a tough call and one has to work multiple times harder to reach success,” she said. Adding that at 40 years of age, entrepreneurship is a conscious call because that’s when people are already earning better in their careers. Secondly, she says, a middle-aged person has already seen corporate for close to 20 years, so they understand human relations at a more mature level.
Saraogi also said that people gain respect in their middle-age because of their abundant experience. For the younger generation, she does not reject the idea of entrepreneurship but says that it should be a well-thought-out decision. Also, during the 20s while the chances of doing a business and its succeeding are low, if one does get success they become unicorns—a privately owned startup with a market valuation or estimated valuation of $1 billion and over—and at 40s there are lesser chances of becoming a unicorn.
YOUNG ENTREPRENEURS AND SUCCESS
The report has also included a few younger entrepreneurs who established some exorbitantly successful businesses like Jeff Bezos, Steve Jobs and Bill Gates and conveniently missed out on Mark Zuckerberg who is still under 40 and owns one of the most powerful social media platforms in the world. But it still drags on to the point that the likes of these “young entrepreneurs” had more success as 50-year-olds than as a 20-year-olds because the business obviously grew with age.
Well-under-40 years old, Kanika Tekriwal, who runs JetSetGo and the first woman in the aviation industry to run a private-jet experience business, has a different take on the research. She says, “In the Indian context, people definitely take you more seriously as an entrepreneur if you are older but I personally think that chances of success at a younger age are more because the older you grow the lesser risks you take and the safer you play. As a young entrepreneur, I can take more risks, I have lesser responsibilities and I can try newer things. So, I don’t think age is a barrier in terms of success.
Maybe in American phenomena it is but as far as India is concerned, we have several young successful entrepreneurs.” However, she does agree to the fact that many young people jump onto entrepreneurship because they consider it glamorous.
As a young entrepreneur, I can take more risks, I have lesser responsibilities and I can try newer things. So, I don’t think age is a barrier in terms of success.
YOUNG V/S OLDER ENTREPRENEURS
While the report claims that middle-aged entrepreneurs have better financial resources, better network and experience, Tekriwal argues that young people may have lesser financial resources but it acts as a driver and “makes you hustle and succeed better.” “And as far as networking goes for young people, it is precisely because of that lot of people are willing to help us out,” she noted.
Today, there is a better understanding of entrepreneurship in the market and among the younger and older generation. People read the markets before jumping onto the bandwagon with an idea and that is why it is thriving in the Indian scenario. The research does stand true in certain aspects in the Indian scenario but in the country, we have founders as young as 24-year-old, Ritesh Agarwal—founder of OYO, and even younger. So it is on you decide whether age matters in entrepreneurship or not?