Dispelling the Myth that Entrepreneurship is a Young Man’s Game
There is a general perception today that the typical entrepreneur is a 20-something tech wiz who builds a million-dollar social application out of his parent’s garage or college dorm room. The problem with this stereotype is that there is no such thing as a “typical” entrepreneur. Indeed, perhaps one of the few things common to all entrepreneurs is that they are not typical. They are risk takers and innovators, and often times, success means thinking in creative, untypical ways to satisfy an unaddressed consumer demand. This essential color-outside-the-lines quality is not limited to the college dropouts (of the Bill Gates, Steve Jobs and Mark Zuckerberg variety); it is found in people across all backgrounds and ages.
There are numerous statistics that upend the concept that most successful entrepreneurs are young people. In fact, there is a direct correlation between age and entrepreneurial odds of success. So say several studies from the Kauffman Foundation. A survey from the Foundation revealed that in 2013, entrepreneurs 50-59 years old started 20% of all new businesses and 15% were started by the 60 and older cohort. The Kauffman Index of Entrepreneurial Activity shows that the highest rate of entrepreneurship over the last decade occurred in the 55-64 age cohort; conversely, the 20-34 age cohort had the lowest rate of entrepreneurial activity.
There are good reasons why more experienced Americans are better prepared for entrepreneurship than their younger colleagues. As innovation and entrepreneur guru Krisztina Holly wrote in Forbes: “A manager from a manufacturing company might recognize the need for new logistical software, or a technician in the energy industry might see the opportunity for a better ceramic filter. These opportunities are not sexy nor obvious to someone fresh out of college, but they can make a unique and compelling value proposition and the basis of a successful company.”
There are other reasons why older entrepreneurs tend to fair better:
- With age (usually) comes wisdom, and experience and professional networks are critical in starting and growing a successful company. Also, as Jules Pieri, founder of The Grommet, wrote in the Harvard Business Review, older adults have more substantial family and social support, which can help encourage and propel entrepreneurs through the grueling early stages of building a business.
- Researchers at the University of Oregon found that older people tend to be more competitive and are better at competition-oriented risk taking, critical factors in entrepreneurship, which is inherently risky and competitive.
- Older cohorts may also have more robust savings that can be invested into their enterprise, and while there is some age bias in soliciting start-up capital, as we grow older, we build our credit score, which can help secure loans.
Recognizing that successful entrepreneurship cuts across all ages and backgrounds, we would do well to look for other cohorts that may have robust entrepreneurial potential but perhaps not the public awareness they deserve. Veterans are a good example. As Iraq War veteran Mark Rockefeller wrote in a recent Chamber Foundation blog post:
“Veterans are natural business owners. Surveys show that military service is one of the strongest predictors of business ownership. Military veterans make up only 6% of the U.S. population but nearly 15% of business owners, and these businesses produce a whopping $1.6 trillion in annual receipts and employ 8.2 million Americans.”
Interestingly, this trend in veteran entrepreneurship is less a result of military training than it is the personality traits of the individual. A study from the Small Business Administration’s Office of Advocacy, “Factors Affecting Entrepreneurship among Veterans,” revealed veterans are at least 45% more likely to be self-employed than those without active-duty experience. Yet, it is not the career military folks who tend to start businesses; it is most often those with less than 4 years of active duty service. Why? The study says people with an entrepreneurial bent tend to leave service earlier in pursuit of their own endeavors. This tells us not that good soldiers make good entrepreneurs, but rather, the veteran community is yet another cohort from which entrepreneurs can emerge, and that deserves recognition and support.
So what? Why is it important to recognize the numerous cohorts from which entrepreneurs emerge? In short, the squeaky wheel gets the grease. There are myriad challenges for entrepreneurs, such as access to credit and appropriate federal, state and local legislation. As a nation, finding ways to support new business is synonymous with supporting our country’s future. It is important that we amend the popular narrative that suggests entrepreneurs are most often young.
Indeed, an important aspect of encouraging new American business is a positive public perception that accurately reflects the entrepreneurial potential of the entire population. That message was brought to public in a Senate hearing from the Special Committee on Aging and The Small Business & Entrepreneurship Committee in February, “In Search of a Second Act: The Challenges and Advantages of Senior Entrepreneurship.” Sen. Susan Collins said at the hearing:
“The role played by America’s small businesses in creating jobs and opportunity is well-known, but the role played by America’s seniors may come as a surprise: individuals between the ages of 55 and 64 make up the largest percentage of new business owners in the U.S., and this has been true for decades, even at the height of the ‘Dot Com’ boom.”
This public exposure about the importance of entrepreneurship amongst older cohorts is critical for raising awareness about persistent challenges and untapped potential. By that same measure, we should work to find ways to support veterans in their entrepreneurial pursuits and clear the obstacles in their path.
There are numerous programs and workshops teaching entrepreneurial concepts to younger generations. This is important; it helps foster and perpetuate the desire and know-how to chase the American Dream, which in turn drives economic prosperity and jobs. Yet, all age cohorts have the capacity to engage in entrepreneurship, and given that age and experience have a big impact on the potential for success, we should be mindful to champion and encourage entrepreneurship amongst America’s older (read: non-Millennial) generations.