We live in a world that values youth above almost everything else, and the business world is no different. Thanks to the success of silicon valley, when most people think of the word “entrepreneur” these days they instantly imagine a young Steve Jobs working out of his garage or Mark Zuckerburg launching Facebook from his Harvard dorm room.
Many young entrepreneurs have indeed found wild success, but that doesn’t mean the over-30 crowd can’t start a profitable business. For example, Colonel Sanders was in his 60s when he first franchised the KFC brand. Not exactly a spring chicken. More recently, Reid Hoffman was 35 when he founded LinkedIn.
In fact, a recent study conducted at the Rensselaer Polytechnic Institute has concluded that older entrepreneurs are just as capable of success as their younger counterparts. Their research also revealed that older women are usually far more adept at opening up businesses than younger women.
“Correcting people’s negative stereotypes about older entrepreneurs, and encouraging people at later life stages to engage in entrepreneurship, is important,” comments lead study author Hao Zhao, an associate professor of management at the Lally School of Management at RPI, in a press release. “The United States has an increasing population of older adults that have skills and knowledge valuable to society. This study helps to illustrate their strengths.”
Zhao and his team analyzed 102 businesses and discovered that the rate of success among businesses started by people in their 20s is the same as endeavors started by entrepreneurs in their 50s.
The research team theorizes that younger entrepreneurs probably succeed for different reasons than older entrepreneurs. Younger people are better at developing groundbreaking new technologies and making fearless decisions, but seasoned adults have more experience, wisdom, business connections, and in many cases, funds to draw on when starting a new business.
So, both young and old entrepreneurs have a unique set of assets to draw upon when launching a new company.
As far as noted differences in the analysis, older entrepreneurs’ businesses tend to have higher satisfaction levels among early customers and greater financial success. Suddenly it doesn’t sound like such a bad idea to open up a business later on in life.
That being said, companies started by older adults also have slightly lower growth rates, but the study’s authors believe that is only because said companies usually start larger in the first place than businesses started by young entrepreneurs.
Moving on to gender, age appears to be especially significant for female entrepreneurs. Older women who started businesses enjoyed much more success.
“Our findings suggest women should not give up too readily, because their chance of success increases as they move to later life stages, and their perseverance ultimately tends to pay off,” Zhao says.
When is the worst time in one’s life to start a business? Succeeding as an entrepreneur appears to be most difficult during middle age.
Adults in their 30s and 40s usually work full time jobs, whereas younger adults may not have found employment yet and older adults often have enough savings to either retire or quit. Additionally, many middle-aged adults have young children to look after.
“Although it is generally commendable to pursue one’s entrepreneurial aspiration,” Zhao concludes. “We suggest that early mid-life individuals carefully evaluate all of the resources at hand and take a realistic view of this career path before taking the leap.”
The economy has taken a huge hit due to the COVID-19 pandemic, but once this is all over, it may very much be up to hungry entrepreneurs looking to make a big splash to help rebuild what once was. If you’ve got a big idea in the back of your mind, don’t do yourself a disservice by assuming you’re too old to succeed.
The full study can be found here, published in the Journal of Business Venturing.