Who Starts More Businesses Gen Y or Their Parents?

| August 29, 2010 | 8 Comments
Entrepreneur

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A recent article in Newsweek shows a study that says older workers are more likely to start a business than the younger generation. Despite what most people hear and see on the news about how many young people are ruling the business world like Mark Zuckerberg and Facebook or the Google founders most businesses are being started by older people. It seems as though the press has a fascination with younger people who start businesses.

The article says that “As it turns out, the average founder of a high-tech startup isn’t a whiz-kid graduate, but a mature 40-year-old engineer or business type with a spouse and kids who simply got tired of working for others, says Duke University scholar Vivek Wadhwa, who studied 549 successful technology ventures.”

It also states “According to data from the Kauffman Foundation, the highest rate of entrepreneurship in America has shifted to the 55–64 age group, with people over 55 almost twice as likely to found successful companies than those between 20 and 34. And while the entrepreneurship rate has gone up since 1996 in most other age brackets as well, it has actually declined among Americans under 35.”

One reason for this is that older entrepreneurs don’t start businesses that are “easy to understand”. Young entrepreneurs sell hot web apps or simple online products that become the next big fad. Older entrepreneurs start companies that sell and produce things for other businesses. They produce things that support the framework of the business world which is not only more complicated but simply not as a fun to talk about in the media.

So how did this huge stereotype of older workers being less innovative come around? Is it the media’s fault? Are they actaully less innovative? Or are their stable businesses just not as fun to talk about?

Read the full article here

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  • http://www.financiallydigital.com Nunzio Bruno

    As a young professor and entrepreneur it was very interesting to read through this post. I can absolutely see why it’s an older generation not only initiating more start up but finding more success. They have a life time of experience and exposure to what their niche markets needs are and how to fill them. It’s my hopes that my firm Financially Digital stays the course and doesn’t end up just being another Gen Y statistic.

  • Rob Smith

    In all my trips to the Silicon Valley over the past year I’ve been surprised at just how few people were in my age bracket (I’m 24, so mid 20′s) and how very, very many were in their mid to late forties. I expected more peers but am not entirely surprised. I know I’ve thought many times how I wish I had another decade of experience to pull from. If you have a decade or two of experience, why not give it a try? Assuming a good bank account and the right contacts of course.

  • http://www.askraul.com Raul Felix

    Sometimes we as Gen Y tend to be arrogant. Since our whole adult lives we’ve been able to access whatever information instantly without having to wait. I sure do believe that the average 24 year old is more informed now than the average 24 year old was back in 2000, 1990, or 1980. But we still have remember that age does have experience and we have to learn to use it our advantage. Like Malcolm Gladewell talked about in The Outliers, there is no way around your 10,000 hours of work to become world class at something.

  • http://Under30CEO.com Jared O’Toole

    It is that experience that leads them to more success. I think that is a major reason why younger entrepreneurs should find mentors and advisors to help guide them through some of the ups and downs ahead of them.

    Thanks for the comment!

  • http://Under30CEO.com Jared O’Toole

    Yea Rob Ive never been to the Valley but from what you hear all the time you would think it was full of 25year old tech geniuses. But I believe that it is not and rather full of experienced business people who are now building the infrastructures of so much of the technology we use.

  • http://Under30CEO.com Jared O’Toole

    Great comment on Gladwell…There is no way around that work whether your are starting a company or working for one.

  • Martin

    Nice post, but “experience” is often overrated. Part of being an entrepreneur is understanding fundamentally that you can only wait so long before taking action. Eventually you must jump, and as this blog has pointed out numerous times, the sooner you jump the better. How many leadership conferences must you attend before you can stand up and lead? How many companies must you work for before you take action and start your own? While recklessness is NEVER advisable, life is far too short to live with regrets while you are gaining experience. Ten years is too damn long to put your dreams of entrepreneurship on hold. If you are truly motivated, years of professional experience can be accelerated into months or even weeks. Even with the inclusion of highly quantitative fields, there is no industry that takes ten or even 5 years to learn.

  • Usama

    Awesome post. I think Gen X pick stuff up very fast and utilize it while Gen Y rely on the old methods. They have to realize that trends is what its all about

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