Does a Founders’ Age Play a Role in Ensuring Start-up Success?
Is the age of a founder an important determinant to start-up success? This is a question that a lot of people have sought to answer in recent years. The proliferation of start-ups has brought about a new age of successful billion-dollar companies that 5-10 years prior were not in existence. However, with every new entry into the unicorn league, there are other start-ups that are unable to achieve lift-off, and as a result, fail. Success in the start-up universe is not a given.
Numerous attempts have been made to unravel the science behind start-up success. These led to various studies that sought to link founders/entrepreneurs’ personalities or traits to start-up success. In recent years, there has been growing interest to examine whether a relationship exists between the age of founders when they first got started and the success of their start-up.
Studies between age and start-up success
There is a commonly held view that most start-ups are created by founders that are as young as age 35 and below when they first established their start-ups. According to existing research, reasons for this can range from the high risk-taking behavior of many young people to the numerous famous stories about young successful founders such as Mark Zuckerberg, Bill Gates, and Peter Thiel are just amongst the examples of those who were quite young when they founded their start-ups.
These reasons notwithstanding, a review of empirical studies has shown that there is no consensus on the connection between a founder’s age and the success of a start-up. Rather, existing research on the relationship between the age of founders and start-up success revealed findings that pose more questions than provide answers. An early study by Frick (2014), which sampled 35 Venture Capital-backed firms from Wall Street Journal’s Billion Dollar start-up cluster list, found out that the mean age of founders of successful start-ups was 31 years.
This finding is in contrast with the widely cited study by Azoulay, Jones, Kim, and Miranda (2020) which studied 1,700 fastest-growing start-ups in the USA that were in the top 0.1% in terms of employment growth and found that the average age of founders was higher at 45 years. The authors cited the prior working experience of the founders as being a key reason for why they were successful. A more recent study by Tamaseb (2021) revealed findings that further highlighted the ambiguity in this argument by concluding that, although the average age of founders of successful start-ups was around 34 years, most of them had a minimum of about 10 years of work experience which may have played a role.
Ultimately, the arguments made in these studies do not point to any consistency towards the existence of a direct relationship between the age of founders and the success of their start-ups. There are other factors to be considered too, such as the work experience of founders, the location of the start-ups, the type of industries targeted by most start-ups in an environment. These factors come into play when these arguments are being made but are not the key determinants of start-up success.
The process towards success
So, the question remains. What determines the success of start-ups? The answers to this question may lie in the concept of entrepreneurial actions. Looking at start-up success through this lens allows us to ask the question “What are successful start-up founders doing so well that others have not been able to emulate?”
A point to be made is the realization that the start-up activity is steeped in uncertainty; like any scientist will tell you, the process of scientific discovery happens after numerous rounds of experimentation, testing, and learning. Start-ups that have been able to achieve success have maintained this ethos of continuous experimentation, testing, and learning. This process ensures that they can properly identify problems that customers deem to be important, provide a solution that addresses such problems, study a market size that makes the solution economically viable, and create a culture that allows them to pivot in the event of poor problem-solution or solution-market fit.
We just may have been looking at the whole thing all wrong from the beginning, and not asking the right question. When looked at broadly, the age or other personality traits of founders when they establish their start-ups is irrelevant and does not determine start-up success. Rather, the focus should shift to finding how to create a blueprint of actions that founders can implement towards improving their chances of success.