Time for entrepreneurship: A survey of entrepreneurs found that most started their first company at age 39. People with degrees in computer science started companies much sooner than those with advanced training in other sciences or engineering.
Are venture capitalists misguided, then, in funding companies with baby-faced CEOs? Perhaps one answer lies in the results of a study conducted by the Kauffman Foundation. It found that during the period when funding young technology entrepreneurs became the norm, from 1997 to 2007, the venture industry grew dramatically. But returns actually stagnated and then declined—precipitously. The returns of venture industry lagged those of the small-cap Russell 2000 Index by 10 percent over the 10-year time frame.
When you meet entrepreneurs in India, Ireland, Brazil, and other parts of the world, you find many of the same dynamics at play. The young have the outrageous ideas, but its older people who achieve business success. In all these countries, youth entrepreneurship is on the rise. And as in the United States, most of these businesses fail. That’s okay when you can learn from your failures and start over—again and again. This has been Silicon Valley’s advantage: it accepts failure and encourages entrepreneurs to keep trying. It hasn’t been like this in other parts of the country and the world. In most places, if you fail, you don’t get a second chance. But cultures are changing. They are beginning to accept failure. So entrepreneurs all over the world are trying again and again. In the process, they are getting older and smarter, and eventually achieving success.
Even China is becoming more open to entrepreneurship, though in that country a chasm divides old and young. Despite the billions of dollars that China’s government is investing in research, there is practically no innovation in its labs: they are staffed by a generation that came of age in the days of the Cultural Revolution, when defying authority was a capital offense. But if you meet the young at the universities or the Internet cafés, you find the same innovative ability you see in Silicon Valley.
Most of what I discussed above was in the computing world. But we live in an era of exponentially expanding technologies. Moore’s law describes the advances in computing power. Today there are other fields of science and engineering advancing just as rapidly, such as robotics, synthetic biology, medicine, and nanomaterials. The human genome, for example, was first sequenced about a decade ago at cost of more than a billion dollars; now the same feat costs $1,000. Together, all these advances are making it possible to address many of the grand challenges of humanity: making sure we all have adequate education, water, food, shelter, health, and security. Entrepreneurs can now do what only governments and large corporations were once capable of.
But understanding these diverse technologies isn’t the domain of the young. Though college dropouts may know all about social media, it is very unlikely that they understand the intricacies of nanotechnology and artificial intelligence as well as their elders do. These are complex technologies that require not only a strong education but also the ability to work across domains and collaborate with intellectual peers in different disciplines of science and engineering.