“People under 35 are the people who make change happen,” said venture capitalist Vinod Khosla, “People over 45 basically die in terms of new ideas.”

Khosla, who believes that old entrepreneurs can’t innovate because they keep “falling back on old habits,” said this at the NASSCOM Product Enclave in Bangalore, on Nov. 9.

He isn’t alone in his views.

Silicon Valley VCs talk openly about their bias toward young entrepreneurs. Some argue that Internet entrepreneurs peak at the age of 25.

Khosla and those who think like him are wrong.

The young may have good ideas, but there is no substitute for experience. You aren’t born with the management, marketing and finance skills necessary to turn ideas into successful ventures. This obsession with the young may be why the venture capital system is in such steep decline and underperforms key public market indices, such as the Russell 2000. VCs are doing themselves a big disservice by ignoring the real innovators: old, experienced people.

In 2008, I led a research team in exploring the backgrounds of 652 U.S.-born chief executive officers and heads of product development in 502 successful engineering and technology companies established from 1995 to 2005. These were companies with real revenue — not just the start-ups founded by the college dropouts that some venture capitalists like to fund. We learned that the average and median age of successful founders was 39. Twice as many founders were older than 50 as were younger than 25. And there were twice as many over 60 as under 20.

In a follow-up project, we looked at the backgrounds of 549 successful entrepreneurs in twelve high-growth industries. The average age of male founders in this group was 40, and the average age of female founders was 41. The majority had two or more kids. Kauffman Foundation director of research, Dane Stangler, built on our findings by analyzing Kauffman Firm Survey data and Kauffman Index of Entrepreneurial Activity—which uses data from the U.S. Census. He found that the average age of U.S. entrepreneurs is actually rising, with the highest rate of entrepreneurial activity shifting to the 55–64 age group.

Our research revealed that successful entrepreneurs typically start companies for three reasons:

— They have ideas for solving real-world problems.

— They want to build wealth before they retire.

— They like the idea of being their own bosses.

The experience entrepreneurs have gained, the contacts they have made, networks they have formed, their ability to recruit good management teams and their education give them their greatest advantage. Young adults fresh out of school don’t have these advantages.

Do people stop being creative as they reach middle age? Ben Franklin certainly didn’t. He invented the lightning rod when he was 44. He discovered electricity at 46. He helped draft the Declaration of Independence at 70, and he invented bifocals after that. Henry Ford introduced the Model T when he was 45. Sam Walton built Walmart in his mid-40s. Ray Kroc built McDonald’s in his early 50s. Some of the most creative people of the century were also not young. Ray Kurzweil published The Singularity Is Near in his 50s; Alfred Hitchcock directed Vertigo when he was 59; Frank Lloyd Wright built his architectural masterpiece, Fallingwater, when he was 68. And let’s not forget the greatest innovator of recent times: Steve Jobs. His most significant innovations—iMac, iTunes, iPod, iPhone, and iPad—came after he was 45.

Kellogg School of Management economist Benjamin F. Jones analyzed the backgrounds of Nobel Prize winners and other great achievers of the 20th Century. He collected data on the age at which an inventor made his or her first discovery, the average age at which a scientist made his or her greatest accomplishment and the productivity lifespan of innovators and scientists.

Jones found that the average age at which Nobel laureates performed their prize-winning work, and the average age at which inventors had their great achievement, were both 39. The largest mass of great innovations in knowledge came in an inventor’s 30s (42%), but a substantial amount also came during their 40s (30%), and some (14%) came beyond the age of 50. Curiously, Jones found that the average age of innovators is rising. Over the last century, the average age of greatest achievement for both Nobel Prize winners and great tech inventors rose by about six years. Since 1985, it was 45. In fact, in both physics and chemistry during the past two to three decades, very little Nobel Prize–winning research has been done before age 40.

Jones also looked at another group: “ordinary inventors.” The mean age at which they filed their first patent was 31.

”There’s a longstanding view that innovators are most productive early in their lives,” said Jones during an e-mail exchange, “Empirical evidence suggests that this view is increasingly incorrect.”

One exception in recent times, said Jones, has been a small set of information and computing technologies in which a few young people have made breakthroughs. But Jones argues that it is not as much the case in medicine, pharmaceuticals and biotechnology, chemical engineering, nanotechnology, clean energy or any other field.

It may well be the only people who are really set in their ways and “keep falling back on old habits” are Vinod Khosla and the old-time VCs. The rest of us aren’t too old to take risks or innovate.

Tags:

  • Pingback: It’s Easier to Succeed by Solving an “Adult” Problem

  • WebTechRadio

    Superb article,bravo.

  • Pingback: The 20's Survival Guide » It’s a marathon, not a sprint » The 20's Survival Guide

  • Rajesh

    For some, they just start at 40! Thanks for sharing and making older guys feel better :)

  • Pingback: How to Get an MIT Education for Peanuts | Biz Op Radar

  • Nancykatich

    Glad to hear this since my husband and I have started two businesses after the age of 55.

  • Pingback: How to Get an MIT Education for Peanuts | Internet Marketing | SEM | SEO | Social Media | Web Consultancy

  • Pingback: How to Get an MIT Education for Peanuts

  • Pingback: How to Get an MIT Education for Peanuts | InBaoGao

  • Pingback: How to Get an MIT Education for Peanuts | Augusta Blog

  • Pingback: How to Get an MIT Education for Peanuts | Sulvo

  • BigChief

    One of the best entrepreneurs I know is my mentor. He started the fastest growing food service business now in England at age 65. He started two companies doing millions of pounds in turnover after he turned 60

  • BigChief

    There I was thinking my life was just starting now people think I am “old”. Steve Jobs was still sketching ideas for new inventions on his deathbed

  • http://twitter.com/endymion Loren Fykes

    Also, entrepreneurism and innovation isn’t the exclusive domain of IT, the Internet or areas of engineering and science. Innovation and new ideas that revolutionalize the way we think and feel….the way we communicate and improve our lives comes from individuals in all fields–e.g. journalism/documentary, nonprofit/charity, teaching/writing, and other areas. I personally don’t understand why there seems to be a prejudice against seeing a “writer” as an entrepreneur, for example, or any artist. They take huge risks, make little or no money for a long time, and highly influence thought and thinking once they succeed and their “art” or “artistry” is proliferated. These people are often older, too. I think age has less to do with it and perseverance and dedication to developing the idea until its value is understood and/or shared by others is more the key.

  • http://twitter.com/praveenasara Praveena Sara

    I believe Younger generation nowadays is having the most sophisticate, developed brains :) Future isn’t dark. 

  • Tom

    After starting three successful companies, one successful charity in Afrcia and CEOing (“turning around”) two other firms, I am now privileged to be starting my best company ever.at age 66.  And, hmmm, this is happening without needing the capital of folks who feel I’m 5 decades out of touch!

  • http://twitter.com/chrisyeh Chris Yeh

    I work with entrepreneurs who are in their 50s, 60s, and even 70s.  I tell them, “People may discriminate against you, but markets can’t.  Make the numbers, and nothing else will matter.”

  • Anonymous

    If a 25 year old makes a breakthrough scientific discovery or solves a worldwide problem through creative thinking, kudos to them. Young tech entrepreneurs largely live in a self-induced fantasy world, though–where designing the latest content-mashing, data-crunching website is on par with the discovery of electricity, where closing a $1 million Round A is the next California gold rush, and where a failed startup is akin to the string of failed experiments that led to the creation of the light bulb. I can’t wait to see what the next 5, 10, 15 years bring.

  • Pingback: Kevin Cullis: How to Start a Business Mac Version » Another case for “older” entrepreneurs

  • Pingback: My daily readings 12/19/2011 « Strange Kite

  • http://www.MacStartup.com Kevin Cullis

    As it has been demonstrated, younger people generally are “faster thinkers” whereas older people have better judgement or “connect the dots” better, called experience. But we need each other, both young AND old. Too bad both demographics are too selfish to see this.

  • http://roshanjoshi.com.np Roshan

    why generalize? the fact is, there is no limitation to age for entrepreneurship or being an entrepreneur.

  • http://twitter.com/orlandoroebuck Orlando Roebuck

    With respect to the internet, I can understand the venture capitalists’ position. Both the technology and the trends move very quickly. It’s difficult to stay on top of things as an older individual when you have a spouse, children and numerous other responsibilities. They are simply playing the odds.

    However, a fantastic idea can come from anywhere. And, everyone should be taken seriously.

  • Anonymous

    It took me ’til I was 30 to get up the nerve to start my first (semi)entrepreneurial venture (consulting work for Advocate Interactive), and it is scary. The OLDER I get the more willing I am to take risk, albeit calculated and hopefully recoverable… 

    For me, it’s all about the company you keep.  Timid, uncertain people keep you timid and uncertain.  Bold, cutting-edge, innovators have a way of rubbing off on you.  If you surround yourself with successful people, of any age, it definitely does rub off on you.   

  • Anonymous

    age is crap, argued by people who dont do things themselves

  • Anonymous

    age is crap, argued by people who dont do things themselves

  • Dsuggitt

    rather appropriate reading for an entrepreneur on his 42nd birthday. nicely written. thank you :)

  • http://www.dancingbison.com Vasudev Ram