Age and Experience of High tech Entrepreneurs

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There has been a recurrent debate about the relative importance of age and experience in high-tech entrepreneurship where the uncertainty not to say non-existence of certain markets and products may render knowledge less critical than in established industries. Are the famous entrepreneurs in their early and mid-twenties exceptions? Some recent studies claim that the average age of entrepreneurs is closer to forty years old. We revisited the topic and analyzed not only the age of founders but also their roles when the company reached success and the links with geography, fields of business, value creation and venture capital.

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Age and Experience of High tech Entrepreneurs

  1. 1. 1BCERC 2014Hervé Lebret AGE AND EXPERIENCE OF HIGH-TECH ENTREPRENEURS Hervé Lebret EPFL Babson College Entrepreneurship Research Conference London, Ontario, June 4-7, 2014
  2. 2. 2BCERC 2014Hervé Lebret Why revisit the topic of age? Diverging messages about age of high-tech entrepreneurs. 2 examples:  At MIT, “the median age of first time entrepreneurs has gradually declined from about age 40 (1950s) to about age 30 (1990s)”. Hsu, Roberts and Eesley 2006  “The average and median age of U.S.-born tech founders was thirty-nine when they started their companies. Twice as many were older than fifty as were younger than twenty-five.” Wadhwa et al., 2008
  3. 3. 3BCERC 2014Hervé Lebret The famous young entrepreneurs Company Year Founder Age Company Year Founder Age HP 1939 W. Hewlett 26 HP 1939 D. Packard 27 Intel 1968 R. Noyce 40 Intel 1968 G. Moore 39 Intel 1968 A. Grove 32 Oracle 1977 L. Ellison 33 Microsoft 1975 B. Gates 20 Microsoft 1975 P. Allen 22 Apple 1976 S. Jobs 21 Apple 1976 S. Wozniak 26 Genentech 1976 R. Swanson 29 Genentech 1976 H. Boyer 40 Sun 1982 V. Khosla 27 Sun 1982 B. Bechtolsheim 26 Sun 1982 B. Joy 28 Sun 1982 S. McNealy 28 Cisco 1984 S. Lerner 29 Cisco 1984 L. Bosack 29 Amazon 1994 J. Bezos 33 Netscape 1994 M. Andreessen 23 eBay 1995 J. Skoll 30 eBay 1995 P. Omidyar 28 Yahoo 1995 D. Filo 29 Yahoo 1995 J. Yang 27 Google 1998 L. Page 25 Google 1998 S. Brin 25 Dell 1984 M. Dell 19 Facebook 2004 M. Zuckerberg 20
  4. 4. 4BCERC 2014Hervé Lebret The results Source: 577 founders from 278 high-tech companies http://fr.slideshare.net/lebret/equity-in-258-high-tech-start-ups-lebret-mar2014 Number of co-founders # Average age Standard deviation 1 53 39.1 9.6 2 203 38.4 9.8 3 170 37.4 8.5 4 71 37.3 9.8 5 48 41.4 9.5 6 32 36.2 10.7 7% 14% 24% 20% 14% 8% 8% 5% under 25 26-30 31-35 36-40 41-45 46-50 51-55 above 55 c-geography Geography Nb. of founders Age Age at 1st start-up Silicon Valley 243 36.5 34.1 Boston Area 77 42.9 39.5 East Coast. 51 42.9 41.6 California 52 42.4 41.0 West Coast 29 34.8 33.7 USA/Canada 20 37.2 35.9 So. America 4 35.7 35.7 China 16 34.0 32.4 India 4 46.0 43.0 Israel 3 27.7 26.0 France 44 34.1 32.5 Switzerland 9 41 37.9 UK 11 36.6 34.6 Other Europe 14 31.3 28.3 Total 577 38.2 36.0
  5. 5. 5BCERC 2014Hervé Lebret The results a-field of activities Field Nb. of founders Age Age at 1st start-up Biotech 159 45.6 43.3 Medtech 18 38.0 33.9 Energy/Env. 24 39.9 39.0 Semiconductor 89 36.8 34.8 HW/Comp./Tel. 86 36.7 34.6 Software 62 32.2 31.3 Internet 129 33.3 30.8 Others 10 38.1 34.6 Total 577 38.2 36.0 b- period of creation Period Nb. of founders Age Age at 1st start-up 1965 10 35.4 32.3 1970 4 32.3 32.3 1975 11 28.8 28.8 1980 38 35.2 35.1 1985 13 36.1 36.1 1990 73 34.8 33.3 1995 141 38.1 35.9 2000 170 38.5 36.2 2005 105 42.6 39.2 2010 12 40.1 35.8 Total 577 38.2 36.0 Source: 577 founders from 278 high-tech companies http://fr.slideshare.net/lebret/equity-in-258-high-tech-start-ups-lebret-mar2014 f-value creation including M&A values Value creation Nb. of founders Age Age at 1st start-up >$100B 20 28.0 26.9 >$10B 42 35.9 33.0 >$1B. 185 35.8 34.2 <$1B 250 40.0 37.6 Private 75 41.7 39.3 Ceased 5 43.0 34.6 Total 577 38.2 36.0
  6. 6. 6BCERC 2014Hervé Lebret The results 0 5 10 15 20 25 30 35 40 45 50 under 25 26-30 31-35 36-40 41-45 46-50 51-55 above 55 Before 1995 (sample size: 159) 1996-2001 (sample size: 187) 2002-2011 (sample size: 207) 0 20 40 60 80 100 120 140 under 25 26-30 31-35 36-40 41-45 46-50 51-55 above 55 Age of founders Age at first foundation Age excluding professors and biotech Age of CEOS Age of advisors Age of former employees
  7. 7. 7BCERC 2014Hervé Lebret More results Full paper on http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2416888 beta se t p 28.3543 1.6117 17.5932 0.0000 *** Year of foundation (relatively to 1960) 0.2441 0.0398 6.1298 0.0000 *** Biotech (0/1) 5.3818 0.9337 5.7640 0.0000 *** Software/Internet (0/1) -4.9262 0.7898 -6.2373 0.0000 *** Professor (0/1) 5.0013 1.0748 4.6533 0.0000 *** CEO (0/1) 0.4596 0.7816 0.5881 0.5567 Former Employee (0/1) -3.8122 1.6322 -2.3356 0.0199 * Silicon Valley (0/1) 0.1380 0.7018 0.1967 0.8441 beta se t p 28.9637 1.7600 16.4569 0.0000 *** Year of foundation (relatively to 1960) 0.1884 0.0470 4.0049 0.0001 *** Value creation ($10B) -0.2627 0.0888 -2.9579 0.0033 *** VC 1st round ($M) 0.1179 0.0357 3.2993 0.0010 *** VC total amount ($M) -0.0045 0.0003 -1.5009 0.1340 CEO (0/1) 1.0430 0.8586 1.2147 0.2251 Professor (0/1) 10.4935 1.1084 9.4674 0.0000 Former Employee (0/1) -3.9357 1.8840 -2.0890 0.0372 **
  8. 8. 8BCERC 2014Hervé Lebret Food for thought:  Galenson (2012) has two distinct kinds of innovators: “The first is the conceptual innovator. […] They boldly break away from accepted standards. Take Picasso. He completed his most important work by the age of 26. Experimental innovators create in a different manner. It takes time for them to hone their craft. They return to familiar ideas, trying to perfect them. […] They devote their life to learning, seeking answers to their unsolved questions. In our society, we tend to glorify young prodigies at the expense of late bloomers.” Age and creativity  The idea that major (scientific, artistic) creators are young individuals is not new. In mathematics, the Field Medal is only awarded to less than 40-year old individuals.  But in science, the situation has evolved: “Comparing discoveries made before 1905 with after 1985, the average age at which physicists made their discoveries rose from 37 to 50. Chemists' average age rose from 36 to 46 and that of medical scientists from 38 to 45. Before 1905, 20% of prizewinning work was done before age 30, but by 2000, this fell to almost zero.” Jones and Weinberg 2012.

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