Here’s an interesting surprise, from Education and Tech Entrepreneurship, a Kauffmann Center research paper published yesterday:
Twice as many U.S.-born tech entrepreneurs start ventures in their fifties as do those in their early twenties.
I think it’s ironic that this should be a surprise; a generation ago it would have been a common assumption. Then came the successes of industry icons Bill Gates and Steve Jobs, both young college dropouts. And a lot of people like them. Or so it seemed. The young techies ruled the PC industry boom in the 1980s, and again, the dot-com boom in the 1990s, and the Web 2.0 boom right now.
And there is truth in that stereotype, of course. Where there’s smoke, there’s fire. But this latest research puts in a word for classic wisdom, experience, and education as well.
I picked this up from David Miller on Campus Entrepreneurship, who cites Ben Worthen’s Tech Entrepreneurs Mostly Aren’t Youngsters After All in the Wall Street Journal. He summarizes:
Instead, the average tech entrepreneur was 39-years old when the company was founded, says a survey released Thursday by the Kauffman Foundation. The survey asked questions of 652 U.S.-born execs at tech companies started between 1995 and 2005 and with revenues of at least $1 million. Not only was the average founder pushing middle age, but also nearly five times as many founders were over 45 (24%) as were younger than 25 (5%) when their companies got off the ground.
Only 8% of founders hadn’t completed a college degree, contrary to the image of the Bill-Gates-like college dropout. Forty percent had a masters degree or a PhD.
Some other interesting findings (quoting the study):
- Tech-company founders were four times as likely to have attended an Ivy League school than the public at large, 8% compared with 2%.
- The most common universities from which U.S.-born tech founders received their highest degrees in our sample are Harvard, MIT, Pennsylvania State
University, Stanford, University of California-Berkeley, University of Missouri, University of Pennsylvania, University of Southern California, University of Texas, and University of Virginia.
- U.S.-born tech founders with Ivy League degrees tend to establish startups that produce higher revenue and employ more workers than the average.
- Startups founded by those with only high school education significantly underperform all others.
- Nearly half (45%) of the startups were established in the same state where U.S.-born tech founders received their education. Of the U.S.-born tech founders in our sample receiving degrees from California, 69% later created a startup in the state; Michigan, 58%; Texas, 53%; and Ohio, 52%. In contrast, Maryland retained only 15%; Indiana, 18%; and New York, 21%.
- And while they were more likely to have received a techical degree than the general population – they founded tech companies, after all – only 37% graduated from computer-science or engineering programs. (Only 3% received liberal arts degrees.)
And this last point, included in the summary of the study, is actually citing a different Kauffman Center study. It looks like it was included because this study looked only at U.S.-born entrepreneurs.
- From 1995 through 2005, skilled immigrant founders established 25.6% of all the startups nationwide, and 52.3% of those in Silicon Valley. This group tended to be highly educated in science-, technology-, and engineering-related disciplines. The majority came to the United States to study and decided to stay.
Is any of this really surprising? That successful startups tended to correlate with experience and good education? I’m very happy to see research confirming some of the points that ought to be obvious but get disputed. I am surprised to see that fully 50% of successful Silicon Valley startups are established by immigrants, but, as I look around, maybe not so much. That one didn’t come from this study, but it’s a good reminder that our immigrant stereotypes are out of date as well.