The not-so-young and the restless

Perhaps, the bright-eyed, geeky, 20-something entrepreneur living in his parents’ basement is not the norm. Steve Jobs and Bill Gates notwithstanding, we may have misjudged the tech entrepreneur altogether, Harvard Law School Fellow and entrepreneur Vivek Wadhwa says. In an April 30 Business Week article, “How to Foster Tech Entrepreneurship,” Wadhwa reveals a recent survey showing that tech entrepreneurs are middle-aged college graduates from an assortment of universities and regions.

Wadhwa’s study, which was originally intended to explore entrepreneurship among immigrants, began with a survey of 652 U.S.-born CEOs and heads of product development from 502 engineering and technology companies established between 1995 and 2005. The average company surveyed had 42 employees and $5.7 million in annual sales. The surprising survey results showed:

• The average and median age of tech start-up founders was far older than expected: 39. In fact, twice as many tech entrepreneurs were older than 50 than were younger than 25.
• Most entrepreneurs were degree holders: 92 percent held bachelor's degrees, 31 percent held master's degrees and 10 percent were PhDs.
• Depending on type of degree, the average entrepreneur surveyed founded his company 13 to 21 years after graduation.
• While Ivy League graduates were more likely to start companies than any other group, only 8 percent of the entrepreneurs surveyed were from Ivy League schools and nearly every major U.S. university had tech entrepreneurs among its alumni.

In addition to bringing into question our stereotypes about the average tech entrepreneur, the survey data suggests that fostering entrepreneurship means providing assistance for a previously overlooked source of new business ideas. Rather than catering only to young MBA and engineering hotshots, economic development groups should focus much of their effort on meeting the needs of middle-aged businesspeople with the necessary experience to start a successful company. Often, concerns among this group center on other financial obligations, like paying for family health insurance or saving for children’s college tuition.

Wadhwa adds that when looking for entrepreneurs, we should focus on the workplace, not the campus. Providing today’s students with necessary skills to start a business is still important, but training should be available for middle-aged employees who want to become versed in entrepreneurship. In economic development, as well as entertainment, it is important to know one’s audience.

Read Wadhwa’s full article.