Mid Life Entrepreneur Crisis (continued)

Wow. I touched a nerve with that post. I did not mean to suggest that 40 is too old to be an entrepreneur or to suggest that we prefer to back younger entrepreneurs. Nothing could be farther from the truth. Both of my friends I referred to in that post are wildly successful serial entrepreneurs in their 40s who I'd love to back again.

I am 45 and will turn 46 this year. I have never been more productive and seem to get more energy every day. And I am sure that there are people ten or twenty years older than I am who feel the same way. As Sabat said in the comments to the original post, "it's all in your head".

My post was actually more about serial entrepreneurs who have been incredibly successful who find themselves mid-career in a place where they've achieved more than they ever thought possible and want more. But "more what" is the question. More money? Maybe. More thrill, yes for sure. More balance in their life, absolutely.

And when you've done it once, twice, three times successfully, you want to focus on bigger and bigger opportunities. It's no longer interesting to build a $100 million or a $500 million dollar company. You want to change the world.

But the thing of it is that many companies that end up changing the world don't start out that way. Trying to come up with a "really big idea" is possibly an exercise in frustration. The great ideas present themselves over time, as you pursue a market opportunity and it opens up before you and you step on the gas and hit the window of opportunity.

So I don't have any really good advice for the mid life entrepreneur going through a "what next?" crisis. But one thing I'd say is try to think like that late 20s/early 30s entrepreneur doing it for the first time. Don't let everything you've learned get in the way. Go for it with gusto and don't think too hard.

Comments

[Alex Mather]

I'm 27 and working on a tiny startup. I am in the midst of the toughest grind of my life. Sometimes I want to quit but I wont. This defines me right now. It's the most important thing in the world to me. It needs 100% of me and I need 100% of it. I spend my time in the trenches. I spend my time on the street. To be successful I have to. To offer the world something valuable I need to have my finger directly on its pulse. This is not easy. It takes time, devotion, passion, desire, and definitely luck. Changing the world requires every ounce of ones soul, there are no shortcuts. If someone has to ask "how can i change the world?" they probably cant - if you're in the trenches you know how.

Like you said, Fred, serial entrepreneurs have probably made their money and they've probably even experienced the joy of love, marriage, and children (things more important than money.) I have a beautiful nephew and niece and I cannot imagine devoting enough of myself to a venture if I had children or a wife. I couldn't justify spending all of my time in the trenches with such beautiful distractions.

Maybe this a factor. Maybe not.

[Peter Bell]

Sometimes it is a matter of being willing to sit with things and just wait. Success comes from being passionate about solving a problem. No question over time there are classes of problems you decide not to solve based on previous experiences, but whenever I have been between businesses in the past I've usually run around like a headless chicken trying to find the next big thing. Over time I realized that the right big thing will tend to come along when you're open to it but not pushing for it - same as any other breakthrough.

[anon]

I'm a serial entrepreneur in my 50s. My first big hit was in my early 40s with modest success after that. You hit a point where you have to figure out what you are after. Money isn't it for me. Fun and changing the world is. How do you find your next "next big thing"? How did you find your first "next big thing"? Network, listen, remain dedicated, follow your heart. If you are looking for balance, forget it. It is about doing what you love.

[ronconnor]

phew.
thanks for the second post fred. i'm 43 and i was just about to jump off the ledge.

just kidding. back to work.

[Michael Hoffman]

I started companies during bubble #1, around the time that I turned 30. Ten years later I feel a lot smarter. Part of that was my lack of real business experience the first time around and part is being able to process what worked and what didn't.

The crash made me more focused on profit and a lot more careful about how I pursue and use other people's money. I took all of that very personally the first time around. The result is a business now that combines a fee-for-service company with a venture play, so I can have my cash flow and not feel it's a home run or nothing at all. (At least for now... I can imagine spinning out the venture piece.)

So the comment about thinking like those in their 20s and 30s... I know what you mean, but I think you can think hard and go for it with gusto at the same time.

[Lloyd Fassett]

Is this the 40 year old club? Good, I turned 40 a month ago.

It seems to me causality and correlation are, well, not meeting in the discussion of Fred's observation. The reason things skew young has to do with what people were doing 10 years earlier, not that anything changes when you hit 40.

It's more about a traditional life path and not at all irrational that Fred's portfolio skews the way it does. When a person get's older they more frequenlty have a house, kids and stuff. It's not a selfish thing to look around and think 'it's worth being a middle manager because I make enough and I'm happy, and most of all, my family is happy.' I say go with it and stay away from the VC's. Why risk other people's happiness by becoming one fo the 8 (9 if you're not with Fred) not wildly successful out of every 10 investments a VC makes?

Also, it doesn't sound like Fred's 40+ entrepreneurs need his money either, so you'd think that sentiment would skew the results of entrepreneurs who took the investment.

People in their 40's frequently and usually shouldn't take the risk, that's why the results skew young. It's not ability, vision, energy, viagra tab at the pharmacy or the other problems.

My personal story is a love a entrepreneurship, which is why I never bought a house, under invested in my retirement, still have a family, spend more than I make, moved to a more beautiful lower cost of living environment....because I've always been geared and working toward entrepreneurship. Fred didn't wake up and suddenly become a VC, he worked at it and still does. By the time someone is 40, their activities of their 20's and 30's are really solidifying. It's a really brave soul to jump their tracks, but those are the exciting people too. And of course when the jump the tracks you're starting all over and nobody will fund you and nobody will buy from you and god bless you for your journey.

If you do take the risk and your happy, that could be a great way to teach your kids that doing things that gets you excited is worth more than doing things that don't.

[Michiel Trimpe]

Why don't these mid-life entrepreneurs go looking for a challenge that will leave them fulfilled for the rest of their lives?

When I read the post thoroughly, it sounds almost exactly like something I've heard over and over again: relationships!

The need for more balance, running around like a headless chicken looking for the next one, the frustration of trying to find the perfect next one; they all sound remarkable similar to the comments I get from friends of mine who are still dating/serial monogamists.

So my suggestion would be: stop dating and be open for the love of your life to appear! Don't go for something that will probably last a while, go for something that you trust will last a lifetime!

[Leigh]

I am going to go out on an ageist limb here....(and why not? it's close the weekend)

Early 20's and 30's - if you are taking the risks involved with a start-up often it's all about the money. “I am going to be a billionaire!” “I want to be giddy like the YouTube dudes and get invited to the good parties”

Doing this later in life (especially if it's your first time) is a bit nutty. Only so many years to recover from the financial loss (and the loss is also the income you could have gotten if it doesn’t work out…I mean at 20 what would I have given up? My $x dollar an hour job at Lavalife formerly known as Telepersonals?

So IMHO, the 40 yr old and over star-upper is all about wanting to change the world (be it your 1st, 2nd or 3rd time doing it), being in control of your own destiny and not wanting to look back in the "coulda woulda shoulda window"

[David]

I think it's the same phenomenon that stops people in their mid-30's and older from listening to new music, learning new subjects, experimenting with new ideas. Sadly, most people somewhere in their 30's, start to tune out. I think we can all agree that when you have kids, they certainly take center stage, but there's never an excuse to getting old.

[Dick Costolo]

You're 45?! No wonder you're always ranting about the brooklyn dodgers and how much better you liked union square before the streets were paved. I wonder how i'll feel two years from now when I'm *that* old.

[Grand Egress]

As one of the folks who Fred met with on this subject, let me narrow the discussion away from the issue of "age" (as in, pure chronology) and over to the issue of "risk profile + age".

For I can assure you, my struggle has nothing to do with my physical age or fitness or energy level. I am chomping at the bit and expect I will be until I croak.

Rather, my issue is, as Bob Dylan observed, "When you got nothing, you got nothing to lose." And I don't got nothing.

As one accumulates stuff -- wealth, possessions, people -- one's risk profile (rational appetite for risk) inevitably changes and almost certainly diminishes (at least to the extent that if one has amassed things of value -- financial or emtional -- then one does not wish to lose them.)

With startups and entrepreneurship, beyond a certain risk profile (meaning if one gets affluent) then the conundrum is

1) am i willing to risk losing my affluence?

2) if not, am i willing to live with the terms that come attached to venture capital?

3) if neither 1 or 2, does my startup idea not require me to submit to 1 or 2, or else do i have other sources of capital that don't come with the same heavy limitations as venture capital?

There's an old saying in showbiz -- on the first contract, the talent gets f--ked; on the second contract, the movie studio/record label gets f--ked. Meaning, that if talent survives to be in a position to get a second contract, they have proved themselves and have amassed big negotiating power. So successful repeat movie directors and musicians and actors take huge risks with their time and reputations, but their economics are fixed, and the capital risk is borne by the studio or label or network.

With a few exceptions, in venture capital that does not happen. Even successful entreprenurs get term sheets that radically reduce their ownership and entirely eliminate their control -- and in every case, the entrepreneur is required to come back to the well and renegotiate their (already lousy) deal over and over again (when they need the "next round" of funding.) Imagine a rock band which had to renegotiate its contract after each song is recorded until the album is done. Imagine an actor or director who had to renegotiate their deal 3-4 times during the course of making a movie or TV pilot.

Happens every day in VC/startup world. And maybe it should. But it means that successful entrepreneurs are almost by definition not attracted to venture capital (if nothing else, one would think one would learn how VC funding contracts actually work after living thru it once!)

Any case, I know, these are very high class problems and I am not looking for sympathy. Just mulling over a hugely luxurious, if still challenging, life inflection point -- if I can do anything I want to do... what the heck do I want to do?

[Grand Egress]

Oops, I forgot the best "imagine this" example:

Imagine a VC firm which had to go back to its LPs (its investors) every 12-18 months to ask for more capital and in the process renegotiate its fees and carried interest?

;)

[Neal]

I think your post would be an interesting read after we see what happens to Joost. Can't wait to see of the Joost founders who are going for the BIGGEST win of all can actually pull it off.

Based on your post, I would say the answer is NO. Lets wait and see how it plays out.

[David Lee]

I'm a believer that being an entrepreneur/engineer is like playing professional baseball. Your peak years are probably between 22-33, but some people are still productive after that age. It just takes more discipline, dedication and drive. Or steroids.

[jill Stern]

How many of your entrepreneurs are women? Just curious. I am a born entrepreneur who last had success prior to kids (talk about an ambition killer). Gave everything up for them, but now I'm antsy to get back to my real nature. This makes me a 43 yr old mom hoping to create a start up. Odds are against me but I am still hopeful!

[Shawn McCarthy]

I am 34 years old and for some reason I feel like I'm too old to start a company.

Help!!

[Charlie]

Julio Franco homered and stole a base last night... Score one for the old guys. :)

[Robin Wolaner]

Fred, having launched Parenting Magazine when I was 32, and now TBD at 52, I have read these posts with keen interest. In retrospect, Parenting was easier because I didn't have anything to lose, as many of the posters have observed. But at the time it didn't feel easy, it felt like the hardest thing I'd every done. And that hasn't changed.

I was asked a great question by a Harvard B-School student who'd read the Parenting case study: "how do you know which of the lessons you learned the first time still apply this time, and which don't?" I'll let you know....

[Mike Sabat]

I agree with the other Sabat (cheers mate) it's all in your head. You really have to listen to your heart, and not listen to your head too much. I'm 30, working on another startup, and sometimes I think 30 is old.

It's great to change the world, but like Fred said - it's tough to force that. The thing you can do to change the world is help out new entrepreneurs.

[CeciliaNY]

I was actually featured by the WSJ among 12 entrepreneurs (one of two women) in an article titled "The Really Early Midlife Crisis" (Nov. 2000 I think). I was 30 at the time and was totally blindsided by the experience of being an entrepreneur. I agree with Fred that I would have probably been better equipped to handle the responsibilities and stresses of being CEO in my 30's rather then when I started my company at 27. However, for women, it is not so easy to become a serial entrepreneur. I nurtured my company and devoted every waking moment I had to it. Now, as a single mother of a five-year-old boy, I've made a life choice to not be the boss. I've still got plenty of ideas that have not been done which I think I could make a success of. I have investors saying they'd back my next business. Except I don't want to give up the life balance I currently have. I take my son to school in the mornings. I have a nanny pick him up and watch him until 7 PM when I get home. Then I cook dinner. I no longer network. Since having my son, I've only accepted jobs after stating quality of life terms (getting to work at 9:30 AM, leaving at 6 PM, very limited travel, time off for chaperoning school trips, pediatrician appts., etc.). With two hours in the morning with him before school, and two hours in the evening before he goes to bed at 9 PM, I do not blackberry when I'm with him. My investment is now in my son and making sure he grows up feeling whole and confident.

[Ellen]

Well, I started a business to change the world - I started a non-profit in my early 30s, and four years later, on the verge of either shutting it down or merging into a larger organization, I wouldn't recommend it to anyone, unless they've thought through a cash contigency plan (ie. there's a non-profit in Seattle who in the 70s decided to buy parking lots, not as part of their mission, but to keep them around as cash flow - it was quite visionary then and now and has worked for them) or a for-profit hybridization plan.

Problem with non-profits is that yes, there're donors, private and govt grants, sponsorships, but in the build-up stages, one needs the infrastructure to manage these income streams and since many non-profits can't offer the competitive benefits or salaries as for-profits, it's hard to find skilled employees (and it's a lot harder than one would think - you can't just find anyone off the street to raise money; it takes experience and skills). So, I ended up absorbing the labor myself, working upwards of 100 hrs per week. In retrospect, the non-profit industry is broken, and not enough B-schools teaching social enterprise.

I would also agree with Cecilia of NY; being an entrepreneur is certainly much harder on women who want to have kids. You hardly ever hear of men saying, "my wife just had kids; I think I'll quit my job or find a flexible job so I can take care of the kids too."

[Aruni]

Very interesting post. I am a woman on her 2nd start-up. The first one I started just before I turned 26 and while I was in grad school. I was the founding CEO and helped raise $15 million in equity financing. The company is still operating today.

Now I have 2 kids and am well into my 30's and my current business, Babble Soft (www.babblesoft.com) is completely different than my first. First was B2B and current is B2B and B2C.

I think most true entrepreneurs start their businesses to change the world, not only for money. Money is good but the hope of money doesn't usually keep one motivated for years and years but the hope for making a difference in someone's life or making someone's life easier can.

I think it is harder for women because of all of the expectations society has on us as mother's and wives....but on the plus side if you are boostrapping (as I currently am) you can manage your schedule a bit easier. My husband is also an entrepreneur so can appreciate my burning need to change the world!