The Age Question (continued)

Brad suggested I write this post. I've been reluctant because I don't want to pick at this scab of a meme. I really don't want to be the guy who made it harder for anyone older than 30 to get funded in the web services market.

But I've been thinking about all the young entrepreneurs we are seeing walk through our offices. I've been thinking about Mark Zuckerberg, Rob Kalin, all the ycombinator entrepreneurs, and the 15 year olds who are hacking up facebook apps. You can't ignore it. There is something fundamental and important going on.

The answer lies in Marc Andreessen's words of wisdom about the web:

After an initial phase of the Web as a medium, in which lots of people attempted to make the Web look like a newspaper, or a magazine, or a TV channel, we as an industry have recently been collectively developing a much clearer idea of what the Web is really like as a medium in and of itself.

This has led to broad realization of a set of design patterns for how Web services and Web companies often get built and used.

Who is developing this "clearer idea"? Who is developing the set of "design patterns"? It's the younger generation. And its important to understand why.

It is incredibly hard to think of new paradigms when you've grown up reading the newspaper every morning. When you turn to TV for your entertainment. When you read magazines on the train home from work.

But we have a generation coming of age right now that has never relied on newspapers, TV, and magazines for their information and entertainment. They are the net natives. They grew up in AOL chatrooms, IMing with their friends for hours after dinner, and went to school with a Facebook login.

The Internet is their medium and they are showing us how it needs to be used.

Now don't get me wrong. We've only funded one of these net natives out of close to fifteen portfolio companies. We'll certainly fund more. There's a lot more we look for in an investment than a 23 year old design whiz.

But the truth is that some of the most interesting things I've seen this month and this year are the creations of kids who barely shave. And it's not an accident.

Comments

[Dick Costolo]

yeah, i generally agree with this. all you have to do is look at the consumer technology companies that go public and become billion dollar successes and see which were founded by people over 30 at founding and which by people under 30:

google, ebay, amazon, yahoo under 30
apple microsoft under 30

although I can think of a couple founded by people over 30: netflix comes to mind.

nonetheless, you are really gonna hear it from our fellow 40-50 something entrepreneurs!

Looking at the existing landscape you've got a few potential big hits that were started by people over 30, but the real monsters are all founded by people under 30. So there's an interesting question...what will be the next billion dollar consumer tech company founded by somebody over 30? you can think of a bunch of under 30 candidates - Facebook, Bebo, AdMob? (think those guys are under 30, but not sure!).

[David Henderson]

Ok I let Fred's first post on this slide. The Mid Life Entrepreneur Crisis

But he's back on the age issue again.

The Age Question (continued)

"It is incredibly hard to think of new paradigms when you've grown up reading the newspaper every morning. When you turn to TV for your entertainment. When you read magazines on the train home from work."

Yes it is! That's why the very very few who can are so special! You should be seeking them out rather than insulting them with these discriminative posts.

Continuing to write posts like these is also a self fulfilling prophecy for you because you just completely push older entrepreneurs away. Clearly you have a bias. That's unfortunate for you.

Ok Facebook opened up their social platform. The new paradigm to me is where the Social Graph intersects with Social Media and the Attention Economy. It changes everything. It changes media. It changes marketing. It changes advertising. I get it and I'm 50. So what..... Truth be told I don't know a lot people of any age that really fully get this.

Who cares how the hell old you are! You either live in this new world or you don't. That's the only determinante. There are many young people that don't live online at all. Just like there are older people like myself that live in and on the web, the 2.0 social web, 24/7.

Let's stop the valueless gross age generalizations and built the new paradigm! Shall we?

Please stop insulting the outliers. You're smarter than that Fred.

Now go check out: Trakzor Myspace, Trakzor Facebook, FoodFight, Quick Search and Atten.tv. We have millions of users. 1.5m which were acquired on Facebook in the last 2 weeks.

We have a diversified experienced team (ages 23 - 50). Now that seems like the smarter strategy doesn't it? We're just getting started and there's a lot of paradigm shifting to come. Stay tuned!

Ironically, I was riding the BART to SFO on Friday. As I entered the BART they were handing out free Newspapers. I hadn't read a paper newspaper in the past, I don't know, 5 years or so. It was a very nostalgic experience. ;-)

[Adam]

The reasons why you see so many successful young entrepreneurs are very simple:

1. They don't know what does and doesn't work, so they're more likely to come up with a novel solution -- on the other hand, there's the problem of reinventing the relational database mentioned above. The latter group are invisible from a VC perspective.

2. Lots of free time. It's very easy for a college kid to write software from their dorm room and push it out to market. Again, those whose ideas never make it out of the dorm room are invisible.

3. No downside, huge upside. Young entrepreneurs don't bear the opportunity cost of leaving an established career, they can usually do their project on the side (see #2), and even if they don't strike it rich their project can still be a plus on their resume.

4. From a PR perspective, there's mileage in the "young whiz kid" story that you just can't get anywhere else -- yet in many of those cases there are plenty of experienced older people behind the scenes nevertheless. Even if they're founders or key players, they're often invisible because it's just not a sexy story -- doesn't mean they're less important.

It's not an "insult" to outliers to say that they're outliers -- there are simple statistical reasons why startups are generally started by youngsters, and most of them have little to do with this mystical intuitive understanding of the subtle workings of teh Intarweb.

If you're trying to tell me that my peers sending each other text messages in lol-kitteh are vanguards of a new zeitgeist, I've got a nice cold bucket of ice water here for you to dunk your head in.

Startups are subject to power-law dynamics: highly visible, often unpredictable successes emerging from many, many failed ventures. So the market is more amenable to the young and reckless, period.

But a statistical fact should have nothing at all to do with your due diligence while evaluating a single startup: if you're using age as a proxy for energy, prior commitments, creativity, that's just sloppy. If it's those attributes you're looking for, why not just talk about the personal qualities that make a good founder, rather than all the smoke 'n' mirrors about how "them youngsters just understand this internet thingy"? In hindsight, would you have made the same argument about other new mediums, like television, radio, or home video?

Your story might hold some water as a narrative, but evaluating individual companies on this basis is just naïve. One would expect more from a dedicated VC.

[Ferodynamics]

Don't forget BBS, we had chatrooms, multiplayer games, message boards and all that in the 1980's. I'm over 30 and online my whole life, since 300bps baby!

[SpragueD]

"We've only funded one of these net natives out of close to fifteen portfolio companies."

That is the critical quote from your post. We are no doubt experiencing a Cult of Youth, because geeky kids are the earliest of early adopters -- and why not, they have little to lose by trying new things. But what is the success rate of their inventions? As a cohort, how do they fare over time with a cohort more experienced in business?

Please follow up with a post addressing that.

[George Nimeh]

Fun and provocative conversation ...

I like Adam's reasons, and I'd like to suggest another one for the list: Because it is easier to take advantage of young, often naive entrepreneurs.

[Dean Richardson]

I've greatly enjoyed your posts on the "age problem" topic and the comments that have come in as a result.

As a 40-something potential future entrepreneur, I'm neither offended nor discouraged by your observations. It seems like you've offered them in the spirit of "here's what I'm seeing... it's up to you to draw your own conclusions and launch a great company, regardless of your age."

Nowhere in your posts have I sensed that as a VC you would discount the potential impact and investment return of startups founded by entrepreneurs who are older than 15-20.

For me the takeaway seems pretty straightforward: founders of promising startups are getting younger and younger because the center of gravity for internet usage is squarely within their demographic. Those of hoping to build successful web-based companies can't afford to ignore these realities, be they 18 or 48.

[raj]

Aghhhhhhh. It's like you're paraphrasing what Curt Cobain said: don't trust anyone over thirty.

All of the paradigms I came up with "while reading the newspaper" can now be pursued online because I have the accumulated wisdom of experience, and more level-headedness.

True, the younger kids have the energy and time to work on the ideas all day and night, but there are over-thirties who are developing new paradigms and being successful.

I really wish I'd bookmarked that post I came across which listed some hot startups for 2007, several of which had creators well over thirty, some in their forties.

There's a giant market out there for over-thirties, over-forties, etc., and many will come around. My father is nearly 80 and he's trying to blog about health. There will be more like him, possibly with the help of someone younger and experienced, say 35-45 :)

[allan isfan]

If it is true that being under 30 is an advantage for a start-up, then the same logic should apply to VCs making the funding decisions. VCs should be run out of basements, garages and dorm rooms by 20 somethings. At the very least, VCs should have 20 something advisors beyond just their kids.

How about an experiment in which you turn the tables. You hire a geographically distributed team of 20 somethings, give them a few $M and let them invest it in 10 start-ups with you being the advisor rather than the other way around. I'm not kidding. Would that be a more successful model? I wonder what the result would be. BTW, I'm 39 and would not qualify (plus I'm busy starting up my own gig).

Allan
http://isfanstartup.blogspot.com

[thacker]

Age?? You bunch of wet behind the ears whipper snappers. My point is this ... uh, I forget my point. Time to get to the bathroom, anyway, and it takes me a damn hour to get there.

[Maggy]

The net facilitates small start ups which can quickly become huge. This is a great culture, but it is inevitable that it favours a younger age group.

But the real sad question no-one is asking is how long does this last? From Micro to Google & FaceBook & all, the big successes will all become the new corporates, huge multi billion conglomerates run by the older staid executives that they began as the antithesis to.

And as these companies get richer fast, so they buy up more & more net cos. thus establishing a dominating presence. This leaves the net, which originally mushroomed as a playground for daring, young & unwealthy entrepreneurs, as the province of what will then become the new version of the old bureaucracy.

So we maybe go full circle - new culture & opps = young start-ups, successful young start-ups = staid mature public companies,
& a new culture eventually - whenever - emerges & it all starts off again.

Hopefully it won't all take too long.

[Dennis Howlett]

Well - that puts me in the crapper. Seriously - is there no room for those with experience working with the younger generation? I believe there's bags of opportunity. Or put another way - what has Zuckerberg proven that would allow him to command the same fee as say - Jack Welch?

[Cranky Chick]

How many dotcoms failed because "youthful" entrepreneurs didn't have the patience, experience,and stick-to-it-ofness to make them successful? The youngsters may be more prolific, but it's the older generation who are more successful. The single biggest mistake Americans make is devaluing their elders. Imagine how much more evolved we'd be as a nation if we actually harvested their experience and knowledge.

I don't see much of value coming from the younger generation -- it's all bells and whistles with no content; very little of it is making our world a better place. Youngsters want everything overnight and with the least amount of work possible; to hell with tomorrow. They have zero ability to plan for the future nor do they understand the word "sacrifice".

And contrary to youthful opinion, my 76 year old mother enjoys her computer very much. Better start "inventing" for this crowd, kiddies, because they'll make up a good 30% of the population in just a few years.

[Stephen]

I generally agree with the idea that those of us over 30 are what has been described as "digital immigrants". We come from the analog world and that is an inhibiting factor.

On the other hand, what I see in the world of social networking is a great deal of copycatting. How many more photo sharing sites are necessary? How many really give the user something new? In other words, not all young entrepreneurs are especially innovative or original. Social networking is like any new industry. Just as in the automotive industry at the turn of the century, there were many many companies and after a while there was huge consolidation. That is what will happen in social networking and probably sooner than anyone thinks.

What can an older person bring to the table? Well experience, especially experience in business. It is not too surprizing that the young innovators have frequently been unable to monetize their innovations.

The other thing that is important, if intangible is deep knowledge, a deep immersion in culture and history that can only come with time and reflection. The young are callow by their very nature.

The ideal combination for a new venture? A mix of ages and levels of experience. But above all an attitude of openness to innovative ideas and perspectives. Innovation and creativity is not a monopoly of the young-if it were we would not be seeing the copycatting.

As a 64 year old, I do not feel that my days of creativity are over. Far from it. In am in the process of developing an entirely new approach to social networking based on my experience and that deep immersion in culture and history that I mentioned before.

Stephen

[meehawl]

Kids make better copy and a standard template story that fits well with the business magazine and CNBC hype machine (ironic, isn't it, to be so reliant on these to build valuation hype)? How many times will we see a re-tread of the homoerotic "twin male uberkid" story coming out of the Valley? It was old when Woz and Jobs did it, then fast-forward with Yang/Filo Spencer/Kraus, Brin/Page and most recently Hurley/Chen (with Karim written out as an inconvenient third wheel disrupting the dyadic symmetry of the story). People have loves twin stories for millenia, and in the absence of actual twins, will settle for ersatz twins, the younger the better (but no too young, because that would convert the eroticism into ephebophilia).

[Bootstrap]

Young entrepreneurs usually come up with something new simply because they have plenty of time to think about it, and doesn't have the worries as a married person has. However, youths tend to rush everything and want everything almost immediately, which is usually the cause of their failure. On the contrary, older entrepreneurs think carefully and slowly on new ideas, and have the patience to wait for it to bloom fully.

[Jeff Grill]

I just heard a talk by Malcolm Gladwell in his new book "Outliers: Why Some People Succeed and Some Don't." His perspective is that the world is made up of individuals like Picasso and Cezanne. Picasso did his best and most valued work in his 20s. He saw a way to change art and then executed. Cezanne's early work is of significantly lower quality than his later work. He nurtured his creativity over time, ultimately producing a body of work that is arguably more valuable than Picasso.

By investing in 20 year olds we may be biased toward Picasso. Quick returns that diminish over time. Cezanne may be the better bet, with individuals that have honed their talents over time, and will only get better with age.

Same is true of Fleetwood Mac, who didn't produce "Rumors" until album number 20. Today, they wouldn't have gotten past the first single. More on my blog The Rogue Marketer.