The Age Question (final post)

So yesterday I pissed off Dave Winer, Scott Karp, Steven Hodson, and a host of others who have weighed in heavily in the comments.

I guess I knew it was gonna happen because I was uneasy about writing the post in the first place.

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.

It's also a bit frustrating to me to be so misunderstood. Yesterday's post was the third in a series of musings (yes, that is what they are) on the age question.

It all started with a post where I mentioned several conversations with mid life entrepreneurs I know well who are struggling with "what to do next" issues.

That post was also misinterpreted as a "young is better" post. It wasn't. In that post I pointed out that in our portfolio, there are more 40 and 50 somethings than 20 somethings.

But because I was unhappy with the way people interpreted that post, I followed with one where I said age is a mindset and encouraged entrepreneurs of all ages to go for it. Clay accused me of "waffling" with that second post.

I guess I should have left it at that. But Brad and I were talking on Friday about the sheer volume of young entrepreneurs we are seeing that is unprecedented in my 20 years in the VC business. Contrary to one of the comments from yesterday, this is not like what happened during the bubble. Back then it was newly minted MBAs starting companies out of greed. This is different. This is 15 to 20 year old kids building and launching authentic web services that fill a real need in the market.

Let me re-emphasize a point that I've now made three times but seems to be ignored by all the people who I've annoyed. We have funded only one 20 something entrepreneur in close to 15 investments we've made so far in our fund. I am sure we'll do more but we are not going to be a fund focused on 25 year olds and younger as Scott Karp suggests.

Dave Winer has been a frequent recipient of praise on this blog for inventing the concept of syndication that drives the whole distributed media model. He knows that I think his contributions to the Internet and web services are huge.

So to Dave and everyone else I've pissed off, please take a second to read everything I've written on this subject. I am not an ageist. I would gladly back an entrepreneur who was 80 if they were doing something interesting.

This blog is about transparency - sharing with everyone what I am seeing and thinking. I am seeing way more super young entrepreneurs than I've ever seen. That's a fact. End of story. No more posting on this topic.

Comments

[cosmicray]

losing my edge / lcd sound system

http://www.youtube.com/watch?v=ON1eRJtoOrg

[Doug Skoglund]

Regarding your "mid-life" entrepreneurs -- come and join me at http://nationalcomputerassociation.com

There is a lot of work to be done -- let's talk about it!!!

[Patricia]

Smart is smart. Has nothing to do with age.

I think you're seeing more young entrepreneurs because they're seeing the fun side of instant success, like YouTube. I hate to say it but not one of the 20 somethings I know who have businesses are doing well. They make stupid decisions with the money, struggle with the long hours, still think they need to have the facials and tables at the clubs which their income can't support so it comes out of the company...

Just my 2 cents. I'd take an older, seasoned enterpreneur with the ability to drive the business over anybody 20, any day.

[will]

"Back then it was newly minted MBAs starting companies out of greed. This is different. This is 15 to 20 year old kids building and launching authentic web services that fill a real need in the market."

these are not mutually exclusive characteristics! . . . greed can fill a real need in a market (supply and demand!) . .. lack of greed doesnt mean the resulting product will serve any need. . .

[Joseph Hunkins]

Reconciling the partial truth of what you have noted with the dissenting views is easy and you've started to do it above:

* There are *many* more young people engaging in online biz ideas than there are older startup founders.

* Therefore if you look at successful online biz you'll see more young people in charge of those companies.

However:

Age probably has no predictive power vis a vis successful internet business.

Because:

If you looked at all startups along with age of founders you would (probably) see that age is not correlated with success.

[Douglas Karr]

Any publicity is good publicity, right? I do think age has an impact. It's the old adage of a kid touching the stove, right? The young people I work with are fearless. This is a blessing and a curse.

Without fear, they are willing to take risks. This is fantastic... unless the risk is on your client. I work for a major Email Service Provider. Our product assists marketers in communicating with their customers and prospects.

The problem with acting fearless is that a minor change in the development of the application can have a negative impact across 15,000 users. That's something that demands respect.

I also find that our younger employees don't recognize boundaries and don't fear raising the red flag. This is another blessing and curse. Not recognizing boundaries is okay - unless the boundary you're crossing happens to be someone else's expertise. It's something that requires respect.

Raising the red flag is great, except when a company is full of employees that aren't afraid to do it. The net effect is a production line that can't move.

With experience comes the ability to evaluate these situations and act accordingly. I'm not afraid to fail, but I'm respectful and insistent that my failures won't impact our clients!

It's a good discussion. I suppose at the end of the day, it's all about balance.

[Nate]

Please don't start filtering what you say because a couple of "respected" names get upset. This is an interesting topic. If you have another insight or observation on age, let us have it. We subscribe because we're interested in what you think.

Thanks for making the effort to share your thoughts and ideas - more than most of us do.

[P-Air]

You know Fred, this reminds me of the MBA program I attended in France. It was an executive program for people w/a minimum of 10 yrs work experience. The grading was a check or check plus system, no actual grades. The reason being that it was about learning not about ranking/grading students, we were all old enough to be comfortable in our abilities. I was there for the richness of the information being shared by top-notch professors from around the world. Some students however, were up in arms that there wasn't a more formal grading system. They felt slighted. It was actually pretty amazing to see the reactions, as though the info they'd be getting was less valuable because there'd be no grades for their assignments.

All this to say, who cares what Dave & company think, you've merely been reporting on your observations and "them's the facts". I found no value judgments in any of your comments, but to see how some people ran to take positions as though their entrepreneurial integrity was being judged was amazing. I'd say this was more a projection of their own insecurities than anything you actually said.

Thanks for raising the issue, as it was a good one to note.

[hmmm]

wait, so let me get this straight. you ONLY support young entrepreneurs?! ageist!

[Andrew Haydon]

Aruba, Starent, Infinera are hot 2007 IPO's of note that were recently in the news. None of them were started by 20-somethings.

I think you have a software-centric focus. There may well be a significant number of successful 20-somethings in software businesses. But software is a subset of technology and one cannot apply the observations here to technology in general.

Consider this: the global market for communications equipment exceeds 1 trillion dollars -- there's a lot of opportunity there for domain specific expertise that often times requires an advanced degree and experience in the industry. Companies such as Qualcomm and Broadcom are other examples where the founders were well-established in their careers, i.e. not 20-something.

[Steve Kane]

At the age of six I wanted to be a cook. At seven I wanted to be Napoleon. And my ambition has been growing steadily ever since.
--Salvadore Dali

Old age is like everything else. To make a success of it, you've got to start young.
--Theodore Roosevelt

I think age is a very high price to pay for maturity.
--Tom Stoppard

[Ben Reytblat]

Hi, Fred,

This has been a great discussion. I've read all your blogs on the age issue, and a bunch of the comments both here and elsewhere. You really touched a nerve.

To make a point, I'll hugely oversimplify the whole thread:

1. Fred (over several blogs): "In my day-to-day life in this industry segment, I see more companies/ideas generated by the younger population than ever before. So much so that they constitute a large majority of such startups. Something to think about."

2. Lots of other people: "Wait a minute! I'm way older than that, and I'm still good for something!"

My skin in the game: I'm a 40++ CEO of a software development company. In the last 13 years of servicing companies large and small, we've worked with about 30 Internet startups of various flavors. Currently, among other clients, we're working with three startups, all driven by 40+ CEOs.

My first reaction was very much along the line in #2 above - "I'm over 40! How dare he say I'm over the hill! Why, I'm just as Internet savvy as any kid still in high school! I had my first email account in 1981! I ran a small corner of Usenet in 1984! I can still out-create the whole bunch of them! I , I , I....."

And then it hit me.

I've never been anywhere near the middle of the bell curve in my entire life. I'm willing to bet that neither have a lot of others that are unhappy about your description of the ground truth as you sees it right now.

Folks, just because Fred's noticing that the middle of the curve moved to the left along the time axis, doesn't mean he's saying that that the rest of the curve has gone to 0. Those of us who used to be 4 sigma are still just as capable of kicking it in high gear. It's just that for a whole host of reasons, both good and bad, we're now 5 sigma. Or even 6 sigma.

Who cares?!! Either you can still kick it or you never could. Do your own thing, and don't worry about the distance to the middle of the curve so much.

I'm willing to bet that the smart VCs, of which I perceive Fred to be one, are just as willing to fund you now as they always were. They'll fund you based on your idea and your record. Not based on when you were born.

And if a VC worries more about your age than what you can do, then more's the pity for their LPs - their returns, if any, will not be as good as they could be. And they'll be the ones looking from the outside in, as your successful startup leaves the "Liquidity Event" station.

Sorry for a longish rant, Fred. Thanks for kickstarting a great thread.

[wordwarp]

"this is not like what happened during the bubble. Back then it was newly minted MBAs starting companies out of greed"

Right. Better to fund a bunch of kids who have no experience and aren't interested in making money. Man am I glad I'm not one of your LPs.

Stop digging.

[Dale]

I'm only 50 (not 80), and I'm not even sure if I want venture capital, but I feel there's been a challenge thrown up. Check out my site at http://3dskimaps.com and see if you would find it interesting enough to fund. Bear in mind that there are $185 million being spent this year alone on ski areas in the Ukranian Carpathians and Kazakhstan intends to begin spending millions on seven ski areas, some old and some new.