💾 Archived View for gmi.noulin.net › mobileNews › 3838.gmi captured on 2021-12-05 at 23:47:19. Gemini links have been rewritten to link to archived content

View Raw

More Information

⬅️ Previous capture (2021-12-03)

➡️ Next capture (2023-01-29)

-=-=-=-=-=-=-

Enterprising oldies

Founding new businesses is not a monopoly of the young, even if it seems so

nowadays

Feb 25th 2012 | from the print edition

A LAZY bastard living in a suit is Leonard Cohen s description of himself in

his new album, Old Ideas . Mr Cohen is certainly fond of wearing a suit, on

and off stage. But lazy seems a bit harsh. He is 77, which is 12 years beyond

the normal retirement age in Canada, where he was born. But there is no sign of

his laying down his guitar. He spent 2008-10 on tour, performing on stage in

Barcelona on his 75th birthday. Old Ideas has won widespread acclaim. Mr

Cohen says he has written enough songs for another album.

In the 1960s pop was a young person s business. The Who hoped they died before

they got old. Bob Dylan berated middle-aged squares like Mr Jones in Ballad of

a Thin Man . But today age is no barrier to success. The Rolling Stones are

still touring in their 60s. Bob Dylan s songwriting skills, if not his vocal

chords, have survived intact. Sir Paul McCartney warbles on.

It is time to do for enterprise what such ageing rockers have done for pop

music: explode the myth that it is a monopoly of the young. This idea has been

powerfully reinforced by the latest tech boom: Facebook, Google and Groupon

were all founded by people in their 20s or teens. Mark Zuckerberg, aged 27,

will soon be able to count his years on earth in billions of dollars. But the

trend is not confined to tech: Michael Reger was a founder of one of America s

most innovative energy companies, Northern Oil and Gas, aged 30.

The rise of the infant entrepreneur is producing a rash of ageism, particularly

among venture capitalists. Why finance a 40-year-old (with a family and

mortgage) when you can back a 20-year-old who will work around the clock for

peanuts and might be the next Mr Zuckerberg? But it is not hard to think of

counter-examples: Mark Pincus was 41 when he founded Zynga and Arianna

Huffington was 54 when she created the Huffington Post.

Research suggests that age may in fact be an advantage for entrepreneurs. Vivek

Wadhwa of Singularity University in California studied more than 500 American

high-tech and engineering companies with more than $1m in sales. He discovered

that the average age of the founders of successful American technology

businesses (ie, ones with real revenues) is 39. There were twice as many

successful founders over 50 as under 25, and twice as many over 60 as under 20.

Dane Stangler of the Kauffman Foundation studied American firms founded in

1996-2007. He found the highest rate of entrepreneurial activity among people

aged between 55 and 64 and the lowest rate among the Google generation of 20-

to 34-year-olds. The Kauffman Foundation s most recent study of start-ups

discovered that people aged 55 to 64 accounted for nearly 23% of new

entrepreneurs in 2010, compared with under 15% in 1996.

Experience continues to count for a great deal, in business as in other walks

of life or, to borrow a phrase from P.J. O Rourke, age and guile can still beat

youth, innocence and a bad haircut . It is one thing to invent a clever new

product but quite another to hire employees or build a sales machine. And even

when it comes to breakthrough ideas, age may still be an asset. Benjamin Jones

of Northwestern University s Kellogg School of Management and Bruce Weinberg of

Ohio State University examined the careers of Nobel prize-winners in chemistry,

physics and medicine. They found that the average age at which these stars made

their greatest innovations is now higher than it was a century ago. Mr Wadhwa

speculates that many of the most promising businesses in future will result

from the mating of two subjects that each take years to understand robotics and

biology, say, or medicine and nanotechnology.

Experience may be nothing if it is not linked to mould-breaking creativity. But

there are plenty of older people who are capable of breaking moulds. Ray Kroc

was in his 50s when he began building the McDonald s franchise system, and

Colonel Harland Sanders was in his 60s when he started the Kentucky Fried

Chicken chain. David Ogilvy worked as a chef and a spy before turning to

advertising in his late 30s, an age when Bill Gates reinvented himself as a

philanthropist. The late Steve Jobs was as creative in his second stint at

Apple, from 1995 to 2011, as in his first.

This is not to say that the rise of young entrepreneurs like Mr Zuckerberg is

insignificant. The barriers that once discouraged enterprise among the young

are collapsing. Social networks make it easier to build contacts.

Knowledge-intensive industries require relatively little capital. But the fact

that barriers are collapsing for the young does not mean that they are being

erected for greybeards. The point is that the creation of fast-growing

businesses is now open to everybody regardless of age.

Back on the road again

The evidence that older people are if anything becoming more enterprising

should help to calm two of the biggest worries that hang over the West (and

indeed over an ageing China). One is that the greying of the population will

inevitably produce economic sluggishness. The second is that older people will

face hard times as companies shed older workers in the name of efficiency and

welfare states cut back on their pensions.

Here, Mr Cohen is a man for our times. In 2004 he faced financial ruin when he

discovered that his manager, Kelley Lynch, had misappropriated most of his

savings. He sued successfully but could not lay his hands on the money. So he

had no choice but to go back to work. Mr Cohen told the New York Times that

reconnecting with living musicians and living audiences had warmed some

part of my heart that had taken a chill . Let us hope the same is true of the

ageing boomers who will have little choice but to embrace self-employment as

the West s welfare states discover that they cannot keep their promises.

Economist.com/blogs/schumpeter