If I asked you to describe the prototypical successful entrepreneur, you may share a story mythologized in our culture of a brilliant young man with an idea so good and so disruptive that he just can’t waste any time finishing college. Of course, he never would have considered taking a job in a big corporation. Such places, thought of as employing less gifted automatons, would never suit someone with his passion to set the world on fire with his great idea. Instead, he would take his evident talent to Silicon Valley. There, he would be showered in venture capital, build a team of similarly brilliant twenty-somethings, acquire millions of customers seemingly overnight, and steer his startup to an IPO and himself to the cover of Inc magazine well before his 30th birthday.
Oh, how wrong you would be. The truth is that the average entrepreneur is nearly 40 years old. There are more Baby Boomers (ages 53 to 71) starting businesses than Millennials (ages 20 to 36) and even more entrepreneurs in Generation X (ages 37 to 52). What’s more, your odds of starting a company that experiences scale growth, becoming really profitable, only increase with age.
The “Mozart Myth” leads us to believe that if you haven’t started your first company in your twenties then you’re never going to be an entrepreneur. But age, financial security, and experience — most often at an established company — are far more likely predictors of an entrepreneurial career. It turns out that corporations are often far more effective in training entrepreneurs than are most business schools or incubators. Years of working at an established company can payoff by teaching you the tradecraft of sales, managing a workforce and negotiating with suppliers. People in big companies see innovation through the lens of new product development. And, they know that marketing is the critical ingredient that makes it all come together.
Fluency in these critical skills is the key to any entrepreneur’s success, not reading textbooks about product-market fit, and certainly not painstakingly constructing a business plan. Any entrepreneur would tell you that such plans never survive first contact with the real world. In my new book, Burn the Business Plan: What Great Entrepreneurs Really Do, I tell the story of Michael Levin to illustrate this point. After years of managing an international steel trading company, Levin invented the idea of creating an online, B2B, market for steel. Because of his previous success and deep industrial knowledge, he secured venture capital in a matter of weeks.
Only after his company was underway did his investors insist he write a business plan, with detailed sales forecasts, staffing strategies, pricing regimens, and financial projections including when he would be able to take the company public. All this had to be in place before he tested his product in the market. When he did go to market, he soon discovered that steelmakers and their customers preferred the existing, relationship-focused approach to buying steel to his more efficient online solution. His company was stalled.
What Levin discovered by talking with his customers was they really liked was the software he had invented to predict pricing and identify supply chain problems. His customers wanted Levin to become a software company providing customized solutions to steel companies.
However, Levin’s board, composed mostly of investors, was married to his business plan and could not be convinced that a pivot was needed. The plan, with its fictional forecasts and mythical customers, operated as a brake on the inevitable evolution of the company, which only occurred when Levin bought out his investors and threw out his obsolete plan. Now, in addition to selling steel in the old, conventional way, he also sells software to companies that helps them manage supply chains. He told me, “Making a successful company requires an intimate tango with customers, not a tight grip on a business plan.”
It isn’t only corporate experience that makes the mid-career professional better equipped to start up. If you’re nearing 40, you’ve probably paid off your student loans, maybe have equity in a house and comfortable savings safety net. You probably have a spouse whose salary and family benefits will help lessen the risks you’ll assume when you quit your job to build a new company around your dream.
With 15-plus years of professional experience, you’ll have a large and productive network from which you can draw customers, suppliers and mentors. Though someone 20 years your junior, born into the age of the internet, may have more connections on LinkedIn, it is only through years of work that one can convert an exchanged business contact into a meaningful connection. Who’s more likely to successfully make that first sale or hire?
With visions of startup glory inspired by Zuck or Evan Spiegel in your head, you might wonder if my advice to wait, work inside a big company, and decide if the idea you’ve had when you are in your late thirties is really a better path to becoming a successful entrepreneur. My research at Syracuse University, not to mention years of data acquired and analyzed by the Kauffman Foundation, support this view of how and when to become an entrepreneur and what will improve your chances of starting a business.
So, as you take stock of your career at the start of this new year, and perhaps worry that you’ve missed your entrepreneurial moment, fear not – you’re right on time, and you’re in good company
This article was originally published on LinkedIn and is reprinted with permission.
© 2018, Carl J. Schramm. All rights reserved.