Entrepreneurship: The New Mid-Life Crisis

Posted by: Nick Leiber on June 18, 2009

This is a guest blog by Emily Schmitt, who joined BusinessWeek’s Small Business team and Investing team in June.

An entrepreneurial boom is on its way, but don’t expect it to be led by 20-somethings. Instead, America’s best economic recovery plan is in the hands of those aged 50 and up, according to a recent study by the Kauffman Foundation. The study found that over the past 10 years, most company founders were between the ages of 55 and 64. This goes against the stereotype of the college drop-out entrepreneur á la Bill Gates and Mark Zuckerberg.

So what does this mean for the U.S. economy? Should we expect a decline in productivity if those at the helm of the workforce aren’t as spry as they once were? Not at all, says Dane Stangler, the researcher who put together the study. He says the popular myth of boomers being a burden on the U.S. economy is completely unfounded. “We so often look at this aging population as a huge albatross,” he says. “But really the people who start companies that allow our economy to grow and create jobs are also the most experienced—and generally wealthier.”

The research dovetails on previous work done by Vivek Wadhwa, who found that the average age of tech company founders in the U.S. is 39. Wadhwa, a frequent BW contributor, emphasizes one key takeaway from the new study. He writes in an email that it’s not just that an entrepreneurial boom is ahead, but “it is the old guys, the baby boomers who are going to lead the charge.”

The study lists several reasons for the older ages of entrepreneurs. For one, there’s been a drop in “lifetime” jobs, meaning more boomers are bouncing from job to job. Longer life expectancies account for the older ages, fewer barriers to entry, and lower transaction costs since the dot-com bust make it easier for someone to start a tech company. And then there’s the death of the “too-big-too-fail” mentality. As we see more large firms go under, we may also see a shift toward small businesses—the same ones that drive innovation. And it’s all thanks to the baby boomers.

Reader Comments

JahLove63

June 19, 2009 07:21 PM

Yahoo! I've just recently been laid off my job and I couldn't be more happier about the opportunities it will open up for me as a late baby boomer (circa 1963) who is contemplating the entrepreneurial route myself. Having felt totally exploited and extorted from for the past 30 years or so working for corporate America, I wish to no longer maximize the wealth of the corporatocracy who really doesn't appreciate how they got their wealth and I am going to concentrate on maximizing my own wealth. Viva Revolution, Viva the Small Business Entrepreneur. Corporate America can kiss my shiny white arce!

Chuck Nyren

June 19, 2009 08:08 PM

I wrote about this in my book in 2005. A quote from the introduction:

Advertising to Baby Boomers is also for anybody with a marketing or product idea, yet to be realized or about to come to market.

Venture capitalists take heed: the largest demographic of entrepreneurs are over forty, the largest consumer demographic the same.

Bobo

June 20, 2009 02:33 AM

I guess all that cheap young imported labor from the 3rd world hasn't quite worked out as expected. Corporate America got what it deserved. Let it die a painful death. The oldsters so reviled by Corporate America will replace it - and America will rise again.

Ky

June 20, 2009 09:04 AM

Thanks for these thoughts. As a co-founder and managing founder of Office Divvy, a leading provider of Ready to Use Offices and Virtual Office Solutions in the Florida market.

Services we provide make our company a magnet for entrepreneurs, inventors who want to take a product to the market, and startups overall.

In our real-life experience we see the entrepreneurship age group more in the 45 to 60 range than 50-64, and just wanted to offer that.

Based on what we see what's being done by small business and government in 2009, should revive the economy for 2010 onward.

Regards,

Ky Ekinci
Office Divvy
http://OfficeDivvy.com

___________
On Twitter: @OfficeDivvy

wendy morris

June 20, 2009 03:19 PM

This conclusion makes total sense to me. In starting a business you must not only to know a lot about the main focus of your core enterprise, but you also need to know a little bit about a lot of other functional areas involved in running a business (accounting, advertising, purchsing, billing, payroll, etc.) and you need start-up funds. Very few 25 year olds have spent enough time in the work force to amass such knowledge or funds base. Most successful small businesses do not launch in the Microsoft model.

drfred

June 20, 2009 04:30 PM

Recent studies reveal that the notion of a midlife "crisis" is a myth. As in any age group, midlifers go through change and transition.

There's an emerging new paradigm of aging characterized by rebirth, regeneration, revitalization and reinvention instead of the older paradigm of disease, depression decrepitude and dependency.

Third Agers (45-75 years of age) who take on being entrepreneurs are an asset to societies because of the wisdom they have to contribute.

My partner, Dr. Frank and I offer midlife coping strategies particularly in relationship to happiness and aging-happiness-after-midlife.com

Amy Grossman

June 21, 2009 10:50 AM

The meltdown has only intensified the motivation of the oldest of the boomers to delay retirement. They are either continuing their current employment or taking an entrepreneurial path.

While there are some boomer entrepreneurs growing companies with staff and overhead, there are others whose goal is to generate an income while staying flexible and mission-driven as solo-entrepreneurs.

Amy Grossman
www.boomerbusinesslauncher.com

RedPants

March 26, 2010 10:52 AM

I'll be 38 this year and have a patent pending for a product that I know will turn the health & beauty industry on its heels. I just want to be established and well retired by 50 (which isn't too far away).

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About

What's it like to run your own company today? Entrepreneurs face multiple hurdles new and old, from raising capital and managing employees to keeping up with technology and competing in a global marketplace. In this blog, the Small Business channel's John Tozzi and Nick Leiber discuss the news, trends, and ideas that matter to small business owners. Follow them on Twitter @newentrepreneur.

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