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Frontier -- Features
Why older entrepreneurs are turning to a young person's game
At age 72, Poppy Bridger decided her time had come. To go into business, that is. The PhD chemist had retired after a 45-year career as a precious-metals specialist at several large laboratories, but the life of leisure bored her. When a small lab came up for sale, Bridger didn't hesitate. She took her $250,000 nest egg to buy the Anaheim Test Laboratory in Santa Ana, Calif., with her two children cheering her on. In her business, there are constant surprises. One day, she's analyzing a car-accident fragment for metal fatigue, the next she may be testing the authenticity of a platinum heirloom. "I never know what will walk through the door," says Bridger, now 77, with obvious relish. A gutsy move at her age? Well, yes, considering that her savings might have been invested more safely elsewhere. "I knew this was risky," says Bridger, who plans to eventually pass the lab on to her son and daughter. "But I was determined to make it work."
-- In 1994, just before New Year's Eve, Barbara Miller, 62, reached the breaking point. She was the chief executive of an Amarillo (Tex.) office-supply distributor, where she says the founders' heirs were constantly "pushing on me" to quit. So she did. Hours after giving notice, a group of 15 colleagues sought her out, urged her to start her own rival company, and offered to follow. She spent the weekend getting a phone, a mailbox, and a bank account. She borrowed a computer to print her business cards on New Year's Eve. Then, Miller took $300,000 in savings to start up Miller Paper Co. It was "a big-time risk" concedes CEO Miller, now 67. "Suddenly, I had 15 people looking at me for a paycheck." Today, making payroll isn't a problem. The Amarillo company has $7 million in sales and 30 full-time employees.
-- In 1998, Kees Verheul, then 62, made a move that some might justly call quixotic. While Don Quixote tilted at windmills, Verheul went and bought himself an ailing windmill manufacturer. Once the CEO of his family's oil-equipment business and later a gentleman rancher, he paid $1 million to acquire the Aermotor Windmill Co. in San Angelo, Tex., and spent another million to retool it. "I knew I could make a difference," he says. "It was a wonderful company, but it hadn't reached its potential." Since he took over the 14-employee business, revenues have increased by 33%, he says, and orders that used to take three months to fill are turned around in three days. Verheul, who recalled unhappy times in his family business because of bickering among relatives, views this venture, like his second marriage, as a chance to get things right. "I work 10- and 12-hour days," he says. "I give this company everything I've got."
FORGET, FOR A MOMENT, the images of wunderkinder who start companies before the ink dries on their diplomas. These senior go-getters are perfecting their business plans--not just their golf swings--as they embark upon new ventures in their 60s and 70s.
True, they represent a tiny--if notable--minority of older Americans. In 1998, according to a Gallup poll for the National Federation of Independent Business, senior entrepreneurs (60 and up) started 143,000 businesses, a mere sliver of the 3.4 million businesses the survey says were launched that year. An additional 53,000 companies were purchased by seniors. By contrast, the most prolific group of entrepreneurs that year, those aged 30 to 34, started or purchased almost four times as many businesses, according to the survey.
Still, the significance of this aging crew should not be underestimated. "We've never before seen a group of seniors who are this active and doing so many things," says Lisa Gundry, a professor of management at DePaul University's Kellstadt Graduate School, who has worked with seniors in DePaul's business incubator program. "They've accumulated enough financial security so that they are better able to take a risk on a business than someone who is younger and has a mortgage and small children."
That doesn't mean they have vanquished the effects of advancing years. They may have to withstand jokes or a funny look from customers; they battle the usual health problems of the aging; the specter of financial ruin late in life may give them pause; and they're not always willing or able to work the long hours of their younger counterparts. However, those limitations are tempered by a wealth of experience, contacts, and self-confidence. What matters most to many of them is making a mark in the world through their business. "I see this as the culmination of my life's work, of taking it to another level," says Ellen Haas, 60, the founder of the new nutrition Web site Foodfit.com, based in Washington, D.C. Haas is a former Agriculture Dept. Under Secretary and a consumer activist.
While some of these business owners are serial entrepreneurs, many are first-timers, driven by the same motivations as younger folks--a passion for business, a good idea, and, sometimes, a little external push, like Miller had. She likens her business adventure to the excitement of riding in the rodeo: "The chute opens, and the best thing you can do is hang on."
But why risk getting thrown when you can sit by the fire? Miller gets teased by her clients and suppliers all the time. "They say stuff like, `If I'd have been you, I'd have taken my marbles and gone to the beach.' I say I couldn't take that lifestyle. What I'm doing is fun for me. If it felt like work, I'd start looking at retirement."New Age. Indeed, experts say, the traditional notion of old age is being challenged by rising life expectancies and greater prosperity. And because of the sheer enormity of the baby boom population, many more people are expected to follow the lead of these entrepreneurial pioneers. "What we have now are the mavericks who are laying that foundation," says sociologist Scott A. Bass, dean of the graduate school of the University of Maryland in Baltimore and an expert on aging.
In a 1998 survey of boomers by the American Association of Retired Persons, 80% of the respondents said they planned to work beyond retirement age, and of that number, 17% said they wanted to have their own business. "People are saying, `Wait a minute, I have another 30 years to go. That's plenty of time to start a company,"' says Bass.
In many ways, these entrepreneurs could not have picked a better time to get started. The Internet is opening up new vistas, and investment funds have been flowing into new-media startups. Seniors such as Julann Griffin, 71, don't want to be left on the digital sidelines. "No one has actually said, `Hey, grandma,' but it's always in the air," says Griffin, the ex-wife of Merv Griffin and co-founder of Boxerjam Inc., an online game show company based in Charlottesville, Va. She can't help but notice some generational differences between her and her younger partners. Like everyone, she relies on e-mail and voicemail, but she misses the office interaction of pre-technology days. So she keeps candy on her desk to lure her colleagues to pay a visit.
Griffin, the co-creator of Jeopardy, spent most of the '80s pitching new game shows to the TV networks without success. In the early '90s, she explored the idea of putting game shows on CD-roms. Later, with the rise of the Internet, Griffin realized she had found the distribution medium she was searching for. Griffin and her partners--her then-61-year-old sister, Maureen Roberts, and two young film-makers--put in a total of $1.7 million in working capital to launch Boxerjam.
The company now distributes 12 live, multiplayer game shows and puzzles over the Web. Its coup was getting America Online Inc. to sign on as a sponsor. To date, they have raised $12 million in venture capital. Like most dot-coms, Boxerjam is still in the red, but Griffin has found her creative niche at last. "I feel as though I put in my time as a mother and housewife, and that was kind of confining. I had a lot of ideas and no outlet."
Surging creativity, it turns out, is a key characteristic of older entrepreneurs. Research by psychology professor Dean Keith Simonton of the University of California at Davis, has shown that adult creativity typically peaks about 15 to 25 years into a career, mid-life for most people, and then rebounds in the retirement years, when many of these seniors are starting over. Studies suggest this period of creativity is distinguished not by novelty but by the ability to synthesize and reflect.
Another advantage: These older entrepreneurs bring "an invaluable network of contacts, credibility, and investment acumen," says Barry Merkin, a professor at Northwestern University's Kellogg School of Management. And having been tested again and again in their lives, they're not afraid of failure or worried about what others will think, says Depaul University's Gundry. Instead of that urgency to "make it," they get their satisfaction from the process of building their companies.Limitations. But startups can be physically and emotionally draining for an older person. Seniors, who often crave flexibility, may arrange their schedules and responsibilities to compensate. Bridger, for instance, keeps to a 40-hour work week--part-time, she jokes, compared to the hours she used to work. She lets an assistant do the heavy work in her lab, such as breaking rocks so she can analyze their mineral content. Windmill manufacturer Verheul heads out at dawn to work each day, but he keeps to a four-day week to allow more time with grandchildren.
Then there's financial vulnerability. "Failing at 60 is not like failing at 30, when you have lots of time to build up your assets," says Martin Nissenbaum, national director of retirement planning for Ernst & Young International.
Scott Balmer, 74, the founder and chairman of Power Save International in Tamarac, Fla., expected it would take three years to develop and market the technology for his energy-saving co-generators. In fact, it has taken him ten. At one point, he went so far into debt that the lender foreclosed on his house, and he and his wife had to move to an apartment. "We basically spent every dime we had saved all our lives, cashed in all our insurance policies, and were really broke," he says. Balmer has since gotten back on his feet, in part by bringing in other investors. He also has appointed a younger CEO, who is 57, a move that should allay any investors' fears about continuity. "I know I'm not infallible and I'm not indestructible," he says.
Health problems, these older entrepreneurs know, can come at any time. Griffin is scheduled to undergo hip-replacement surgery, which will require a ten-week convalescence. Undeterred, she plans to work from home. Less than two years after starting her company, Miller was stricken with ovarian cancer. "I have Plan A and Plan B," says Miller. During her chemotherapy treatments, she checked into the office daily but let subordinates run the company. Now that her cancer is in full remission, she hopes to stay active in the business another 10 years. "Things happen for a reason, and I'm just glad I got the opportunity to do this now," says Miller. Come to think of it, "now or never" isn't a bad philosophy for any entrepreneur.To read more about older entrepreneurs and late-life startups, click Online Extras at frontier.businessweek.comBy Stephanie B. GoldbergReturn to top