The average age of a successful startup founder is 45 – Pierre Azoulay

MIT Sloan Assoc. Professor Pierre Azoulay

From Harvard Business Review

It’s widely believed that the most successful entrepreneurs are young. Bill Gates, Steve Jobs, and Mark Zuckerberg were in their early twenties when they launched what would become world-changing companies. Do these famous cases reflect a generalizable pattern? VC and media accounts seem to suggest so. When we analyzed founders who have won TechCrunch awards over the last decade, the average age at the time of founding was just 31. For the people selected by Inc. magazine as the founders of the fastest-growing startups in 2015, the average age at founding was only 29. Consistent with these findings, Paul Graham, a cofounder of Y Combinator, once quipped that “the cutoff in investors’ heads is 32… After 32, they start to be a little skeptical.” But is this view correct?

Our team analyzed the age of all business founders in the U.S. in recent years by leveraging confidential administrative data sets from the U.S. Census Bureau. We found that the average age of entrepreneurs at the time they founded their companies is 42. But the vast majority of these new businesses are likely small businesses with no intentions to grow large (for example, dry cleaners and restaurants). To focus on businesses that are closer in spirit to the prototypical high-tech startup, we used a variety of indicators: whether the firm was granted a patent, received VC investment, or operated in an industry that employs a high fraction of STEM workers. We also focused on the location of the firm, in particular whether it was in an entrepreneurial hub such as Silicon Valley. In general, these finer-grained analyses do not modify the main conclusion: The average age of high-tech founders falls in the early forties.

These averages, however, hide a large amount of variation across industries. In software startups, the average age is 40, and younger founders aren’t uncommon. However, young people are less common in other industries such as oil and gas or biotechnology, where the average age is closer to 47. The preeminent place of young founders in the popular imagination may therefore reflect disproportionate exposure to a handful of consumer-facing IT industries, such as social media, rather than equally consequential pursuits in heavy industry or business-to-business sectors. Read More »

Scaling customer development: crowdsourcing the research – Elaine Chen

MIT Sloan Senior Lecturer Elaine Chen

From The Huffington Post

In the seminal book “The Four Steps to the Epiphany”, Steve Blank introduces the concept of “customer development” – get out of the building and interview customers. While this is not a new concept – product people with user-centered design training have always done this – this is a huge development in startup-land, where technology used to run amuck.

Challenges with sample size

There is one small problem with customer development. It relies on qualitative research techniques like detailed interviews and observation, which are time consuming and costly.  Additionally, these techniques involve deep interactions with a few individuals, and you always run the risk of talking to the wrong people about the wrong problems.

How do you know whether you can trust your results? One way is to increase sample size – but given each interaction can take a couple of hours all-in, trying to get to 100 conversations quickly becomes daunting.

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Building Obama’s lean startup in America’s biggest bureaucracy — Elaine Chen

MIT Sloan Senior Lecturer Elaine Chen

From TechBeacon

What do you do when tasked with making the US government work like a lean startup? “Just start,” advises Hillary Hartley. Or, as we say in startup country: “JFDI.”

Hartley is the cofounder and deputy executive director of 18F, a government organization that causes quite a bit of cognitive dissonance. On the one hand, it’s a team firmly embedded within the 11,495-person General Services Administration (GSA), with a $23.9 billion operating budget. Yet its website explains that it’s “built in the spirit of America’s top tech startups.”

Launching a lean startup in the federal government

18F is one of the “Obama lean startups” created under the leadership of former US Chief Technology Officer Todd Park, who was tasked with the mission of remaking the aging and in many cases woefully outdated digital infrastructure underneath the government. The big idea behind 18F is to leverage world-class designers, developers, and product specialists from the tech industry to do projects with government agencies and show them how to work like lean startups.

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The best training for entrepreneurship? Hint: She doesn’t sleep through the night — Trond Undheim

MIT Sloan Sr. Lecturer Trond Undheim

MIT Sloan Sr. Lecturer Trond Undheim

From WBUR Cognoscenti

My best ideas come to me between the hours of 2 and 4 a.m. This is not by design — in fact, I wish it weren’t the case — but, as an entrepreneur, I roll with it. My third child is a terrible sleeper. In her two years, she hasn’t slept through the night once. When she wakes up in the wee hours, and it’s my turn to comfort her, sometimes I can’t fall back asleep. I tiptoe out of the room, flip on my iPad, and work on my new startup.

It’s counterintuitive, but of all the experiences I’ve had over the course of my life — including starting a business incubator, stints in government and at big corporations, and teaching in MBA programs — perhaps the thing that’s prepared me most for entrepreneurship is parenting.

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How a big company can run fast, like a startup — Elaine Chen

MIT Sloan Senior Lecturer Elaine Chen

From Xconomy

What does the word “startup” mean to you?

Many words can come to mind: new, exciting, experimental, small, lean, agile, fast. To me, “startup” mostly makes me think of “agile” and “fast.”

In an early stage startup, everybody is focused on the same thing. People are passionate, enthusiastic, hungry for an opportunity to change the world, and they will do whatever it takes to get things done. At a headcount of 5-10 people, coordination comes naturally. There are no legacy processes to slow things down. Without existing customers, the team is free to modify their products and services as they learn more. There is also a shared sense of urgency. So they run fast: because it’s fun, because they can, and because they have to.

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