One of geekdom’s most cherished beliefs—especially among young hackers—is that of the 20 year old who comes up with a new idea, builds it into a fabulously successful business, sells it for millions after a few years, and retires a millionaire at age 27. Indeed, Paul Graham built his own business catering to that idea and has helped start several successful companies.
It turns out, though, that our cherished belief is mostly a myth, at least according to a study by Pierre Azoulay, Benjamin F. Jones, J. Daniel Kim, and Javier Miranda. An article on the American Institute for Economic Research (AIER) Website discusses the study and some of its conclusions. The TL;DR is that experience, domain knowledge, and discipline are actually the best predictors of startup success and that most successful startup founders are middle aged (mean of 45 years old for the 1 in 1,000 highest growth new ventures) rather than the 20 year old who drops out of school to follow his dreams.
That’s a provocative claim that goes against the conventional wisdom but the study authors took a hard look at the data and are reporting what they saw. I’m not an economist so I can’t speak to the validity of the study but it does seem well researched and is certainly worth looking at if you have the itch to start your own company. There are, of course, many examples of young hackers who have built successful companies but it’s hard to name more than a handful. Doubtlessly, Graham could name more than most of us but of the thousands of companies he helped launch how many could be termed huge successes? The data the study presents (and which is discussed in the AIER article) is pretty discouraging for young entrepreneurs.