Last year, I found myself at a lunch meeting in Silicon Valley with two of the most ferocious entrepreneurs I’d ever met. We were discussing the potential launch of a new medical software company.
Now, I’ve covered Silicon Valley as a journalist for more than 30 years and have sat in on thousands of such meetings. I've also attended a couple of dozen as a founding shareholder (including eBay). They’re all different yet similar: brilliant young people with boundless enthusiasm, a new product idea … and not a lot of business experience.
What Made This Start-Up’s Meeting Unusual
If you could have listened to that lunch meeting, you might have assumed it was just like the others, though perhaps the enthusiasm and competitiveness were more keyed up than usual.
But if you could have seen the meeting, you wouldn’t have believed your eyes.
At age 58, I was the youngest person there. One of the men, Steve Millard, was nearing 70. He’s often described as “the most connected man in Silicon Valley.” The other, Paul Baran, 82, was among the greatest inventors of the 20th century, the genius behind packet switching — in other words, the Internet and the cell phone. Baran was the driving the force behind the new company; he was also dying of lung cancer.
Our meeting place wasn’t a coffee shop full of punks and hipsters, but the dining room of a retirement home that smelled of butterscotch pudding.
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The Superiority of 50+ Entrepreneurs
I came away from that meeting, and many that followed, convinced that not only were these older entrepreneurs equal to their younger counterparts in passion and commitment, but when it came to interpersonal skills, business experience and networking they were clearly superior.
When the conversation turned to names of potential angels and board members, it wasn’t a matter of who knew this or that legendary Silicon Valley chief executive, venture capitalist or inventor, but which one of us would be having dinner with him or her next.
Between them, Millard and Baran had built four companies ultimately valued at $1 billion each. There was probably nothing in the business world they hadn’t seen — and if there was, I had probably reported on it.
And now, with the energy and passion of men and women one-third their age, they were ready to become start-up entrepreneurs one more time.
How Tech Launches Have Changed
Thanks to Steve Jobs, Bill Gates, Mark Zuckerberg and the boys of Twitter and Google, we tend to think of the classic tech entrepreneur as being in his or her 20s, working with a group of peers, sleeping on the floor and writing code while building giant companies and becoming tycoons almost as an afterthought.
But these days, starting a tech company is less about pulling all-nighters to work on a prototype and more about managing diverse teams of individuals scattered around the world; it's less about making that one big pitch to a venture capitalist and more about managing a host of older angel investors and strategic partners.
The skills that matter most in 2013 are more likely to be found among older entrepreneurs than younger ones.
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The more I look at entrepreneurship here in Silicon Valley, the more I’m convinced that older people — the ones executive Tom Hayes calls “encore entrepreneurs” (he’s now launching Mepedia, a networking platform for young job applicants) — are actually at an advantage when it comes to starting enterprises.
Why Young Founders Stumble
While young entrepreneurs enjoy an obvious edge when it comes to energy, health and irrepressible optimism, much of that advantage is dissipated on endless searches for connections and capital, unrealistic product dead-ends and on-the-job training.
Whiz kids also typically believe they have all the time in the world. As a result, they keep re-inventing their product and often never get it to market or get it there too late.
Most destructive of all, young moguls tend to be romantics: They fall in love with their products, often wasting years trying to salvage projects that will never pan out.
Advantages of Older Entrepreneurs
By comparison, older entrepreneurs have learned from their past mistakes. They aren’t flummoxed by the twists and turns of starting a new company. That means fewer dead ends and misdirections.
They also know that life is short, particularly at their age. This makes them pragmatic and, in a vital way, detached. They use their days more wisely, in large part because they aren’t distracted by the money chase or office politics. If they determine that their venture isn’t going to make it, they’ll put a bullet in the enterprise and walk away.
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True, venture capitalists still prefer younger businessmen, largely because they can control them. But my hunch is that, in the long run, encore entrepreneurs will produce more successful enterprises.
The State of My Start-Up
As for my new business, sadly, Paul Baran died a few months after the company got under way; he was working on the product design the day he died. But Millard and I have soldiered on.
Our company has about $1 million in angel financing, a new (young) chief executive and a product expected to reach the market by the end of 2013 — all because of a lunch three guys with a combined age of 210 had in a retirement home.
Veteran Silicon Valley journalist and author Michael S. Malone is vice chairman of PatientKey Inc.