There’s a pervasive myth in Silicon Valley: Startups are only founded by a bunch of 20-year-olds who recently dropped out of college. “The Social Network,” “Pirates of Silicon Valley,” the various Steve Jobs biopics, and even the “Silicon Valley” TV show — wherever you look, the popular narrative is all about youngsters making it big.
It is true that entrepreneurial folks are more likely to start companies before the real world has beaten the optimism out of them and dulled their eyes with cynicism. But while youthful vigor can fuel and motivate fresh-faced founders, startup veterans know there are other aspects of building companies that are equally important.
After you’ve seen enough startup pitches (God knows, I have), you start to spot a pattern: The best founders often have a few miles under their belt. The advantage is in having a curated, personal database of solvable problems, of the people who might be able to help, and a good idea of who you can sell your product to once you’ve built it.
Life skills often come with age. For example, having kids makes you a better manager, because it forces you to learn priorities and the value of time. Parents tend to be more resilient and patient, which are both crucial startup skills. But the real reason why experience is important is related to building one’s personal network.
When I got my journalism degree, I found myself wondering, “Great! Now I have the academic and theoretical context for the field of journalism, and I know all the techniques journalists use to string an article together.” What I didn’t have, though, was anything to write about.
All of this is to say that one of the most important parts of building a company is having great founder-market fit. You can learn to build that at a college or a university — Zuckerberg is a great example. And it’s possible to build deep expertise in academia, too. If you have a PhD in a particular field, for example, you are likely among the world’s foremost experts in that field.
Ren Ng earned a doctorate in computer science with a dissertation on “digital light field photography.” He went on to found Lytro, launched a $400 camera that turned out to be a novelty, raised round after round of financing (the last one was a $60 million Series D), and eventually exited to Google for a reported $40 million.
From a startup or venture point of view, Lytro wasn’t a success. But commercial lackluster performance aside, this startup is a perfect example of how you can turn a PhD into a commercial enterprise.
What you rarely have after college, however, is experience. An investor is far more likely to invest in a founder with a thick Rolodex of industry contacts, years of experience in a market, or a couple of successful startups under their belt. You can only get any of that with persistence and time.
Founders are taking note. I’m increasingly seeing startups founded by 40- and 50-year-olds who have been around the block. There’s good precedent for founders who want to start companies a bit later in life: Genentech was founded by Herbert Boyer when he was 40. Lynda.com was founded by Lynda Weinman, age 42. Costco, Red Bull, Geico, GoDaddy, Lululemon, The Gap, Intel and Garmin were all started by people who had rich careers, broad networks, lots of experience, and probably a midlife crisis or two under their belts.
Zoom was founded by Eric Yuan after he experienced the pain of video conferencing extremely deeply: He was one of the early employees at Webex. When Webex was acquired by Cisco, he became Cisco’s corporate VP of engineering, and in conversations with customers, he realized that they universally hated the way video conferencing worked, and he saw an opportunity.
As an investor, you get to choose: Do you invest in someone fresh out of college who is frustrated with how clunky Skype is? Or do you invest in someone who’s been working in the video conferencing world for 15 years, has a deep understanding of the technical and go-to-market challenges, and has convinced a team of 40 to leave Cisco to finally solve the challenge of calling people over the internet?
That dilemma has two answers. One is that both founders may get funded; the other answer is that Zoom is worth $21.62 billion today.
Problems are everywhere. The people who have a deep and personal connection with the ways things are being solved have an outsized chance of success. Investors know that, and that’s why the myth of the young founder is just that: a myth.
Comment