In The Tech Entrepreneur's Survival Guide, founder Bernd Schoner reflects on his experience starting up ThingMagic, an early RFID company, during the dot com bust. In the following edited book excerpt, he explores why business owners--though not as many as you think--choose to launch businesses in their 20s and 30s.
Contrary to urban myth, only a small percentage of technology entrepreneurs are very young when they start their first company. Only 15 percent of all high-tech entrepreneurs found their company before the age of 30, and only slightly more than half of all tech founders are under 40 when they start their business. The average tech entrepreneur lets 15 years elapse between receiving her terminal degree and founding her first company. Most surprisingly, only 0.9 percent of all U.S. technology companies are founded by entrepreneurs without a bachelor’s degree before the age of 25. Given this statistic, the success of famous college-dropout entrepreneurs, including Bill Gates, Steve Jobs, and Mark Zuckerberg, is even more remarkable.
Numerous successful entrepreneurs have started companies at the beginning of their careers, toward the end of their professional lives, and anywhere in between. For many of us, circumstances trump careful strategic thought about the right moment. For those of you who have the luxury to choose, let's have a look at the pros and cons of founding technology companies at different times in your career. Why should a twenty something young kid with no professional experience to her name consider entrepreneurship? Why could it possibly be a good idea to start a company right out of college or grad school?
- The blessings of poverty. First of all, if your post-school entrepreneurial endeavors stumble, you won't fall very far. Your financial needs are probably as low as they will ever be. You share an apartment in borderline sanitary conditions, and your family is very small--as in one-person small. You do not carry the financial baggage that will burden later years of your life. In addition to your personal financial flexibility, you don't have the expectations of an established professional. There will be time to make money, but for now being poor is just fine. You secretly hope you will be following in the footsteps of Steve Jobs, who reflected: "I never worried about money. . . .I went from fairly poor, which was wonderful because I didn't have to worry about money, to being incredibly rich, when I also didn't have to worry about money."
- Smart as you will ever be. Right after leaving college or grad school, you have the advantage of being up-to-date on the latest and greatest in science, business, or technology. The in-depth knowledge you acquire during your secondary education is truly special, and this freshness will never return to the same degree later in your career. It turns out clever employers systematically exploit this phenomenon by aggressively recruiting the brightest of the brightest right out of school. As an entrepreneur, you have the opportunity to get the most out of your freshly gained (and paid for) education for yourself, which is a more rewarding prospect than letting some consulting or financial services outfit suck your brain dry 24/7.
- Academic farewell gifts. Coming out of school, you may have firsthand access to an idea, a technology, or a patent that lends itself to commercialization. Professors or scientists at times come across a new technology with commercial potential and not too many strings attached later in their careers. However, most professionals encounter this opportunity only once, and that one time is in grad school or right after completing it.
- The innocent enthusiasts. Finally, upon completing your education, you are more likely connected with peers who enjoy a similar free-spirited attitude, personal situation, and energy. You can find your cofounders among like-minded graduates who will go about the great adventure of founding a company with an innocent enthusiasm that professional experience will almost certainly destroy.