The Truth About Success
There is an emphasis on speed and age in business growth, and the headlines we read about the meteoric rise of tech startups seems to confirm the bias. When you look deeper in the data on founders and businesses a different more accurate story emerges.
The average age of success for a business
Fortune‘s 2019 ranking of the world’s top three-year performers in revenues, profits, and stock returns provides a snapshot of the trends driving the global economy. For the second year in a row, the technology sector placed the most companies on the list, matching last year’s total of 32. The once-dominant energy industry, meanwhile, continues to lag. However, there is no “one size fits all” when it comes to warp-speed growth, and not every fast grower is a product of the Internet era. The average age of the companies on this year’s list is 38 years old. But they have all been market winners, with an average annual return of 29% over the past three years vs. 14% for the S&P 500.
The average age of success for a founder
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?
