The classic description of an entrepreneur is someone who is energetic, young and ready to shake up the world. But some of the best don’t quite fit that definition. Rather, they are decidedly older -- yet just as eager to make things happen.
Waiting a bit longer to take the plunge allows a founder to better know industry nuances, employ a network of trusted advisors built over time and personally seed some initial funding, sending a powerful message to investors. Accumulated experiences simply increase one’s chances of entrepreneurial success, with grey hair being a net positive.
I actually did that myself. My first two post-masters of business administration (MBA) jobs involved extremely long hours and eating several slices of the requisite humble pie, learning at the foot of some great entrepreneurial masters. Although it may have been a sobering process for my ego, the time investment worked. When I decided to finally go for it, I was clearly far better prepared in terms of industry knowledge, people management and psychological well-being.
Outside of my own venture -- and receding hairline -- I am fortunate to also have over 15 years lecturing in business school classrooms and working closely with the entrepreneurial community. Some of my best lessons for students are by example.
1. Good management chemistry is vital.
After graduating with an MBA, and learning the U.S. management system and tech trends, one of my star Venezuelan students returned home to re-boot his somewhat sleepy family business as a new concept. His old-school father knew the industry well but didn’t have enough current information technology (IT) knowledge to create meaningful change. Both father and son admit the launch couldn’t have happened until each had previously earned their stripes elsewhere.
2. Personal investment actions speak louder than pitch-deck words.
A successful business attorney who ran several divisions of different companies chanced upon previously-patented technology for cell phones. His past successes afforded him enough disposable income that he could personally recapitalize the intellectual property and launch a new company. Investors are now flocking, since the founder has so much of his own skin at risk.
3. There is no substitute for industry experience.
Another successful entrepreneur worked in the IT space for 20 years with different sets of partners before setting up his own solo venture a few years prior. In a recent class visit, he conceded his fundraising required only two phone calls. He knew the industry well, and his reputation clearly preceded him. With so many contacts, he also has an impressive roster from which to hand pick his advisory board and C-level lieutenants.
Of course, there are unique challenges in waiting to launch mid-career: wealth, patience and culture. Unlike a recent college grad, we all have far more to lose in terms of nest-egg wealth and will have far fewer chances to replenish it if things either blow up or suffer a prolonged cash burn.
Everyone loves to bet the farm when the worst possible losses involve someone else’s money, the equity of faceless stockholders or relinquishing the underground or downtown parking space your employer provides. But it’s difficult staying consistently positive, if you’re unsure whether you have to personally cover payroll next week. Patience never seems to be a virtue when it’s your own company, your own friends’ investment or sullying the public persona you took years to perfect.
Culture always begins and ends with the person occupying the corner office, but older age brings stubbornness and likely a shorter fuse when things don't proceed exactly as planned. That not only makes hiring a bit more challenging, but it also makes for ongoing team management.
Let’s face it, from the employee’s perspective, which is going to be easier, working for your older sibling or for your parents? Also, putting in 80 hours per week is great for the company’s esprit-de-corps but not nearly as glamorous for a founder in his or her 50s or 60s. The concept of work-life balance is no longer a business school case study topic whose discussion thread will end 90 minutes later.
I love encouraging my students to embrace entrepreneurship and immediately apply what they’re learning in the outside world. There’s no better satisfaction hearing they put it all together and landed a great job at a large company or became one of the first 30 people in a vibrant start-up.
But true, individual success takes time and only comes from gradually honing different skills such as business analysis or salesmanship. As much as I love to see my students start companies, I strongly recommend they cut their teeth in lower level positions, so they’re better prepared when they do their own thing.
Successful entrepreneurs are such since they passionately pursue sectors they intimately know. While nothing in life will ever be guaranteed even if you consciously delay your entrepreneurial launch plans, the old adage that there’s no substitute for experience still rings very true. I also don’t see too many vintners capturing top dollar for their young grape harvests in 2013.