An excellent article in The New York Times on August 19, 2017 explored how creativity declines as we age. The authors described how we grow from a stage of exploration in early years to later years of exploitation of the knowledge we have accumulated. I have worked with all ages of entrepreneurs from undergraduate students at UT Austin to middle-aged (defined as 35 by Dante, as you no doubt recall) to seniors older than I. There’s much to consider when looking at how those various ages take on the challenges of being startup founders, particularly in the tech industry.
The one constant in all startups is the importance of human capital. The basic rules of behavior and motivation are immutable. At the heart of almost every business decision there is a human element. Younger founders have fewer experiences to guide them, but the smarter ones also are adept at seeking wisdom from more seasoned mentors. And, those mentors are happy to be asked to be involved and to maintain their relevance. You’re never too young to avail yourself of someone else’s hard-won exploitation. Chances are your mentor has accumulated decades of data that drives supernatural pattern recognition around all things people related.
My first CEO job was a turnaround of a chain of hardware stores in 1972. I was 23 when I acceded to that job. (That’s a very long story for another time.) The company was nearing 100 years old and was distinguished in part for having sold to John Pemberton the pots he used to invent Coca-Cola in the late 80’s, 1880’s that is. Most of the employees where in their 60’s and 70’s. I was completely unbiased due to my lack of a special interest in home repair or an appreciation of the fine art of hardware retailing. However, I had enthusiasm for accomplishing the mission and managed over a couple of years to complete the turnaround and reach an exit. I introduced what little POS automation was available at that time, but, more important, I recognized and supported the high-performers in all those stores. My exploration of that business played nicely with exploitation of their knowledge of everything from faucets to chain saws. One of my better experiments was bringing in a Georgia Tech peer to run one of the stores, who in turn brought his wife along, and they set the pace for the entire chain. They opened their own store sometime later and developed a great career in specialty woodworking. Ask Jimmy Carter about them; he was a regular customer. I owe a considerable debt to all those who tolerated my domain ignorance and enabled this to succeed.
One thing I have learned over the years is that age is not an indicator of energy and drive, two factors critical in a startup. Health problems can strike at any age, but if you are fortunate to be blessed with good health, you should have the wherewithal to apply your talents in a startup. A second thing I have learned is that age is also not an indicator of knowing how to be a founder. I sometimes serve as a one-man incubator for companies with very fine subject matter comprehension and great concepts but devoid of any startup experience. There are certain markets where a degree of maturity is an entry requirement to play – life sciences for example. Those who have moved up the corporate or academic ranks is such areas may have had no reason to learn the basics of the startup process. They know much less than our undergraduate students did after one semester. They’re also usually at life stages with family, children, and professional and community obligations such that they can’t go off to an incubator or accelerator program for 12 weeks and hang out with a bunch of highly portable 20-somethings. Early on the decision process is learning what decisions have to be made. Entrepreneurship was most likely not a curriculum option when they last attended college if they are now 40 or over. Hopefully the book I’m creating out of posts on this site will be a useful guide for such folks, but I’ll be the first to admit that this, like golf, is not a subject best learned solely from books or YouTube videos. Use those resources to learn how to learn from those who have been down the startup path and who can actively teach you.
Let’s talk about a few critical decision making junctions for intergenerational founding teams.
The Technology roadmap had best be left to the one who is most current on the latest trends in the market of choice. I met with a company earlier this year about an advisory role. The company has mature leadership and is doing quite well financially in a sector where I have some knowledge and using a technology stack where I have even more insight. Keep in mind that I am not a CTO candidate for anyone unless it involves Microsoft BASIC and 8” floppy disks. My first take was that it was throwback jersey day at the football stadium. Their stack was quite a few years behind the way I would suggest going about things today and had seen implemented in similar use cases elsewhere. I was too honest about that and, needless to say, I wasn’t invited to proceed with them. They have some slow-moving customers who care little about tech wizardry and only about anything that solves their particular problems. This company will probably enjoy a killer exit before their customers pay any attention to alternatives that I would consider to be more contemporary. The point is that the more market experienced team members are in the best position to drive the product design, but chances are that the more newly trained engineers are going to be a few generations along the curve in terms of what is the most effective way to implement that design. And, generations in this business come along about every other year. Deciding to be vigilant on that count is always a good decision.
Identifying and acquiring Customers is another area where differing ages have differing viewpoints. I personally have a large number of contacts that I have accumulated over the years. These are people who actually know me, not just that I have collected a card from. I’d be receptive to hearing from any of them, and they in turn will give me an audience. When I get involved in advising a company where I have firmly established trust and belief in the team, my first instinct is to call upon my relevant connections. I am a proponent of relationship selling. But, I am well aware of the thousands of marketing automation companies that have been successful and that have created a new generation of transactional selling based on emails, calls, features, and promotions that do win customers. MailChimp in Atlanta is a great example of this; there’s a Unicorn in the making with almost no human interaction with customers. Their software and the lovable chimp are genuinely anthropomorphic. Of course, if you’re too young and haven’t shown your capabilities in venues where you’ve earned your own network, you’re very happy to have these more removed methods of selling. Or, you’ll make a good decision by finding a co-founder who brings along that dimension. Not all products lend themselves to both these genres of selling. Some absolutely require relationships, but others are at price points where only automated marketing is financially realistic.
Raising Money is a team sport. I wouldn’t invest in me as the CEO of a startup that might take five to ten years to play out. I’m in great health and am cycling 4,000 miles per year, but that could all change in an instant. I look around at my peers in various social and business settings and see that many are not so fortunate. I might invest in a company where I’m in a chairman-like roll to provide my wisdom and connections to back up younger founders. I’m finding in some of my current activities that my presence makes a big difference to investors. They know that I’ve had successful starts and exits, along with venture capital, banking, and IB experience and numerous board seats and can at least assure a rational and orderly fundraising process. They know I can recognize and land the “make the company” deals when they come along. I contribute what I can to the more granular subject matter decisions of creating the company, but when the discussion moves to finances and the big opportunities is when everybody turns to look at me. If nothing else, I can usually lend some comfort to potential investors as they make their decisions on a deal.
And remember, every plan I see these days touts AI. I’m presuming henceforth that means Aged Insights.