Survey shows surprise decline in US startups run by young people(gigaom.com)
gigaom.com
Survey shows surprise decline in US startups run by young people
https://gigaom.com/2015/01/05/survey-shows-surprise-decline-in-us-startups-run-by-young-people/?utm_content=buffer4c161&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer
6 comments
Since when did innovation and skill become a characteristic of being young? What's the new age ceiling for when skill meets opportunity? Does this have anything to do with adults working jobs that would have been occupied by minors just 20 years ago?
Youth culture has been responsible for social and cultural innovation (art, music, fashion...) for as long as they've had the extra leisure to devote to it. The growth of the merchant class, the growth of the middle class and the abolition of child labor all resulted in increased leisure for youth segments of society. Your second question must be missing some punctuation because I'm going to suggest you look into Yanni.
Why did I get down-voted? I answered the question and added a little humor. "Innovation" is not analogous to "invention". (Here's Alan Kay on the subject: https://www.youtube.com/watch?v=gTAghAJcO1o) TLDW: Technological adoption follows patterns of consumption like fashion. When we talk about "innovation" we're really talking about technologies that succeed in the marketplace and were successfully adopted by society.
Over the last decade we've seen major tech growth in two areas: mobile computing (computers as fashion accessories) and social networks. Both happen to be areas where youth culture has historically served a role as early adopters. If you're looking for historical perspective to figure out when 20 somethings were given the keys to the tech kingdom, it happened over the last decade when tech companies started using youth culture to drive consumption and "innovation".
Why do we need companies full of 20 year olds?
1) Because 20 year olds develop products for other 20 year olds. Most of them don't have the experience, wisdom or maturity to do anything else and they are fundamentally still trying to please each other and define themselves as a generation.
2) 20 year olds have a ton of energy, health and are willing to work ridiculous hours on bad code for lower pay.
3) Making millionaires out of a few 20 somethings every year helps feed the fire.
Over the last decade we've seen major tech growth in two areas: mobile computing (computers as fashion accessories) and social networks. Both happen to be areas where youth culture has historically served a role as early adopters. If you're looking for historical perspective to figure out when 20 somethings were given the keys to the tech kingdom, it happened over the last decade when tech companies started using youth culture to drive consumption and "innovation".
Why do we need companies full of 20 year olds?
1) Because 20 year olds develop products for other 20 year olds. Most of them don't have the experience, wisdom or maturity to do anything else and they are fundamentally still trying to please each other and define themselves as a generation.
2) 20 year olds have a ton of energy, health and are willing to work ridiculous hours on bad code for lower pay.
3) Making millionaires out of a few 20 somethings every year helps feed the fire.
TLDR 3.6% of households headed by adults younger than 30 owned stakes in private companies, 10.6% in 1989, 6.1% in 2010.
Private company != startup. The article is irrelevant to the startups we talk about here.
Private company != startup. The article is irrelevant to the startups we talk about here.
I agree. It's a worrying statistic for sure, but it has nothing to do with startups.
The "decline" is strictly in terms of percentage. I'm sure a sizable amount of this is due to older cohorts making a similar jump. Bad statistics, sheesh.
Percentage is what matters. You are less likely to start a startup than your parents were.
I can't speak to the statistic about households, because I don't understand enough about how that's measured or where the correlation would be significant.
However:
> According to a separate study cited by the Journal, only 22.7 percent of new entrepreneurs in 2013 were aged 20–34, compared to 26.4 percent the year before.
This statistic doesn't necessarily support what you're claiming, since it doesn't control for an increase across the board, primarily from other groups.
It's possible that this statistic could be true even while the percentage of people those age who join is rising, because another group rose faster, reshaping the cohort statistics even while there was a gain for everyone.
Example with made up numbers:
20% of young adults; 30% of older adults in 2013.
25% of young adults; 50% of older adults in 2014.
Young adults fell as a percentage of the new cohort from 40% to 33%, year over year, even as the likelihood that a young adult would become an entrepreneur rose.
That is, without controlling for other factors, the statistic about the relative population of young adults in the latest cohort doesn't tell us anything about young adults' behaviors.
However:
> According to a separate study cited by the Journal, only 22.7 percent of new entrepreneurs in 2013 were aged 20–34, compared to 26.4 percent the year before.
This statistic doesn't necessarily support what you're claiming, since it doesn't control for an increase across the board, primarily from other groups.
It's possible that this statistic could be true even while the percentage of people those age who join is rising, because another group rose faster, reshaping the cohort statistics even while there was a gain for everyone.
Example with made up numbers:
20% of young adults; 30% of older adults in 2013.
25% of young adults; 50% of older adults in 2014.
Young adults fell as a percentage of the new cohort from 40% to 33%, year over year, even as the likelihood that a young adult would become an entrepreneur rose.
That is, without controlling for other factors, the statistic about the relative population of young adults in the latest cohort doesn't tell us anything about young adults' behaviors.
there are situations where percentage is misleading.
10% of people start a startup today, 5% 5 years ago.
20% of young people start today , 30% 5 years ago.
chance of a young person starting today? 2%, 5 years ago? 1.5% . therefore young people are more likely to start a startup today than 5 years ago
10% of people start a startup today, 5% 5 years ago.
20% of young people start today , 30% 5 years ago.
chance of a young person starting today? 2%, 5 years ago? 1.5% . therefore young people are more likely to start a startup today than 5 years ago
To clarify I think what you meant in your example is that 20% of those who start today are young while there were 30% of the same cohort 5 years ago.
How is this surprising? Young people are graduating with a crushing amount of debt so now they're faced with a choice between entrepreneurship versus a steady paycheck at zombie corp. It seems most are choosing the job at zombie corp in order to pay a huge pile of bills staring them in the face.
I don't think this is a valid criticism. Most of the VC funded startups I'm aware of are founded by graduates of top US schools (Ivy or similar), where almost no one graduates with debt.
An alternative hypothesis that fits the data equally well is this:
As startups become more popular, the low hanging fruit is quickly picked over (social networks, mobile apps that require very little initial capital, etc.). Concurrently, startups have become more mainstream and seen as less risky (whether justified or not). As such, many "older" (by which I mean not in their 20s) people with narrow domain expertise have begun to start companies with the goal of addressing some narrow need that isn't addressable by the typical smart, CS-grad, startup founder with little to no real world experience outside of tech internships.
An alternative hypothesis that fits the data equally well is this:
As startups become more popular, the low hanging fruit is quickly picked over (social networks, mobile apps that require very little initial capital, etc.). Concurrently, startups have become more mainstream and seen as less risky (whether justified or not). As such, many "older" (by which I mean not in their 20s) people with narrow domain expertise have begun to start companies with the goal of addressing some narrow need that isn't addressable by the typical smart, CS-grad, startup founder with little to no real world experience outside of tech internships.
> As startups become more popular, the low hanging fruit is quickly picked over (social networks, mobile apps that require very little initial capital, etc.). Concurrently, startups have become more mainstream and seen as less risky (whether justified or not). As such, many "older" (by which I mean not in their 20s) people with narrow domain expertise have begun to start companies with the goal of addressing some narrow need that isn't addressable by the typical smart, CS-grad, startup founder with little to know real world experience outside of tech internships.
Very much so. You are at an incredible advantage when you're worked in a market and then you go build your startup vs sitting in a chair whiteboarding what problems you could possibly solve.
Very much so. You are at an incredible advantage when you're worked in a market and then you go build your startup vs sitting in a chair whiteboarding what problems you could possibly solve.
> Most of the VC funded startups I'm aware of are founded by graduates of top US schools (Ivy or similar), where almost no one graduates with debt.
Not true. Although not bad, students typically graduate with $15k in debt. Families with income just above the aid cutoff point or with high assets but lower income tend to get hit hard; I know some individuals that are graduating with $50-100k in debt from undergrad at Ivies.
http://www.browndailyherald.com/2014/04/07/brunonians-highes...
Not true. Although not bad, students typically graduate with $15k in debt. Families with income just above the aid cutoff point or with high assets but lower income tend to get hit hard; I know some individuals that are graduating with $50-100k in debt from undergrad at Ivies.
http://www.browndailyherald.com/2014/04/07/brunonians-highes...
> Most of the VC funded startups I'm aware of are founded by graduates of top US schools
I know plenty of folks that graduated with debt from top schools.
> graduating with $50-100k in debt from undergrad at Ivies.
Indeed.
I know plenty of folks that graduated with debt from top schools.
> graduating with $50-100k in debt from undergrad at Ivies.
Indeed.
households headed by people under 30 is somehow a good indicator of college dropouts? would not be suprised if there were other effects like college students living in their parents garage to bootstrap their startup.
could have measured the growth in accelerator applications by college students as an alternative
could have measured the growth in accelerator applications by college students as an alternative
That and state/corporate-sponsored "youth startup" things. I deal with enough of those to have seen oodles of fickle, immature teams who don't know the first thing about working, let alone building product.