Op-Ed: Greater Hartford third in nation for oldest entrepreneurs
Leading from behind again, or is there something more?
A recent Hartford Business Journal article called our attention to a study released on August 14, 2018 by LendingTree on the ages of entrepreneurs throughout the nation. The overall findings from LendingTree don’t paint an inherently optimistic view of the Capital Region, as the assumptions in the study imply that younger entrepreneurial cultures equate to better ones. And, as is often the case, Greater Hartford isn’t leading the pack. In fact, we clocked in at a solid 47th, placing our business-creators among the oldest entrepreneurs.
Before delving into next steps and interpretations, let’s look at what the data really says.
[Ed note: Perhaps the reporting on this study is a lesson in Darrell Huff’s 1954 quip-turned-book “How to Lie with Statistics,” though we can give the reporters covering this the benefit of the doubt here and say that it was unintentional. It’s a trademark of the Nutmeg State to see it through whatever the opposite of ‘rose-colored glasses’ is.]
First, the definitions used in the study. LendingTree outlines the generations as Silent: those born between 1928 and 1945; Boomer: those born 1946-64; GenX: individuals born 1965-80; Millennials: those born 1981-96; and GenZ; anyone born after 1996. While ‘Millennials’ have been the hard focus of many workforce and cultural studies since well before they reached adulthood, it’s important to note that there are currently 70 million GenZers in school, and they will make up a full 20% of the U.S. workforce by 2025. Shifting the focus from simply on the Millennials [Millennial Editor’s Note: who have apparently ruined everything] to a combined look at the generation that follows them is imperative.
Secondly, the mean ages for all 50 metro areas in the study range from 37.81 years to 42.68 years. Fewer than five years of age separates the youngest average entrepreneurial culture from the “oldest.” These averages do span two generations (late GenX and early Millennial), but with such a small gap in average age, the differences in lived experiences within this span can be assumed as minimal.
Third, Hartford, as the 48th oldest entrepreneurial culture, isn’t exactly in poor company. Nearby Boston clocks in at 47, and occasionally antagonistic neighbor Providence, R.I. is dead last at 50. (Don’t worry, the Courant clapped back at the Providence Journal for the slight.) Moreover, rising and established emblems of the new and hip, like Nashville, Seattle, and New York, hover in the middle of the pack.
Can older mean wiser? And what about those Youths?
With all this in mind, what we found particularly interesting is not that we have a “graying” entrepreneurial culture in Greater Hartford, but that we have an especially diverse one. In our youth-obsessed culture, we tend to accept that younger is better; and certainly, there are benefits to a younger entrepreneurial culture. The gumption of youth is an assumed given, there’s more room for failure and increased potential longevity for successes. But youth-driven innovation will never be the complete picture of entrepreneurial accomplishment.
2.8% of new businesses started in the area were established by entrepreneurs from Generation Z. […] That’s more than the mean youngest metro area, Salt Lake City, and more than twice the average of all cities studied.
In fact, in a paper published in March of this year that examined the age of entrepreneurs, the findings were clear: the entrepreneurs who succeed the most frequently are middle-aged, not young. The paper, Age and High-Growth Entrepreneurship, from a cross-institutional team of Pierre Azoulay and J. Daniel Kim of the Massachusetts Institute of Technology Sloan School of Management, Benjamin Jones of Northwestern University’s Kellogg School of Management and Javier Miranda of the Census Bureau’s Center for Administrative Records Research, specifically looked at the ages of founders for “growth-oriented start-ups” for a decade. Their discoveries were significant and spoke volumes.
The paper found that “[t]he mean founder age for the 1 in 1,000 fastest growing new ventures is 45.0. The findings are broadly similar when considering high-technology sectors, entrepreneurial hubs, and successful firm exits.” With this in mind, the LendingTree study placed every mean age of the areas examined below this “sweet spot” that the paper authors discovered. Moreover, their findings undercut the assumption that youth is a key factor for success in entrepreneurial ventures. This is supported through research from The Kauffman Foundation’s “2018 State of Entrepreneurship Report” (link is an automatic pdf download from https://www.kauffman.org/ ) that suggests older entrepreneurs have more business experience and acumen, and have an easier time securing funding, whether from traditional loan sources or venture capital.
[E]mbracing our sometimes-motto, “the land of steady habits” would be a boon – we have the conscientious and experienced talent pool that can make new ventures truly work.
According to the LendingTree study, Greater Hartford is second in the nation in terms of Silents opening new businesses (2.8%). And seventh for the number of GenXers as entrepreneurs. On the other hand, the same percentage, 2.8%, of new businesses started in the area were established by entrepreneurs from Generation Z. That places Greater Hartford at a solid third in that regard, outstripped only by Charlotte, N.C., and Buffalo, N.Y. That’s more than the youngest metro area, Salt Lake City, and more than twice the average percent of GenZ within cities studied.
And while we can agree that youthful optimism and “giddyup,” is essential in driving an innovation culture, it must be balanced by the experience and wisdom of having been a working professional, entrenched in the local business climate, for some time. No one is suggesting that young entrepreneurs should give up, quite the opposite, actually; we want young entrepreneurs to become the next successful startups. And we want them to do it here. We also want the entrepreneurs who are middle-aged and older to start and succeed here, especially because they already are doing so.
What Greater Hartford offers, then, is a generationally diverse entrepreneurial climate. The Nutmeg State is not New York. We’re not Seattle. We’re not Silicon Valley. And everyone needs to stop pretending that we should emulate any of these locales. Perhaps embracing our sometimes-motto, “the land of steady habits” would be a boon – we have the conscientious and experienced talent pool – born out of those steady habits – that can make new ventures truly work.
Of course, what the Kauffman report underlines is that entrepreneurs across the board want more resources to help them succeed. The Connecticut Technology Council, through our renewed commitment to community building, world-class networking, and celebrations of community achievements, is just one such resource. And we’re proud to be a part of a larger community of organizations working hard to elevate, enhance, and embrace businesses from startup to scaleup and beyond.