There is an assumption that age matters. It’s assumed that as an investor you want to invest in older, more stable, more experienced founders. I’m not sure it’s that simple. If you look at the top twenty unicorn companies in the world, 25 percent of the founders started their company either at university, or upon graduating.
EF was born based on the idea that you could take young people straight out of university, without a team and without an idea, and help them build a startup.
Four years on and we have opened up EF to all age groups; as long as you have a technical background we will consider you. We did this because we felt like we were missing out on some of the skills and assets that older founders bring.
It’s been interesting working with the latest cohort who are slightly older, with many of them in their late twenties and early thirties. The majority of them have left their jobs to join EF, rather than come straight out of university. We have a range of backgrounds, from those who have left jobs as devs at startups, to those who were part of large corporations.
It turns out that age and stage of life plays more of a role in how effective someone is at building a company than we originally thought.
First up, experience within an industry is, unsurprisingly, useful. It allows more experienced founders to identify real problems that need to be solved. They know the pain point and they know how deep that pain runs. They often have experienced the pain themselves. They also have the contacts in that industry to accelerate customer development.
However, knowing an industry has a downside. It means experienced founders know how hard the problem will be to solve. They know the barriers that will prevent them from reaching their customers, so they stop, they deliberate and they can become inert.
Young founders on the other hand can't see the barrier as they're more naive. We see our younger founders struggling to fully understand a problem, but they are happy to explore without being held back by industry norms, for example, how long a procurement cycle is. Young founders don’t know how things are typically done, so their ideation isn’t limited to the status quo.
Second, as you get older and you settle into a comfortable pay cheque, your lifestyle reflects that. The variable costs of fancy dinners can be cut back, but the fixed cost of rent is harder to change. We give everyone who joins EF just over £1,000 per a month for the first three months. The young founders straight out of uni revel in their new income but the older founders struggle to work out how to make ends meet. This can make them more risk averse and it can be harder to get them to quit their jobs in the first place.
This ties in with one of the other common themes we have seen for older founders - life gets in the way. Older applicants are more likely to be concerned about how starting a startup will affect the rest of their life. Often this is a valid concern as building a startup is an all-consuming activity which can be hard on life partners and children.
But it’s not all about the golden youth. One of the biggest benefits to working with older founders is their professionalism. When we work with fresh grads who have never had a job before it can be challenging. We find the older founders expect and want to work longer hours. They are used to working long hours for other people and now they’re working for themselves that’s not going to stop. They work evenings, they work weekends and they don’t complain. The same cannot be said for the younger founders who are changing their mental model of hard work from just-in-time before exams, to sustained and sustainable graft.
Overall I think we now have a healthy balance of old and young founders who complement each other and work well together on the businesses they're creating.
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