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Innovation&: The golden (c)age

the golden cage

Picture: What is the best age to found a start-up?

The myths hyped in the media about young startup founders with white sneakers and hoodies repeatedly raise the question of the perfect time to start a business. In this article, we illuminate the pros and cons of different life stages, sift through statistical insights, explore the reasons for the "Golden Cage," and delve into the complexity of specialization in entrepreneurship.

In Germany, founders, irrespective of gender, are typically young academics. A quarter have a master's degree, every fifth has a bachelor's or diploma, and 13% of all founders are Ph.D. holders. The percentage of those starting a business with completed vocational training is less than 5%.

Advantages and disadvantages at a young age

The young age of entrepreneurship brings a wealth of energy, fresh ideas, and a certain willingness to take risks, which can be extremely advantageous for starting a business. Young entrepreneurs tend to make quick decisions, are flexible, and open to innovative approaches. This dynamism can contribute to tackling challenges with agility and responding rapidly to changing market conditions.

The enthusiasm and creativity of young entrepreneurs are key factors in developing disruptive ideas and new business models. The lack of deep experience in this phase can be compensated for by an open willingness to learn and a readiness for networking. A young founding team can bring fresh perspectives and a certain carefree approach to problem-solving.

However, there are also disadvantages to consider. The lack of professional experience may lead young entrepreneurs to underestimate certain business challenges or face unexpected difficulties. The limited professional network and sphere of influence could be hindrances in the early stages.

Another aspect that should not be overlooked is the often limited financial stability of young founders. Resources might be scarce, and the lack of financial means could hinder the implementation of certain ideas or projects.

Overall, the young age of entrepreneurs is characterized by a mix of enthusiasm and challenges. The art lies in leveraging the advantages of youthfulness while consciously dealing with potential pitfalls and strategically implementing balancing strategies.

Most founders (47.5%) are between 25 and 34 years old. Only about 5 to 7% are younger or already 55 years old at the time of founding. Most founders are in the perfect working age, and they rarely start a business out of necessity. Instead, the job market loses so-called "opportunity founders," who constitute 60% of all new ventures.

Advantages and disadvantages at a more experienced age

Experience has its own treasures. An experienced entrepreneur brings not only higher human capital and social capital based on a rich network of contacts and long-term relationships but also solid starting capital. The variety of skills developed over the years gives an experienced founding team a broad range of tools to successfully overcome challenges.

On the other hand, some shadows could cloud the picture. The seemingly inexhaustible energy of younger years may diminish with more experience. The urge to spend 16 hours a day at the desk may give way to a more balanced lifestyle, affecting the pace and intensity at which new projects are approached.

Another aspect is the potential danger of entrenched thought patterns and inflexibility. While experience is invaluable, long-established routines and proven methods could lead to a certain blindness. The willingness to question established thought patterns could be a challenge in this phase.

However, it is important to emphasize that these challenges are not insurmountable, and one is not trapped in "the golden (c)age." An experienced entrepreneur can maximize the benefits of maturity and minimize the drawbacks through conscious energy management, fostering an innovative thinking culture, and strategically deploying age diversification in the team. The art lies in appreciating the skills and wisdom of age while remaining open to new ideas and approaches.

Our primary finding is that successful entrepreneurs are middle-aged [45], not young.

The Golden Cage

The "Golden Cage" represents the comfort zone of "older" individuals who are already financially established in employment. With fixed incomes and stable financial circumstances, they can provide for their families and already have numerous time commitments. These securities could lead experienced professionals to shy away from the risk of starting their own company.

Financial establishment in a steady job provides stability, but at the same time, it can lead to a certain aversion to risk. The prospect of exchanging a secure salary for the uncertainty and volatility of a start-up may seem like too great a challenge to many. The "Golden Cage" thus symbolizes not only financial security but also a certain immobility and reluctance toward the uncertainties associated with starting one's own business.

Family obligations further reinforce this restraint. The responsibility to provide not only for one's own well-being but also for that of the family can lead older professionals to opt for proven paths. The idea of embarking on an unknown entrepreneurial journey may appear daunting in the face of these responsibilities.

The time commitments associated with an established career and familial ties could limit the necessary time and energy for building a business. The prospect of investing overtime in a new venture may seem discouraging for experienced professionals who have already invested many hours in their careers.

Specialization as a disadvantage in start-up founding

Over the years in a steady employment, many develop deep expertise in their field. This expertise is undoubtedly invaluable, but it also poses a challenge for founding a company. While employees focus on a specific field, entrepreneurship requires a broad understanding distributed among few founders.

The challenge is to detach oneself from specific expertise and develop a more comprehensive understanding of various aspects of entrepreneurship. Deep technical knowledge alone may not be enough to lead a successful business. It requires additional skills in areas such as finance, marketing, human resource management, and strategic planning.

The art lies in preserving the specialized skills that have made one successful in their profession while being open to learning new skills. This could mean joining forces with co-founders who possess complementary skills to form a balanced and versatile founding team. The challenge is not only to acquire broader expertise but also to expand the mindset from a specialist to a generalist to successfully cope with the complexity of business management.

Conclusion - The golden (c)age

The journey through the dynamic landscape of entrepreneurship reveals that the right timing and age play crucial roles in the founding and development of a company. The interplay of human capital, social capital, and financial capital forms the foundation on which innovative ideas can thrive.

The choice between solo entrepreneurship and partnering with co-founders opens different perspectives and challenges. It's not just a matter of the number of heads but also of the synergy and complementarity of skills that make a successful founding team.

The "shackles" of entrepreneurship, be it in energetic, cognitive, physical, financial, or familial terms, are real challenges that need to be recognized and consciously managed. Striking a balance between the various aspects of life is crucial to successfully navigate the path of entrepreneurship.

However, the conclusion of the entrepreneurial journey is not only characterized by challenges but also by opportunities. The art lies in finding the right mix of experience and curiosity, stability and willingness to take risks. Successfully navigating the entrepreneurial ocean requires not only the ability to adapt to the tides but also the courage to explore new horizons.

At any age and at any time, entrepreneurship offers a wealth of opportunities and challenges.

Yetvart Artinyan

P.S: Do you want to know more in-depth how you to start with your own company?

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