Sometime during the summer, a friend of mine questioned if young founders (let's say younger than 26) would be able to develop the biggest startups of the future. The argument was that startups of the future will trend towards hard tech. Technologies like biotech, robotics, AI, and material science each take years to build domain expertise, not to mention capital intensive. Both those form barriers for young founders to get started. Contrast this with the recent history of companies centered in information technology/internet startups. We all have the image of genius hacker developing applications as a teenager. This was (and still is) an open industry, where the tools for development are literally on everyone's desktop. With all that said, it sounds like we have to say goodbye to the garage startup. So are there any reasons for us to be optimistic about the young founder of the future?
In the past 20 years, there have been many examples of student founders. Michael Dell, Bill Gates, Woz, and Steve Jobs all come to mind. Yet, it's hard to think of examples that stretch outside of this range, but we should fall prey to availability bias.
- Age of Steam and Railways: Éleuthère Irénée du Pont founded DuPont at 30, Rowland Hussey Macy founded Macy's at 21, Hebert Henry Dow founded Dow Chemical at 24
- Age of Electricity, Steel: Alexander Graham Bell founded Bell at 27, Fred C. Koch founded Koch Industries at 25, Cornelius Vanderbilt started in the railroad business at 19, Samuel Goldwyn founded Paramount at 24, William Fox founded 20th Century Fox at age 26
- Age of Oil, Automobile, and Highways: John D Rockefeller founded Standard Oil at age 23, J.C.Penney founded J.C.Penney at 27, Henry Ford founded his first of many car companies at 33, Howard Hughes started his motion picture and airline empire at 22
- Age of Finance and Mass Consumer Credit: Phil Knight founded Nike at age 26, Ray Dalio founded Bridgewater Associates at 26, Sam Walton (of Sam's Club and Walmart) took over his first retail store at 26
- And just for fun, this trend of young founders extends to that of the founding of the United States. James Monroe, Aaron Burr, Alexander Hamilton, and Betsy Ross all ranged from 18 to 21 years old.
"The first set comprises problems that are solved by an emotional state (poetry, painting), by loading a very difficult single framework into your head (math, physics, coding), and / or competition (driven by sex drive and time-sensitive). The latter set are more rational, are systems problems rather than point problems, and don’t have time-sensitive competition. " - Naval
"Modern entrepreneurship, especially web entrepreneurship, is extremely competitive / time sensitive, requires enormous amounts of iteration even withina single product life-cycle, and often requires solving many challenging technicaland business problems one after the other in a public view (with the opposite sex watching). So, it favors the young and single." - Naval
- CRISPR -> 10x easier to gene edit anything "“With CRISPR, literally overnight what had been the biggest frustration of my career turned into an undergraduate side project,” says Reed, of Cornell University. “It was incredible.”
- Desktop gene sequencing -> 10x cheaper and faster to analyze your genome
- Cloud experimentation platforms -> 10x faster/cheaper way to run and scale. I compiled some other bio related advancements here.
- AI applied to VR Content Dev -> 10x faster generation of scenery and characters
- Open Source CS -> 10x more stable and useful software... for free
- Physics/material science/chemistry/protein folding -> 10x faster experiments with computer simulation (just wait for quantum computers)
- Bitcoin/cryptocurrency -> 10x better way to incentivize open protocol adoption.
After a founder uses those basic tools of infrastructure to find an idea that looks like it could be impactful they leverage new funding mechanisms to can scale more quickly. The funding of innovative ideas has long been concentrated in the hands of a few. Governments once reigned supreme in funding things, as we became wealthier this trickled down to wealthy individuals, then to professional risk investors, and now to individuals in the form of crowd sales, Kickstarters, and most recently app-coin sales. If you accept the idea no one can judge innovation at the earliest of stages--that VCs and angels are using basic heuristics to cull bad startups as opposed to picking winners--then new funding mechanisms can. Free flow of capital through crowdfunding, more diversified risk at the seed stage benefits allows for more companies to get created.
- the nature of innovation in has always skewed young
- and will the composition of entrepreneurship stay the same change (more geared towards fluid and less towards crystallized)
- the inputs of entrepreneurship are increasingly getting easy for young entrepreneurs to access ie: knowledge.
- the tools of development and capital are easier for anyone to acquire