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« The Future Belongs to Those Who Take The Present For Granted: A return to Fred Wilson's "age question" | Main | Gorman, redux: The Siren Song of the Internet »

June 18, 2007

Mis-understanding Fred Wilson's 'Age and Entrepreneurship' argument

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Posted by Clay Shirky

Technorati reports approximately one buptillion disputatious replies to Fred Wilson’s observations about age and tech entrepreneurship. These come in two basic forms: examples from industry (“Youth doesn’t matter because Steve Jobs is still going strong”) and examples from personal experience (“Youth doesn’t matter because my grandmother invented DoS attacks when she was 87!”)

These arguments, not to put too fine a point on it, are stupid.

Fred is not talking about intelligence or even tech chops. He is talking about a specific kind of tech entrepreneurialism: the likelihood of coming up with an idea that is so powerful it will shift the tech landscape. He is then asserting that, statistically, young people have an edge in their ability to come up with these kinds of ideas.

The first counter-argument, whose commonest explanandum is Steve Jobs current success, not only fails, it actually supports Fred’s point. Back In The Day, Jobs’ best decision was to work with Wozniak, and together they brought out usable versions of the GUI and the mouse. These changes were so radical that they didn’t catch on until they were copied in more pedestrian and backwards-compatible forms. And now? What is Apple doing with a seasoned Jobs at the helm? They are polishing the GUI to a fare-thee-well. They are making Diamond’s idea of an MP3 player work better than anyone imagined it could. They are making (brainstorm alert!) a phone! Woz was a mere tinkerer in light of such revolutionary moves, no?

As a Mac user, I love what Jobs is doing for the company, but no way am I willing to confuse the Polecat release of the current OS with what Lisa tried and the Mac achieved in the early 80s.

Then there is the personal attestation to brilliant ideas, coming from the outraged older set. I guess I should feel some sort of pride that my fellow proto-geriatrics are still in there fighting, but instead, I think they kind of prove Fred’s point by demonstrating that they’ve either forgotten how to read, or that they can’t do math so good anymore.

Fred’s basic observation is statistical: In the domain E, with the actors divided into two groups Y and O, there are more Y in E than you’d expect from a random distribution, and many more if you thought there should be an advantage to being a member of O.

This observation cannot be falsified by a single counter-example. Given that Fred’s argument is about the odds of success (he is a VC, after all), the fact that you remember the words to the Pina Colada song and you recently did something useful is meaningless. Fred’s question is about how many grizzled veterans are founding world-changing tech firms, not whether any are.

There are lots of possible counter-arguments to what Fred is saying (and I am echoing): Maybe so many young people start companies that the observation suffers from denominator bias. Or: young people raise money from VCs in disproportionate numbers because they don’t have the contacts to raise money in other ways. Or: the conservatism of the old is social, not mental, and concerns for family and quality of life turn otherwise undiminished imaginations to lower-risk goals. And so on.

It would be good if someone made those arguments — the thesis is provocative and it matters, so it should be scrutinized and, if false, destroyed. But Fred has said something important, something with both internal evidence (the list of successful recent entrepreneurs) and external existence proofs (mathematicians careers are also statistically front-weighted, so the pattern isn’t obviously absurd.) Given this, the argument cannot simply be whined away, robbing many of the current respondents of the weapon with which they are evidently most adept.

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COMMENTS

1. Baldur Bjarnason on June 18, 2007 1:11 PM writes...

Steve Jobs and Wozniak did not develop the Mac. They employed the people that did, but they didn't do it themselves.

Alan Kay was over thirty when he headed Smalltalk development at Xerox PARC.

Bill Atkinson and Jef Raskin were over thirty when the Lisa and the Macintosh were under development.

Douglas Engelbart was over thirty for all of his world-changing, paradigm-breaking inventions and ideas.

Tim Berners-Lee was over thirty when he invented the world wide web.

Almost all of the foundational revolutions of computing were made by people over thirty. Sometimes they were over forty.

Each and every one of these are "an idea that is so powerful it will shift the tech landscape". I'd even argue that most of the counter-examples involving people under thirty are mere advancements that are logical continuations of the concepts of the early pioneering greybeards.

Hypercard, Smalltalk, the Macintosh, the computer mouse, hypertext, the web, all invented and made by people over thirty.

When it comes to actual innovation, your and Fred's assertion has little in terms of historical fact.

Not that it bothers me personally either way, as I'm still under thirty :) (just barely, by a couple of weeks).

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2. Clay Shirky on June 18, 2007 1:28 PM writes...

But you are mis-reading Fred, because he is including people in their 30s, so move a number of your counter-examples into Fred's 'young entrepreneurs' list. You are also trolling through the last several decades of history for counter-examples, which seems to support Fred's suggestion that this is a current trend.

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3. Baldur Bjarnason on June 18, 2007 2:03 PM writes...

My list includes people that were in their forties and fifties when they did their best stuff.

I'm also replying here to you. In your earlier post you specifically mention: "young entrepreneurs have an advantage over older ones (and by older I mean over 30)".

And the problem with tagging this as a current trend and discounting the fact that history weighs against your argument is that there has been little but incremental technological innovation over the last ten years.

Social software/networks, weblogs, socialised and mobile peer to peer networking, identity consumption and production, web-video in the style of youtube, are all larger trends that have been incrementally improved upon by a large number of people until somebody made it just good enough at the right time and the right place. It's next to impossible to point to one single individual or group that came up with the breakthrough idea.

Most of these things are amalgamations of larger social trends which are symptoms of a massive social change caused by a new order of communication.

None of the current trends are breakthroughs of the same order as those I mention above.

Financial and media successes? Yes. And they deserve all the credit they get for their work and effort. Technology innovations? No.

Maybe I'm just hard to impress. :-)

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4. Baldur Bjarnason on June 18, 2007 2:05 PM writes...

Or to put it short:
I reject your answer because I reject your question. ;-)

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5. Richard Ziade on June 18, 2007 2:39 PM writes...

I don't disagree with Fred's conclusion. I just think highlighting age is really what its about. I think it's about how we view being "experienced." In most contexts, being experienced is a good thing. "He has 15 years and headed up these departmetns at Big Corp."

Yeh, those 15 years also had him focusing his entire brain on one thing and most likely not playing/fooling with/touching/trying anything outside of that.

I'm pretty convinced that this isn't about age, but rather about keeping your mind active; challenging yourself; being conscious of exposing yourself to different challenges/people/opinions/ideas/environments.

It's like exercise. A sprite 45 year old that keeps their body healthy can crush the average 25 year old. It's just we need to apply it to our minds.

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6. Peter on June 18, 2007 5:36 PM writes...

Was Fred's analysis "statistical" as you say, or just as anecdotal as the silly examples you give? If he really did a statistical analysis, please ask him to publish the numbers.

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7. Baldur Bjarnason on June 18, 2007 6:22 PM writes...

I'd say that it didn't matter if it is statistical or not. To use Clay's words, the domain E has precious little to do with technical innovation and everything to do with business implementation.

The quality of the analysis is irrelevant when the question is unsound. This tells us nothing more about technical issues and technical evolution than the statistical analysis of the social background of lottery winners.

If you replace "technical" with "business" or "management" in both Clay's and Fred's argument, then you might have something that connects with the data that they're poring over.

This is always going to be the problem with mining large datasets. Unless you have a very clear hypothesis the results are always going to be wooly. The only thing they've told us so far is that entrepreneurs and startups have a large proportion of people that are either in college or just out of college.

I find it hard to see how they would go about proving their current hypothesis about youth innovation in the technical field without first defining exactly what they mean with "shift the tech landscape" and then doing a comprehensive overview of those instances and the individuals behind them. Publish the data and let people study it. Then you'd have something that we'd learn from.

The conclusion that a lot of young people are using the relative ease of raising finance to avoid entering the job market doesn't teach us anything. Heck, it's what my dad did in the eighties (although I think he gave up way too soon).

Anyway, I'll stop now since I don't have anything constructive to say.

Permalink to Comment

8. Peter on June 20, 2007 1:20 PM writes...

Well, I'd have a hard time accepting as fact that there are really more Y than O in E, when it seems the data set used for that conclusion is just what one guy who writes a blog says. Even if more Y than E approach him for his VC, that's hardly proof of there being more Y than O in E. All it really proves is that more Y than O want him to fund their startups.

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9. wai on August 2, 2007 11:32 AM writes...

i would amplify Peter's comment. Fred's "statistics" aren't statistics at all. We need the denominator AND the numerator. As pointed out in the comments to Fred, the fact is that a 15 year old can viably develop the skills and obtain the tools necessary to launch an idea from his (or her) bedroom. Not true even ten years ago. It's also true that a 15 year old is far more likely to naively think he has the next killer app than a 40 year old tinkering in his spare time. Fred says he sees lots more kids than older entrepreneurs but raw numbers don't count. What's the hit rate? Apparently low since he's only funded 1. I doubt the population statistics for this have ever been all that different. Young people are far more likely to boldly strike out on their own for a number of well known reasons. That's life. The difference is that 50 years ago, a 15 year old had limited opportunities but, nevertheless, started newspaper delivery services, or shoveled sidewalks, or made things in the garage and sold them. Now, he develops integrated web apps and hawks them to a global market. Same dynamic, but the barrier to entry has never been lower.

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10. Ralph Hyre on September 22, 2007 10:45 AM writes...

>Back In The Day, Jobs best decision was to work with Wozniak

No argment here

>together they brought out usable versions of the GUI and the mouse.

Actually, Jobs and Wozniak developed the Apple I and Apple ][. iWoz details this.

Both were incremental improvements with elegant circuit design, and 'just enough' added functionality to sell well, and that was all Apple needed to crack the Fortune 500. Many other firms tried, and:
a) Didn't have the talents of Woz or his team
b) Spent too long getting the software or hardware 'perfect', and missed the market window.

The choice of proprietary (Apple) or open/collaborative (CP/M) hardware business model doesn't seem to matter a much as having effective marketing, design, AND third party support working together.

>These changes were so radical that they didn't
>catch on until they were copied in more
>pedestrian and backwards-compatible forms.

I assume you're referring to Windows 3.0 here, but Xerox was the innovator, Apple proved a market existed with the Lisa and Mac, and Microsoft was there with a 'good enough' product on their 3rd effort.

The world might be very different if Microsoft hadn't negotiated w/ Apple to license the Mac visual design concepts in exchange for continuing to license BASIC to Apple in 1985.

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