by: Michael Goodwin
There are three common myths about tech founders: they are extremely young, they are technically trained, and they’ve often graduated from a prominent local university. The logic then follows that to accelerate the growth of a local tech sector, cities need to actively cultivate people who fit this profile and encourage them to start a business. But on all three counts, the data tell a different story.
Two of the most successful tech entrepreneurs in history—Bill Gates and Mark Zuckerberg—follow this model. Both were college dropouts who studied computer science by day, programmed by night, and built large public companies without ever having worked at one. Anecdotes from popular media have only added to the cult of youth. Last year, articles in The New Republic and The New York Times explored the role young entrepreneurs have played in shaping Silicon Valley. The verdict in both follows a familiar line: for better or worse, successful tech sectors are products of young entrepreneurs, who disrupt whole industries without ever having worked in them.
These founders, in turn, are invariably portrayed technical experts. HBO’s Silicon Valley is emblematic of this stereotype: its protagonists are nerds. What they lack in business and social skills, they make up for in technical brilliance. The show is satire, but not pure hyperbole, either. Science, technology, engineering, and math (STEM) education is now at the center of entrepreneurship policy, and cultivating technical talent has become an important goal of the White House’s Office of Science and Technology Policy (OSTP).
Where better to get that technical education than at a great local university? Stanford is the classic example, with hundreds of future Silicon Valley entrepreneurs passing through its Palo Alto campus. A university of this caliber not only creates great talent, the theory goes, but also helps a region to retain it. It makes sense, then, to assume that without a world-class university nearby, a city’s tech sector cannot thrive.
Over the last year, we at Endeavor Insight began studying the New York City tech sector, one of the largest in the world, to understand just how closely these myths align with reality. We started with publicly available data from Crunchbase, AngelList, and LinkedIn, and layered on top of it interviews with nearly 700 local tech founders. We found that none of these three stereotypes hold up.
We looked at the university start year for over 1,600 New York City tech founders, and found that college dropouts are the exception, not the rule. While the bulk of founders were in their twenties, the average founder in our analysis was 31 years old at company founding, and a full 25% were older than 35 when their companies got their start.
We also found that youth does not predict success. We took recent research by the Harvard Business Review a step further, by comparing founders’ age to traditional measures of success—investment amount, employee count, exit value—and found no relationship between age and company success.
The most successful entrepreneurs are not like Mark Zuckerberg or Bill Gates, and instead tend to be mid-career specialists with substantial industry experience. Take Alexandra Wilkis Wilson. She earned an MBA and worked for several years at retailers like Bulgari and Louis Vuitton before founding Gilt Groupe, a leading e-commerce business that has raised over $200 million. The same is true for Neil Blumenthal, who spent five years as Director of VisionSpring, honing his industry knowledge before founding online eyeglass company Warby Parker.
Tech founders are also much less technical than conventional wisdom leads us to believe. We divided New York City tech founders’ college majors into two categories: STEM (science, technology, engineering, and mathematics) and non-STEM, and found that just 35% studied STEM fields, while 65% majored in something else. In fact, these founders were more likely to study political science than electrical engineering or math.
When computer chips were made by hand, tech entrepreneurship was the domain of engineers and computer scientists. But today the barriers to starting a tech company have never been lower. With just a few clicks, a would-be entrepreneur can build a website, acquire new customers, and begin making sales. Scientists will continue to develop new technologies, but most entrepreneurs will succeed by applying existing solutions to new markets, creating a thriving local tech sector in the process.
Local universities certainly develop new research and talent, but their role in attracting and retaining entrepreneurial talent is less certain. In truth, talent flows to wherever opportunity is greatest. New York City is no exception, with over 90% graduating from college outside of the city. (The University of Pennsylvania, 100 miles to the south, is the school with the most alumni in our sample of New York City tech founders.)
Despite its world-class universities, New York City’s tech scene succeeds because people want to live there, not because they studied there. The average future entrepreneur initially comes to the city to work for one of its existing companies, taking the plunge to found a company almost a decade after graduating. Ultimately, it is not the cities that educate entrepreneurs, but rather the ones that attract and retain them that are building top-performing tech sectors.
Our research shows that entrepreneurs don’t fit the stereotypes. Policymakers looking to further local tech sectors need to base their decisions on numbers, not anecdotes. In reality, the entrepreneurs they are seeking to support are older, less technically trained, and more likely to have attended college elsewhere. Whatever their age, experience, or background, the best policies use data to help local entrepreneurs scale their businesses and reinvest as mentors, angel investors, and serial entrepreneurs in the city where they got their start.
About the Author
Michael Goodwin is a project leader at Endeavor, a global nonprofit that supports high-impact entrepreneurship. As part of it’s research team, Endeavor Insight, Michael explores how to accelerate the growth of entrepreneurship ecosystems in cities around the world. Prior to working at Endeavor, Michael led a global study of small and medium sized businesses in Ghana, India, the Philippines, and Peru at Innovations for Poverty Action.
Powered by Facebook Comments