A serious study here: http://www.google.com/search?hl=en&q=Aging%20and%20Creative%20Productivity&sa=N&tab=sw concluded that younger people being more creative is a highly predictable at the aggregate level. However, it is far more unpredictable at the individual level. The author concluded this has less to due with aging than to other factors, both intrinsic and extrinsic to the creative process (i.e. my “too young and naive to know it can’t be done theory.”

Marc Andreessen also covered the age topic here: http://pmarca-archive.posterous.com/age-and-the-entrepreneur-part-1-some-data

steve

Say that gives 15 years in business. How much of that in the domain, using pertinent skills?

I think that one of the good themes of this blog is that years != “dog years” in deep industries. We could for example, find warning signs in popular literature about e.g. finance suggesting rapid maturation in bond trading. Warning sign?

Say 40 years = 20 years real direct experience. At best. ~ Is 20 years enough?

My own metric is that you need experience >= 1.5 times the last whole business and credit cycle. (which is not a technology cycle, necessarily, though readers here are naturally biused towards those i would expect)

Thus, doing a startup in my all to early 20s, i was inclined to trust only those of age >50. How you discount the harmonic average is up to you

I’d also like to echo an obvious intrinsic to business: time to being able to talk about what you did, and hence really analyse it, with outside non – domain groups, such as are interesting when assembling a board, is not short in real industries.

I’m not quite 40. So i had better hold my peace!

To Steve B: thanks for a great blog, and connecting so many outlying or just plain uncorrelated dots.

But the essay did not live up to its vital and interesting title. A quick scope of VC economy is not an essay on evaluating by age or experience, the latter and original proposition for discussion being entirely more interesting.

– john

Thanks for the thoughtful response. I forget that other people actually read this blog.

What inspired the post was encountering the same phenomena you pointed out, “Many VC’s I know are simply not that hungry…”

I would have finished the the thought and said, “Many VC’s I know are simply not that hungry are happy living off the management fees and operate like the “cargo cult” that formed in the Pacific Islands after WWII. They built airplanes out of palm trees thinking if they did manna would come in airplanes again. I find the same still going on with a few firms and partners.”

I think the economics of venture (limiteds committing funds over a long period) allows poor performers to remain in place longer than any other industry (certainly longer than non performing portfolio companies.) And given the “clubbiness” of the venture business there appears to be little self policing of steering entrepreneurs away from firms that are bad news.

That said, I agree with you (and other posters) that age is too broad a brush to label all VC’s and that there are world class VC’s who learned a lot and are much better for going through the bubble.

steve

I think you bring up a number of great points

but I think it’s hard to paint this stuff with a broad brush. I’m a co-investor with folks over 40 (fred wilson) and under 40 (peter fenton, benchmark) and they both deliver a ton of value and are world class investors.

I feel the same about entrepreneurs. A number of VCs I know say that young entrepreneurs are the best to back. We have our share of 20-somethings but we also have serial entrepreneurs in their 30s & 40s. I’m proud to be in business with them all.

I think it’s hard to draw a line and make a call based on age.

I agree 100% that the VC industry still has a tendency to think that raising money on the sizzle cures many ills whereas we know money is rarely the answer to anything when it comes to startups. But I wanted to share a very different experience from the last 10 years.

I got into VC at the worst possible time (99) with the worst possible background (hybrid derivatives at GS) … ironically because I thought the industry I was in (derivs) was not sustainable. Talk about getting market timing wrong

Anyway I willed myself into the world of entrepreneurship and essentially “grew up” in venture through a world of pulled IPO’s then pulled M&A’s then Sep 11 and then, the big one, March02/Worldcom and the giant sucking sound that ensued when telecoms capex collapsed.

My experience of 2001-2004 is very remote from what you are describing. The mantra was as follows: “no one is coming to save us, we are going to make it on our own”. The companies I was involved with as board member, such as Inxight Software (sold to BOBJ), were living on a high through the hype phase and had to relearn and retool themselves to make it on scarce resources and raw talent.

My personal perception is that 2000-2004 gave me deep scars and a sense of the value of each $1 spent that will always be with me as an investor, as we seek to prudently prove models and build solid foundations before we really scale hard, understanding hopefully well the return on effort expanded.

I actually don’t think age has anything to do with it. Many VC’s I know are simply not that hungry, they are the ones you should worry about most. You need relentless intent, focus, the willingness to challenge, the willingness to take measured risk. We have in our partnership a gent by the name of Barry Fidelman who puts us all to shame with his intensity.

Maybe more importantly, you need to accept that there are no rules to success, that most business books you should never have read, and that you must consider each situation in the unique context of its people and market opportunity, with common sense and humility.

As someone once put it to me, “the only thing I know for sure is that I am a better VC than last year and should be a better VC still next year.”

All the best
FD
[Oh yes, I am under 40 ))]

One minor footnote regarding the 2003-2008 M&A period… in addition to Google IPO, 2004 also saw the Salesforce.com IPO which did well both in initial trading and long run growth.

thank You steve blank!!

Great insight for us young entrepreneurs.

I’d counter the title of your post with my own point, which is that why should a young entrepreneur trust a VC over 40 (maybe we shouldn’t trust any, period!) when these are the guys (and gals) who tend to be “made” already, and have little to gain from new deals? Wouldn’t younger VCs with the incentive to climb the ranks internally be better champions of one’s startup and more likely to want to fuel growth, regardless of the exit strategy? Unfortunately, regardless of a VC’s age, their business models are suffering and IPOs seem to be a thing of the past for at least a while longer.

For instance, I’ve been warned when being introduced by other entrepreneurs not to trust certain older VCs due to their disposition towards using young startups to do their friends favors, prove a point, gain some insight, etc. When you drive a $100,000 car, live in a $10MM house, got your wife plastic surgery and sent your kids to Stanford already, what is motivating you to grow some 20-something’s idea? These types seem dangerous, yet are often the ones needed on board to get the fund to invest in the first place, seeing that the younger partners naturally have less pull during the Monday round-ups.

Just food for thought– certainly this argument does not apply to all as there are some outstanding VCs out there.

M

Great post and really great advice. Thank you.

Jon