A 36-year-old friend of mine recently got turned down by a “venture capitalist” in Taiwan, who said: “you are doomed to fail if you start your own business because you are too old.”Is age really a key determinant on whether or not one will be successful in starting one’s startup? In my opinion, judging a person by age shows the immaturity of that “venture capitalist.” Entrepreneurs of different ages have different advantages.
The advantages of young entrepreneurs in their 20’s are lower opportunity costs and a firmer grasp on the needs of the new generation. As for those who are in their 30’s, 40’s, or above, their advantages are (should be) industry network, mature mentality, better industry understanding, and sufficient financial resources. These advantages are more suitable in B2B market. A perfect example is the newly established digital advertising platform adGeek by ex-Yahoo! General Manager Frank.
Whether or not one is successful in starting one’s own company has nothing to do with one’s age, but is determined by a combination of one’s own quality, degree of preparation, and objective environmental conditions.
In recent years, we see more young people are diving into the startup realm. This is a good thing, but the core purpose of startup should be to solve problems, not to become a trend. I see a lot of young people choose to start their own company when they are not ready and when conditions are not ripe yet. This will undoubtedly lead to failure. Although failure yields valuable experiences, I think only “failure that follows diligent preparation” can be regarded as one’s best teacher. Those who start their company without thinking too much show tactless effort; they are not smart adventurists.
I only encourage young people to immediately start their business in special conditions. Most young people still need some period of time to hone their skills and to gather enough experiences before they acquire criteria for success. If you are less than 25 years old and would like to start your company in 3~5 years, I will suggest you to prepare the following five criteria:
1. Expertise or knowledge in a specialized field
If you want to start your company, please make sure you have specialized knowledge that is not easily replicable. Put more simply, your startup topic should tie closely to yourself. For example, let’s look at the case of our Bootcamp alum Kung, founder of iLoveMilk. Kung is a veterinarian for large animals and has taken care of over 6,000 cows. There is probably no one else who understands the ecosystem of dairy farm as well as him in Taiwan. Hence, it makes perfect sense for him to found a startup that serves as a platform for milk delivery. More importantly, his existing expertise has already set a high barrier of entry for others.
Let’s also look at the case of my friend Mikaal from Hong Kong, who founded a trading and financial management platform 8Securities. Before founding this company, Mikaal has already been in the e-trade field for over ten years. He understands very well how the securities industry operates, what needs the clients have, and how to establish an ideal team. He was able to raise USD 10 million (seed fund USD 2 million + Series A USD 8 million) without having actual product, as his background and reputation in the industry were compelling enough to investors.
2. Network – clients and team
Network is also an advantage that is difficult to replicate. The network here refers to business partners, as well as clients and team.
Before founding ALPHA Camp, I was the Product Director at iClick. (iClick just raised USD 60 million in Series-D; it is one of the largest DSP platforms in the Greater China region). iClick’s CEO and Co-founder, Sammy, is my ex-colleague at Yahoo! He founded iClick after quitting his position as the Marketing Director of Yahoo! Search Engine in Hong Kong in 2009. He was able to transform iClick into a large corporation with a valuation of over USD $ billion in just six years because he had a solid foundation for starting a new company; Sammy had nurtured a talented team at Yahoo! who became his early employees at iClick. And his good reputation in the industry quickly earned him a group of loyal clients.
You can also attend community events to build your network. For example, our column writer, UX designer Dix at PicCollage, established a design community that periodically organizes gatherings for designers, while ALPHA Camp’s web development instructor ihower actively participates in Ruby on Rails community and established RubyConf Taiwan that invites famous Ruby developers to become speakers every year. The best way to build one’s network rapidly and to gain credibility is to devote one’s strengths to communities.
3. Ability to observe and read people
As an entrepreneur, you will have many opportunities to come into contact with people, including investors, clients, partners, or job candidates. Powerful entrepreneurs have some special radar in their brains, where they can determine in a few seconds whether or not the people they are talking to can be trusted or whether job candidates suit their startup culture. For example, many companies have interviews that are more like conversations. Although the interviewers will not ask job candidates too many questions, they can still determine whether or not the candidates suit the company’s culture after figuring out the candidates’ personality, value system, and way of working just by having a conversation with them. Entrepreneurs should have the same acuity as these recruiters.
It takes time to develop this type of ability to read people. Sales, BD, or HR tend to have more opportunity to nurture this type of skill.
4. Enough initial funds
In the majority of circumstances, you will not have that much income before your startup starts making a profit. The current CEO of Y-Combinator has suggested entrepreneurs to keep their personal burn-rate low in order to overcome the harsh period in the nascent period of a startup.
If you do not have enough initial funds, you may not have money to raise your parents or may rely on your other half for financial support. Long-term financial pressure takes a toll on the spirit of entrepreneurs. Although every entrepreneur faces this problem, but if you are prepared then you can minimize the negative impact of financial pressure. Please make sure you have saved enough initial funds to start your business and that you will be able to spend more than a year with the most basic living standards.
5. Understand your interests, expertise, and aspirations
A lot of people start their companies because they want to make money. But to be honest, startup is not the best way to make money, because its risks are high and its costs are high (only a few entrepreneurs can say that they have balanced their health, family, and work well). If you are driven to start a company because you want to make money, you will soon encounter obstacles. Only passion can bring entrepreneurs to a higher dimension.
Only a few young people can find their passion, especially in Asia, because most children are taught to study hard to get into a good high school and university. When they enter society, they still do not know what they should do. Many people end up living in others’ expectations for their whole life and not for themselves.
Many young people who start their own companies have not gotten rid of this mindset. They start their startups because they want to gain others’ recognition or they do so for the sake of starting a startup, not because they are truly following their passion. This kind of startup is not sustainable and is doomed to fail.
The key to finding passion is whether or not you consciously experience your life. Take traveling, for example. Many people travel just to compile photos of themselves with scenic attractions; others travel to experience the lives of the local people and to understand different culture. The difference between those who regard living as a routine and those who consciously experience their life will only get larger. If you are willing to step out of your comfort zone to accept different challenges or to have different life, you will gradually realize what you are suitable for and what is the most important to you. When your ability to shape yourself gets better, you will have more opportunity to find your passion.
Once you find your passion, you will understand what kind of influence and change you can bring to the world. Only then can you stay calm and focused as pressure builds up and not lose your orientation as you venture down your startup path.
photo credit to Patrick Fore