There was an extended article in the New Republic recently on the rampant “ageism” in Silicon Valley. In some ways, it isn’t surprising. Start-ups can be brutal on a family, so having less (or no) family to worry about makes it somewhat easier. Ironically, the culprits in the article don’t view those in their 60s or 70s as being discriminated against, but rather those in their 30s and 40s, those with real hardcore experience.
Beyond the societal need to avoid discrimination, there is a double price that these startups pay.
The Wages of Talent
Let’s say you are an engineer or product manager or marketer in Silicon Valley. You may feel young and brilliant at 23, and you just know that those 37-year-olds are over the hill. While you may feel invincible, you know that, in 10-15 years, that over-the-hill person will be… you! If you know you have only 10-15 years of real earning power, how much will you expect, will you need to earn in each of those 15 years, compared to if you believe you have 40-45 years of earning power in front of you? The price of your talent just went up.
At the same time, as an employer, if all you are willing to hire are those under 35, you have just cut out 75% of your supply, without reducing your demand. What happens to the price when supply is cut by three-quarters, but demand remains the same?
A focus on youth costs you a lot when capital is scarce.
The Cost of Inexperience
One of my favourite stories in the New Republic article, about three fourths of the way through, is when Nick Stamos, the founder on nCrypted Cloud, is asked to advise a young founder who is in trouble. Like Nick, as soon as I heard what the business idea was, I saw most of the roadblocks based on my own past experiences. I love it when the dumbfounded founder asks Nick how he “guessed all of this,” and Nick responds, “you see these gray hairs?”
Young startup founders – and investors – are right; sometimes experience and age really do equate to cynicism about the way the world works, and whether or not it really can be changed. But is that really a question of age, or of character. I have seen countless youth who accept the world for how it is, and countless adults in their 50s, 60s and 70s who have an energy and passion for changing it. Bill Gates is still changing the world in his 60s, and doesn’t appear to be slowing down. How many lawyers, straight out of law school and into their first year as associate at big Washington, DC, firms, are changing the world?
Experience can lead to cynicism, but what it really does is teach you what roadblocks will be in the way; youth often lacks that knowledge. Whether or not you view the roadblocks as insurmountable or just one more obstacle to go over, around or through, is the difference between cynicism and optimism.
If Nick’s advisee’s investors had gotten experience before starting out, they could have saved many millions of dollars.
The difference between experience and cynicism? It isn’t age, it’s character. But learning to evaluate that in a candidate is a little harder than evaluating Ruby on Rails coding skills; it takes experience.