Why Older Entrepreneurs Have an Edge
by Marc Freedman | 10:24 AM April 20, 2012
Randal Charlton had great strokes of midlife success — then he didn’t. He did well co-founding Asterand, an ethically sourced human-tissue sampling business, but lost his shirt on a jazz club and a cattle-ranching enterprise to produce low-fat beef. At a time when he was really down on his luck, he considered jobs he never imagined earlier in his career, like becoming a night watchman.
Finally, while pounding the pavement, he approached Irv Reid, then the president of Wayne State University. Reid hired Charlton to bring his entrepreneurial instincts and accumulated experience to TechTown, a nonprofit business incubator Reid had spearheaded in the 1990s. Charlton’s assignment: To raise millions of dollars in funding, recruit legions of participating entrepreneurs, and train mentors to win the war on recession. With Charlton’s help, TechTown is sparking a small renaissance in entrepreneurship in midtown Detroit. Charlton’s effort to use his entrepreneurial instincts led not only to a job for himself, it helped create jobs for a lot other people, too.
Charlton’s case is a dramatic one but, in many respects, not dissimilar from the path many are taking in midlife, when jobs are harder to find and gray-haired applicants don’t feel entirely welcome. Recent research shows that one in four Americans between the ages of 44 and 70 — about 25 million people — are interested in starting their own businesses or nonprofit organizations in the next five to 10 years.
Most won’t be running TechTown-like entities. Instead, 72 percent of those in this age group who want to be entrepreneurs envision small start-ups and sole proprietorships with just a handful of employees.
The findings reinforce consistent research from the Kauffman Foundation, which shows that for 11 of the 15 years between 1996 and 2010, Americans between the ages of 55 and 64 had the highest rate of entrepreneurial activity of any age group. The National Journal reports that 9 of the nation’s 15 million small-business owners were born before 1965.
These findings fit another area of research as well, which shows that creativity and innovation spike for many in later life. In his study of artists, University of Chicago economist David Galenson has shown that genius clusters into two categories. Conceptual geniuses tend to do their best work while young, producing breakthrough ideas early in their careers. But experimental geniuses, by contrast, need a long period of time to reach their peak, moving forward by trial and error, slowly accumulating the elements that will be integrated into their fully realized work.
Later entrepreneurship often crosses paths with yet a third later-life trend — the urge to give back. Research shows that half of those who want to become midlife entrepreneurs — more than 12 million people ages 44 to 70 — also want to meet community needs or solve a critical social problem at the same time.
These encore entrepreneurs include small businesspeople like Elaine Santore, who started Umbrella of the Capital District in Schenectady, N.Y., to provide “handypeople” — most over the age of 50 — to do low-cost home repair for older adults who need help maintaining their homes. And it includes people with bigger visions, like Jenny Bowen, a former screenwriter who created Half the Sky Foundation in her late 50s to revolutionize the care of orphans in China.
None of this is to say that the entrepreneurial route is an easy path in the second half of life, or one that is risk-free. Randal Charlton knows that first-hand.
Now in his 70s, Charlton is trying to make it easier for other entrepreneurs, imparting lessons from his own odyssey. His new organization, BOOM The New Economy, works “to transform Southeast Michigan’s economy by assisting adults 50+ towards career change, entrepreneurship, and meaningful volunteer service.”
Charlton and those working with him are out to show that, for those over 50, setting out on your own is a viable alternative to the traditional job market — but that setting out alone doesn’t have to be lonely.
This post is part of the HBR special series “The New Rules for Getting a Job.”