The entrepreneur is a hero in the American economy – and rightly so. Entrepreneurs create most of the new jobs in the U.S. and play a critical role in driving innovation throughout the economy. There is remarkable unanimity of political opinion supporting policies to encourage entrepreneurs – from the most liberal Obama supporter to the hardest core Tea Party conservative.
But what if many of our prevailing myths about entrepreneurs – the young, tech-savvy college dropout who risks everything to start a firm in a garage – turned out to be false? That’s the contention of Vivek Wadhwa, director of research at the Center for Entrepreneurship and Research Commercialization at Duke University. In a recent Washington Post column, Wadhwa takes on what he calls five myths about entrepreneurs.
- Myth 1: The tech whiz kids. According to Wadhwa and his research team, the average and median age of the founders of 549 companies in fast-growth industries was 40. Twice as many were older than 50 as were younger than 25. Most are married and have kids. “The mythology of the kid in the garage is grounded more in Hollywood than Silicon Valley,” writes Wadhwa.
- Myth 2: Entrepreneurs are born, not made. Forget the idea that entrepreneurship is in the genes. Wadhwa’s research found that 52 percent of successful entrepreneurs – including Bill Gates, Jeff Bezos, Larry Page, Sergey Brin and Russell Simmons – were the first in their family to start a business.
- Myth 3: Dropping out of college is a good bet if you want to start a business. No, concludes Wadhwa. The greater the education of the founder, the lower the rate of business failure and the higher the business’s profits, sales and employment. However, neither graduation from an elite college nor the choice of major was a significant factor in entrepreneurial success.
- Myth 4: It’s a man’s world. Wadhwa found that women-led companies are more capital-efficient and venture-backed companies run by women have 12 percent higher revenue. Wadhwa also reports that men and women entrepreneurs were about the same age, had similar levels of experience and were equally likely to have children at home.
- Myth 5: Venture capital is the key to launching a business. Wadhwa’s research found that less than 11 percent of companies in high-growth industries took venture capital at any stage in their development.