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May

2008

"How to Foster Tech Entrepreneurship" by Vivek Wadhwa (Business Week)

Report on research by Vivek Wadhwa, "a former tech entrepreneur, ...Wertheim Fellow at the Harvard Law School and an executive-in-residence at Duke University." Turns out that the idea that tech entrepreneurs are predominantly Mark Zuckerberg's age are exagerrated/ wrong.

Another interesting finding is that lack of health insurance holds many older potential entrepreneurs back. (Yet Canada has affordable universal health insurance, but the US easily overtakes it in the entrepreneurship category.)

Additional insights also re. education and training.

businessweek.com/...sb20080430_430663.htm

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entrepreneurship business_week demographics startups

Startup hotshots are older and more educated than generally thought; it follows that training and finance skills should be offered to all age groups
recent research I helped lead at Duke and Harvard shows that most U.S.-born tech entrepreneurs are middle-aged and well-educated.
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- Twice as many tech entrepreneurs start ventures in their 50s as do those in their early 20s, according to our research.
- Contrary to the popular belief that tech entrepreneurs start their companies in their teens or early 20s, we found that the average and median age of founders was 39. Twice as many were older than 50 as were younger than 25. And there were twice as many over 60 as under 20. So, we may read stories about young people starting tech companies (BusinessWeek.com, 4/17/08), but they're the minority. Most tech entrepreneurs have grey hair and experience.
  - Yule Heibel on 2008-05-02
    - who would have guessed...?
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- Very few tech entrepreneurs dropped out of college to start their companies. We found the vast majority (92%) of founders held bachelor's degrees, 31% held master's degrees, and 10% had completed PhDs. Nearly half of these degrees were in science-, technology-, engineering-, and mathematics-related disciplines. And one-third were in business, accounting, and finance.
- Only 8% graduated from Ivy League schools.
- But that was significantly higher than their proportion of all graduates. In other words, you don't need to graduate from an elite university to become an entrepreneur, but graduates of Ivy League schools were more likely to become entrepreneurs than others.
  - Yule Heibel on 2008-05-02
    - a greater competitive streak? Or just more competition drilled into them from a young age?
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- Founders holding MBA degrees established their companies the soonest compared to other advanced-degree holders—an average of 13 years after graduation. Master's-degree holders took 14.7 years and bachelor's degree holders took 16.7 years. Those with PhDs typically waited 21 years.
  - Yule Heibel on 2008-05-02
    - those with PhDs are likely too heavily invested in institutional academia/ research to make the entrepreneurship leap quickly
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- Our findings raise questions about how to best foster tech entrepreneurship. It is clear that education provides significant advantage, but most of these would-be entrepreneurs spend years in the workforce before starting their companies. That means if we want to boost entrepreneurship, we need to understand what might be keeping middle-aged workers from starting their own businesses. The next upstarts won't all be found in the university business-plan contests—they'll be found in the workplace.
- Last year, the Kauffman Foundation, which sponsors some of my research, released a working paper titled "On the Road to an Entrepreneurial Economy". It found that health-care costs were a major concern for entrepreneurs and U.S. businesses in general.
- It also suggested that school curricula be adapted to foster not just excellence in science and mathematics, but also creativity and entrepreneurial thinking among students.