BY Kathy Crosett
Since the start of the tech revolution, news reports of successful young entrepreneurs have captured our imagination. We equate youth with creativity and unencumbered enthusiasm. And employees have been willing to put up with the famously bad behavior of tech titans like Steve Jobs and Travis Kalanick because they wanted to be along for the ride to wealth. Mark Zuckerberg popularly explained his success by saying, “Young people are just smarter.” It might be fun to entertain that fantasy for a few minutes. Still, research shows that factors like the owner’s business acumen and ability to optimize their leadership team are the primary drivers of a company’s success.
Business Acumen and Enthusiasm, Not Youth, Drive Successful Startups
Academics Pierre Azoulay, Benjamin F. Jones, and J. Daniel Kim recently teamed with the U.S. Census Bureau’s Javier Miranda to analyze the average age of company founders. Even in the high-tech arena, the age was older than people might expect — 43. This news might come as a shock to venture fund manager and PayPal founder Peter Thiel. In promising to fund fellowship grants of $100,000, Thiel had stipulated that grantees must be younger than age 23 and willing to drop out of college.
We all know what happens to venture-funded firms. First, the young founders lead their business to one level of success. Then, the business funding organization will insist on placing their more experienced, read that as older, people on the board and into key positions to ensure long-term success and their eventual payout. Finally, new ideas and out-of-the-box thinking may originate with younger employees who haven’t yet had their minds shaped by corporate drones.
But the research indicates that leaders with business acumen make the difference between successful and unsuccessful organizations. But what is business acumen? Chris Elgood states, “Business acumen is a combination of knowledge and skill informed by experience.” Azoulay and fellow researchers support this contention, finding that business starters with experience in their industry have a better chance of success in their new venture. But that’s not all they need.
The Power of High Performers
Business leaders who have learned from previous stints know what to avoid when running their own companies. As Kumar Mehta points out, these individuals are often high performers eager to create something of value. The people who held “cushy corporate jobs” aren’t the “ones most likely to become successful founders,” in Mehta’s experience.
If you seek guidance on who to select for your startup team, the experts will tell you not to obsess about age. In addition to high-energy workers, look for people who possess the work traits and behavior that will optimize your team and lead you to become a successful startup. Using psychometric assessments, you can learn which prospective team members will work best in specific roles and for which managers.
You’ll need to take motivation into account as well. In any business, some team members will be primarily motivated by money. Others will want to achieve results and yearn for the independence to reach them on their own.
Team members who crave frequent feedback and one-on-one meetings should report to a manager who enjoys coaching employees to achieve career success. Assessment details will also reveal which employees will make the best managers. As a business owner and leader of a startup company, you may believe the employee who performs well in their current position will excel as a manager. However, that assumption doesn’t always work.
Being an effective manager means relying on different skill sets and attitudes. Managers must commit to developing their team members’ skills, staying socially aware, and focusing on the progress of projects and goals.
Your Business Success
Starting a new business can be exhilarating and nerve-wracking. You likely know the statistics. Nearly 1.4 million new businesses opened their doors in the U.S. last year. But, unfortunately, nearly 50% of those businesses will no longer be operational in five years. To boost your chances of success, tap into your business acumen and enthusiasm, and rely on available tools and information, especially the psychometric assessment results for the team members you plan to hire and place in key roles.
Photo by Andrea Piacquadio on Pexels.