Article Commentary 2

Success at Any Age The article I chose is called Why Older Entrepreneurs Have an Edge talks about Randal Charltons personal experiences with success and failure as an entrepreneur throughout his life. It is used as an example for how many individuals do not reach their full potential or height of their success until much later in life. It goes on say that one in four Americans between the ages of 44 to 70 are interested in starting their own business (Freedman, pg. 1). The article gives many reasons for this finding including the real world knowledge accumulated through time and experience and financial means to pursue opening ones own business. Another interesting point brought up in the article is economist David Galensons theory that there are two different what he calls clusters of knowledge (Freedman, pg. 1). The first is what Galenson calls conceptual geniuses, which are those likely to have success early in life with revolutionary and brand new ideas. The second cluster Galenson calls experimental geniuses, which are the individuals I have already mentioned that take time to develop and use trial and error to form their success. With this in mind, a good place to start my analysis is looking at human capital. Obviously not every fifty-year old will be pursuing and entrepreneurial lifestyle. It takes the right kind of person with certain skills and frame of mind to start a business and have it be successful. Most of these skills will come from life experiences, things that cannot be taught out of a book. Another thing to keep in mind which we talked about in class is that someone may have the necessary skills to come up with a new business model and pursue it but lack the skills to run the company well once it has established itself. It would then be up to the CEO or those close to him to recognize it and make the necessary changes for the company to continue to succeed.

This article talks about entrepreneurial opportunities in the context of small startups and sole proprietorships. As the book states, there are three elements that must be present for the entrepreneurial venture to be valuable. There must be an entrepreneurial opportunity, must have resources to pursue the opportunity, and the entrepreneur must be willing and able to undertake the opportunity (Dess, Lumpkin, Eisner, McNamara; pg. 281). Older entrepreneurs have some advantages when it comes to these three elements. Older individuals are more likely to be financially sound and able to invest in their new startup. They have also spent many years making acquaintances that could potentially help them in their new venture either financially or intellectually. They will also have a better understanding of which opportunities are worth pursuing. Once an entrepreneur has identified an opportunity worth pursuing, the next step would be to form a business strategy to define exactly what they want the venture to accomplish and the best business structure for the venture. We discussed in class three types of entry strategies that entrepreneurs should consider. Depending on the type of venture and market they are trying to enter, entrepreneurs can choose between pioneering new entry, imitative new entry, or adaptive new entry strategies. These strategies vary from brand new and innovative business models in which pioneering new entry would fit best, to redefining a broadly used business plan in which adaptive new entry would be the optimal choice. This article also touches on the fact that no entrepreneur has a perfect success rate. Some business models, no matter the attractiveness or value created, will fail due to factors outside the entrepreneurs control. Charlton successfully co-founded Asterand while he had to deal with the failures of a jazz club and a cattle ranching business. Dedicated entrepreneurs will take the

lessons they learn from their failures and apply them to future ventures with the hope that this will help them succeed in the future.

http://blogs.hbr.org/cs/2012/04/why_older_entrepreneurs_have_a.html

Why Older Entrepreneurs Have an Edge

10:24 AM Friday April 20, 2012 by Marc Freedman | Comments (12)

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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 cattleranching 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."