Silicon Valley's Age Problem

Silicon Valley startups, and the venture capitalists who fund them, have a pathological fixation on youth.
Photographer: David Paul Morris/Bloomberg

If you haven't read Noam Scheiber's feature on the youth culture of Silicon Valley in the New Republic, I suggest that you drop everything and do it now. Go ahead; I'll wait right here while you do.

For those who don't have time to read a whole piece, I'll briefly summarize: Scheiber argues that Silicon Valley startups, and the venture capitalists who fund them, have a pathological fixation on youth. People in their late 30s are already aging out of the industry, getting botox to make them more marketable in their job searches.

The youth culture of Silicon Valley was remarked upon in the 1990s, but in Scheiber's telling it seems to have actually gotten worse. New industries often start out young, and then age to stately silver as the founding generation stays put at the top. But almost 20 years after Netscape started the first Dot-Com Bubble, Silicon Valley is still in a startup frenzy. And according to Scheiber, investors are looking almost exclusively for disruptive youth, not competent experience.

This has implications for the kinds of projects that get funded -- Scheiber argues that all this disruption is focused on stuff that 25-year-old nerds need, like cab-hailing apps and social networking, and not so much on the things that 45-year-old parents might want.

It also has obvious implications for the people who work at those companies. Unless an early stint at a startup makes you megawealthy , you may suddenly find it hard to make a living, especially if you've made mistakes like getting married, having kids or turning 40. This sort of thing obviously terrifies those of us who have acquired things like spouses, mortgages and a birthday in the 1970s.

One hopes that the market will eventually correct this trend, if Scheiber is right and the excessively youth-focused culture is missing out on big opportunities. One thing his piece doesn't include is a discussion with venture capitalists of why they don't invest in older entrepreneurs. I say this not to fault Scheiber, because it's obviously very difficult to get someone to discuss their illegal age discrimination on the record. But it's hard to make predictions about what will happen when you don't understand exactly why it's happening.

One possibility is that VCs are looking for a lottery ticket of sorts -- the fantastic scores that will make you Facebook money from a small initial investment. And maybe you're more likely to get a winning lottery ticket from a young entrepreneur, not just because they're unconstrained by past experience, but also because the markets they cater to simply have more of that potential than businesses based around an older demographic. Older people are more set in their ways and have more obligations; they're unlikely to spend hours of their valuable time helping you build a sustainable user base for the next Facebook or Twitter.

Another possibility is that most of the people who want to be first-time entrepreneurs are in their 20s and early 30s, before they have families and mortgages that need to be paid every month. Because older entrepreneurs are rare, they don't fit investors' mental model of what an entrepreneur looks like.

But those are only two possibilities. I'd like to hear what the venture capitalists have to say -- though I doubt I ever will.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

    (Megan McArdle writes about economics, business and public policy for Bloomberg View. Follow her on Twitter at @asymmetricinfo.)

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