There’s no golden age to start a company, but there is definitely a timer on when we can withstand failure. The question is — when does that timer expire for us?
As it happens, our numeric age isn’t really what’s driving our “Founder Expiration Date” — it’s about how our age may reflect our relative appetite for risk. That’s really a nice way of saying “What’s the oldest I can be before I’m too old to recover from failure?”
Age Erodes Risk
Every year that goes by is another year we can’t get back. When we’re in our 20’s and starting a company, we have our entire adult life to make up for the risk of failure. In many cases, we may not have a family or even a mortgage to worry about. At most, our failure may result in some lost years and a shitty make-up job afterward. It’s not awesome, but it’s very survivable.
But then we enter our 30’s, and often we start taking on those wonderful liabilities, and now for the first time if we muck it all up, there are real consequences. Moving back in with our folks at 25 wasn’t fun, but moving in with them at 35 is a whole lot less fun. That said, while we have consequences, this is still the only time in our lives where we have more years in front of us than behind us. It’s a great time to manage our downside risk (time) but it’s also the last time we get to gamble like this, so we have to make it count.
Over the Hill and Under the Gun
But then in our 40’s something really starts to challenge us — if we burn these valuable years, we really don’t have a ton of time to make up for them. Not only that, but our dependencies have dependencies. We’re thinking about funding college educations, weddings, and, what’s this — retirement?
Now it isn’t just about maximizing our upside, it’s about being legitimately concerned about our downside because we’re burning our best income-earning years, and at the other end of those years finding a promising gig is going to be harder and harder.
At this point, if we miss, there’s a fairly good chance that we will permanently change our financial trajectory for life. It’s not about “I can make this up later” it’s more about “I may never get the opportunity to have that major trajectory again.” On top of that, our support structure is mostly eroded, meaning if things tank, we’re on our own.
Retired not Wired
As we round the corner into our 60s and beyond, we’re no longer thinking about risk in the same way. Every dollar we “lose” as either burnt up investment capital or a lack of potential income is a dollar we will almost certainly never earn back. Not only that, we’re pretty damn tired, deservedly so, because we’ve been grinding for 40 years straight!
Our appetite for risk is almost entirely tied to how well we may have set ourselves up in the past for future failure. We may have put away some nice savings or some sort of residual income stream. Maybe we can afford to roll the dice because our bills are going to get paid either way (nice work if so!)
At this stage though, the conversation turns to “If not now, when?” where we can’t kick the can down the line any longer. These are the highest stakes we’ll ever take on, and yet, it’s also our last time to bet the farm.
Assessing Risk, not Age
Every one of these stages is a balance of our risk, not our age. As we enter different epochs of life, we have to assess how willing we are to lose and suffer the consequences of that loss at that stage. There’s nothing stopping us from trying at any age, only what we are willing to withstand if things don’t work out.
If we continue to believe we can manage our downside, then we confidently start at any age.