Startups by People Over 50: Why Should you Watch Out for Them
Think startups and what comes to mind is twenty somethings in loafers, hoodies and headphones, reclining in their chairs and entering codes into their smart laptops. Another stereotype of startup founders is as recent grads or college graduates who hold meetings in coffee shops. Almost no one would suspect that a person in his/her 50s could also begin a startup.
What would you think if we told you that many seniors also harbor dreams of starting their own companies? Would you invest in a company started by a 50-year old? Here are a few facts that might make you consider this group seriously.
Half of the companies launched in 2011 were started by entrepreneurs who were between 45-64 years old.
The amount of business created by new entrepreneurs between the age of 55-64 was 14.3 percent of the total business in 1996. In 2011, it was 20.9 percent.
One in twenty workers over the of 50 years plans to start a company.
Encore.org has found that nearly 25 million people, one out of four Americans in the age group of 44-70 years want to start businesses/non profit companies in the coming five or ten years.
Do older entrepreneurs have the qualities needed to succeed?
Old entrepreneurs actually have many things going for them. Their work ethic is strong, they have management experience, they already know many potential customers, they have patience and if they become a bit tech savvy, they can easily start a business from home.
The trend has not gone unnoticed. The United States Small Business Administration and the AARP have acknowledged the surge of entrepreneurial interest in seniors and they have started a collaboration to link 100,000 United States citizens over 50 with resources that will help them develop their businesses like workshops, mentoring programs and conferences, all designed to give a fillip to entrepreneurship as a career.
For many seniors, holding a job is no longer an option. Thanks to improved healthcare facilities, seniors are living longer, which means they are worried that they might outlive their savings. Then there is also the fact that they want to remain mentally engaged.
AARP launches platform to promote businesses that serve older Americans
AARP has also launched an initiative to showcase startups which provide services in the 50 and over, innovation and healthcare sector. The initiative is called Innovate@50+. The initiative is sponsoring design and research in products and services targeted towards seniors.
The average senior may not be conversant with new services like SnapChat and they may not share the millennial generation's love for social media and video sharing services. However, they are responsible for nearly half of the consumer expenditure in the United States, which comes to $2.3 trillion. So you can say that they have an extensive knowledge of at least one market. Their generation's spending on consumer goods and services also exceeds the spending by other groups by $400 billion.
After reading all these details, as an investor, which 'senior' - the senior citizen or the college senior will you put your money on?