Tech’s latest golden boy is crypto platform boss Sam Bankman-Fried. SBF, as he is known, looks exactly how you’d expect a young founder to look. The precocious 30-year-old wears shorts and T-shirts, is known to sleep on beanbags and became a billionaire when he was in his 20s. But what makes him stand out is his lack of peers.
Where have all the prodigies gone? The tech sector seems to be missing its latest batch of 20-something founders who become household names. The only other example I can think of are the Collison brothers, now in their early thirties, who created payments giant Stripe.
For decades, very young company founders have been a stand-in for the innovation, disruption and vision that the tech sector prides itself on. Youth equals a high tolerance of risk and a healthy disregard for the sanctity of existing systems. Some of the best-known success stories were teenagers when they started the companies that made their name, including Microsoft’s Bill Gates and Facebook founder Mark Zuckerberg. Steve Jobs co-founded Apple when he was 21. Larry Page and Sergey Brin were 25 when they set up Google and had just turned 30 when it became a public company. Evan Spiegel was 21 when he founded the disappearing message app Snapchat and 26 when its parent company went public as a $20bn-plus company.
The mythology of youth holds strong. Zuckerberg’s hoodies are still referenced when describing Silicon Valley’s unique business culture. Never mind that Zuckerberg is now 38, a father of two and more often photographed in expensive-looking crewneck jumpers.
Perhaps the tech sector is no more immune from America’s creeping gerontocracy than any other industry. Even in crypto, one of the most disruptive sectors to emerge in the past few years, the best-known founders are middle-aged. Changpeng Zhao, 44, created crypto platform Binance when he was in his late 30s. Coinbase chief executive Brian Armstrong is 39.
An ageing tech sector fits American demographics. The nation’s median age topped 38 in 2020, up from 28 in 1970, according to the US Census Bureau. The country has its oldest president in Joe Biden, 79. It is heading into an election in which the main opposition candidate could be Donald Trump, who by then will be 78.
But the dearth of famous 20-something tech founders is surprising given the amount of money poured into start-ups in the past decade. Crunchbase data shows that investors put close to $330bn into start-ups last year. There is clearly no lack of ambitious young people with bright ideas setting up companies. California’s median age remains one of the youngest in the US.
Yet most of the companies that reach high valuations are run by older founders. Ali Tamaseb, partner at venture capital firm DCVC, found that over the previous 15 years, the median age of start-up founders with billion dollar plus companies was 34.
Investors may have grown less willing to hand large sums to inexperienced business creators. Elizabeth Holmes did irreparable damage to the idea that college dropouts should be celebrated for their inexperience. She left Stanford University in 2004 at the age of 19 to found biotech start-up Theranos. Her youth was offered up as one reason she was able to create a blood-testing company those who worked in the sector said was impossible. Of course, the naysayers were right. Earlier this year, Holmes was found guilty on four counts of fraud.
Not every famed tech founder was fresh out of college when they turned entrepreneur. Jeff Bezos created Amazon when he was 30. Elon Musk was 29 when he co-founded X.com, an internet payments company that became PayPal. Eric Yuan started Zoom Video Communications, a pandemic-era phenomenon, when he was 41.
But something will be lost if tech does not replenish its supply of youthful success stories. Peter Thiel, co-founder of PayPal and a vocal proponent of young founders, has railed against what he sees as an increasingly old population less willing to shoulder the risk necessary to change the world. He accuses a “finance gerontocracy” of standing in the way of what he considers the revolutionary youth movement of cryptocurrency.
Companies are still being created by young founders. The lack of breakout stars is not down to lack of ideas. Instead, it may be the result of the way the sector has grown. While the number of venture capitalists funding young companies has increased, so have acquisitions by the biggest companies. The domination of Big Tech means promising young founders are more likely to be snapped up before they have the chance to grow into established names. The more successful Silicon Valley becomes, the more compelled it feels to eat its young.