Should you do a startup after 40?

If you're under 30 years old, do whatever you want. This article is not for you.

This article is for my fellow over-40 and the few over-50 people who are considering starting a business--specifically any kind of business that would seem to require creating software. And it is especially targeted to those who cannot execute the entire development effort themselves.

Over the years, I have worked with software entrepreneurs in every age bracket. I failed myself at the three tech businesses I started between age 19 and 31. In the last one, despite a promising start, I lost my own savings and suffered a financial setback in conjunction with the financial crisis that took a decade to recover from.

A startup is just a failing business until proven otherwise. There is nothing romantic or glamorous about this for someone our age. Only the fickle gushers of VC money and their PR spin can paint a gloss over this reality.

Most SUCCESSFUL businesses are started by people over 35. But being over 35 doesn't mean that YOU will be successful in your startup venture. And failures at this age, like accidents and injuries are more painful and take longer to recover from.

I have now been in business for 15 years. I provide skilled teams of developers, mostly to established businesses but occasionally to startups as well. It's a people business more than a software business, but it requires understanding software, and all the complexities surrounding its creation and maintenance. This business doesn't have the high capital requirements or risk that startups do. That is something to consider if you are an older entrepreneur.

Surviving for 15 years is succeeding even though we have not yet achieved great scale. It has not been an easy road. Some days and some years are great. When all the customers and staff are happy and you are cash-flow positive for months on end, owning a business can feel like a dream. Savor it because such sweetness is always temporary. There will come days or weeks or months when two or three or four things go wrong at once and you find yourself not getting paid, or not getting paid enough, for months or years.

If you have worked your way up in corporate environments from a cubicle to an office with a personalized door that closes, the dream of being your own boss and having a successful business can be an enticing one. Job searches for senior, even highly-skilled and very accomplished people often take years. Finding another position that matches your compensation, now well into six figures, presents a challenge to be sure. You can't just snap your fingers and get another job that pays even better than your last one the way it seemed you could a decade or two ago. But these are supposed to be the highest earning years of your life! You probably need them to be.

Just know that building a business that can replace your solid executive income is no small chore.

My more senior peers who stuck with more conventional corporate employment are running into the changing job market reality now. At this point there may be a strong incentive to keep with what you have and defend your position mercilessly. You will put up with a lot to keep your job. Your employer knows this. You have kids in college. You probably have a mortgage. Your retirement funds might be back above 2008 levels and growing, but probably not as fast as you need them to. Maybe you have lucked out in the housing lottery. Maybe not.

I knew 15 years ago when I made that fateful decision to strike out on my own, that I was probably stepping off the corporate ladder for good. After sufficient time "outside" it would not be easy for me to plug in to a hierarchy and play a well-defined role. I knew I was delaying family formation, home ownership and other life priorities. Yet I knew it was something I had to do.

My favorite types of businesses -- and actually my favorite clients over the years -- are what I call ORGANIC businesses. They grow up serving paying customers right from the start. They don't start by building someone's "vision" for a "platform." That vision comes in time. It evolves from actual business needs. These businesses start with a commitment to satisfy customers right off the bat.

I usually encounter these businesses after 10 years when they have built a lot of software to automate or improve their operations. Organic businesses are messy. They are complex. They have a lot of edge cases. They need to integrate with lots of systems. But you know what? They are also anti-fragile. They are not based on false ideas and dreams. They are not funded with the funny money that pumps every asset bubble. Organic businesses are grounded in the reality of meeting customers' needs and the ultimate validation--profit and loss. This means they can make business decisions with sound economic reasoning, not strategic voodoo. You can do business with these companies because they are reasonable.

The primary concern for an older prospective-entrepreneur, especially one who is not already financially secure, should be to validate and de-risk your idea as quickly as possible. Find all your unproven assumptions and attempt to validate them without spending much money or inordinate amounts of time. Look for the genuine kernel of a good idea within all that creativity. It might be different than you think. Be humble and open minded.

It might also be better to think of your business as a "side hustle" for now. Keep that day job but see if you can do something or create something that someone will pay you for right now, today. If you can't advance in position, try to limit your time at the office and use your own time to work on your idea. Get a few people or companies paying for the same thing, then automate what you can. Rinse, repeat. Or, see if you can get an email list together of 1000 potential customers who have opted in to receive content or information from you. Chances are you can make some money from a list that size and you will certainly have figured out how to reach your market!

If your position in the corporate world has given you a network of potential customers you may have a little more of a challenge starting it as a side-hustle. It may be impossible to solicit these contacts while retaining your position, however, you can go into business with a lead customer. If the account is big enough, and your expenses are low enough, you can quit your job.

The struggle will be to get the second and third customers.

Once you have survived 2 years without going broke, and you have closed two or three additional large accounts or dozens of small ones, you probably have learned enough to survive.

So, should you do it?

Yes, if you really feel this is something you have to do, but do it the smart way. Do it in a way that minimizes your risk. Focus on customers and do whatever puts money in your pocket that is in the general space of your ambition. Do what you can to prove it all out and get cash flowing before you quit your high-paying job. Do not get caught up "designing a platform," cooking up a grand strategy, innovating a business model, or heads-down coding for months on end. Your castles in the sky are probably a waste of time or even dangerous. They can sink you.

Another option is to engineer some kind of spin-out from your employer's existing business. If you can go into business with the support of your employer or with them as an initial customer or investor, you can at the very least gain valuable experience without a lot of downside risk.

Whatever you do, focus on getting and serving customers while limiting your risk and you'll probably do fine. For the type of startup or business I have described, do not commit to any fixed recurring expenses like office space, or write a lot of software which has ongoing maintenance costs until you have the cash flow to support it. Do not mortgage your properties or tap investment accounts unless you truly can afford to lose these things.

I speak from experience and from having observed many entrepreneurs in action, as friends, as clients, and as employers. I hope this helps you in your journey. I wish you all the luck in the world. If you want to talk with me about your idea, I can help you temper your enthusiasm and then give you a couple solid suggestions. Just reach out here on LinkedIn.

And if you really need a solid software team, by all means let me know.