12 facts about entrepreneurs that may surprise you

September 25, 2009 | Dharmesh Shah | Comments |
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(Editor’s note: Dharmesh Shah is a serial software entrepreneur and the founder and CTO of HubSpot, which provides marketing software for small businesses. This column originally appeared on his blog. )

I have a picture in my head of what the average entrepreneur is like. I’d guess pretty young (think Facebook, Twitter, Google, etc.) living the red beans and rice lifestyle, working 80+ hours a week and sleeping under their desk. shock

On some parts, I’m probably right — but on many, I’m flat-out wrong. This is demonstrated by a recent report from the Kauffman foundation for entrepreneurship.  The report, “The Anatomy of an Entrepreneur,” is based on a survey of 549 company founders across a variety of industries.

Here are some of the points from the report that I found the most interesting.

1. The average and median age of company founders when they started their current companies was 40.

2. 95.1 percent of respondents themselves had earned bachelor’s degrees, and 47 percent had more advanced degrees.

3. Less than 1 percent came from extremely rich or extremely poor backgrounds

4. 15.2% of founders had a sibling that previously started a business.

5. 69.9 percent of respondents indicated they were married when they launched their first business. An additional 5.2 percent were divorced, separated, or widowed.

6. 59.7 percent of respondents indicated they had at least one child when they launched their first business, and 43.5 percent had two or more children.

7. The majority of the entrepreneurs in the sample were serial entrepreneurs. The average number of businesses launched by respondents was approximately 2.3.

8. 74.8 percent indicated desire to build wealth as an important motivation in becoming an entrepreneur.

9. Only 4.5 percent said the inability to find traditional employment was an important factor in starting a business.

10. Entrepreneurs are usually better educated than their parents.

11. Entrepreneurship doesn’t always run in the family. More than half (51.9 percent) of respondents were the first in their families to launch a business.

12. The majority of respondents (75.4 percent) had worked as employees at other companies for more than six years before launching their own companies.

Which surprises you the most and alters your mental model of what entrepreneurs are like?

Image by emutree via Flickr.

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About the Author, Dharmesh Shah

Dharmesh Shah is a serial software entrepreneur. He is currently the founder and CTO of HubSpot, which provides marketing software for small businesses. The company, based in Cambridge, Massachusetts, has raised over $17 million in capital, and has over 1,400 customers. Dharmesh also authors OnStartups.com, a popular startup blog with over 15,000 subscribers and 80,000 members in its online community. He is an angel investor and a frequent speaker on the topic of startups and inbound marketing. He has a B.S. from UAB and an M.S. from MIT. He can be found on twitter as @dharmesh.

  • SimonFletcher
    I'm quite surprised that the average age is 40 when all the entrepreneurs I know (in my industry) are around 20 years old and I myself am only 17!
  • cyberfanatic
    really!!
    most of the ones i know, have atleast finished theeir degree and have bit 2-3 work experience.
  • SimonFletcher
    Yeah, though my industry is web development which I guess is an industry that is really rapidly evolving so if you don't just jump in to it you'll fall behind your competition. I myself only have 1 years work experience in a similar business but I feel that is all I needed to get started with my own company.
  • The key is that you are referring to the entrepreneurs "that you know" and "in your industry." I wish you much success and hope that my 14 year old will follow in your footsteps! But, I would strongly encourage you to meet some of those 40+ y.o. entrepreneurs. Some mistakes you just don't make until you've had some years to make them. Learn from our mistakes. Please.
  • no big surprise to me, but still very interesting!
  • Interesting stuff indeed, I would say the average age was biggest surprise.
  • Love the stuff you do with HubSpot, Dharmesh.
    The only surprising facts here would be:

    1) The average of 2.3 companies per respondent. As someone who speaks with many, many entrepreneur's, I find most to be one-time entrepreneurs. (Though those of us who have founded multiple companies have usually created 5+, possibly skewing the numbers a bit).

    2) That entrepreneur's are mostly married. At 70%, that is significant. I remember how reluctant I was to drag my sweetheart into the entrepreneurial fray in my first venture. Then again, not being "on the prowl" reserves a significant amount of brainpower for the critical issues entrepreneurs must address to succeed.

    Well done. I wonder what newly tabulated results will show over the next 2-3 years?
    Mark Alan Effinger
    http://www.ThoughtOffice.com
  • I was bit surprised by this one: "74.8 percent indicated desire to build wealth as an important motivation in becoming an entrepreneur."

    Although we know that entrepreneurship has a lot of upside, although it's very risky, I guess I thought that more people would be in it to solve problems or in some way, either large of modest, make the world a better place. Maybe there's that, too, but if you're not madly in love with what you're doing, being an entrepreneur is going to be a tough road.
  • GeoffCJ
    I think it's important to note that it says "AN important motivation". If it said "THE important motivation", I'd agree with you. Any rational entrepreneur recognizes that there are risks. Most of recognize that using any reasonably application of probability and potential payout, we'd probably want to go get jobs working somewhere. But it is the problem solving that intrigues, and the potential for payout that makes it all work.
  • Interesting! but I'm not so surprised..coz that's what I thought
    but desire to build wealth as an important motivation in becoming an entrepreneur suprises me the most
  • sairamR
    points 3 and 9 surprises me the most but i guess both can be further qualified -
    for point 3 what's rich and what's poor?
    for point 9 - I understand entrepreneurs can generally get traditional employment but i'd argue that the lack of being able to get their ideal (or close to) employment that drives them to start something on their own (plus the wealth motivation). I don't mean ideal in the idealistic sense of the word but just rather as a combination of challenge, monetary rewards and incentives, work environment (lack of politics) etc...in other words, the flaws in traditional employment (where it generally doesn't know how to cultivate and foster talent) is a driving factor.

    very nice article though.
  • Nice facts!
  • Jan
    It matched my profile pretty well, except for the relationship stuff. I imagine that it is easier to start a business if your spouse has a regular job to support the family.
  • interesting

    but would be much more so if the stufy described what they meant by the word "entrepreneur"

    i assume such a stufy would include every hardworking person who founded a

    restaurant
    gas station
    dry cleaner
    convenience store
    flower shop
    fast food or other franchise
    auto body shop
    etc

    the point is, the demographic data (eg average age) maybe is not at all surprising when one opens ones mind to include all entrepreneurs, not just high tech or software startups?
  • Interesting data and worth having a look at the original report. 82.5% of respondents were from the USA. We need more entrepreneurs in the UK and Europe. We've got too many people employed in government inventing more red-tape. Time to liberate more entrepreneurs and loosen the rules and regulations that can spa their creative juices.

    Scotkan
    http://www.kangarooselfstorage.co.uk
  • CoryMathews
    13. 68% of all entrepreneurs lied during this test.
  • One thing that encourages me about this list is that it points to the possibility that entrepreneurs aren't necessarily a product of their environment, at least not directly. Of course, the sibling factor indicates that something in the environment may influence this direction, but being born to parents who are entrepreneurs or to wealth are not determining factors.

    I was surprised at the number of entrepreneurs who had families when launching a business given the risks and lack of security (even though I personally had two babies and shared in the raising of four young children as an entrepreneur and primary income earner) and encouraged by how many did not start a business strictly as a result of unemployment.

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