Increased longevity, rising unemployment and an ageing population are all contributing to the growing number of seniorpreneurs establishing businesses for the first time, writes Tony Featherstone.
Bambi Price MAICD never expected to help 70-year-olds record rock music when she launched TelUs Support last year. That was until a septuagenarian needed help with the GarageBand software app so he could better record music with two similarly-aged band mates.
Price thought TelUs, a specialist technology support service for older people, would mostly help them use websites and smartphones. But she soon realised that seniors would need help with a range of smart devices and e-services in coming years, and that technology could liberate those who felt isolated at home.
“Companies and governments worldwide will need to think much more about technology design and support for the older demographic,” Price says. “Technology can make a huge difference to the quality of life for seniors, so long as they know how to use it.”
Fifty-six-year-old Price had been a senior executive in technology companies and consultancies, and on the boards of not-for-profit organisations, before starting TelUs, her first business. She was inspired by her mother, who had mobility issues and was struggling with technology. “Everything is moving online, yet we are not thinking enough about how we help older people fill in long government forms over the internet, for example.”
Price is part of an emerging worldwide trend of “seniorpreneurs” — people over 50 starting a business, usually for the first time. For Price, seniorpreneurship is about pursuing an opportunity to build a multi-million-dollar venture. For others, seniorpreneurship is driven by necessity: the need to create an income because full-time work is scarce for them.
Some seniorpreneurs start a business late in life to stay active. They believe full or part-time work is the key to active ageing and want to remain engaged in some form of work. So they start micro-ventures, such as consultancies, and combine them with other roles such as a directorship. Or they become directors of start-up ventures or investors in them.
Seniorpreneurship is becoming a powerful trend overseas. In the US, more people aged 55 or over now start a business than those in their twenties or thirties, according to the prominent US entrepreneurship think-tank, the Ewing Marion Kauffman Foundation. It found entrepreneurial activity in the US in the past decade has been highest in the 55-64 year old age bracket.
The Organisation for Economic and Co-operation Development (OECD) is also studying this trend. A 2013 OECD report, Senior Entrepreneurship, found about 16 per cent of third-age respondents (aged 50-64) in its survey were considering entrepreneurship as a late career alternative.
In Australia, the 2011 Global Entrepreneurship Monitor found the rate of entrepreneurial activity among older people was significantly higher than the average for other innovation-driven economies.
Several forces are driving rapid growth in the number of older entrepreneurs. An ageing population is increasing the ranks of seniorpreneurs, and medical advances are helping people feel fitter, younger and more energised to build businesses and take risks later in life.
At the same time, the prospect of higher unemployment among older Australians, as companies downsize, is forcing more people to consider self-employment. Unable to find a corporate job, seniorpreneurs are creating their full-time or part-time job, to supplement retirement savings.
Moreover, academic research has found seniorpreneurs have better prospects to build a business than their younger peers. The author of the OECD report, Professor Teemu Kautonen, wrote: “Current literature suggests that older people are generally in a better position to start a business than younger individuals.” More business and life experience, stronger networks, greater ability to control risk, high self-awareness, and in some cases better access to capital, are key advantages.
Several seniorpreneurs interviewed for this feature have created formal or advisory boards early in their venture’s life. Bambi Price, for example, put together a five-member board for TelUs, including two non-executive directors. Like other seniorpreneurs, she recognised the value of implementing strong governance systems early in the venture’s life.
This trend could create opportunities for experienced company directors to participate in start-up businesses owned by seniorpreneurs, either as board members, angel investors or part-time executives. For the governance community, a rise in seniorpreneurship will, in time, add to the ranks of company directors in Australia and create higher demand for governance training and support.
Much depends on how governments foster seniorpreneurship. “There are very strong economic and social reasons for governments to help older people into self-employment,” says Dr Alex Maritz of Swinburne University. “It stands to reason that we will see more seniorpreneurs becoming company directors in coming years and looking for support from the governance community.” Maritz is the leading Australia researcher on seniorpreneurship and a noted entrepreneurship academic.
He adds: “It is still early days for seniorpreneurship, but the concept is getting a lot of traction overseas. Governments in Europe recognise that self-employment has an important role in helping people actively age, and reducing unemployment among older workers. They can see the benefits of self-employment in an ageing population.”
Maritz says seniorpreneurs have a lot to contribute to Australian business. “All the research shows you have more chance of starting a successful business later in life, and that starting and running a business, small or large, is a very enriching personal experience.”
There are strong potential linkages between seniorpreneurship and company directorship, Maritz says. “When you ask people in business, ‘what would you have done differently 20 years ago,’ they say, ‘surround myself with people who know more than I do.’ You will see a lot of seniorpreneurs eager to have mentors, advisers, or form boards.”
On the same level
Perhaps the greatest opportunity for seniorpreneurship is the ageing population itself. Nobody is better placed to understand the needs and wants of older Australians — and the opportunities that come with it — than seniorpreneurs. Or have greater empathy with this demographic.
That logic is a key factor behind TelUs’ early success. Price knew older people would prefer to receive technology support from their peers. “Young people are great with technology and some of them are very patient. But they just do not have the life experience,” she says. “Having older people helping older people with technology makes a huge difference.”
Although it was daunting at the time, starting TelUs has been a terrific experience for Price. “I love work and doubt I will ever retire. Every day brings new opportunities for the business. It is a great feeling when you are potentially building a big business and helping people at the same time.”
Other seniorpreneurs are also working overtime to help older Australians. Emeritus Professor Murray Gillin, almost 80, is helping to organise a major new conference on the implications of ageing. The conference, Ageing Well: Boomers Riding the Long Wave – ‘Wicked Problem’ and Opportunity Spaces, is currently scheduled to take place in Adelaide in September 2015, and will bring together speakers on innovation, entrepreneurship, informatics and the healthcare sectors.
Gillin believes South Australia can build a valuable innovation hub on active ageing. “I see seniorpreneurship or starting a small business as a very powerful way to keep older people active, engaged and excited,” he says. “Done well, a successful small business can contribute to your lifestyle and income, and re-energise older people who may feel jaded after their corporate career.”
Gillin still works three days a week, lectures at the University of Adelaide, consults to the accounting firm Pitcher Partners on entrepreneurship training, travels to overseas conferences, and supervises PhD students. For good measure, he wants to develop an ageing conference that will bring together some of the world’s top thinkers on this issue.
“I have no plans for retirement,” he says. “I will know when I start to lose steam and it is time to stop work. But I am passionate about this idea of active ageing. I do not see why somebody in their 60s, 70s or 80s can’t start a business.”
Other seniorpreneurs who started a business later in life are also succeeding. Peter Long MAICD was 49 when he started his first business, ARK Private Exchange, an internet security company, in 2008. After spending 10 years in Silicon Valley, in senior management roles for Cisco Systems, Long returned to Australia so his children could finish school here.
He saw an opportunity to help business, governments and individuals take advantage of cloud-computing, while retaining their privacy as files were shared online. Long has run small consultancies, but never a small venture with big growth plans.
“Although I had a successful corporate career and had some capital, it still felt like a risk to start the business,” he says. “You worry about financial risk, reputational risk and other risks that emerge when you bring in investors and you are suddenly using other people’s money. But I just had this passion and vision to give people privacy on the internet, because privacy really matters.”
ARK now has eight employees, significant revenue and plans for rapid international expansion. It also has a six-member board of experienced directors — something that most companies of ARK’s size would rarely consider.
Long understood the value of good governance, having been a board observer in the US, on behalf of investors, and on the boards of start-up tech companies in Australia. “I have dealt with a lot of start-ups over the years and when I ask if they have a board, the answer is almost always ‘no’. But when you have been around a while you see how well boards can work and the huge value they can offer. A strong board provides a huge return on investment.”
Long believes older entrepreneurs are more willing to form boards early in a venture’s life. “You’ve seen all the things that go wrong when you do not get the foundations right at the start. I have seen start-up companies that skimp on paying for legal advice, or they get a terrible shareholders agreement off the internet and wonder why nobody will invest in the business. Or they do not want to form a board because they think it will get in the way.”
Part of being a successful seniorpreneur is recognising what you are good at, Long says: “You get to a point in life where you are happy to take advice from someone who knows more about something, or hire someone who can do the job better. When you are younger, the business is all about you. When you are in your fifties, you just want the job done right, so you do a great job for clients, enjoy what you do, and help everyone in the business share in the success.”
Tom Crampton, 53, is another successful technology seniorpreneur. He started Trusted Impact, an information security company, in 2007 after spending more than two decades in global management consulting firms and local technology companies. The business has 10 staff and plans to triple revenue and employee numbers this decade. “We knew the marketplace for information security was growing and had something unique to add in this space for clients,” he says.
Crampton always had an inclination for entrepreneurship. His wife’s grandfather started a successful steel business in the US in his 50s and his father built a law firm. “I used to hear my father say he would jump out of bed to get to work. I enjoyed my corporate career, but I felt it was time to do my own thing and build on the knowledge and networks I had developed.”
Crampton says it is a culture shock at first running a small venture. “Running your own business is all about outputs. When I was in the corporate world there were always edicts to cut costs or grow revenue, and make the budget. But if often felt like Monopoly money. When it is your business, you worry less about inputs, such as trying to be busy or have lots of meetings. Instead, the entire focus is on outputs, such as helping clients with hard problems and growing revenues. It gets very personal when you have to pay rent from your own back pocket.”
Being older has helped Crampton grow the business. “The older I get, the more I realise how little I know. When I was a typical young ‘smart’ consultant, I thought I knew everything. After a while you realise how important it is to have good people around you who can add value in ways you cannot.” Crampton has a number of mentors and Trusted Impact will consider a board as the business continues to grow.
Like many seniorpreneurs, Crampton has no intention of retiring. “Life is way too short to simply show up to work to earn a pay cheque. If you do not love what you are doing, you need to change. Life is for living, not plodding.”
Bambi Price, for her part, feels energised at the prospect of older people living longer. “There is an entire industry that Australia can create by becoming a world leader in technology design and support for older people. In turn, that will create a huge number of opportunities for seniorpreneurs in coming years.”
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