Nearly 23 percent of new entrepreneurs were between the ages of 55 and 64 in 2010, according to the Ewing Marion Kauffman Foundation's Index of Entrepreneurial Activity, up from 14.5 percent in 1996
By Janet Kidd Stewart, Special to the Tribune August 18, 2011
Whether they jumped or were pushed from corporate life, more mid- and late-career adults are striking out on their own.
Nearly 23 percent of new entrepreneurs were between the ages of 55 and 64 in 2010, according to the Ewing Marion Kauffman Foundation's Index of Entrepreneurial Activity, up from 14.5 percent in 1996. The Global Entrepreneurship Monitor reported that people over 35 accounted for 80 percent of entrepreneurial activity in 2009.
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While overall startup activity slowed in the first half of 2011, according to outplacement firm Challenger, Gray & Christmas Inc., longer-term trends affecting older workers remain. Baby boomers are expected to live longer, healthier lives, and many want to stay engaged in work. But older workers aren't getting rehired as quickly as younger workers, and mature entrepreneurs often have more resources to self-fund their startups.
Unemployment rates among older workers are generally lower than for younger workers, but they have risen sharply in recent years amid overall economic doldrums, a mismatch between job skills and available work, and age discrimination. This spring, average unemployment for people 55 and older surpassed a full calendar year.
The job market is driving many older workers to trying to make a go of it on their own, experts said.
"A lot of these are what I call reluctant or accidental entrepreneurs," said Ellen Rudnick, executive director of the University of Chicago's Polsky Center for Entrepreneurship. "There often is some triggering event — they may have gotten fired — and they realize they don't want to work in a large company anymore."
Many, of course, don't have the option.
"I'm seeing more and more older workers finding it impossible to find even part-time and temporary jobs, so they're starting to work from home or start a small business that doesn't require a large investment from their 401(k)," said Art Koff, 76, a former Chicago advertising executive who in 2003 started his own website business, RetiredBrains.com, that posts job and business opportunities for seniors, along with other retirement content.A recent lecture Koff gave at the Harold Washington Library Center for older job seekers drew more than 200 people, and another is planned at the library for Sept. 26. In addition to job-hunting skills, Koff offers tips on starting small enterprises that can help cover expenses, even if it only helps bridge a long gap between jobs.
Another factor driving mid- and late-career workers to start their own businesses is a changing perception about the risks associated with different career paths.
With the demise of job stability and rich pensions in the corporate world, starting a company almost seems like the more stable career path, some entrepreneurs said.
"There is no more job security in working for someone else. Now it's about controlling your destiny," said Ed Bellis, 40, who held jobs at Bank of America and online travel site Orbitz before launching his own Chicago-based startup, HoneyApps, last year. The company, which designs software that helps companies manage their online security, received $1 million in funding from angel investors this year.
Mark Hadding, 43, got the idea for his business on a cold, drizzly afternoon following his daughters around as they tried to sell popcorn for a school fundraiser.
"I kept thinking there has to be a better way," he said. And thus was born Mulamu.com, a Deerfield advertising website that offers donations to customers' charities of choice. The company was selected this year for a Chicagoland Entrepreneurial Center program providing mentoring and other services to promising startups.
While tech startups do tend to attract a younger crowd, there are certainly exceptions, particularly for entrepreneurs who can walk the line between self promotion and teamwork, said Kevin Willer, the center's president since March.
"One thing that's challenging (for older entrepreneurs) is that many times they are coming from important positions in large organizations," Willer said. "In the startup world, entrepreneurs are humbled every day. You have to not have too much ego.''
If the perception is that startups are for 22-year-old whiz kids, the reality is older workers have more experience and business contacts and often have fewer family commitments, making them better candidates to be entrepreneurs, said Rudnick.
A Kauffman study found, in fact, that twice as many technology company founders were over 50 than were under 25.
"There's been a massive decline in lifetime employment, and people are leaving their jobs earlier, in their 40s and 50s, to start businesses," said Dane Stangler, research director for the foundation.
Julie Savitt
To say Julie Savitt, 45, built her Lake Bluff trucking and construction company out of necessity is an understatement.
After a divorce, the mother of three teenagers knew the type of office jobs she had been working wouldn't pay enough to get the kids through college.
"I knew I couldn't work a regular job anymore. There's hardly any benefits anymore anyway," she said.
Savitt decided to leverage one of the few assets left from the marriage: a single truck that had been leased to a construction company.
"I'm not a truck driver, but I had helped with back-office work, and I just thought maybe I could make
something out of being a woman-owned business in a male-dominated field," she said.
That was four years ago. This year, AMS Earth Movers Inc. expects to log $3 million in gross sales. In May, Savitt was named the Chicago Business Owner of the Year by the National Association of Women Business Owners.
The seven-employee company will move into a 32-acre parcel of land in Lake Villa shortly, which will provide space to house stone used for road building and foundation work. Savitt hopes the move will put her on track to win large federal construction and hauling contracts.
"I'm not thinking of staying a small business," she said. "My idea is to build this into something someone would want to buy or that I can pass on to my children."
Savitt has converted her trucks to biodiesel and works to recycle a significant portion of the company's hauling loads.
"My love in life is being eco-conscious, and I'm using the business as a catalyst for that," she said.
Of course, striving for government contracts at a time when budgets are retrenching is a challenge.
"It's a very difficult economy," she said. "Still, I believe there's opportunity out there, but it's about developing relationships and understanding where you can grow."
Gary Slack
Serial entrepreneur Gary Slack is at it again at age 57.
In March, the marketing agency owner launched Bizy, a Groupon-like deal website for businesses, with partner Lou Friedmann.
Slack had founded another Internet business, B2BWorks, in 1999 and left the ad agency world in the late '80s to start his own marketing firm, now called Slack + Company.
Launching businesses across several decades has given Slack perspective, both internally and on how the business world views entrepreneurs of different ages.
"I started my own (agency) at 33. One of the factors was that I didn't want pink slips when I reached my 50s," Slack said. "Plus, I was never good with bosses. Today, I'm not making as much as I would have if I'd stayed with Omnicom, but it's absolutely a control issue with me. I can be challenging to bosses, and I know I would have burned out at the agency."
Not everyone is cut out to be an entrepreneur, of course, but Slack said he encounters fellow corporate refugees fairly frequently.
"When I talk with entrepreneurs who started later in life, most people wish they had done it earlier. A lot of people become disillusioned about big companies. When I ask people if they regret leaving, they all say they wish they'd done it earlier."
One downside, however, is that age discrimination can follow older entrepreneurs right into their new ventures, said Slack, who believes venture capital firms overlook startups that involve more seasoned company founders.
"In fact, the reality is that our ideas are just as good, and we have a lot more life experience and connections," he said. "Plus, when you're younger, you're (often) consumed with raising children. Now we're past all that. I have more fire in the belly today than I did at 33, and that should be important to a venture capitalist."
Fred Pira
Midlife corporate refugee Fred Pira got the idea for his business during his own battles with weight loss a decade ago.
"I was tired of working out and not losing weight," said Pira, now in his 50s. He consulted a doctor, who ran some tests and discovered Pira had insulin resistance, a condition that can lead to heart disease and diabetes.
He left the doctor's office with a binder full of information and diet logs, which he was supposed to fill out by hand and fax to a nutritionist. The cumbersome process drove him crazy, and he started exploring ways to coordinate data between patient and health provider using information technology.
After a false start, Pira relaunched ProNex Inc. in 2005 with a new technology platform. It produces software and Web-based products for tracking weight-loss programs for diabetes management and prevention. Today, the company has eight employees and several large customers, and it is awaiting word on venture capital funding.
The product helped him get control of his own blood sugar problem, too, bringing it from dangerous to a healthier range in eight weeks, he said.
"My team is basically living on vision," he said. "The definition of being an entrepreneur is learning to live with terror. I go through a bottle of Pepto-Bismol a month. "
Still, Pira prefers it over his previous corporate jobs, including one at information technology firm Comdisco, which filed for bankruptcy protection in 2001.
"It can be agonizing, but you keep building because you know it's right," he said. "Could I end up with no money? Yeah, no question. But I have the right team and know how to motivate people to get that extra degree of difference out of them. If you don't have that ability, you will get clobbered, and those young kids will walk all over you.''
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