People wonder why more VCs fund young people, why more young people are entrepreneurs, and things like that. I have a theory: Young people are too dumb to know better.
This is a huge advantage and it has multiple dimensions. Certainly, it was true of my first start-up. Ah, I remember it well. Our initial business plan said that if we worked really, really, really hard, we could make $35,000 per year!
That is what people are up against. Start-ups where the goal is only to make $35,000 per year. The result is that their cost structure is massively lower, they have access to talent that is incredibly inexpensive, they think 100 customers offering them $20 per month is a mind-blowing business.
But here is the real challenge: They will do anything for a buck. Think about it. If what I just described sounds pretty awesome, imagine what they would offer to do if a customer offered them $15,000. They would do ANYTHING. People with experience out in the corporate world don’t just have mortgages and families and cost structures. They have an idea of what a dollar should be worth. They look for businesses that have “models”. They look for businesses with “Market Size”. And they look for businesses that sound “reasonable”. This is probably the most heart-breaking of all. Very few “grown-ups” try to start businesses that are incredibly hard and/or expensive. They know better! It’s too hard! It’s too expensive! The model doesn’t work!
Young people will start that business and then slowly pivot their way to real revenue and profitability.
If you want to start an awesome start-up, you should start thinking more like that.