When is the right time to found a start-up?

Since I’ve become increasingly visible in the start-up scene, I’ve often been asked when the right time is to start a company. The expectation is always that I’ll probably give an age indication along the lines of: at 24.5 years old. But it’s not that simple.

(Reading time: 5 minutes)

Not all start-ups are the same

I think you have to differentiate between different types of start-ups, as they place different demands on founders. A small, non-exhaustive list:

Become self-employed

Many professionals who work on their own account describe themselves as start-ups. This is not wrong by definition, of course. However, I don’t consider this to be a typical start-up venture. Rather, it is working for your own account: you offer your services to your network in the area in which you are good.

This usually works pretty well. The prerequisite for this is that you have experience and expertise and a network that recognizes this as such. If you already have that at 19, then 19 is the right age. However, most people don’t enter the field where they are perceived as such until they are around 35.

Copying an existing business model

The second category, start-ups, are new companies that copy existing business models. This is not a bad thing. Classic companies such as a bakery, a consulting firm, an electrical installation company or conventional accounting software, etc. belong in this category. But it also includes the whole armada of e-commerce initiatives, etc.

As a rule, the risk is manageable, although considerable investment is required to launch the new business. Once the market has been thoroughly analyzed and the company’s own services clearly defined and positioned, and a so-called niche has been found, it can generally be assumed that the business can be brought to break-even within 1-3 years. Assuming that the founders have the necessary expertise and professionalism.

This expertise is best acquired in a smaller company where you have an “end-to-end” view of the entire value chain. I therefore think it is best to set up such a company between the ages of 20 and 30.

New business model

If you want to establish a completely new business model and/or a new technology on the market, there is a simple answer to the question of when the right time is: it is simply never the right time.

Because building a completely new model actually goes wrong all the time. Not as a whole, but on a small scale. Many small things go wrong all the time and you have to get them back on track. My experience is that very few people are able to deal with these small daily failures and manage to turn them into something that actually works in the long term. When I started with Accounto, a manager of an American VC told me when I was looking for funding that he “congratulates me on the insane vision and ambition and all the pain”. He meant that in a positive way, mind you.

I understood about the vision and ambition, but not about the pain at the time. Today, 18 months later, I know exactly what he meant. Because big ambitions, when you try to turn them into reality, always come with pain for founders and drivers. There’s just far too much detailed drama to just shrug it off. Things get to you. They don’t leave you for 24 hours, no matter what you do. I think it’s similar to getting through a serious illness. The bigger, more ambitious and, for mere mortals, more unrealistic the goals are, the more pain there is. So you have to be obsessed with turning your vision into reality.

That sounds super negative at first. But it’s not. I have already made many ambitious announcements and set goals. I, or rather my teams, have achieved the vast majority of them. Sometimes at a high price. But there is not much more satisfying than achieving such goals against all odds.

Old or young founders

It is often said that older founders have an advantage. I think this is misleading and depends very much on the individual situation.

I had one or more start-ups when I was still living at home with my parents, when I was single and as a father of 3 children. Today, I think all phases and constellations have advantages and disadvantages.

While young people have more energy and youthful recklessness, older founders have more experience, maturity and, above all, a larger network of relationships. However, they are usually at a completely different point in their lives, which brings with it many obligations. In particular, a start-up is already a family in itself. And anyone who finds everything easy has never really had problems in the family (such as a seriously ill child) and in the start-up at the same time. These multi-front wars – incidentally, a very perfidious specialty of parallel entrepreneurship – that you then have to wage are a direct drain on your health. And your health is by no means as robust at 40 or 50 as it was at 20, no matter how young you feel.

Okay, there is no such thing as the objectively perfect time. And now?

So while I don’t believe that there is an objective, perfect time, I do think that there is such a thing as the subjectively right time. Namely, when you know that you have to do it now. Even though intuition is no substitute for analysis and knowledge, in my opinion it is the crucial point at the end of the decision-making process: you will simply get up one day and know that it is time for you to realize your start-up. And do it.