Levy: The Peachfuzz Billionaires

Early in the year I found myself in a room full of entrepreneurs, part of a "boot camp" run by a development and investment group called Y Combinator. These were the creators of 13 new companies, all with dreams of millions of users and many millions of dollars. And all these companies save one had founders in their 20s, including some who were still college undergraduates. This was no coincidence of demographics. This was the year when Silicon Valley developed an obsession with youth that rivals Hollywood's.

The myth of the peachfuzz billionaire has emerged. This new Horatio Alger typically launches his first start-up in middle school, and somewhere between the campus computer-science lab and a move to Palo Alto hacks up a Web site where users provide fun or useful content. The operation grows, "Sorcerer's Apprentice" style, and soon the budding teeny-mogul's beaming mug is on the cover of BusinessWeek (like Digg's Kevin Rose) or the front page of The New York Times (like Slide's Max Levchin). Not just the business plans, but the fashion preferences and dating habits of this cohort are followed voraciously in tech mags and blogs, in some geeky update of Tiger Beat.

The poster boy for this movement is Mark Zuckerberg, the 23-year-old CEO of Facebook, which he created in a Harvard dorm when he was 19. Zuckerberg raised a few eyebrows this spring when he told an audience of would-be moguls to hire young people with technical skills. "Young people are just smarter," he said.

Zuckerberg later apologized for the remarks, explaining: "I hadn't really planned [the speech] more than five minutes before I talked." He says he wanted to tell his audience that their youth was no impediment to fulfilling their goals, not to imply that older folks weren't worth hiring. No matter the intent, though, the speech seemed to fit the Valley's growing cult of youth, if not a movement, based on "Don't Fund Anyone Under 30."

The reality is not that extreme. "There's a perception that when you're young you can swing for the fences," says venture capitalist Fred Wilson, partner in Union Square Ventures. But even though Wilson has invested in one company led by a 21-year-old, most of his founders are older by a decade or more. "I'm also really enjoying working with an entrepreneur in his late 50s," he says. Jim Breyer, a principal of Accel Partners and the guy who funded Facebook, says that although passionate entrepreneurs in their 20s are the ones who create "truly defining companies," he's also had huge deals from founders in their 30s, and is excited about ideas he's seeing from veterans of Internet companies like eBay and Google.

Still, there's the suspicion that the young are capable of seeing opportunities that the older folks can't get, particularly when it comes to inventing stuff for a medium that they grew up with. "I genuinely believe that this generation is fundamentally different," says Union Square's Wilson. "They're the first generation that's had computers before they had sex." Paul Graham, a cofounder of Y Combinator, says that it's also a generation that benefits from the use of cheap programming tools and instant Web distribution that levels the playing field between a dorm-room innovator and a professional at a big company. "It doesn't matter if you're 19 or not—you can do it!" he says.

If you're 19, you don't know what can't be done. According to Web guru Clay Shirky, who wrote about the subject on his blog, the knowledge that comes from experience is the very thing that prevents older techies from coming up with groundbreaking ideas. For instance, he says, a person with fixed ideas about what a VCR is and what a PC is is much less likely to come up with the idea of mashing the two concepts together to invent TiVo. "People who … do that kind of work … are, overwhelmingly, young," wrote Shirky.

This paradox of vision—the genius of youthful ignorance—is nothing new. Had Bill Gates not been in diapers in the early days of computer software, he may have understood that there could never be a market for consumer software—but the 19-year-old Gates went ahead and co-founded Microsoft. And Steve Jobs at 21 hadn't the chance to learn what the executives of IBM knew for certain—that no one had any use for a personal computer. Thus blinkered, he joined with Steve Wozniak to found Apple. But now Jobs and Gates are still at it, and Apple's CEO—who I believe is still a force in the industry—jokes about being "the oldest guy in the room," when he was once the youngest.

While youth is being served in the Valley, experience still counts for plenty, especially when it comes to creating innovative hardware products or intricate projects involving infrastructure. When Palm wanted to revamp its product line, it reached out for Apple veteran Jon Rubinstein, 51. So while there's never been a better time to be young, technical and working a Silicon Valley start-up, there's still hope for those with a touch of gray. Remember Clay Shirky's blog posting on why it makes more sense that a young person would do a VCR-PC mash-up to make TiVo? As Shirky's readers quickly pointed out to him, when TiVo began, its two founders were 47 and 38 years old.