The Peachfuzz Billionaires

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 fashion preferences and dating habits of this cohort are followed voraciously in tech mags and blogs as if they were '60s teen idols.

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 eyebrows last spring when he told an audience of would-be moguls to hire young people with technical skills. "Young people are just smarter," he said. Although Zuckerberg later apologized for the remarks, the speech seemed to fit the Valley's growing cult of youth based on "don't fund anyone over 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 firms like eBay and Google.

Still, there's the suspicion that the young can see opportunities the older folks can't. "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, a kind of boot camp for entrepreneurs, says 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 the digital video recorder.

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 might have understood that there could never be a market for consumer software—but the 19-year-old Gates went ahead and cofounded 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 cofounded 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 there's never been a better time to be young, technical and a Silicon Valley start-up, there's still hope for those with a touch of gray. Remember Clay Shirky saying it makes more sense that a young person would do a VCR-PC mash-up? When TiVo began, its two founders were 47 and 38 years old.