The lost generation of young founders
2023-08-14
In the most recent conversations with Tyler, Paul Graham and Tyler Cowen discuss the question: "Why are there so few great founders in their 20s today?"
While Graham challenges whether or not this is actually true, I want to offer an alternate explanation: they went into crypto and that turned out to be a dead end (for now at least). [0]
Here are some major crypto busts and the ages of their founders:
- FTX: Sam Bankman-Fried (31 according to Wikipedia), Gary Wang (30 or 31 according to Wikipedia)
- Three Arrows Capital: Kyle Davies and Su Zhu, both about 36 now (34 in 2021 according to this article)
- BlockFi: Zac Prince (graduated from college in 2006 according to this website, so about 37-38) and Flori Marquez (on the 2021 30 under 30, so maximum 31 or 32 right now)
- Terraform Labs / Luna: Do Kwon (age 31 according to Wikipedia)
So not everyone on that list fits the young founder profile, but had things turned out differently for the industry but here we have 3 founders that would’ve been in their early twenties when their large and successful companies were founded. SBF was well on his way to creating young founder aura about himself when FTX collapsed. Without the failure of these companies / projects, we would have an additional cohort of young founders.
It strikes me that many of these founders were the same age as the people I spent time with while living in SF from 2014-2018, a period when companies like Uber, AirBnB, and Instagram had reached escape velocity. People were searching for the next big opportunity, and many found it in crypto.
I don’t think it was obvious at the time the main way that consumers would interact with crypto would be speculation. The crypto boom / bust cycle has gotten pretty toxic so people are going to see this as a value judgement, but I don’t mean it as one. I had lots of really enjoyable bar conversations with people that went into the industry about where it was going to go and none of them were saying “yeah, this is only good for fake internet speculation.” There was real optimism that killer consumer or industrial use cases would be discovered that leveraged the decentralized nature of crypto currencies and this would lead to new economic models and usher in a new era of peace and prosperity. I never got the crypto use case, but the thing that made me think I might be wrong was the passion of the people leading it to create something new and useful.
This doesn’t excuse any wrong doing by anyone in the industry, but I don’t think that most of the people that got into the industry intended for it to be as scam ridden as it has become. I think it turned out that the speculative nature of crypto projects has outweighed the usefulness of decentralization for end users, leading to Ponzi-esque business models.
Had this turned out differently — if crypto had found real, value producing consumer traction or if the dead end had been more obvious — I think we would continue to have the same pipeline of young founders.
Because of this, I expect the pipeline to return to form in the age of LLMs and climate tech start ups. We’ll see!