Measuring Usability
Quantitative Usability, Statistics & Six Sigma by Jeff Sauro

Were most Software Millionaires born around 1955?

Jeff Sauro • November 17, 2010

If you've read a book by Malcolm Gladwell then you know how he has a knack for making the mundane meaningful through drama-filled story telling.

In his book, Outliers, he makes a convincing case that birthday matters for success in hockey. Being born as close to the year-end cut-off provides a developmental advantage.

According to Gladwell, a disproportionate number of NHL hockey players have birthdays in January, February and March.

Those few extra months of development provide a crucial advantage over other maturing boys. 

While professional hockey might not be in your sights, financial success in software might. Are there also certain birthdates that could help you become the next Bill Gates? 

1955: Back to the future

Gladwell argues that Bill Gates wouldn't have founded Microsoft if he wasn't born at just the right time (and have access to the right opportunities). Gladwell cites 1955 (specifically between 1952 and 1958) as the right time to be born to make it big in high-tech. This sweet-spot ensures an ideal age to be ready for the 1975 personal computer revolution. 

He lists the birthdays of these famous tech millionaires:
  • Bill Gates, Microsoft Founder : October 28, 1955
  • Bill Joy : SUN Co-Founder November 8, 1954
  • Scott McNealy : SUN Co-Founder November 13, 1954
  • Steve Jobs : Founder Apple. February 24, 1955
  • Eric Schmidt: Google & Novell CEO: April 27 1955
  • Paul Allen: Microsoft Founder: January 21, 1953
  • Steve Balmer Microsoft Founder: March 24, 1956
  • Vinod Khosla SUN Co-Founder January 28, 1955
  • Andy Bechtolsheim SUN Co-Founder September 30, 1955
Gladwell argues that it's no coincidence so many software millionaires were born in an 18 month window near 1955.

Is he right that birthdays are as important in software as they are in hockey, or is he just being fooled by randomness?

What are the chances?

Simple chance occurrences happen all the time. Statistical Analysis is fundamentally about separating chance occurrences from real causes. To find out whether a birth year has a major impact on success in high-tech I would need a large dataset of birthdays for this population.

The first problem I ran into was defining the population in Gladwell's list. What he calls "Silicon Valley Tycoons" includes a mix of founders and CEOs of both software and hardware products from in and outside Silicon Valley (Microsoft was founded and based in Washington).

I'll consider Gladwell's list a sample of people, from any geographic-location, who made their fortunes in some software or hardware based business, with more emphasis on the former. This leaves out the early computer pioneers like IBM, Burroughs (now Unisys) and Hewlett Packard from the mix.

I searched through dozens of corporate websites, annual reports, obscure Wikipedia entries and press releases to find as many birthdays of software millionaires in search of evidence for the birthday influence.

I was able to find the following 41 birthdays (in order of birth year).

 
CompanyPersonBirth YearDecade
NovellRaymond Noorda19241920
IntelRobert Norton Noyce19271920
IntelGordon Moore19291920
AdobeCharles Geschke19391930
AdobeJohn Warnock19401940
SAPDietmar Hopp19401940
PeopleSoftDave Duffield19411940
OracleLarry Ellison19441940
SGIJames H. Clark19441940
SAPHasso Plattner19441940
Computer AssociatesCharles Wang19441940
BMCJohn Moores19441940
McAfeeJohn McAfee19451940
SymantecGary Hendrix19481940
AppleSteve Wazniak19501950
IntuitScott Cook19521950
SiebelTom Siebel19521950
MicrosoftPaul Allen19531950
Sun MicrosystemsBill Joy19541950
Sun MicrosystemsScott McNealy19541950
MicrosoftBill Gates19551950
AppleSteve Jobs19551950
GoogleEric Schmidt
19551950
Sun MicrosystemsVinod Khosla 19551950
Sun MicrosystemsAndy Bechtolsheim 19551950
MicrosoftSteve Balmer19561950
MacromediaMarc Canter19571950
AOLSteve Case19581950
Adobe/SGIShantanu Narayen19641960
SalesForceMarc Benioff19641960
AmazonJeff Bezos19641960
DellMichael Dell19651960
YahooDavid Filo19661960
eBayPierre Omidyar19671960
PayPalPeter Thiel19671960
YahooJerry Yang19681960
NetscapeMarc Andreessen19711970
GoogleSergey Brin19731970
GoogleLarry Page19731970
PayPalMax Levchin19751970
FacebookMark Zuckerberg19841980

In the list you'll notice several major players not mentioned in Gladwell's book: Larry Page and Sergey Brin—co founders of Google, Larry Ellison co-founder of Oracle (and now CEO of SUN) and Steve Wozniack, co-founder of Apple, Amazon's Jeff Bezos and Yahoo's pioneers.

Some of the less glitzy founders have virtually no public information or birthdays (e.g. Borland, BEA, BMC). So this list, like Gladwell's, is biased to the more well-known, more financially solvent companies and founders—although it is probably large enough to provide a reasonable picture of the software industry.

When we graph the birthdays we indeed see a spike in births between the years 1952 and 1958 as Gladwell suggests. In total there were 13 birthdays (which I was able to find) between these years. Gladwell named 9 of the 13 in Outliers.


Figure 1: Distribution of a sample of 41 software millionaire birth years.
 
There appear to be other birth "sweet spots" : 1938-1944 (9 birthdays) and 1965-1975 (11 birthdays). However, of the 41 birthdays, 27 (68%) were outside Gladwell's 1952-1958 window.

A software millionaire is more than twice as likely to be born outside the 1952 to 1958 window then within it (.675/.325 = 2.0769).

Sure, maybe Gladwell is wrong, but did he get you thinking?

To his credit, Gladwell states that he's not suggesting that every software tycoon in Silicon Valley was born in 1955. "Some weren't…But there are very clear patterns here, and what's striking is how little we want to seem to acknowledge them." (Outliers p65).

Nevertheless, more than two-thirds of this sample of software millionaires have birthdays before 1952 or after 1958 (95% CI 53% to 81%).

So even saying most software millionaires were born in this period is a stretch.

While we can be critical of Gladwell's tendency to cherry-pick data to make his points, his ideas don't need to be entirely dismissed even if they crumble under scrutiny.  Gladwell is less concerned about the veracity of his claims than he is on whether they get you to think (What the Dog Saw p. xv).

So he did get me thinking. I think he is was onto something when examining the influence of simple things like birth dates. So I continued the analysis, but in another direction.

The Baby Boom

The baby boom resulted in a population spike following World War II.  How much of the spike in software millionaires is just due to a spike in population? Most of these millionaires were born in the US, so I looked to US birth data from 1920-1970.

I dropped the 1980s from the table since the last half of that decade includes a lot of people too young to have a chance to have shown success in software (even Facebook's Mark Zuckerberg was into his 20's before making millions).

The table below shows the total number of people born in the US in each decade along with the total number of software millionaire's also born in that decade.

Decade Total US Births Software Millionaire Birthdays
 1920  28,582,000  3
 1930  24,374,000  1
 1940  31,666,000  10
 1950  40,530,000  14
 1960  38,808,409  7
 1970  33,308,985  4

US births by Decade : National Center for Health Statistics

I performed a simple linear-regression analysis by using the number of US births as the sole predictor for the total number of software millionaires (see figure below).


Figure 2: US births by decade predict software millionaire births by decade reasonably well (R-Sq(adj) = 53%).

The results of the regression analysis suggest that the changes in the number of births alone explains most of the variation in the number of software millionaires (R-Sq(adj) = 53%). The regression equation is:

# of software millionaires = - 14.14 + 0.000001(US Births)

While not a perfect predictor, the equation suggests that a a software millionaire birth occurs in about 1 in 14 million births. With an increase in the population came an increase in software millionaires.

More CEOs were born during the 1950's

If we add three more years to Gladwell's software millionaire sweet-spot of birth years, we're encompassing the entire decade of the 1950s. 

To look for evidence that the 1950's generated more software millionaires simply because there were more people I looked to see if the same pattern held for all CEOs regardless of industry.

I drew a random sample of 70 companies from all industries except software from the 2009 Fortune 1000 list and looked up the current CEO's birthday.

The group included CEOs from Starbucks, FedEx, Altria, Verizon, Cummins, Wells Fargo and Avis to name a few.

It turns out, there are also more CEOs born in the 1950's across all industries.

DecadeAll CEO
Birthdays
Software Millionaire Birthdays
 19202
 3
 19302
 1
 194023
 10
 195038
 14
 19609
 7
 19700
 4


The graph of both samples shows the 1950's bulge for both groups (software versus all industries).


Figure 4: Births of software millionaires mirror CEO births across all industries.

There is a very strong correlation between the birthdays of CEOs and software millionaires (r = .971 p <.01). This linear relationship is shown below.


Figure 5: Birth decade of all CEOs predict the births decade of software millionaires very well (R-Sq(adj) = 93%).

In fact, over 93% of the variation in software millionaire birthdays can be explained by the general spread of all CEO birthdays across the decades (99% if the 1980s are excluded). In other words, the software industry is no different than all other industries.

Coffee, tobacco and banking have been around for hundreds of years yet we are still seeing striking success from pioneers in these less glamorous industries.

There's still time to be the next Bill Gates

If you're an aspiring high-tech mogul, you can still be the next Mark Zukerberg, Bill Gates or Steve Jobs. You weren't born too late. You just need to be one of those 1 in 14 million.

Gladwell is correct that being born at the right time is critical in being able to take advantage of a major economic shift. You might be too old or too young (or not even born yet) to take advantage of the PC's introduction, but it looks like there's ample time to catch up or re-tool your skills regardless of your birth-year.

It seems there is a certain person who has the skills and talents to exploit an opportunity regardless of how old they are. The real mystery is in what combination of factors drive these 1 in 14 million to success. It is likely the more banal  combination of parents, peers, personality, genes, circumstances and luck--and no doubt the subject of more books on the secret of success.

For the few hockey players who make it to the pros, birthdays probably matter. For the 1 in 14 million software millionaires, birthdays may be a time for lavish celebrations, but they are unlikely the secret to their success.


About Jeff Sauro

Jeff Sauro is the founding principal of Measuring Usability LLC, a company providing statistics and usability consulting to Fortune 1000 companies.
He is the author of over 20 journal articles and 4 books on statistics and the user-experience.
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Posted Comments

There are 11 Comments

April 10, 2014 | John wrote:

A better comment would be the right time to be born when a new technology arises, but you can't know that in advance. rnTo expound on your data you can almost label, and group the birthdays, as hardware, database, PC software, and Internet. rnI would think you would see the same thing happen in industrialization, railroad, oil, electricity, and science/technology.rnIt's good to be in your late teens and early 20's when a new world changing technology roles out. 


November 28, 2012 | Azollo wrote:

There are a few issues with your analysis, some which have been pointed out.

To start, google and facebook aren't "software" in the terms Gladwell talks about. They are internet-based, not PC based, and would (for obvious reasons) have their own niche era and profile for success.

Second, Gladwell looked at PC and a lot of the earlier era computer businesses (Xerox, Adobe, Intel) weren't really involved in software or creating the PC directly. Some even missed the boat and only caught up later. Second, you should keep in mind that the older generation played a very different role. They had established the companies, but I don't know if you'd accredit people like Charles Geschke with the actual R&D, like you would people like Bill Gates.

Third, it'd be interesting to see comparisons of not just who and when, but also how much money they were making.

Fourth, his point still stands. If you were one of the relatively few people doing software design back in the 60s and 70s, you made the boat. If you are doing it today, you missed the boat and are most likely working for someone who made the boat. 


June 5, 2012 | Alex Zhang wrote:

This is great, but please give out more reasons why there's this huge chance being born in 1955. 


December 23, 2011 | Jeff Sauro wrote:

Thanks for your comment. You're right that this is a small window of time but probably the more relevant unit is not time but number of births--this period was at the peak of the baby-boom with a disproportionate share of births per year. We see this in the number of CEO millionaires from all industries (Figure 4).

So the data would suggest that when there are more people born, there are more millionaires. Gladwell's is trying to argue that Bill Gates and Steve Jobs were successful because they happen to be born at just the right time for the PC revolution (luck). But was this also the right time for FedEx, Starbucks and Avis CEO/Millionaires ? Not at all.
 


December 2, 2011 | Matt Schlichting wrote:

Hold the phone on this. 1952-1958 represents only 12% of the time range that you analyze. 32% of the "millionaires" are born in this time period.

It is clear, than that the 1952-1958 time frame was much more fertile for producing millionaires. Sure, they are more than twice as likely to be born outside that window. However, that window represents almost 88% more time! 


August 23, 2011 | Aaron H wrote:

Well done analysis! I am halfway through the book now, and this critique is welcome. The numbers seemed a litttle fishy, and thank you for this write up. Thank you for the linear - regression in particular, which is much harder to dispute than what Malcom Gladwell wrote. It makes a much more iron clad case, that the distribution of millionaires and billionaires is more random, and the editor should have caught that right off the bat! 


July 5, 2011 | CK wrote:

Jeff,

This is really an interesting article but I am just wondering why are you comparing the birthday of CEOs and software millionaire?

From what I can see, the birthday (~82%) of CEOs are in the 40s and 50s, which translate to 50-70 years old in 2010. This leads me to a question, are CEOs more likely to be born in 40s and 50s or between 50-70 years old. My take the latter one.

If that is the case then the correlation between the birthdays of CEOs and software millionaire is not valid. Say 20 years down the road, we should expect CEOs be born in the 60s and 70s, and the there will be no correlation.

The problem in comparing CEOs and software millionaire is that CEOs have correlation with age, not birthday (I could be wrong as I have no supporting evidence).


I think another question we should ask is does a global/national event (i.e. PC revolution, industrial revolution, Hockey intake date) have a "sweet spot" in birthday. In economics term, when there is "demand" (an event), there will be a "supply" (people), but does this "supply" have a "sweet spot" (birthday). If there is, does this apply to all kinds of event? 


December 19, 2010 | Jeff Sauro wrote:

Scott,

Gladwell didn't really define who this group of millionaires are to represent. You're right that Gladwell cites 1975 as the dawn of the PC computer age but lists four millionaires from SUN Micro-systems. SUN's fortunes came from supplying the hardware and systems for the Internet age and had little to do with the PC or consumer market. It was sold last year to Oracle after finishing a post-internet decade that most would characterize as a big disappointment.

What's more, he included Eric Schmidt, the current CEO of Google, which is sort of the quintessential internet brand, thus opening the door for some of those internet millionaires. Eric Schmidt was also CEO of Novell, an early software company (just recently sold). But then why not consider the founder of Novell, Raymond Noorda ? He was born in 1924. According to Gladwell this is too early. It was also "too early" for 13 other high-tech tycoons who's birthdays made them too old for the 1975 Altair introduction.

So even leaving out the few recent internet success stories still leaves more who were born outside this supposed sweet spot. Gladwell sort of cherry-picked a few names to fit within an interesting argument about being born at just the right time. And in looking at the number of CEO's in all industries, we see a spike in the 1950's as likely just due to an increase in population. 


December 19, 2010 | Scott wrote:

Gladwell was talking about millionaires from the personal computer boom. I think you have confused this by including millionaires from the rise of the internet (amazon, google etc). If you have a look at your list every millionaire between 1964 and after has achieved this by capitalising on the internet. Rather than contradict Gladwell it seems you have supported him.  


November 18, 2010 | Jeff Sauro wrote:

Michael,
I also conducted the CHI square and got the same results as you did. I also saw that the 1970’s was contributing most to the test statistic. However, I think you just transposed your labels, there are actually more software millionaires born in the 1970s relative to all CEO’s 10% versus 0% from my sample of 70.

Therefore I suppose you could argue that the stereotype of youth and software is supported. And of course, I’m using the term software rather loosely as most people wouldn’t consider Google and Facebook to be software companies, even though they are built on software. Either way, good insight!
 


November 18, 2010 | Michael Zuschlag wrote:

I’d like to see a chi-square test of independence for birth-decade and industry that millionaires are in. Using your numbers (which assumes none of your software millionaires are among the random sample of CEOs), I’m detecting a significant relation between birth-decade and industry (Chi-square(5) = 11.22, p = 0.0472). However, inspection of the differences between actual and expected values reveal that the 1970s, not the 1950s, is the key decade, with unusually few software millionaires born then relative to CEOs in general (0% versus 10% of the marginal sums). Drop the ‘70s, and there’s no significant relation (Chi-square(4) = 3.74, p = 0.4422).

So does this mean that software is passé and younger people will have a better chance of making millions elsewhere? Or that, contrary to stereotypes, making millions in software requires more maturity and experience than in other industries on average? 


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