Launching a start-up before hitting the tender age of 25 seems to have become common practice. And indeed one could reasonably argue that the traditional model, in which age equals success, has been turned on its head – thrown out the window along with the quill, the typewriter and, of course, the rule book.
Now entrepreneurial success requires first and foremost a comprehensive knowledge of the latest tech, and it’s generation Y – as the only workplace cohort to have grown up in the digital age – who has that. From exploiting social media effectively to being able to code, confidence with technology is an acquired talent, and it’s one that seems to be giving millennials an entrepreneurial advantage from the word go. That’s not least driven by the fact that tech is by far providing the largest number of opportunities for those looking to launch the next big thing. As a result the classic ‘older the wiser’ gem, once taken as an incontestable truth, seems to have morphed into a new deviant – the younger the better.
Those advantages, combined with a cultural shift, seem to be giving millennials a decidedly more entrepreneurial streak than past generations; a recent study by Bentley University (The Millennial Mind Goes to Work), found that 66 percent of millennials asked wanted to start their own business. In 2012, over 500,000 people launched start-ups in the US alone, according to statistics from Harvard Business School – and of those, companies with an average age of between 26 and 34 bagged the highest level of funding. Entrepreneurialism seems to be on the rise generally; a GEM Global report found that in 2011 there were 400 million ‘early-stage entrepreneurs’ across the world, up 22 percent from the previous year in mature economies (and markedly more in the US and Australia) – and 18 to 25s accounted for a substantial 41 percent of them.
of millennials want to start their own business
One need only look at the list of digital successes to see the trend – Mark Zuckerberg was a billionaire at the age of 23. David Karp, Kevin Systrom and Daniel Ek were all in their 20s when they founded Tumblr, Instagram and Spotify respectively. A quick glance at the Forbes’ 30 Under 30 2015 list shows the millennial trend continuing, with everything from beauty product lines to medical companies being created by those barely out of the pushchair. Millennials seem to be taking over, and they could be threatening to push out their older peers entirely.
Cheaper than ever
It is clear that there is an increased desire for entrepreneurialism among generation Y – what’s interesting to look at is why. One of the biggest factors seems to be the increased ease and affordability of setting up a business, and that’s largely down to advancements in technology. Thus one of the key advantages that older people might have had in past times – savings – is no longer as relevant as before. That’s true even of businesses that aren’t directly related to the digital world; social media allows start-ups to promote themselves for next to nothing, for example.
In terms of digital companies themselves, costs have dramatically declined for a number of reasons. First off, millennials often have the skills that before would have necessitated large-scale, expensive teams. And if they don’t, it doesn’t take too long to pick them up, according to 26-year-old American entrepreneur Mattan Griffel, co-founder of Y-Combinator-backed start-up One Month. A magnate on the Forbes’ 30 Under 30 list, Griffel speaks from experience – he taught himself how to create apps and websites and used that knowledge to form the basis of his current business, which teaches other students how to do the same. The consequences of that increased ease is clear: “Companies used to require a development team of six to 10 people, because the languages were so much more complicated”, he says. “Nowadays you can build a start-up with one person and they don’t even have to be that good a developer.”
The advent of new, easier coding languages has helped to drive that. Among them is Ruby on Rails, an open-source web framework that’s made it simpler and faster than ever before for budding digital geniuses to develop websites and applications. It enabled Twitter to come to fruition in the matter of months, Griffel notes – compared to what would have once been a matter of years. He adds that 15 years ago, digital businesses needed their own physical servers – costing tens of thousands and requiring trained IT staff; now they can be run on an Amazon platform. It’s no wonder millennials are getting more entrepreneurial than their parents.
And these advancements have certainly driven change in the entrepreneurial arena since the pioneers of the early dotcom days. Steve Jobs and Bill Gates were arguably predecessors to the millennial wave of eager business tycoons – both achieved tech success in their early twenties. But they had to fight far tougher battles according to Fred Tuffile, Management Director of Entrepreneurial Studies at Bentley University. “You take Jobs. He couldn’t write code, he had to have somebody who could do that”, he says. “The whole notion of what it took to get something like that done… was astronomical compared to what it is today.” He adds that what once required several million dollars can now be done for $5,000.
Complementing those falling costs is the fact it’s become substantially less of a challenge to get funding, according to Griffel. The statistics speak for themselves; venture capital investors backed 1,500 start-ups in 2012, while angel investors funded more than 50,000, David Rose, Gust CEO, told Forbes. Added to that is the rise of crowdfunding platforms such as Kickstarter, which offer entrepreneurs the opportunity to source funding from members of the public without having to rely on a venture capital or angel investor giving them the nod. These platforms are having a notable impact, accounting for $1.4bn of the total $2.7bn raised for start-ups in the US in 2012, according to Harvard Business School. Once again, entrepreneurialism seems to be getting cheaper, if not easier.
Millennials seem to be taking over, and they could be threatening to push out their older peers entirely
The world’s your oyster
Aside from the cost and ease factor, there’s the very significant element of opportunity. The digital age has created more occasions for entrepreneurial activity than ever before, gratifying the appetites of the most ambitious wannabe magnates. That’s partly driven by the rapid pace of the tech world; its constant state of change means innovation is a necessity, and start-ups are among the best ways of driving that. Tuffile agrees: “I think certainly 10 years from now, something like a smartphone won’t exist, computers won’t even exist as we know them today, that world is all going to change”, he says – meaning young, budding entrepreneurs looking to create new things to replace the old are living at the right time.
Moreover, because digital phenomena now tend to be embraced so quickly – a lot more quickly than, say, the laptop, according to Tuffile – such businesses can grow rapidly. That growth and success is certainly being made apparent, with start-up valuations reaching a record high in 2013, according to a New York Times report. That evident success seems to be inspiring millennials to innovate, cultivating a certain optimism and ambition that extends beyond the confines of the more traditional, nine to five job-for-life route.
That optimistic spirit marks part of an intriguing culture shift, and it’s perhaps being first and foremost driven by role models; that is, by the prevalence of digital success stories barely out of puberty and hitting the billionaire jackpot.
As an entrepreneur, Griffel is well aware of, and grateful to, their influence. He says everyone from Foursquare founder Dennis Crowley to Mark Zuckerberg has helped spur on his success, and he believes it’s having an impact on the generation as a whole. “You have the Twitter guys, you have all these companies, Snapchat and so on, and I think a lot of people, maybe misguidedly, think – I can do that.”
That can-do attitude is something far more common to millennials than it was to previous generations, according to Tuffile, and it’s an essential quality for any budding business creator. Krassi Popov, founder of US mobile charging start-up Veloxity, believes Generation Y also has a level of confidence, instilled through upbringing, that their older peers might not have had. “This is especially true in the United States, where young people think they are special because they are told that they are”, she told Slideshare. “People who think they are special don’t want to sit in front of a computer from nine to five doing cubicle work.” That combination of having the confidence to take risks, a sense of being “special” and a can-do attitude, seems – along with the tech knowledge imparted from a young age – to be driving this entrepreneurialism. It’s also likely to give millennials an advantage in succeeding, inspiring them to follow through with their ideas and pursue their passions – something in itself more common among generation Y than in previous cohorts, according to Tuffile.
That marks an important cultural shift that’s arguably been compounded by, and perhaps in part fuelled by, the financial crisis, when long-held trust in companies started to falter with the collapse of companies previously considered stable. “Our parents had told us our entire lives, you want to get a job as an accountant or a doctor, and then we realise there’s not necessarily that certainty out there”, says Griffel, who adds that the changing tides made becoming a young entrepreneur more culturally acceptable. The tough job market the crisis sparked seemed to fuel entrepreneurialism as a solution, with such activity peaking in 2010 in the US – the same year that unemployment rates were at their highest. Essentially, the factors that once drew young people to big businesses – namely stability and security, the gods of past generations – were damaged, and entrepreneurs’ desire to start something new and separate from what was already out there began to grow.
When that situation is considered – along with the shift in cultural attitude, a background of inspiring young entrepreneurial idols, increased affordability of starting a business and more opportunities than ever before – it seems only logical that entrepreneurialism is growing among generation Y. Tuffile is cautious of ruling out older peers completely and he has a point; experience certainly still has its place and a successful team requires balance. But he’s aware there’s been an undeniable generational shift. “I think [the average age of an entrepreneur] is a lot younger now… in the old days it was mostly much older guys.”
And indeed it seems only natural that as the digital sphere takes on an ever increasing prominence in the world of business, so too do the millennials; the very people who grew up surrounded by that technology, and the very people who are helping to create, shape and redefine it, building the future of a forever changing world, even as we speak.