There will always be people out there pitching novel business ideas. Concepts like a service that installs artificial turf in drought-stricken areas, a bakery that specializes in vegan croissants, a tech company that installs data chips in your foot, or a construction company that produces 85% less waste.
What may be changing among younger generations, however, is the willingness to do what’s required to help those ideas take flight. Drawn to the appeal of steady jobs, Millennials are pursuing entrepreneurism at a lower rate. As reported by the Wall Street Journal, the proportion of small business owners under the age of 30 is reaching its lowest point in 25 years.
When the Economic Innovation Group surveyed millennials in 2016, the majority of respondents felt the most successful careers could be achieved by climbing the corporate ladder as opposed to starting a new company. The data was so un-entrepreneurial that the Economic Innovation Group’s president would later appear before the U.S. Senate and testify that “Millennials are on track to be the least entrepreneurial generation in recent history.”
So why are younger Americans less inclined to start a business? The Great Recession definitely played a role. With personal finances drying up and family members unable to support their children in school, more college students took on large amounts of debt. One report showed that between 2004 and 2014, the number of students who were borrowing from lenders went up 89%.
Saddled with student debt, entrepreneurial-minded youngsters often aren’t in a position to start a business with their own capital. The second-most common source for funding a business is family and friends, but the economic downturn made this more difficult as well. When you owe more on your mortgage than your home is worth, you’re not in a prime position to give your child’s business a kickstart.
In addition to these domestic issues, there’s also increasing competition when it comes to securing venture capital and private-equity funding. America’s tech dominance is waning, and Beijing may actually overtake Silicon Valley as the number 1 hub for startups on the planet.
“Since 2012, Silicon Valley-based tech companies brought in a total of 12,000 deals, followed by New York area-based companies with 5,000,” states one report. “For funding, Silicon Valley companies brought in a total of $140 billion, with Beijing next, coming in at $75 billion.”
With all these internal and external pressures, it’s unsurprising that many Millennials are keen to seek security and success within the corporate world. But necessity is the mother of invention, and startup communities have sprung from the dearth of traditional funding to help those in the small business world connect with investors, identify collaborators, locate workspaces, or even find a mentor.
“These startup community organizations have developed from a desire to exchange ideas, get assistance, and tap into a support system to help get through the barriers and challenges on the horizon,” says a report from Entrepreneur.com.
Startup communities exploded in 2017, and they are continuing to take hold in cities throughout the country. These types of business-boosting communities have proven to be crucial, even supplanting incubators and accelerators. In fact, research from the Economist Intelligence Unit shows networking in a community was essential to success for 78% of startups.
In many ways, Silicon Valley was the community that first spawned these types of entrepreneurial communities. Impactful networks like Silicon Valley Entrepreneurs, Black Founders, Startup Embassy, and the Cuckoo’s Nest Club have helped many small businesses become big businesses.
On a broader scale, you’ll find networks like Startup Grind, which bridges a million small business owners in hundreds of cities around the world. Another great source is StrtupBoost, known for its extremely social network of entrepreneurs.
Another way Millennial entrepreneurs are finding a competitive edge is through bootcamps and training. Take Build Like A Woman, for example. Started by Kathleen Griffith, CEO of Grayce & Co, in partnership with Entrepreneur, it provides valuable resources and assistance and has the goal of helping to launch 10,000 new businesses by 2020.
Apple has also gotten on board with this bootcamp approach, announcing the new Entrepreneur Camp slated to be held at their campus in Cupertino in early 2019. The 2-week event will be held quarterly, and attendees will receive 1-on-1 training, as well as ongoing mentoring.
Hopefully, the advent of improved networks and robust bootcamps will help to fill the voids Millennials are experiencing in their entrepreneurial pursuits. Collaboration will be the most important component. Not only does it provide crucial resources and partnerships, but it often allows individuals to connect with a mentor. And there’s no better way for a Millennial to gain confidence than for an older entrepreneur to say, “I went through some super tough financial times as well, but owning a business was the best decision I ever made.”