I don’t view them as the lost generation at all.
Donna Fenn, a journalist and author of Upstarts! How GenY Entrepreneurs Are Rocking the World of Business, has been writing about entrepreneurship and small-business trends for more than 20 years. As co-founder of YEC Mentors, a division of the Young Entrepreneur Council (an invitation-only global group), Fenn was well-positioned to provide us with insight into the entrepreneurial mindset of the Millennial generation—or, as we’ve termed them, Generation Go (one of our 10 Trends for 2012). She talked to us about why we’re seeing so many young self-starters right now, the unique characteristics of Millennials and why they’ve been described as the next greatest generation.
There’s a lot of anecdotal stories about people feeling let down by the system these days. How do you see Millennials weathering the storm, trying to not be the “lost generation”?
I don’t view them as the lost generation at all. … I started researching [Upstarts!] long before the economy started tanking. I was seeing, even before the recession, that this was an entrepreneurial generation.
My feeling is that Millennials from the get-go have been a generation of self-starters, of people who would rather pave their own way than work for big corporations. It’s not everybody, obviously, in [the Millennial] generation, but as someone who’s been covering entrepreneurship in small business for more than 25 years, I have, in the past years, seen more businesses started by people in their 20s than I have ever seen in my life—and it’s been kind of a long life [laughs]. There were a variety of factors coming into play that made this an entrepreneurial generation even before the economy tanked.
What factors would you cite?
It’s absolutely not circumstance. I think what we forget is that [Millennials] are the first generation to have grown up with very strong entrepreneurial role models—Richard Branson, Steve Jobs, Anita Roddick, Michael Dell. We just started viewing entrepreneurs as kind of rock stars and people to be admired around the early ’80s, and that seems incredible. Inc. magazine was founded in 1979, and I got my first job there in 1983—and everybody, all my journalist friends, were saying to me, “Why are you writing about entrepreneurs? Nobody cares about them.”
So it used to be that if you said you were an entrepreneur, that meant you were taking over your dad’s hardware store or you were selling encyclopedias door to door. It didn’t have a positive connotation. And certainly the word “entrepreneur,” when I was growing up, was almost an insult—“Oh, he’s a real entrepreneur,” like he’s selling you watches from the inside of his raincoat. But [Millennials are] entirely different. I mean, you have Steve Jobs on the cover of Time. This is like the biggest hero of the generation. Tony Hsieh—these are rock stars and people you would like to be, people you would like to emulate, people whose lives look very attractive and who are very attractive and appealing.
Also, when you [as a Millennial] started reaching the age of reasoning, you saw these corporate scandals—Enron and WorldCom—and then the financial meltdown and your parents getting laid off from big corporations where they had worked for a long, long time. And the message was, Corporate America is not a desirable or a safe place to be. You’re not going to get the gold watch after 25 years of service anymore—you’re going to get a pink slip.
And then the other thing is that there has been a huge proliferation of entrepreneurship programs in colleges and universities. It did not exist 10 years ago. You can now major in entrepreneurship. And so there’s a lot of support out there for young people wanting to start businesses—support that wasn’t there in the past.
And so all those factors were coming into play long before the recession hit. And then when the recession did hit … it seems a whole lot less risky now to start my own business than to spend a year looking for a job that doesn’t exist.
Do you see young people primarily starting tech businesses?
No. I mean, these are the companies we hear about over and over again because it makes for good reading. But I think they’re starting businesses in every single industry. And all—no matter what the industry is—are definitely using technology as a tool to grow their businesses. But kids are starting businesses in every industry—pool cleaning, construction; it’s widespread, they are everywhere. I could find you a small company in every imaginable industry that’s started by somebody in their 20s.
Have you primarily focused on Americans? Can you speak to this trend more globally?
My research is done primarily with American entrepreneurs, but I think it’s a global trend. You’re starting to find that young people in other countries are looking to entrepreneurship as a viable career choice as well. And you’re going to hear about State Department initiatives supporting youth entrepreneurship; we are already doing it in Egypt. There is no better antidote to the radicalization of youth in these countries that are prone to being radical than giving them and helping them find a viable and sustainable means for their own economic support.
The White House is crazy about youth entrepreneurship now. There is probably an event every two weeks at the White House in support of young entrepreneurs. But you are going to see more and more kids globally starting businesses. And part of the challenge is that there’s not the same mentality about risk and failure in many countries in Europe and the developing world that there is throughout the United States. Here we kind of celebrate failure, or we are told that you learn more from your failures than your successes, and that if you haven’t failed, you haven’t tried hard enough. There are all these clichés, right? That’s not the accepted and prevailing mentality in Europe and Asia. I spoke in Belgium, and the audience was filled with kids afraid to fail, like, “My family will be so upset with me, I’ll have nobody to fund me again, I won’t be able to get a job.” So there is not an acceptance of failure as a learning tool in other countries like there is here.
Speaking of failure, do you see better rates of success among Millennial entrepreneurs, or has the failure rate of new businesses remained about the same over the years?
Man, if you could find that research for me, I’d be super grateful. It’s all, for me, very anecdotal. I think what Millennials have that older entrepreneurs don’t have is … they can sleep on futons and eat ramen or live with mom and dad, like so many of them do, and keep cash flow under control in a way that the older entrepreneurs maybe can’t because they have mortgages and families to support. And so there is more tolerance for toughing it out just because they’re young.
That being said, one of the things people say about this generation is that the attention span is very short, and I agree with that. And so if they feel the business they started is not working out, they’re very quick to either morph it or drop it and move on to something else.
Are their businesses lasting longer than others’? I don’t know, but I do think they’re less likely to say, “This isn’t working out now, I’m going to work for a corporation.” They are more likely to say, “I’m going to try something else.” Because they’re a generation of serial entrepreneurs—that’s what I’m finding. In doing my research for the book, so many of them were on their second or third business.
Speaking of serial entrepreneurship, do you find that Millennial entrepreneurs want to grow and sustain a business, or would they rather get acquired and move on to the next thing?
I think, if you did a massive survey, you would find that most of these kids will say, “This is not my first business, and it’s not my last.” They’re driven by the startup phase, by the innovation phase, and just by virtue of their age, they tend not to be managers. And at some point, if your company grows from a couple of people to 20, 30, 40, 50, 100 people, you’re managing a larger organization. And that’s sometimes a challenge for these kids. Very often they’ll bring in people of their parents’ generation, Baby Boomers, as CEOs or at least as key level employees.
The classic is that they get acquired and stay on a couple of years, and they go on to start something else. Like Aaron Patzer at Mint.com, for instance.
What are some characteristics—positive, negative—that you’re seeing in Millennials in general?
They are great at working in teams. And I think that comes from a lifetime of working in teams, from peewee soccer to group projects in high school. It’s a super-social generation. They’re very team oriented, which is terrific because sometimes it takes a village to build a company, right? And they reach out to everyone. This is not a “Don’t trust anyone over 30” generation. They’re terrific at partnering, particularly with people their parents’ age—I admire it. It’s fascinating to me, because I think their generation gets along better with people my age than with Generation X, which would be people who are like 10 years older than them. Like, Gen X doesn’t get [Millennials] at all. [Laughs]
My kids are 20 and 22. And my relationship with them is so different than my relationship with my parents. It’s not any less loving, but what I know about my kids is exponentially greater than what my parents knew about me. [Laughs] And how often I talk to them and how much I advise them. I’m like a classic Baby Boomer parent. There are a lot of reasons why that happened. When I was growing up, we had a lot to fight about—music, the pill, hippies, [laughs] about marijuana. We were a very, very different generation from our parents. And civil rights, you name it—that was the ’60s and ’70s, a very disruptive period that ended up pitting youth against older generations. And [the Millennial] generation just didn’t have that with their parents, so the relationships tend to be a lot closer. As far as business goes, the entrepreneur generation is super comfortable hiring somebody who is 50 years old. It doesn’t seem to be an issue.
Other positive characteristics—it’s a very socially responsible generation. When I was doing research for my book, I asked everybody I interviewed, which was 150-160 entrepreneurs, “Would you describe your company as having a social mission?” And 70 percent said yeah. I thought that was amazing. Previous generations may have said, “I’m going to make my money, and then I’m going to give back. And I’ll do it through donations or maybe donating a percentage of sales to my favorite charity.” But this generation has a stated social mission at the outset: “We’re not going to wait until we make profits.”
There’s a company in my book called HAPPYBABY Foods, which makes frozen, organic baby meals. From the very inception of their company, they were committed to feeding a kid in Malawi for every package of baby food they sold here. And that was before they had a dime in profits. That’s very typical that there’s a commitment to having a larger purpose beyond commerce; there’s not this separation of profit and not-for-profit. You find a lot of hybrid companies in this generation.
Another positive characteristic is flexibility, because you don’t have this expectation that you’re going to get a job and stay in it for 20 years. You’re more flexible about moving around and juggling a lot of balls at one time and kind of cobbling things together, more than people of older generations who kind of would freak out if they lost their job.
What do you see as some of the negative characteristics of Millennials?
I would say impatience. You know, impatience can be a good thing and a bad thing. It’s like, in some ways you’re impatient when it comes to bullshit, but on the other hand you sometimes have to be patient and wait—especially in jobs, you don’t want to pay your dues, you want things to happen right away, and if they don’t, you want to move on. I hear from employers a lot that it’s a hard generation to retain.
And you want to have your progress monitored very frequently, so there’s a bit more hand-holding with this generation. They seem to need validation a bit more, whereas my generation, our parents just stopped paying our way when we graduated from college, and that was it; I don’t ever remember having a career discussion with my mother. But that’s not true with [Millennials] at all. We spoiled you rotten, and now we are paying the price. From an employer’s standpoint, this generation needs a bit more frequent reviews, a bit more “I’m doing this right, I’m not doing this right.” It’s not a bad thing. But it’s sometimes a challenge for employers.
Some say Millennials are very narcissistic—would you agree?
You know, I hate that word. I think narcissists are people who just can’t stop looking in the mirror and whose world is very, very me-centric. And I just don’t see that. I think [Millennials] are me-centric in that they know that they have to be CEOs of their own careers. But [Millennials] are a far too social and socially conscious generation to be described as narcissistic. I really don’t see it.
How do you see this generation confronting major upcoming problems, such as the environment, the economy, the uncertainty of Social Security?
When we first started talking, you described [Millennials] as “the lost generation.” [Millennials have] also been described as the next greatest generation. And not by people their own age—by people like Frances Hesselbein, who’s in her late 90s and who was the person who turned around the Girl Scouts and who is the first non-military professor at West Point. Frances was telling me that when she talks to this generation of cadets, she has never in her years talked to a generation, since the World War II generation, that had the makings for leadership. And Jim Collins—he wrote Good to Great and is the No. 1 management guru out there today—he says the same thing about [Millennials].
[Millennials] are a generation of problem solvers and team workers, and they’ll figure it out. And [Millennials] are entrepreneurs, so you’re going to start companies to solve these problems as well. And because your generation is serial entrepreneurs, by the time you get to be 40 or 50, you will have started three or four companies and you will have learned so much from all the terrible times you screwed up and failed that this generation is going to create some of the most awesome companies of our time. And they will be companies that solve the big problems. I think if entrepreneurs can work together with government and private industry and nonprofits and put to use the partnership skills that you’re so good at, your future is not bleak.