Millennials: Losing the Start-up Bug?
Entrepreneurship is the cornerstone of capitalism but don’t be fooled by Zuckerberg’s billions, despite the tech boom the appetite for founding a new firm among US Millennials is in decline.
Technology, adoption of which is typically led by younger generations, has made scores of youthful millionaires and a few billionaires this decade, creating an impression that entrepreneurship among Millennials is thriving, but recent research paints a darker picture.
Millennial entrepreneurship is actually rarer than for older age groups, according to a 2016 study by the US Small Business Administration.
This found that in 2014 less than 2% of Millennials were self-employed, versus 7.6% for Generation X and 8.3% for Baby Boomers.
The report acknowledges entrepreneurship rates rise as people grow older, but the rate of increase has slowed among Millennials. At age 30, less than 4% of Millennials were self-employed. By the same age, 5.4% of Generation X and 6.7% of Baby Boomers were self-employed.
"The spectacular entrepreneurial successes of some Millennials and the proliferation of programs designed to replicate that success together create the impression of a generation in which entrepreneurship is thriving,” the report states. “Our data exposes a different reality."
Starting a Side Hustle
Yet perhaps the outlook isn't quite so gloomy – a 2011 report by the Kauffman Foundation found 54% US Millennials want to start their own business or have already done so, while another study the same year claimed 35% had started a side hustle business to boost their income.
"There are a lot more resources today for new entrepreneurs than 20-30 years ago, which gives the new generation of entrepreneurs more confidence to start their own business," said Scott Pecoriello, 20, founder of six companies including Connecticut-based WeatherOptics. "There's more encouragement for new entrepreneurs."
He typically gives each of his businesses 12-18 months before deciding whether to continue with them.
"A lot of it was trial and error. I would see what worked and what didn't. I still think that's the best way to go about being an entrepreneur," said Pecoriello, a student at University of Delaware who took a sabbatical ahead of the launch of his latest venture, Flock, a location-based photo and video sharing app.
"I would have an idea, brand it, create a website and give it my all. Then I would see whether it was working in terms of the market place and some failed and some succeeded."
As part of BNP Paribas Wealth Management's 2017 Global Entrepreneur Report, the European based bank interviewed 1,153 'Millennipreneurs'.
This found these young entrepreneurs have the highest level of interest (57%) in angel investing relative to Generation X (44%) and Baby Boomers (26%), something that is a major attraction to both Pecoriello and Mexican prodigy Daniel Gómez Iñiguez.
The Monterrey native, who co-founded Mexico's largest biodiesel producer SOLBEN aged 17, and now almost a decade later is invested in nine other companies through his own investment fund, said his generation of entrepreneurs shared core character traits with their older counterparts.
"We may have learned some new technologies, but we're very similar to entrepreneurs of the past in that we have innovative ideas and work very hard to realize them," added Gómez Iñiguez. "I've never met an entrepreneur who didn't work hard and just got lucky."
of Millennipreneurs favour Angel investments