If The Shoe Fits: Startups, Millennials and the Future
by Miki Saxon
A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here.
For years the media has been proclaiming that the great majority of young people want to be entrepreneurs or work for a startup, as opposed to a larger/older company, because startups were “cool.”
Now it looks like their ardor is what’s cool, as in cooled off.
Research suggests entrepreneurial activity has declined among Millennials. The share of people under 30 who own a business has fallen to almost a quarter-century low, according to a 2015 Wall Street Journal analysis of Federal Reserve data. (…) Two years ago, EIG’s president and co-founder, John Lettieri, testified before the U.S. Senate, “Millennials are on track to be the least entrepreneurial generation in recent history.”
What changed?
Maybe they learned that wanting to and doing it are very different. That they will work far harder for themselves, even if they are well-funded, or that startups fail far more often than they succeed (90% vs 10%).
A survey of 1,200 Millennials conducted in 2016 by the Economic Innovation Group found that more Millennials believed they could have a successful career by staying at one company and attempting to climb the ladder than by founding a new one.
But maybe there is something else going on.
Maybe they have figured out that the world doesn’t need another social network / dating app / review site / etc.
Maybe investors have realized that monetizing through ads isn’t a good road to sustainable profitability, considering the push for more European-style privacy.
Or maybe, just maybe, reality has reared its ugly head and they’ve figured out they don’t have enough experience or know enough to create enterprise solutions for real-world needs.
Matt Krisiloff, the former Y Combinator executive, added that the opportunities “to start compelling start-ups,” for college students without industry-specific knowledge, “has vastly shrunk.”
Maybe they aren’t all looking for a safe harbor in the next downturn (there aren’t any), but for the experience that will ground their startup in their 40s, 50s and beyond.
What they found is that the average age of a startup founder is about 41.9 years of age among all startups that hire at least one employee, and among the top 0.1 percent of highest-growth startups, that average age moves up to 45 years old. Those ages are taken from the time of the founding of the company.
Maybe our media-inspired view of entrepreneurs is a reflection of the warped views of Silicon Valley as engendered by VCs.
VCs believe they have “pattern recognition” abilities that they simply don’t have. Instead, they rely on suppositions and stereotypes that don’t match the underlying data on startup success. The same reason why older founders are ignored by the ecosystem is the same reason why women and other minorities struggle in the Valley: It’s really not about what you build, but what you look like while building it.
Maybe the entrepreneurs of the future will look more like our real world in all its diverse, messy glory.
And a final “maybe.”
Maybe there is room to hope.
Image credit: HikingArtist
