With student debt on the rise, it’s a wonder that millennials are becoming entrepreneurs at all. Yet, growing up and seeing Gen X and Baby Boomers start their own businesses, along with having better access to business classes in college, has helped the next generation gain necessary skills to compete. Let’s examine how millennial entrepreneurs are different from Baby Boomers, and how these differences can be both an asset and a liability.
First and foremost, millennials are in debt. Student loans in the US alone are at more than $1.3 trillion. For some, this is a barrier to starting a business, as they are wary of taking out more loans. Others, however, see their debt differently, as just more debt, and spending money to make money. Some 62 percent of millennials have considered starting their own business, but 42 percent said they don’t have the necessary financial backing.
Because of this, cash flow for millennials is essential. To stay out of debt, especially if they have known student debt, is a high priority.
Millennials also have to deal with the fallout of the 2008 economic crash and are still feeling the effects nearly a decade later. Despite growing up in a recession, millennials flock to the entrepreneurial mindset in the hopes that they will make money, paving their own road to success.
Younger but More Ambitious
While the average age of a Baby Boomer entrepreneur starting their first business was 35, millennials are starting earlier at 27. Not only are they younger, but they are more ambitious: While only 42 percent of boomers said they expected to turn a profit in the upcoming year, 75 percent of millennials expected to make money.
A 2017 study found that 38 percent of millennials work at a startup, while 30 percent own a business (which includes the gig economy). About 26 percent are able to live off of their small business. Owning a business, 61 percent of millennials said in the survey, offers better security than a traditional job.
Self-Promotion and the Internet
Growing up with social media has proved to be a great boon to millennials when it comes to marketing themselves. With an innate understanding of Facebook, Twitter, Instagram, Snapchat, and more, self-promotion comes as second nature to many millennials. Generating hype and promoting through overuse of social media is a cheap, easy way to build a brand name and promote a product or service, even for teenage millennials.
With their fingers on the pulse of what is popular at any given moment, millennials are much more likely to capitalize on trends, exploiting viral fads for financial gain. They understand how to craft a 140-character tweet in order to maximize audience, or how to deftly use the right amount of hashtags. Their ability to blog consistently and get their blog seen rivals newsboys in an age when the newspaper was the only source of information.
Speaking of these services, the top 20 apps, which includes the apps for Facebook, Twitter, Instagram, and Snapchat, were all created after 2012. The market moves fast — remember the flash-in-the-pan Flappy Bird app, that made its creator rich within days, only to disappear forever? What about the recent fidget spinner phenomenon? — but millennials are more than capable with keeping up with the latest, hottest fad.
On the topic of social media and self-promotion, with Generation Z beginning to graduate from college, how people look for jobs is changing. Gen Z doesn’t just check traditional job posting sites; they check social media. A job offer might pop up over Snapchat or Twitter. They might see a listing on Facebook or LinkedIn.
It’s something millennials, who are now doing the recruiting, have to contend with. There are more people in Gen Z than there are millennials. With an always-on mentality, Gen Z is always connected to the internet and their phones. Millennials can capitalize on this, something that is just now happening with older generations, in order to secure talent for their startups.
The best way for millennials to appeal to Gen Z is to use social media for recruiting. Job resource sites suggest using social networking platforms to find jobs, so it makes sense to search for potential employees on sites like LinkedIn. Gen Z often surfs the internet and social media sites with a smartphone while watching TV. Millennials are also known for their social media prowess, having been the pioneers on many of the platforms, meaning this is a perfect technological match.
Influence vs. Money
Millennials would rather gain influence instead of personal wealth. While only 13 percent of entrepreneurs over the age of 50 wanted to become more influential, 23 percent of entrepreneurs in their 20s valued influence over money. The same was true for creating a positive impact within their community.
The motivation of starting their own business is different, as well. About 49 percent of American entrepreneurs in their 20s said they started a business to be their own boss; the over-50 set rank in at 64 percent.
Millennials were exposed to more business-related education than boomers. Just 7 percent of Masters in Business graduates started a business at graduation before 1990, while between 2010 and 2013, that number jumped to 45 percent. While only 250 business classes were offered on colleges in 1985, there were 5,000 classes offered in 2008.
Millennials are more likely to collaborate than strike out on their own. The average headcount of their primary business is 122.2 employees, while boomers had just 29.9 employees. On the topic of primary businesses, Boomers typically started 3.5 businesses, while millennials started 7.7.
While Boomers were more likely to keep their ideas under lock and key until ready, millennials will massage their ideas, bounce them off of friends and colleagues, iterate until the idea or business plan is perfect, but keep it fairly out in the open during the process. They seek feedback, counterpoints to their pitch.
In short, millennials contend with debt and the lingering effects of the recession, but still manage to start more businesses than the Baby Boomers and at a younger age; they are masters of social media, self-promotion, and hype, quickly capitalizing on trends and fads; they need to use these social media skills to woo Gen Z, the generation now moving into the workforce; they were given better access to business-related education, and prefer to collaborate than work by themselves.
In the end, rather than increase their personal wealth, they want to better their community and make a name for themselves.