Earlier this spring, studies in both the U.S. and the UK have reported declines in entrepreneurship: more startups failing, fewer getting off the ground, and low growth expectations for those currently open.
After all this time, is it possible that entrepreneurs are now an endangered species?
I hope you can sense the sarcasm in my tone. As is often the case, the speculation surrounding these kinds of studies has veered into the realm of sensationalism. In reality, the issue is far more complicated than a single article can explain, and the truth isn’t quite as gloomy.
Consider the entrepreneurial spirit within different demographics. A closer look at millennials, for instance, as is reported in a recent study by the CT Corporation, indicates that among those born in the ’80s and ’90s, the entrepreneurial spirit is strong and thriving.
To help visualize the data, we put together the following infographic and broke it into three distinct areas: the entrepreneurial aspirations of millennials, what could be holding them back, and possible reasons for their motivation.
For some personal insight, I spoke with Matthew Leirdahl, a millennial entrepreneur from Minnesota, and Shanesh Ranchhod, a millennial from Auckland, New Zealand, who is on the verge of entrepreneurship.
Aspiring to leadership
The desire to start a business is strong in college undergraduates, as 60% hope to do so after graduation, and 45% think it’s likely to happen. Some didn’t even wait that long: 20% started their own business while still in college.
For Matthew Leirdahl, CEO and co-founder of Zahnk, the desire has been there for a number of years. He was an entrepreneurial management major in college, and says
“My business partners and I decided to start a business right away was because it was something that we always talked about when we were in school together. We could have waited until we had a few years of experience in the industry, but to us, the best way of learning is actually doing.”
However, as the study suggests, not every millennial with the desire to start a business believes they actually will. 30% believe that even though they have entrepreneurial aspirations, they probably won’t take the leap.
What’s holding young entrepreneurs back?
So what is it that could be holding some millennials back from entrepreneurship? The number one reason is a lack of business know-how. Nearly 70% of the study respondents admitted that they don’t know how to start a business.
A lack of confidence can also be a major hurdle for millennials. Respondents expressed insecurity in their abilities when it comes to naming their business, writing a business plan, marketing their business, or obtaining a domain name for their business.
While not listed in this study, another factor holding back millennials may be the time investment required to get a business off the ground. With student loan debt at an all time high, there’s significant pressure for college graduates to get a job as soon as possible, whether it aligns with their degree or not.
However, working full-time for another company isn’t exactly conducive to launching your own. Shanesh Ranchhod, a millennial from Auckland, New Zealand, is not yet an entrepreneur. While he has thought through many specifics of the business he’d like to start, his main hurdle is balancing his entrepreneurial goals with the demands of a full-time job.
This is also something Matthew Leirdahl and his partners have had to deal with during the launch of their company. “My cofounders and I all either hold full-time jobs or are still students. Being able to find times to coordinate with each other each day can be quite challenging.”
Still, if the entrepreneurial spirit is strong enough, these obstacles can be overcome by adaptation and sacrifice. As Leirdahl explains,
“We have been able to overcome these issues by being adaptive. We know that with what we are doing, nothing is predicable. We just make things work by sacrificing. The key to what we’ve been able to accomplish so far though is communication.”
“Everyday, after work, I have a phone call with my lead developer, Zach, and my co-founder, Ben, to get updates on what their teams are doing. There is not a day that goes by when I’m not in communication with the team. When special projects, like our Kickstarter, come up, it is even more crucial that we maintain communication because we need up-to-the-minute updates.”
Why the desire to strike out on their own?
So, what is it that gives the millennials the desire to start businesses of their own? The prospect of an uncertain future.
After watching their parents’ generation deal with corporations choosing profit margins over employees, retirement funds being drained during the economic recession, and the housing bubble burst, millennials have little reason to trust in a safe and uneventful career path.
As Scott Gerber, founder of the YEC says, “Understand the reality of today versus the nostalgia of yesteryear. Instability is here to stay.”
[pullquote position=”right”]”Understand the reality of today versus the nostalgia of yesteryear. Instability is here to stay.” — @scottgerber[/pullquote]
According to the study, 30% of millennials believe that starting a business offers better job security in the next three to five years, and 20% believe that job security will be greater over the next 10-20 years than what a traditional career offers.
Next steps for millennials
For millennials who have a strong entrepreneurial spirit, the secret of their success will depend on their willingness to persevere despite the obstacles.
If there are skills that they lack, there are many free online resources available, such as the “Top 10 Free Online Classes for Small Business Marketing,” or our library of over 500 sample business plans.
Although difficult, it’s not impossible to work a full-time job while also trying to start a business. It may require some significant sacrifices or clever adaptation, but it can be done.
Ultimately, being an entrepreneur is about being willing to take a risk. With that in mind, here’s some advice from others who have already made the leap into entrepreneurship:
“The best advice that I could give to another millennial is to just try it out. The worst thing that can happen is that particular business will fail. You will learn so much from the first attempt that it will all be worth it.” — Matthew Leirdahl, Zahnk.com
“Starting early is the key to building lasting wealth. Take control of your life, OWN IT!” — Hero Huggins, Financial Advisor / Motivational Speaker
“Do not give up, yet do not be afraid of change. Set goals and reach beyond them. YOU are the future!” — Nikki Fica, Social Media Facelift
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