Why Millennials aren’t becoming entrepreneurs and what to do about it.
There’s no doubt about it: the entrepreneurial dream is more popular than ever.
But when we speak about the rise of entrepreneurship among younger generations, let’s not confuse it with the glittery, romanticized American dream of the 20th century. The passion for entrepreneurship is growing, but the actual amount of new business owners is not.
Millennials certainly are creating a boom in our nation’s cravings for entrepreneurship. Nearly 70 percent of that generation has interest in business ownership, while only 13 percent desire to rise within a corporation, according to a Bentley University study.
Unfortunately, that mere interest is a costly limbo between action toward and rejection of entrepreneurship. The U.S. Small Business Association reported that only 2 percent of millennials are self-employed. That’s compared to roughly 8 percent in the preceding Gen X and Baby Boomer generation. It’s a 62 percent difference between interest and new ventures.
A leading cause for this disparity is a fear of failure. When we dissect the rather short history of the millennial generation, it’s easy to understand why.
Millennials were raised in the recession. They remember 9/11 and grew up understanding the financial toll of a sudden disaster. They were taught to save. Today, these lessons from childhood and adolescence continue to follow millennials as student debt piles high, with little growth in true income. Financial stability is a crucial value for members of this generation, which makes entrepreneurship seem like a scary dive into the complete opposite, the unknown.
The truth is, entrepreneurship is hard. It’s a lifestyle of self-motivation, trial and error, spontaneity and risks — some intentional, others not. Compared to the stability of a 9-to-5 job, the risks of all-in entrepreneurship seem like an overwhelming burden to bear.
Before we discuss what we should do about the millennial entrepreneurship disparity, we should lead with a qualifying question: Do we actually need more millennials to become entrepreneurs?
The answer is yes and no. Because millennials already face the stress of financial debt, it’s necessary to understand that more isn’t always better. Quality over quantity is important. We don’t need an oversaturation of similar ventures that will tackle each other for industry leadership. Instead, we must focus on nurturing strong new ideas and unique experiences to build great companies for the future. Diversity in thought is what will make our ecosystem, our country prevail as a true competitor in the innovative space.
When we think about building entrepreneurship in a generation that already believes so deeply in changing the world, we must strive for more than fillers for the business landscape.
For the great thinkers, we can close the disparity by thinking with a millennial mindset. Understand the different demands of the generation: independence, passion, connectivity and more. Use these values to reduce millennials’ fear of failure by proving that entrepreneurship is more than a shot in the dark.
Ultimately, we must create resources that will reduce barriers to entry — financial strain, cultural and gender bias and more — to make the climb back up after the fall not as tough.
This article first appeared in The Phoenix Business Journal, read the rest here.