How new technologies, a proliferation of resources, and a disenchantment with the corporate world are making Generation Y the most entrepreneurial in history.
What better measure of a generation than its approach to entrepreneurship? Generation Y, born between 1977 and 1994, may well be on its way to becoming the most entrepreneurial generation in our nation's history -- and for very good reasons. They took their baby steps during our first true entrepreneurial decade, the 1980s; watched their parents "restructured" out of what were once lifetime corporate jobs; saw barriers to entry collapse as technology democratized the business start-up process; enrolled in newly-minted college entrepreneurship programs, which have increased seven-fold in the past six years.
No wonder that a recent study by The Global Entrepreneurship Monitor shows that 18- to 24-year-olds in the United States are starting businesses at a faster rate than 35- to 44-year-olds. The college campus is now a fertile breeding ground for company builders. "Forty percent or more of students who come into our undergraduate entrepreneurship program as freshmen already have a business," says Jeff Cornwall, the Massey Chair in Entrepreneurship at Belmont University in Nashville. "It's a whole new world."
The rising stars on this year's 30 Under 30 list would most certainly agree. We've got a few high school start-ups, and several more college dorm room launches. Some are already racking up revenues in the tens of millions, while others are just experiencing the first blush of success. But we think that all of them are worth watching, not just for the companies they're running today, but for the ones they've yet to conceive of but will most surely start in the future. Because here's the thing about Gen Y entrepreneurs: they're lifers, or so they say: the majority plan to start more than one company in their lifetimes.
That's true for our list, but that particular defining characteristic was also born out by a recent survey, conducted by OPEN from American Express, which compared Generation Y and baby boomer entrepreneurs. Fifty-nine percent of Gen Y company owners described themselves as serial entrepreneurs, compared to just 33 percent of baby boomers. Maybe that has something to do with their attitudes about risk: 72 percent said they actually enjoy taking risks, while only 53 percent of older entrepreneurs were risk junkies.
Sure, it may still be pie in the sky. It's one thing to plan multiple companies, but quite another to actually launch them; and it's typically far easier to take risks when you're 22 than when you're, say, 50 and saddled with a mortgage and your kids' college tuition. But the stated intention to live an entrepreneurial life -- and to start doing it before you're old enough to order a drink legally -- is part and parcel of Generation Y's confidence, independence, and enthusiasm. And their impatience.
They're often so antsy, in fact, that it's not unusual for them to bail out of college to devote themselves to their businesses full time. Take Ben Kaufman, the CEO of Mophie, who enrolled in Champlain College in Burlington, Vt., because he was drawn to a program called BYOBiz (Bring Your Own Business). But when his iPod accessory company took off, so did Kaufman (for a year, anyway). Raj Lahoti felt compelled to do the same when things started cooking at Online Guru. They wouldn't be the first entrepreneurs to eschew the classroom for the start-up trenches, but that kind of defection may tell us something about entrepreneurship education. "The old model was, go off and study liberal arts and when you're a junior, we'll give you an entrepreneurship course," Cornwall says. "Now, if I wait until junior year, I'll loose them. They want fulfillment and success and they're not willing to wait 10 or 15 years. They want it today."
And having it today is a lot easier than it used to be. Technology is now the great enabler for all businesses, but Generation Y entrepreneurs have an added advantage: a lifetime of exposure to interactive digital devices has given them an enviable comfort level with new technology and the ability to navigate and exploit the Internet intuitively. Yes, they're starting exactly the kinds of businesses you'd expect: Sam Altman's company, Loopt, provides GPS tracking for mobile devices; Dave, Catherine, and Geoff Cook launched myYearbook.com, a social networking site for high schoolers; Will Pearson and Mangesh Hattikudur started a trivia magazine with a website that's an integral part of their brand.
But this year's honorees are also experts at using technology as a competitive tool to start and grow businesses in traditional industries: they sell shoes to tall women; bling to urban youth; houses to middle-market buyers; cookies to college students. Count on them, too, to use blogging and social networking to boost brand awareness of their products and services. They're much more likely to rely on word of mouth and viral marketing than on traditional advertising and promotion. It works for them not just because they're wildly social animals, but because they've grown up with the concepts of team work and collaboration. Nothing illustrates that more succinctly than the number of partnerships in our 30 under 30 list: more than half of our young stars started their companies with one or more partners.
You might also note that these entrepreneurs are particularly savvy about serving the needs of their own generation. There are approximately 73 million people in Gen Y -- close to the number of baby boomers, and far more than Generation X, which weighs in at around 50 million. That's a huge market filled with people whose buying habits and frames of reference are far different from previous generations. Their entrepreneurial peers are capitalizing on that by starting companies with a distinctly Generation Y point of view: IceOutGear.com, Mental Floss magazine, Insomnia Cookies, myYearbook.com, Interview Stream, and Mophie are all companies whose primary customer base is, like their founders, young.
But baby boomers, take heart: this is not an ageist generation. Some of our most successful 30 Under 30 entrepreneurs realize that there's just no substitute for experience when it comes to growing a company, so they've brought on a few seasoned managers to help them navigate entrepreneurial waters. Mophie's Ben Kaufman fired himself and hired a CEO in his 40s; Benjamin Sann runs BestParking.com with his step father; the three founders of Inogen all ceded senior management roles to their older investors. The generational mix isn't always easy or comfortable, but it gives young companies gravitas, the kind of perspective on growth that might otherwise elude them for years, and the freedom to do what they do best -- keeping their companies on the cutting edge of technology and market trends and, of course, conceiving ideas for more cool companies.
Donna Fenn is a contributing editor at Inc. and the author of Alpha Dogs: How Your Small Business Can Become a Leader of the Pack.
DONNA FENN is the author of Upstarts! How Gen Y Entrepreneurs are Rocking the World of Business and 8 Ways You Can Profit From Their Success (McGraw-Hill, 2009), about ways Gen Y is changing the entrepreneurial landscape.