Three years ago, Inc. contributing editor Donna Fenn started noticing that a huge number of the entrepreneurial CEOs who landed on her radar screen were young enough to be her children. Who were these kids? Why were they suddenly starting companies in what seemed like record numbers? Were those companies significantly different from the companies she had been covering for more than 20 years? And, most importantly, what could we all learn from this trend? To answer those questions, Fenn wrote Upstarts! How GenY Entrepreneurs Are Rocking the World of Business and 8 Ways You Can Profit From Their Success, published by McGraw-Hill Professional. You'll find some of the answers to those questions in our excerpt of the book's introduction. And you can read more about Upstarts! on Fenn's website: www.UpstartsRock.com.
Joel Erb slid into the black limousine and settled in for the long road trip from Richmond, VA, to Manhattan. Wearing a somewhat oversized suit coat that he hoped made him look older than he was, he clutched the portfolio of Web site designs that he planned to present to executives at Calvin Klein, Armani, and Hugo Boss. He was a little nervous but also confident in the way that people with very little to lose typically are. Using a trial download of Flash, he had created the designs on the computer in his bedroom (aka "Suite 101"). It was 1998, and Web design was still an emerging profession; back then, a smooth-talking neophyte like Erb could generate enough interest in his mockups to cajole his way into appointments at those prestigious fashion houses. "I'll be in New York in two weeks," he told them, "and I'd love to meet with you." He was 14 years old, and it would be his first trip outside the state of Virginia.
"Suite 101 was my bedroom." -- Joel Erb, INM United
Erb's previous Web design experience consisted of creating a Web site for his middle school and doing a bit of work for a local carpet-cleaning service and for some companies in the heating, ventilation, and air-conditioning (HVAC) industry. The son of working-class parents with limited financial resources, he had a passion for art and design and an impressive toolbox of self-taught technology skills. He also had a family friend with a limo company who was willing to make the drive to New York, open doors for him, and call him "Mr. Erb" whenever anyone was listening. "He pulled out all the stops for me," says Erb. "I felt like Richie Rich." The friend's parents lived in Brooklyn, and they fed Erb a good dinner, put him up for a night, and helped him iron his clothes so that he'd look fresh for his Manhattan meetings.
Reality hit home the next day. The marketing director at one firm took a look at him and asked if his father was coming to the meeting, too. "Have you even reached puberty?" he sneered. Erb was given short shrift at the second meeting as well. But at the third, they asked him the magic question: "How much?" Erb can't say which company it was because of a nondisclosure agreement, but he went back to Richmond, wrote a proposal, and ended up landing a $30,000 contract to create banner ads. It wasn't a Web site design project, but it was a good start. "When the checks came to my house, my parents were completely stunned," Erb says.
"When the checks came to my house, my parents were completely stunned." -- Joel Erb, INM Marketing
The next few years where a whirlwind. Erb became the first high school student in Virginia to earn his diploma by taking classes on the Web, and he grew his company, now called INM United, to $1 million in revenue, only to be wiped out after 9/11. "We lost every single project in New York and a lot near Richmond," he recalls. "I had to let all my employees go except two. And then I started getting panic attacks. I was an 18-year-old with the stress level of 40-year-old businessman." With 80 percent of his business gone, he enrolled at the University of Richmond and built his company back up from his dorm room, drawing on advice from professors and local businesspeople. He reconceived INM, transforming it from a Web design firm into an integrated marketing company, and that would double his revenue.
Since then, Erb has been honored as a rising start by the Greater Richmond Technology Council, won a Small Business Administration (SBA) regional "Entrepreneur of the Year" award, and has been recognized as one of Virginia's top "40 Under 40" entrepreneurs. He houses his staff of 12 in a leased 3,000-square-foot office situated in renovated warehouse space in the trendy Shockoe Bottom section of Richmond, where "we have mood lighting, a drum set and a little helicopter that we fly around the office," he says proudly. 2008 revenues were in excess of one million.
At age 26, Erb has already been in business for longer than he's been able to order a drink in a restaurant or attend an R-rated movie without sneaking in. Precocious? Sure. An anomaly? Well, not really. Over the course of more than 25 years of studying and writing about entrepreneurship, I can't ever recall talking to so many business owners who started bona fide companies in their twenties or earlier. "I've got my own business" has not only replaced "I'm in a band" as the ultimate boast; it also has replaced "I've got a lemonade stand."
Erb is a member of the generation we've come to call "Y" (or "Generation Why?" the "Me Generation," the "Net Generation," the "iPod Generation," "Echo Boomers," and most recently, "Generation O" for the enormous role they played in President Obama's election). They were born between 1977 and 1997, and you can call them what you like; I call them the entrepreneurial generation. There are approximately 77 million of them, and their sheer numbers, combined with the rate at which they're starting businesses, will make them a force to be reckoned with. And because their approach to entrepreneurship is so different from that of previous generations, these "Upstarts" are destined to have a profound effect on the economy and specifically on the small-business landscape. It's the purpose of this book to document this revolution and to paint a narrative portrait of this entrepreneurial generation.
"Starting your own business is the most creative thing you can do. It's a living, breathing work of art." -- Shazi Visram, Happy Baby Food
Upstarts! began to take shape three years ago, after the publication of my first book, Alpha Dogs: How Your Small Business Can Become a Leader of the Pack (Collins, 2005). Alpha Dogs chronicled the success of eight extraordinary companies that had achieved entrepreneurial greatness not by virtue of what they make or sell, but because they were masters at setting themselves apart from the pack through their sophisticated business strategies -- strategies that all small businesses must master if they want to survive and thrive in an increasingly cutthroat economy. In Alpha Dogs, I mentioned four compelling competitive challenges that are forcing small businesses to become more strategic: the growing number of demanding and fickle consumers; industry consolidation, which breeds huge competitors; advances in technology, which allow big competitors to look small and intimate and small ones to look formidable; and market saturation by a burgeoning number of products and services.
But shortly after I began to speak to audiences about Alpha Dogs, I realized that something huge and exciting was happening in the world of small-business creation and that I needed to add a fifth challenge: An emerging group of young, brash, and highly educated "upstart" entrepreneurs was beginning to raise the bar for mature companies in every industry. Everywhere I looked, I saw Joel Erbs.
Technology, it seemed, was helping entrepreneurial dreams come true for a whole new demographic. Company founders were getting younger and smarter, and they appeared to be undaunted by -- or naively unaware of -- the challenges that make small-business survival such a risky proposition. If a young person were inspired and inclined, he or she might dip a toe into the world of commerce with a mere click of the mouse. Fifteen-year-olds could make a killing on eBay or, like Joel Erb, pass themselves off as seasoned Web developers not by means of deceit, but simply by cloaking themselves in the anonymity of the Internet.
"When I started the company, I had to go to customer dinners with a fake ID." -- Rachel Hennig, Catalyst Search
Like previous generations of entrepreneurs, they're driven by the desire for financial independence, motivated by the sudden perception of an unmet market need, eager to sell a newly conceived product or service, or convinced that they can improve on something that already exists in the marketplace. Or maybe they're just having fun. To them, the decision to start a business is not particularly intimidating; for better or worse, it's often not thoroughly planned out. It may start out with a tiny germ of idea like, "Hey, I really like design, and I'm good with computers, so let me take a crack at mocking up some Web sites for clothing designers." Startup costs? Nil. Risk? Nonexistent. Support? Abundant. Parents, teachers, and mentors provide everything from words of encouragement to advice to financial backing, sending a "can-do" message that may have seemed imprudent or indulgent 10 years ago. Welcome to the new lemonade stand.
Some of these young CEOs approached me directly; others made their way onto my radar screen via a great number of breathless public relations pitches, which I typically ignore unless I begin to discern a trend. In this case, I most certainly did. But I was captivated by more than just anecdotal tidbits about "baby" CEOs.
A study by Intuit and the Institute for the Future predicts that "Generation Y will emerge as the most entrepreneurial generation ever." Sean Rush, Junior Achievement Worldwide (JA) CEO and president, says that JA's curriculum is now being taught to more than 4 million U.S. students, some as young as five years of age; that represents a 50 percent increase over 10 years. The organization, which teaches kids workforce skills, the basics of entrepreneurship, and financial literacy, also polled 1,155 teenagers and found that 69 percent of them wanted to start a business. The SBA recently started partnering with JA to launch a business portal for teens and reported that nearly two-thirds of college students want to start their own businesses. According to the Kauffman Foundation, a Kansas City not-for-profit that tracks and funds entrepreneurship initiatives, there are more university-based programs than ever to help them do just that -- a phenomenon that's a direct result of exploding demand among student populations and one that's helping foment a new kind of entrepreneurial revolution.
"Generation Y will emerge as the most entrepreneurial generation ever." -- Report by Intuit and the Institute for the Future
Never in our country's history have so many young adults wanted to become entrepreneurs or have so many colleges and universities been committed to helping them realize their entrepreneurial dreams. Approximately 2,100 U.S. colleges and universities offer courses in entrepreneurship (compared with 400 only 10 years ago), and according to the Kaufman Foundation, there are now more than 400 endowed chairs in graduate and undergraduate entrepreneurship programs that have over 200,000 enrolled students; this represents a 70 percent increase in the past seven years.
More telling is that the curriculum in these programs has changed radically over the past several years to accommodate a more demanding student population. "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." And so Belmont not only teaches entrepreneurship, but also houses three incubators for college business owners and has helped to launch six student-operated businesses on campus. Five of them are profitable, ongoing concerns that serve both their fellow students and the surrounding Nashville community. "Serving the needs of this generation has caused us to change how we teach entrepreneurship," says Cornwall. "The old model was, go off and do liberal arts, and when you're a junior, we'll give you an entrepreneurship course. Now, if I wait until junior year, I'll loose them. Everything has to be tied to experience."
"Forty percent or more of students who come into our undergraduate entrepreneurship program as freshmen already have a business. It's a whole new world." -- Jeff Cornwall, Belmont University
So what is it about this particular generation that draws them to the entrepreneurial life? Why are they starting companies, and what industries are they attracted to? Are they growing and running their companies in ways that are fundamentally different from previous generations? What impact will they have on the economy, and how are their triumphs -- and their failures -- instructive to all small-business owners? These are the questions that inspired me to write this book, and my journey gave me a fascinating glimpse into what I believe is our entrepreneurial future. After more than 150 in-depth interviews and 18 months of research, I found myself with a mental snapshot of a generation that looked altogether more complex than the self-absorbed, impatient, unfocused, and materialistic young adults that the media would have us believe comprise Generation Y.
Yes, many of the young CEOs I spoke to seemed to possess those traits, just like a good number of the older entrepreneurs I've written about over the past 25 years. But these Upstarts also were extraordinarily collaborative and team-oriented individuals who were technologically precocious, agile and flexible, quick to recognize emerging trends, hell-bent on creating innovative and balanced workplaces, determined to change the world, and dismissive of the industry conventions that they felt had kept their competitors treading water.
It's tempting to call them risk-takers, and indeed, some might even refer to themselves that way. But risk implies that you have something to lose. The fact remains that when you start a company in your teens or 20s, there is far less to lose than when you are in your 30s, 40s, or 50s, when career options narrow and financial and personal responsibilities factor into your decision to make the entrepreneurial leap. So what sometimes feels and looks like risk-taking to GenY entrepreneurs is really more youthful exuberance -- a willingness to experiment, to jump into an idea feet first without that gut-wrenching sensation that you are betting the farm. You might fail miserably, you might find that your original idea morphs into something altogether different, or you might just find yourself with a multimillion-dollar company on your hands. Whatever the outcome, it is highly unlikely that you will default to a corporate career. This is a generation of serial entrepreneurs.
"Our business is the best résumé builder we could shoot for." -- Jon Levi, Jlevi StreetWerks
There are two critical distinctions that define the startup mentality of Upstart entrepreneurs. Most importantly, they are the first "grown up digital" generation. We all know now that the Internet, cloud computing, mobile devices, and social media can make starting and running a business infinitely cheaper, less risky, and more efficient than it's been in the past. But knowing it and jumping on it are two different things. While older entrepreneurs may struggle with getting up to speed or even resist the call of Web 2.0, new technology is like the air that Upstarts breath -- there's no learning curve at all. Secondly, GenY is the first generation to come of age with entrepreneurship as a highly attractive life path. Remember that both GenY and their Baby Boomer parents witnessed the preeminence of established entrepreneurial heroes. First, we had Bill Gates, Steve Jobs, Oprah Winfry, Richard Branson, Jeff Bezos, and the late Anita Roddick, and then, younger high-profile innovators like Larry Page and Sergey Brin (Google), Jerry Yang (Yahoo!), Chad Hurley and Steve Chen (YouTube), and Mark Zuckerberg (Facebook) attracted the kind of media attention and public adoration typically reserved for rock stars and athletes. They made business seem cool to kids as well as to their parents, who were often victims of corporate bloodletting.
But it wasn't just the celebrity factor that was compelling. Starting roughly in the 1980s, we heard over and over again that it was small, entrepreneurial companies that truly drove economic growth, job creation, and innovation in our country. Suddenly, the unsung heroes were getting the recognition they richly deserved, and entrepreneurship was not just cool, it was also noble -- worthy of a spot in grade school curriculum. Junior Achievement Worldwide's biggest area of growth is in kindergarten through fifth grade.
A host of other social, economic, and political events also plays a huge role in GenY's fascination with entrepreneurship. It begins with their birth to Baby Boomer parents -- arguably the most child-centric generation in history. Sometimes called "helicopter parents," they devoured parenting books (between 1975 and 2005, the number of parenting books published increased from 57 to 684!), coached their kids' sports teams, volunteered at their schools, enrolled them in countless "enrichment" activities, and generally instilled in their progeny the notion that they were capable of doing just about anything they set their minds to. Praise was frequent ("You're special"); criticism was meted out sparingly.
A Gallup poll reveals strong parent-child relationships among GenY. Ninety percent said they were very close to their parents, whereas back in 1974, 40 percent of Baby Boomers said they'd be better off without theirs. Clearly, this is a reflection of the times we live in; the Vietnam War, combined with revolutionary changes in music, fashion, and culture gave Baby Boomers and their parents plenty to disagree about. While teens and young adults are perennially rebellious, the "generation gap" is no longer the chasm it was in the 1960s and 1970s. And that's evident in plenty of GenY companies where young CEOs are partnering directly with parents, hiring them as employees, or taking over responsibility for family-owned companies at increasingly young ages.
Several young entrepreneurs who I interviewed claimed that their parents encouraged their entrepreneurial pursuits from a strikingly young age. "Our parents had us create a business plan and pitch them every Christmas," says David Mullings, 28, who owns a Caribbean music company, RealVibez, with his brother, Robert. "And every year they said no until we came up with RealVibez. Dad is a lecturer at university and a doctor, and mom is a nurse, but they wanted us to be in business." Alana Millstein, the 24-year-old founder of College Affair magazine in Phoenix, AZ, says that when she was 12, her mother tore up little pieces of paper to explain the concept of buying shares in the stock market. "Then she gave me $1,000 and said, 'start researching companies, and I'll invest for you," recalls Millstein. "The one that made me a lot of money was Apple. I used $120,000 from my sale of stock to start my company." Casey Golden, now 29 and the CEO of new venture called Golden Rule Technology, has started five companies. "The first was when I was 13, and I founded it with my Dad," recalls Golden. "We invented a biodegradable golf tee." His dad raised the initial capital, and his mom worked on the recipe, which initially consisted of water, flour, peat moss, and applesauce. Golden won a national K-mart -- sponsored competition called "Invent America," and before you could yell "fore!" his bio tees where in every K-mart in the United States, he was traveling to Japan to meet with patent attorneys, and the U.S. media was calling him "Mr. Tee."
Parents of GenY children are typically more supportive of their children's company-building dreams than their own parents may have been under similar circumstances. Back then, starting a business had all the cache of hawking watches on a street corner; if you were serious about making a living, you landed a job in a big corporation, where you'd be taken care of until the gold watch came your way at age 65. But the implicit employment-for-life contract ended in the 1980s when global competition, downsizing, and consolidation forced big companies to reduce their workforces. Since 1984, more than 30 million Americans have lost their jobs; only 40 percent of us now work for corporations with more than 1,000 employees. Parents who lost their jobs and the children who watched them work hard only to come home with a pink slip are far less inclined to have faith in a future linked to large corporations. If corporate scandals involving once-trusted companies like Enron and WorldCom weren't enough to reinforce the distrust, the events of 2008 sealed the deal: Companies "too big to fail" did exactly that. In January of 2009, the Bureau of Labor Statistics reported that "payroll employment has declined by 3.6 million since the start of the recession in December 2007; about one half of this decline occurred in the past three months." At this writing, there was no clear end to the recession in sight.
"At Lehman Brothers, I looked around at guys who were in their 40s, and I said, 'I don't want to be those buys. They've worked here all their lives, and they could lose it in a minute." -- Anderson Schoenrock, ScanDigital
If corporate employment looks more and more fragile, so does the world in general. GenY grew up with Amber Alerts, HIV, the Columbine shootings, the dot-com boom and its spectacular bust, the 9/11 tragedy, and the subsequent invasions of Afghanistan and Iraq. At the same time, they were far more independent than previous generations: Three out of four grew up with working mothers, and one-quarter lived with a single parent. Throughout their young lives, the subtle and not so subtle message was clear: You're unlikely to be taken care of by institutions that were once trusted and cherished by previous generations; better look out for yourself. Armed with the self-confidence instilled in them by their parents, they have sought to do just that. And if that sometimes makes them difficult and demanding employees, it often makes them extraordinary entrepreneurs.
I started my research by casting a very wide net. Over the past few years, the burgeoning number of young entrepreneurs has spawned lists such as Inc. magazine's "30 Under 30: America's Coolest Young Entrepreneurs" and BusinessWeek's "America's Best Young Entrepreneurs." I drew from these compilations, as well from the Inc. 500 and Inc. 5000 lists of fastest-growing companies (my colleagues at Inc. magazine generously shared database information with me so that I could find CEOs in the GenY demographic, which I define as people born between 1977 and 1997). I also contacted such groups as the National Federation for Teaching Entrepreneurship, Young and Successful, the Extreme Entrepreneurship Tour, Entrepreneurs' Organization (EO), the William J. Clinton Foundation, and two organizations -- YCombinator and TechStars -- that mentor and fund young entrepreneurs. The Athena Foundation and Count Me In for Economic Independence put me in touch with young female entrepreneurs.
I also spread the word among my colleagues and my extensive professional network that I was looking for successful GenY CEOs to interview. And I made it clear to everyone I spoke to that I wasn't interested in people who had merely managed to get obscenely rich at strikingly young ages. While that may be impressive to some, it does very little to peak my curiosity. I wanted company builders -- people whose financial success was the by-product of creating something of greater economic value than a healthy bank account. I also should note here that I deliberately chose not to focus the book primarily on the superstars of the GenY entrepreneurial world. Stories about Facebook, YouTube, Digg, and other familiar brands are truly awe inspiring, but they've been told many times, and I wanted fresh material.
In no time I had a list of entrepreneurs longer than I could ever manage to make my way through in the months I had to write this book. With each interview, I inevitably added more names to the list because young entrepreneurs tend to know other young entrepreneurs -- typically lots of them -- and they are eager to draw others into projects that they find relevant and exciting. It wasn't just their sheer numbers that struck me, but their incredible diversity: I found more women and minority business owners in this generation than I've ever seen in my career.
I wanted to reach out to these young entrepreneurs in a way that was meaningful, relevant, and practical to them. So I dove into the world of social media by creating a Facebook page. This probably doesn't seem like such a big deal now, but when I did it a year and a half ago, joining Facebook was something that no mother of teenaged children should do without a very, very good explanation. That just goes to show you how quickly things change. I added my interviewees to my page as friends and then also invited them to join a private group on Facebook where I could ask them follow-up questions collectively and where they could meet and network with each other.
I can say unequivocally now that this would be a different book without Facebook. My private group grew to 80 or so people, and every time I sent out a message to them (e.g., "I'm working on a section about partnerships; give me a shout if you've got good stories."), at least a few responded with lightening speed. I got better and quicker responses from my Facebook messages than from e-mail, and I came to know my interviewees a little more intimately from the links they posted and the messages that appeared on my newsfeed. In some instances, I watched their entrepreneurial struggles evolve in a very public way as they shared with their Facebook friends the details of company launches, searches for capital, and partnerships gone bad. And yes, I also saw a few things that that I wish I hadn't and that gave me pause (how much Grey Goose vodka can you drink and still be able to function well enough to run a business?).
To further get the word out about the project and to connect with others who might have been able to help, I started a blog on Inc.com called "The Entrepreneurial Generation." I got multiple comments on most of the posts, some of which helped to shape my thinking for the book. My LinkedIn contacts were helpful as well. And lastly, I started tweeting on Twitter, the micro-blogging site that's become mind-bogglingly popular over the past year or so.
My goal was to speak with as many successful young CEOs as possible so that I could get at the heart of their entrepreneurial motivations, their success strategies and how they manage their companies. I've organized this book around the themes that emerged -- themes that I believe not only help to characterize an important and influential segment of this generation but also provide a roadmap to the future for all of us who are engaged in and care about the entrepreneurial economy. This is a highly collaborative generation whose proficiency with technology, brand awareness, and impatience with outmoded business models will give us a new crop of companies that look altogether different from the one we've admired in the past. And that goes for how they operate as well. In Upstart companies, there's often a clear social mission, rejection of traditional hierarchy, and the desire to make work meaningful and fun. So who exactly are these Upstarts? They are
1. Extreme collaborators. Forget the lone-wolf entrepreneur. Young entrepreneurs rarely go down the startup road alone but frequently team up with a partner or partners. They often start companies with friends, college classmates, professors, parents, or spouses. Upstarts know their limitations and seek out cofounders and investment partners who can compensate for their weaknesses and complement their strengths. Frequently, they also learn the pitfalls of partnerships. As they grow their companies, they continue to be highly collaborative, often drawing in teams of employees, their social networks, and groups of customers through community-based innovation tools that help them to develop new products and services.
2. Technology mavens. According to the Pew Internet and American Life Project, GenY spends significantly more time that its older counterparts on the Internet and comprises 30 percent of all Internet users. However, while technology is the big differentiating factor for this generation of digital natives, don't assume that they're all starting Web-based companies. Some of them, of course, are in industries that didn't exist a couple of years ago. Witness, for example, the large number of small companies whose primary business is creating applications for Facebook. But Upstarts are just as likely to put their own tech-savvy stamp on more traditional businesses as well. Technology is not only the catalyst for innovative new products and services but also the key factor in the ability of Upstarts to differentiate their companies in crowded marketplaces, to breathe new life into family-owned firms, and to become significant players in mature, fragmented industries.
3. Game changers. Upstarts change the game by finding chinks in traditional or outmoded business models and the assumptions that go along with them. They might introduce cutting-edge technology to established industries, such as construction, demanding that their business partners adapt new systems of information sharing or best practices. A healthy disrespect for the status quo leads them to experiment fearlessly. They breath new life into old industries, such as package delivery and hotel services, by reimagining the supply chain, reinventing mature family businesses, and finding new ways to deliver traditional products and services to new niche markets.
4. Market insiders. Upstarts are in the catbird seat when it comes to serving the needs of a very large and wealthy market segment -- their 77 million peers in GenY. They already have annual incomes of $211 billion, and they spend $172 billion of it. Their buying habits are vastly different from those of previous generations. Upstart companies target college students with services such as moving and storage and laundry and cleaning; they create new social networking communities; they build brands that appeal to youth; and they put their own spin on traditional business concepts, such as personal finance and online dating. And increasingly, they even set up shop with the intention of selling their own GenY savvy to the companies that want to learn how to reach this important market segment.
5. Brand builders. Upstarts know how to build brands. From how they name their companies to how they market, sell, and produce their goods and services, GenY entrepreneurs embrace brand building as the key to setting themselves apart from the competition. Their distinctive brand personalities drive faster and broader market penetration, which helps them to generate national public relations and marketing buzz. Many even attract attention from large companies that may want to partner with them or even acquire their companies. Branding also gives them an edge when it comes to appealing to an enormously critical market segment -- their own brand-conscious peers in GenY.
6. Social capitalists. GenY has a keen sense of social justice. A study by Cone, Inc., and Amp Insights of 1,800 young people shows that 61 percent of 13- to 25-year-olds feel responsible for making a difference in the world, and 79 percent of them want to work for a company that feels the same way. In 2005, a report by the Higher Education Research at the University of California at Los Angeles found that entering freshmen were the most civically minded class in 25 years -- 86 percent were engaged in some sort of volunteer activity. While it's true that a good number of people in GenY felt compelled to volunteer, either by socially conscience parents, high school graduation requirements, or simply the desire to build a résumé, the spirit of volunteerism seems to have worked its way into the ethos of this generation. GenY companies very often make the commitment to give back right from the start, not just when the profits start pouring in. They consistently blur the dividing line between for-profit and not-for-profit endeavors, a characteristic that helps them to attract and retain younger workers.
7. Workplace renegades. Upstart companies tend to be flexible, mission-driven, employee-centric meritocracies; it's tough to find a traditional hierarchical, clock-punching workplace among them. These CEOs saw their parents forfeit huge chunks of their lives to the office for precious little thanks; they flatly refuse to do the same. And so they build companies where work-life balance, flexibility, and fun are core values. Upstarts create work environments where employees who excel are promoted quickly, where everyone has the opportunity to contribute to the idea pool, and where decision making is transparent. They're more likely to think of themselves as "servant leaders" -- company founders whose jobs are not only to build successful companies but also to create work environments that are democratic and autonomous. "Work hard, play hard" is their mantra. While you're highly likely to find a Foosball table and Wii in the break room, you'll also find employees who are checking e-mail or working on projects at night and on weekends.
8. Morph masters. GenY entrepreneurs are fabulous improvisers -- they're more likely to take a "just do it approach" to business than they are to spend huge chunks of time on business plans. Failure doesn't faze them; they adapt and reinvent as necessary, very often changing business strategies as rapidly changing markets demand. To them, part of the excitement of business is that it's dynamic, and they're always prepared to pounce on unexpected opportunities. When they fail, they tend to "fail fast" and then quickly move on to the next big thing.
In every generation, some entrepreneurs successfully make that transition from startup to mature company, and others fail to meet the demands of the companies that outgrow them. It's potentially a bigger problem for GenY than for their older counterparts because so many lack the traditional management experience that entrepreneurs often draw on when faced with the challenges of scaling their companies. So what happens to GenY companies as they grow, become more sophisticated, and place more demands on their young owners? Often, adult supervision is in order, and young founders hire older, more experienced CEOs to take their companies to the next level. They also may find that managing a growing company isn't nearly as fun as starting a new one and decide that selling doesn't necessarily mean selling out. Or they stick to their knitting, put their own stamp on the art and science of management, and remain firmly at the helm as they grow their companies.
In the chapters that follow, I'll introduce you to a number of young CEOs who are in the process of starting and growing their companies. I've chosen some of them because they are industry leaders and innovators; others seemed to me to have cornered niches that their competitors had not even heard of; a great number are breaking the mold by disregarding conventional wisdom and creating their own business models in companies that may seem traditional and are anything but. Some have had tremendous revenue growth, whereas others are still very much in the startup phase. And I fully expect that some of them may not exist by the time this book is published. But I promise you this: GenY is at the very center of an entrepreneurial revolution that's being driven by demographics and technology; its members are highly motivated, nimble, and intuitive, and there are lots of them. Yes, they are Upstarts with far less experience than their more seasoned counterparts, but they come hard-wired with an impressive -- and, to some, threatening -- set of competitive tools. To ignore them is perilous; an inside look at their playbook is priceless. So get ready because the Upstarts are coming!
From UPSTARTS! How Gen Y Entrepreneurs are Rocking the World of Business and 8 Ways You Can Profit from Their Success, reprinted with permission from McGraw-Hill Professional, Copyright 2010.
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, an exploration of the ways Gen Y is changing the entrepreneurial landscape.