For Young Entrepreneurs, Safety in Numbers
Recession? What recession? You'd think the events of the past year would have curbed Generation Y's enthusiasm for the always-uncertain entrepreneurial life, but you'd never know it by looking at this year's 30 Under 30 list. It's a dynamic group of self-starters that has managed to raise money, launch new products, build new technologies, and tap into underserved markets. And they've done it with relentless enthusiasm and resiliency.
But they haven't done it alone. Take at look at our list, and one of the first things you'll notice is an astounding number of partners (Getting By with a Little Help from Their Friends). They're starting companies with college pals (Thrillist, Apture, Foodzie, and Smathers & Branson), spouses (ModCloth), or siblings (DANNIJO, M3 Girl Designs), and that should probably come as no surprise since GenY is typically characterized as a very social generation -- they are, by and large, comfortable with teamwork and collaboration.
Dig a little beneath the surface, however, and you'll find that their tendency to start companies with partners is just the most obvious and visible element of this generation's entrepreneurial zeitgeist. First and foremost, they are tribe-builders. By that, we mean that they seem to have an innate talent, and an almost compulsive desire, to draw others into their entrepreneurial orbits and to continually extract from them wisdom and advice. Parents, professors, mentors, investors, and complete strangers are all invested in the success of these companies. No arm-twisting required. After all, who doesn't want even the tiniest role in an entrepreneurial success story?
For many young entrepreneurs, the tribe of support begins forming very close to home. Their baby boomer parents -- increasingly disillusioned with corporate life, yet eager to help launch their children on paths to success -- are probably more supportive of entrepreneurial dreams than any other generation of parents in modern times. When Maddie Bradshaw, the 13-year-old founder of M3 Girl Designs, came up with the idea to make and sell hand-painted bottle-cap necklaces, her mom gave her the thumbs up to spend $300 of birthday and tooth fairy money to start the venture. M3 is now a $1.6 million company with products in hundreds of stores. The three "M"s in the company name stand for Mom (the adult signature on all the corporate documents), Maddie (founder, president, and head designer), and nine-year old Margot, (vice president and assistant designer).
Then there's Jamail Larkins, whose parents encouraged his love of aviation but insisted he help finance his passion for flying. So Larkins, who flew solo in Canada at age 14, sold aviation training books and videos to earn money for lessons. Now, in addition to being a skilled acrobatic pilot, he's the CEO of Ascension Aircraft, a nearly $6 million firm that sells and leases airplanes. At 25 years old.
While we're noticing an increasing number of young entrepreneurs who moved beyond the lemonade stand at shockingly young ages, like Bradshaw and Larkins, college still seems to be the incubator of choice for a good many GenY business owners. And why not? There's no better place to build a tribe. John Goscha, Jeff Avalon, and Morgan Newman cut their entrepreneurial teeth as freshman living in Babson College's E-Tower dorm for entrepreneurs, where idea generation apparently beats beer pong as a favored extracurricular activity. For the three friends, the very process of brainstorming led to a pretty good idea: frustrated with the limited space on whiteboards and with chore of tacking giant pieces of paper to the wall, they invented IdeaPaint, which turns any paintable surface into a dry-erase board. The three even signed on two Babson professors as investors.
Meanwhile, Stanford grad-school classmates Tristan Harris, Can Sar, and Jesse Young tapped into the university's John S. Knight Fellowship for Professional Journalists for advice on a technology tool they were developing for publishers and bloggers. Based on feedback from the journalists on the kinds of Web-based features they'd most appreciate, the three developed Apture, a plug-in that allows readers to view multimedia links without leaving a website. One of the Knight Fellows introduced the Apture team to an executive editor at The Washington Post, and the paper ultimately became a customer.
At Bowdoin, roommates Peter Smathers and Austin Branson were so smitten with the needlepoint belts made by their girlfriends, that they decided to start a business selling them. Not knowing quite where to start, they drew on the Maine college's resources by pitching a joint independent study project to both the art and economics departments. It was accepted, and the two got a crash course in both design and business planning. Their needlepoint belts and accessories, made by more than 1,500 independent contractors in 16 Vietnamese villages, now generate $2.5 million in revenue.
For all of these entrepreneurs, college campuses provided invaluable free resources in a safe, supportive atmosphere. Eric Koger, who founded ModCloth with his wife, Susan Gregg Koger, sums it up nicely. "Carnegie Mellon gave [us time] to hone our respective skills in preparation for jumping into ModCloth full-time," he says. "We were able to work on ModCloth and get feedback from professors and classmates, during a time when we didn't have to worry about 'paying the bills,' since we got our basic cost of living from student loans and help from family. It was a critical development period for us." All start-up entrepreneurs should be so lucky, right?
The most important tribe any entrepreneur can cultivate is, of course, his or her community of customers. And the honorees on this year's list are particularly savvy at just that. Foodzie founders Emily Olson, Nik Bauman, and Rob LaFave created an Etsy-like online marketplace where "foodies" could find gourmet and artisanal treats, and where independent producers were able to reach a broader and more targeted group of consumers. The company is a graduate of TechStars, a Boulder, Colorado-based incubator program that provides mentorship and a small amount of seed capital for start-ups. But Foodzie also landed another $1 million in funding after the program.
ModCloth, too, attracted funding largely because of its strong connection with its customer base. The website sells reasonably priced vintage-inspired and indie clothing and will likely increase sales from $3 million to $15 million this year, according to its husband-and-wife team. "They know their customer," explains their investor Josh Kopelman of First Round Capital, "and have an intuitive sense of what products to offer and what messaging to use. They are passionate, scrappy, and persistent, yet seek advice and counsel."
Thrillist, a subscription-based e-mail newsletter geared toward young men, has such a loyal following among its 1 million subscribers that the company expects to rack up between $5 and $10 million in revenue this year, largely from advertisers who desperately seek the coveted demographic, even as they pull ads from more traditional media amid a huge ad slump. Thrillist's big differentiating factor: 14 local editions that segment its larger tribe of subscribers into smaller, regional markets, all the better for advertisers to target their messages.
Elliott Bisnow, the founder of Summit Series, can't claim revenue like that yet -- but his influence among the entrepreneurial tribe does appear to be growing. Summit Series is essentially a networking organization for prominent, young CEOs. Bisnow organizes retreats where they can discuss everything from business strategy to philanthropy. "We're trying to create Davos for young entrepreneurs," he says. Ambitious? Maybe. But last March, he got a little closer that goal. The White House, he was told, wanted him to assemble a group of 35 young entrepreneurs for a visit. The goal: to start a conversation between the Obama administration and a new generation of influential young CEOs.
Bisnow pulled it together in two weeks, assembling Tony Hsieh of Zappos, Aaron Patzer of Mint.com, Jessica Jackley of Kiva, Adam Lowery and Eric Ryan of Method, Jake Nickell of Threadless, Evan Williams of Twitter, and several others, to convene in D.C. While President Obama was not in attendance, a door to the White House was opened, e-mail addresses were exchanged, and a promise of open dialogue was made. Which makes us think that maybe the most influential tribe of all is the one we honor right here every year on the 30 Under 30 list.
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.