Gen Y Comes of Age: 4 Trends Transforming the Business of the Future
This year, our annual "30 Under 30 Coolest Entrepreneurs" feature ages ever so slightly, to "35 Under 35," in honor of Inc.'s 35th anniversary. And that seems only fitting, as this generation of entrepreneurs quite literally grew up with Inc.
On our 10th birthday, when we featured 34-year-old Steve Jobs on our cover and declared him "Entrepreneur of the Decade," we won't claim to have known that Jobs, and other entrepreneur superstars we subsequently covered, would serve as a role model for today's young company builders. But that's exactly what happened. These Gen Y or Millennial entrepreneurs were born at a turning point in our country's history: Not only can they not remember life before the Internet (because it's been there as long as they've been alive), they can't remember a time when saying "I'm an entrepreneur" wasn't every bit as cool and awe inspiring as saying "I'm in a band."
Is it any wonder that so many of them grew up to be entrepreneurial rock stars? We've had the pleasure of introducing you to a number of them on our 30 Under 30 list, before they earned their place in the entrepreneurial firmament: Mark Zuckerberg (Facebook); Sam Altman (Loopt; Y Combinator); Aaron Levie (Box); Aaron Patzer (Mint); Alexa von Tobel (LearnVest); Lauren Bush Lauren (FEED). We like to think we've got a pretty good eye for the up-and-comers. So if you don't recognize all of the people and companies on this year's list, well, that's the point.
We invite you to discover the superstars of the future along with us and cast your vote for your favorite company. They're building drones, disrupting the fashion industry, rendering the common egg obsolete, and successfully marketing, of all things, organ donation.
This year, we had more than 400 applicants, which were first vetted and pared down by our staff and then sent on to a panel of judges that included Rainn Wilson of The Office and SoulPancake, fashion icon Rebecca Minkoff, and 30 Under 30 alum Ben Kaufman. You can read more about them here. Raising our age limit to 35 (applicants had to be under 35 at the time of application) had a significant impact on our list.
First of all, we had more female applicants, which confirmed our hunch that--for whatever reason--women tend to start companies at slightly later ages than their male counterparts. Approximately 20 percent of our honorees this year are female, and they are running some of the most impressive companies on our list, making construction toys for girls as well as satellites. And because many of the companies on the list have been around for several years, they tend to be bigger (median number of employees is 50) and more heavily supported by outside capital (total venture capital investment in the companies on our list exceeds $1 billion!).
We also noticed that many of our young entrepreneurs have moved well past the startup stage and are now coping with challenges that are more characteristic of high-growth companies: evolving their company cultures; defending market share from competitors, because success breeds imitation; hiring professional managers, and redefining the roles of founders. Their struggles make for good, instructive reading and give us a glimpse into what companies started by Millennial entrepreneurs look like when they grow up.
Here are four other notable trends from this year's list:
1. Pivots are profitable. A surprising number of 35 Under 35 honorees started out on one entrepreneurial path and then found themselves faced with unexpected opportunities. Ayah Bdeir, for instance, developed LittleBits as a prototyping tool for entrepreneurs. But the toy industry got wind of her magnetically connected Lego-like product that features sensors and motors, so the company redirected its marketing and packaging and now has a solid footing in the toy market. Tobias Lutke and David Weinan originally built Shopify to sell snowboards and other winter gear online. Little did they know that what started out as a purely utilitarian pursuit would morph into a company far more interesting and scalable than a sporting goods e-tailer. And when Raad Mobrem and Frank Jones developed software to manage order entry for their growing dog-toy company, they weren't planning on starting an SaaS company, let alone one that would be acquired by Intuit. The lesson: Sometimes the true value of your company resides outside of your comfort zone.
2. Hacking your dinner table. A growing number of consumers are putting a bit more thought into where their food comes from, how it's prepared, and the impact it has on both our bodies and the environment. Our list (and our applicant pool) contains a significant number of entrepreneurs who are catering to this burgeoning market. Hampton Creek's Josh Tetrick has a massive goal that involves taking animals out of the food equation by using protein derived from plants. His first product: an eggless mayonnaise, soon to be followed by eggless cookies. Blue Apron delivers weekly ingredients and recipes to consumers with the promise that everything is locally sourced and that most meals are less than 700 calories. And Instacart does all of your grocery shopping for you and pledges to deliver your orders from multiple locations in less than an hour.
3. Health care's hot. Is there an industry more broken? But where there's inefficiency, there's opportunity. Just ask Josh Kushner, the CEO of Oscar, a new health insurance company that's the most heavily funded company on our list ($155 million). He wants to humanize the relationship between patients and their insurance companies. Or consider Jordan Eisenberg, whose innovative new packaging for over-the-counter medications has potentially lifesaving consequences. The quirkiest award goes to the co-founders of Organize, Jenna Arnold and Greg Segal. They want to vastly increase the number of registered organ donors and hope to achieve that goal in five years, at which point they'd like to close up shop. In each case, these young entrepreneurs are innovating in industries that have been wed to the status quo for decades, and they're going up against established giants.
4. Hardware's still really cool. Last year, we had some pretty impressive hardware companies on our list, and the trend continues this year. At FINsix, Vanessa Green and her co-founders are making the world's smallest power cord--something that not even industry giants could figure out how to do. Maker movement darling 3D Robotics evolved while its Mexican immigrant co-founder Jordi Muñoz was waiting for his green card. It's now the largest drone manufacturer in the U.S. And then there's Skybox Imaging. CEO Ching-Yu Hu wants to use satellites to index the earth the way Google indexes the Internet. (Incidentally, Google purchased Skybox for $500 million while we were tabulating our list.)
This is a generation of entrepreneurs that Inc. is proud to have grown up with, and we look forward to chronicling their continuing journeys here and within the magazine. Their stories are inspiring not only for what the entrepreneurs have accomplished thus far but for what they'll inspire the next generation of young entrepreneurs to do.
DONNA FENN | Inc.com Contributing Editor
Donna Fenn is the author of Upstarts! How GenY 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.