How could anyone think that GenY's love of entrepreneurship is a bad thing? You'd be surprised.
There’s a blog post over on BNET that makes my blood boil on so many levels that it’s tough to know how to respond, so I’ll just dive right in. In the post, entitled, Why GenY Entrepreneurship Will Be a Disaster, blogger Steve Tobak gives us ten reasons why “Generation Y's predilection for entrepreneurship will be bad for their careers, bad for corporate America, and bad for the nation.” Wow. While I won't address all ten of his specious arguments, here are the ones that make me particularly apoplectic:
“The question of necessity versus choice is actually an important one. If it’s necessity - bad economy, no capital, no jobs - then where’s all the capital going to come from to fund all these start-ups? And who’s got the cash to buy all the new products and services all these new entrepreneurs will be creating?”
I have two responses to this comment. First, in both good and bad economies, most start-up capital comes from the same place––the founders’ personal savings, and small investments from friends and family. Only about 4 percent of all companies get venture funding. And I'd argue that the best way to start a company is by bootstrapping, since scartity of funds teaches founders how to manage limited resources and make tough choices. Young entrepreneurs, particularly, can handle being cash-strapped because they typically don't have families to support or mortgages to pay. Secondly, it's common knowledge that some of our most successful companies were started during recessions or economic slumps. Among them: General Electric, Hewlett Packard, Microsoft, Disney, MTV. And thank goodness Tobak was not around to discourage Steve Jobs from creating a little something called the iPod in 2001 – smack in the middle of the dot com crash.
“How about their careers? If you haven’t spent a lot of time with entrepreneurs who’ve spent their entire careers in startups, here’s a dose of reality. Sure, they’ve got great instincts for what their generation wants to see in a video game, but as for management acumen and business savvy, forget it. Where are they going to learn that stuff? Big company experience taught me everything I know about management and leadership.”
Honestly? Big companies are experts on management and leadership? I think what we’ve seen over the past few years is an appalling lack of leadership on the part of corporate America. If there are lessons there, they are frequently negative ones (many, many entrepreneurs who came from big companies will tell you that they learned how NOT to run their companies). Yes, young entrepreneurs have great instincts when it comes to serving their own generation (and btw, it’s not all about video games), but they also have pretty good instincts about how to manage their generation, which is a growing influence in the work place. Their role model isn’t Jack Welch, it’s Tony Hsieh. I know who I’d rather work for.
“Sure, start-ups run by entrepreneurs can succeed, but an important ingredient has always been a rich pool of operating managers with big company experience to complement the entrepreneurs’ lack of management experience and business savvy. If that talent pool is dry or significantly reduced, that’s half the equation for successful ventures, gone with it.”
The last time I checked, unemployment figures suggest that there is an enormous pool of unemployed operating managers that start-ups can tap. What I hear more and more often is that young entrepreneurs are snapping up management talent that simply would not have been available to them a few years ago. That’s great for their companies, and potentially great for the economy.
“What we really need to do to get the economy growing again is to figure out how to bring manufacturing jobs back to America. Instead we’ll have a workforce that, having been denied those types of jobs, gave up and went their own way. Unfortunately, internet and green businesses only exacerbate our shift to becoming a service nation that outsources all its manufacturing jobs.”
I totally agree with his point about manufacturing jobs, but it sounds like he’s suggesting that young people are starting companies because they can’t get jobs in factories anymore. I’m not sure why that’s a bad thing! Also, he makes an assumption, as he does repeatedly in his post, that all young entrepreneurs are starting Internet and “green” businesses. Nothing could be further from the truth. Guess what? They’re also manufacturers! Some companies, like Jolie and Elizabeth in New Orleans and School House in Durham - both are clothing manufacturing companies run by young women – are making it work right here in the U.S. But we need better support – from consumers, financial institutions, and government – for manufacturers.
“While small businesses are nearly half the U.S. economy, the vast majority are boring old mom and pop businesses like auto repair shops, gas stations, cleaners, and fast-food franchises. I could be wrong, but how’s that unglamorous, hard working, long hours kind of lifestyle going to play out with folks who grew up dreaming about designing video games and futuristic cars that can drive themselves?”
This is the one that has me reaching for a beta-blocker! For most young entrepreneurs I know, life and work is a 24/7 mashup – they’re eating Ramen and sleeping on futons in the office, hanging out with the people they work with, and spending their “free” time with other start-up entrepreneurs. Yep, they play hard but they also work hard. And, yes, they are starting those same “boring mom and pop businesses” but putting their own GenY spin on them. Meathead Movers, College Hunks Hauling Junk, Restoration Cleaners. FGX is global shipping company; CityCraft is a fabric store, McClure’s makes pickles (how old school is that?!). These companies were all started by entrepreneurs under the age of 30. They’re all growing and they all have employees. But in my humble opinion, our economy could use a few more awesome video game designers. It’s $10.5 billion industry, after all, and a highly successful company (like PopCap, which was just acquired by EA for $750 million) creates a lot of jobs. And cars that drive themselves? If I’m not mistaken, the company that’s got that covered -- Google – was started by a couple of kids in their twenties. I hear they did okay.
Where do you stand? Will GenY entrepreneurs be a "disaster" as Tobak claims, or are they having a positive impact on our entrepreneurial future?
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.