Call it entitlement, call it independence: Millennials want to be a generation of entrepreneurs.
Roughly two in every three Gen Y-ers have aspirations of going into business for themselves. About 18% of them are actually doing it, according to a new report from Babson College that found entrepreneurship across all ages is on the incline. (Meanwhile, just 13% of millennials are interested in climbing the corporate ladder.)
Millennials fit into the role of a self-starter easily for a number of reasons; we’re digital natives, with heady career dreams and a job market that has taught us to think outside the box — because we might not be hired within it very quickly.
Unfortunately, it’s not as easy as packing your bindle and moving to a garage to found your startup. Even Gen Y-ers who aren’t keen on starting their own businesses are facing insurmountable financial obstacles, including ridiculous student loan debt and low or no credit scores.
Kavita Shukla, who invented paper that keeps fruits and vegetables fresh in her 20s, began by distributing her product at a local farmer’s market. (Photo courtesy of Kavita Shukla)
I talked to a number of young entrepreneurs to find out what it really takes to be your own boss. From veterans (or as inveterate as you can be at 30) to others just starting in the game, these millennials busted some myths and offered a few hard truths about the field.
1. You Don’t Have To Be Unique, Just First and Best
This is what I learned from David Yarus, the founder of JSwipe, a fast-growing Jewish dating app with more than 165,000 users in 70-plus countries. (His title is also technically CEO, but he says he feels a bit awkward using that in a company with less than 10 people.)
Yarus got the idea for JSwipe several years ago at 27, when he started using existing (and nascent) dating apps like Tinder.
“For myself, Judaism plays a large role in my life, I’ve always known that I want to date and marry Jewish,” Yarus told me. “Accordingly, Tinder is an incredible tool, but it wasn’t as efficient or effective for my personal needs as I needed — and, I know, that my peers and community needed. I think any Jewish millennial on Tinder thought of it. It’s not like I’m the only person that said ‘This should exist.’ It’s just that we did it well, we did it quickly.”
2. You Don’t Have To Quit Your Day Job (Yet)
Kavita Shukla was in her mid-20s when she first started selling Fresh Papers — sheets that keep vegetables and fruits fresh for two to four times longer.
“We really didn’t know how to do it,” Shukla admitted. “We were in a couple of local farm stands and we were going to the farmer’s market ourselves — we literally had a stall on the side of the road in Cambridge. And then when we heard from Whole Foods, we were still making Fresh Paper in the kitchen of my studio apartment. So it was this very low budget operation where it was mostly us working to make it. We’d make Fresh Paper overnight on Fridays, and then go early Saturday morning and sell it.”
It paid off. Within several weeks of first offering samples to stands at her local farmer’s market, Shukla and her business partner were able to quit their day jobs and live off the profits.
3. But Don’t Burn Bridges When You Do
You could miss out on your first business partner.
Yarus was dreading telling his CEO he had decided to quit his job in marketing to start JSwipe.
“I had my dream job, I loved the company I worked for, I loved the people I was working with,” he told me. “I had incredible respect for them and they had incredible respect for me — and the conversation of leaving was a scary one.”
And a fortuitous one. As soon as Yarus told his CEO his plans for what was next, his boss offered to help him out.
“When I had the conversation about where I was going and what [I] was doing, his first response was ‘How can I help? How can I get involved? I want to be part of this. I believe in you,’” he told me.
That was how JSwipe got its first investor — and chairman.
4. An Idea Is Meaningless Without Something to Show For It
This is according to Jay Roth, a newly minted millennial entrepreneur who is the process of launching GenYrator, a crowdfunded business accelerator specifically for millennials, with his partner, Sean Nasiri.
Roth is a numbers man. He enjoys the nuts and bolts and legalese of putting together a business, he told me, and was quick to stress the importance of a plan behind the passion, especially if you’re thinking about approaching investors.
“There are so many entrepreneurs out there and so many startups out there, they put together a business plan or they put together a deck with a few pieces of information, they think they’re ready for $100,000,” Roth said. “That’s not the case at all. You need to go out there and create at least a minimum viable product, and once you have that, that’s when you can really start to go out and talk with investors.”
5. Don’t Bring Credit Card Debt Into the Equation
It can be the death knoll of a startup, according to a 2009 study from Monmouth University that found every $1,000 in credit card debt increases the probability a business will close by 2.2%.
Josh Hix and Nick Taranto had to navigate the tricky straits of their personal finances when they founded Plated, an online service that delivers fresh groceries and chef-designed recipes, three years ago. Both were in their late 20s. The idea was there: Their busy cohort needed an easy way to eat healthily and inventively. The money, though, hadn’t yet materialized, with Hix and Taranto burning through their personal savings on a previous endeavor they had realized wasn’t a good idea.
“By the time we got around to [Plated], we really liked working together and we had really complimentary skills, but we were basically out of money,” Taranto told me. “So we started this on credit cards and liquidating 401(k)s and IRAs, and both of us had a ton of business school debt still. So not a great place to be financially.”
“It’s safe to say we had every financial roadblock there is,” Hix added.
Theirs was a long road to funding — they pitched some 150 people, Hix said — “all this crazy, sexy food tech stuff was not happening back then.” The two found success when a college buddy of Taranto’s recommended them to a former boss who had had a similar idea for a company. The boss ended up investing the $400,000 that got Plated off the ground.
But how does an entrepreneur live without credit?
“Getting a second job is an absolute must; you have to be able to support yourself, you have to be able to support the company’s finances to a point,” Roth told me.
Additionally, you need to be frugal — and strategic — about the expenses you bring into the business.
“You don’t have any extraneous expenses, no one’s on salary … you should try to partner with someone who can contribute just a little capital up front,” Roth said.
6. If People Aren’t Taking You Seriously, It’s Probably Not Because Of Your Age
Here’s some good news: Almost none of the entrepreneurs I talked to said they had any trouble getting taken seriously because of their age.
“Age is definitely not a barrier,” Taranto told me. “And in many cases, it’s probably an asset.
Yarus also said he hasn’t had much trouble navigating the space as a relatively young founder — in fact, he said, the millennial mindset is in increasingly high demand as Gen Y buying power increases.
“The millennial and technological disruption will eventually — sooner or later — hit every space,” he told me. “And it’s important if you are a brand or an organization or a product or a service, that no matter how strong you are, if you haven’t begun to challenge your truths or rethink your ideas and offerings, then someone will sneak up quickly behind you, and before you know it you will be outdated.”
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