What Is The New Generation Of American Startups?
Startups are typically newly established businesses that often provide distinct and new products or services. They are usually scalable and innovative, and many are technology-based. They’re also typically boosted by venture capitalists and angel investors.
According to research, the median age for successful business founders is 34. The same research identified that about 66% of those over 34 had launched a startup or worked for at least 10 years before making it big.
This article identifies the new generation of US startups and explores how and why young entrepreneurs are flourishing today.
Gen Z and Millenials defined
Each entity has its definition for each generation or age bracket. But for Pew Research Center, generations can be defined according to the following parameters:
- Gen Z-ers- individuals born on 1997 to 2012
- Millennials– those born between 1981 and 1996
Technology plays a significant role in shaping each generation and their lifestyle. Gen X-ers, or those born between 1965 to 1980, witnessed the beginnings of computerization and were the first generation to become tech-savvy. Conversely, millennials and Gen Z-ers were born during the exponential growth of Silicon Valley tech firms and the explosion of the internet age. It’s not surprising then that most startup owners are young entrepreneurs in their 20s or 30s.
Technology has played a significant part in running startups and other companies. This is one of the reasons Gen Z-ers and millennials aren’t scared to dip their hands into business. Enterprise automation has made it easier to run a business. Smart management solutions like Jobber offer all-in-one solutions for startups, even those with bare-bones staff, allowing for easy internal processes and systems that facilitate productivity and efficiency.
According to estimates, the Gen Z population is poised to become the most significant contributor to the global economy, generating USD$ 33 trillion, or 27% of the world’s revenues by 2030.
Why Gen Z and Millennials are launching their startups
According to the United States Census Bureau, some 1.25 million new businesses were established during the first quarter of this year, while 5 million enterprises were registered in 2021. It’s unknown how many of these startups are owned by millennials and the Generation Z population. But in this digital age, it’s become easier for entrepreneurs to reach their entrepreneurial goals—whether as a side hustle or a full-time vocation.
The pandemic has driven its further acceleration. Company closures and downsizing have forced enterprising individuals to launch their own startups, particularly those who’ve lost their jobs. Many young employees have set up their e-commerce sites or personal websites offering their part-time services as consultants, virtual assistants, copywriters, and related positions. The more enterprising ones have chosen to launch businesses and done so with the use of clever free online tools to help them such as this fully customizable estimate template for service businesses that inherently encourages entrepreneurs to follow best practices.
The global and local lockdowns and movement restrictions have spurred opportunities for savvy entrepreneurs to offer innovative solutions. According to research done by a worldwide marketing consultancy firm, products and services digitalization share has dramatically increased from 35% to 55%, representing an uptrend that’s supposed to happen in 7 years based on adoption rates from 2017 to 2019. This uptrend is expected to continue this year and in the coming years.
Technology has spurred the gig economy and enabled young investors to grow their money even pre-pandemic. Instead of relying on their nine-to-five work, some employees offer part-time online services in various fields. In some cases, business owners had to maintain a side gig to allow their ventures to thrive during the first year.
Thanks to the internet, where over half of the Gen Z-ers and Millennials source their financial knowledge, young entrepreneurs have opportunities of growing their money without risking their life savings. For instance, more than 20% of the younger generation, aged 18 to 24, choose to invest in stocks, while 19% of real estate capitalists fall in the same category. Additionally, over half of the Gen Z population surveyed by a global consulting firm don’t want to stay an employee for long, expressing their desire to launch a business within the next decade.
- The ‘innovative’ mindset
Young entrepreneurs not only know the latest and emerging trends. In most cases, they’re the ones taking charge of creating these. They’re not afraid of taking any risks. For instance, research found that 40% of tech stock investors belong to the Gen Z or Millennial populations. In addition, these generations are also known to engage in the cryptocurrency sector more than the older age groups.
Automation and internet connection has become a part of everyone’s lives. As Gen Z-ers and Millennials have shown us, there are many other things to do with these tools than looking for information and providing entertainment. These generations are always looking for ways to innovate. When paired with business knowledge and grit, the older breed of entrepreneurs can learn so much from their younger and less experienced counterparts.
- Scipioni, J. 27 May 2021. This is the median age of billion dollar startup founders, according to new research.www.cnbc.com. https://www.cnbc.com/2021/05/27/super-founders-median-age-of-billion-startup-founders-over-15-years.html. 18 July 2022.
- Dimock, M. 17 January 2019. Defining generations: Where Millennials end and Generation Z begins. www.pewresearch.org. https://www.pewresearch.org/fact-tank/2019/01/17/where-millennials-end-and-generation-z-begins/. Accessed 18 July 2022
- Aldana, R.W. 03 August 2021. Generation Hustle: Young entrepreneurs got creative during the pandemic. www. cnbc.com. https://www.cnbc.com/2021/08/03/generation-hustle-young-entrepreneurs-got-creative-during-the-pandemic.html. Accessed 18 July 2022
- Davis, D.M and Bhattacharya, S. 15 July 2022. Meet the Gen Z and millennial founders of startups who are raising millions in funding and using social media to turn their side hustles into seven-figure empires. www.businessinsider.com. https://www.businessinsider.com/millennial-gen-z-founders-who-are-growing-their-new-startups-2021-10. Accessed 18 July 2022
- Greechan. J. 09 December 2021. Why Gen Z Will Make The Startup Ecosystem Thrive. www.crunchbase.com. https://news.crunchbase.com/startups/gen-z-startup-investing-founders-crypto-tech/. Accessed 18 July 2022