Last month America’s SBDC teamed up with research firm The Center for Generational Kinetics on an interesting study – America’s Voice on Small Business. You can check out infographics and download a copy of this free report here (no registration required).
What to Know What is Driving Millennials into Entrepreneurship?
Jason Dorsey, co-founder of the Center for Generational Kinetics and leading expert on researching millennials, shared with us some of the key findings of the survey, including what is driving millennials into entrepreneurship, and how their journey is different from their parents and grandparents’ journey.
Below is an edited transcript of our conversation. To hear the full conversation click on the embedded video or audio players below. I also spoke with America’s SBDC CEO Tee Rowe on how the survey results will impact the organization’s efforts to provide guidance and assistance to millennial entrepreneurs. That conversation will be posted in the coming weeks.
Small Business Trends: Maybe you can give me a little bit of your personal background.
Jason Dorsey: Yeah. Sure. I’m the president and co-founder of the Center for Generation Kinetics we’re the number one Millennial’s Research Firm in the world. We started the firm about seven years ago and this year, for context, we’ll have about 200 clients, which is pretty wild. All around the world. Before that, I’d written a lot of books, been on tons of TV shows, spoken all over the world, started my own companies and just really passionate about the topics. Kind of a perfect storm for the study.
Small Business Trends: Tell us a little bit about this survey with the ASBDC folks.
Jason Dorsey: There’s been a lot of conversation around entrepreneurship by generation but,not much data, which is pretty surprising. Everybody thinks they know, right? “Oh, millennials are this and baby boomers are this,” but there’s no real data and certainly not what we would consider, statistically valid data, which means it accurately represents the U.S. Census. I want to look at millennials and have a high level of confidence that when I’m looking at the data, I know it really represents them, not just some silly survey somebody puts on their website.
We surveyed 1,000 people across America, weighed it to the Census and really said, “What are the drivers of small business? What does it look like by generation?” Even things like gender and geography. Trying to understand what’s going on and so for us, when it came down to millennials, there was some pretty shocking findings and when we saw those, were like, “Yes!” ‘Cause you never know. We never know what we’re gonna find, and the study really showed that millennials do have this entrepreneur mindset, this desire, this drive to own their own businesses. In fact, more than any other generation, but there’s certain things that they’re looking for.
What it comes down to is education and access and even money. Access to capital is a huge issue. It’s very easy to say, “I wanna start my own business,” but then when you get into the details people are like, “Whoa well, I need to know how to do that and where am I gonna get the money from?”
One kind of shocking find, which is big picture because ‘remember, we’re not just talking about millennials, we’re talking about every generation; we found that about 34% of all Americans have worked in a small business in some point in their life, which is huge.
We think about small business frequently as this economic driver or maybe even the mom-and-pop mailing place down the street or a little bakery. We don’t realize that literally, one out of every three people in America has worked in a small business. We tend to think of big employers but that’s not really where the employment’s happening.
That was exciting for us and then in terms of millennials, and to clarify, I like to define millennials; millennials in the U.S. are older than most people think. Most people think millennials are 25 and their pants are falling off and they live with their mom and we don’t wanna work unless you’re gonna promote us the first week and a lot of that stuff is just myth. It’s not true.
We found that millennials are the largest generation in the United States’ work force. Most people don’t know that.
Small Business Trends: Really?
Jason Dorsey: They think we’re broke and unemployed. They think we don’t have any money and yet, millennials are gonna outspend every other generation in the U.S., this year. Again, myth versus reality and then, when you get into the actual study, what we found was that almost half of all millennials in America, about 40 million, say they wanna start their own business in the next three years. When you look at everything from the government policy conversation to banking to access to capital to all these other ways to raise money even, what you see is a generation that says, “We wanna own our own business.”
Small Business Trends: Are they going into any different kinds of businesses than their parents or grandparents are going into?
Jason Dorsey: Historically, when you talk to somebody about starting their own business, and you would say, “What would you need?” They would say, “Oh, we need a store front. We need inventory. We need employees. We need all this stuff.” Millennials don’t think about that. For us, a store is entirely online. It’s entirely on our phone and so certainly, we’re seeing a lower threshold in terms of becoming your own business owner because you could go sell stuff on Amazon and suddenly, you own your own business. You can get an Etsy shop. There’s lots of different ways to look at it, along with services.
Even the concept of the “gig” economy, the idea that I can be a freelancer on the side and effectively own my own business, that seems normal for millennials. Other generations, that’s a learned behavior. That’s very different than they were raised. That’s not owning your own business, and we’re like, “Hey. They’re making good money.” They’re creating jobs. They’re doing all these cool things. They just may not have the over head. We certainly see millennials more open to starting these low cost, kind of on demand businesses, for sure.
Small Business Trends: Right.
Jason Dorsey: Now, where it gets interesting is, as I alluded to, millennials are getting older than people think. In fact, some times you hear people say, “Well gosh, we’ve been talking about millennials a long time.” Well the reality is, because we have been talking about them a long time. They’re now 39. The oldest millennials in the United States are turning 40 this year. Most people don’t know that.
Small Business Trends: Middle age is staring them right in the face.
Jason Dorsey: Yeah. We’re gonna start getting facial hair. Some of us. In terms of the youngest millennials though, they were born up to 1995… We have a lot of people watching today that market to millennials. The big divider between millennials and Gen Z, who’s the next generation, is that Gen Z does not remember 9/11. If 9/11 has always been history to you, you’re not in the millennial, you’re Gen Z. There’s an important distinction there.
For the purposes of the study, what got me really excited was that 61% of all the millennials said that they think there is more job security in owning your own business than working for somebody else. That’s a huge statement.
Small Business Trends: Yeah.
Jason Dorsey: What we saw in the national study is that millennials do wanna start their own business. They’re specifically looking for access to education, access to capital, people to mentor and help them but they say they wanna do it more than anybody else and they think that’s a more stable career path.
Small Business Trends: How do you serve millennials best? How do you educate them in a manner that’s gonna be the most accepting for them?
Jason Dorsey: What we found is that millennials are almost entirely visual learners. What that means is, they’ve been conditioned to learn through YouTube.
That’s their most trusted learning resource. The opportunity there is, any company of any size, whether two people or 2,000, can start to develop training that they can use because it’s just on video. Take your smartphone, film some training. Watch interviews like this. There’s a way to teach that way but where the rubber really hits the road is actually in practice and that’s when we find they need somebody in person, or a mentor like in America’s SBDC, but they need a resource to say “Okay, when things don’t go exactly the way you were taught, what do you do?” That’s where a lot of millennials struggle is both the adversity piece, which is gonna happen, and the problem solving piece, and the reason is, we don’t have the experience.
Without the experience, it’s very hard to be successful no matter how many videos you watch.
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This is part of the One-on-One Interview series with thought leaders. The transcript has been edited for publication. If it’s an audio or video interview, click on the embedded player above, or subscribe via iTunes or via Stitcher.