Connecting 4 Generations of Entrepreneurs: An Entrepreneurial Renaissance
Welcome to 4GenNow: An Entrepreneurial Renaissance
The future of American entrepreneurship depends on young entrepreneurs (Gen Z and Millennials) and experienced entrepreneurs (Gen X & Baby Boomers) meeting each other, overcoming their differences, and launching start-ups- together. Millennials and Boomers total nearly 150 million or nearly 50% of the US population. Despite generational differences, Millennials and Boomers can make great teams. If these groups learn to speak each other’s language and respect each other’s expertise, they can become a vital force in building our economy and fueling an entrepreneurial renaissance in both urban and rural areas throughout the US.
The problem is that “American entrepreneurship is actually vanishing,” as reported by Leigh Buchanan, Editor-at-large, Inc. Magazine. You might not think so if you live in Silicon Valley, Boston, New York or Denver. “According to the Census Bureau data reported by the Kauffman Foundation and the Brookings Institution, the number of new companies as a share of all US businesses has dropped 48% since 1978. According to the 2015 Kauffman Foundation Index, between 1997 and 2015, the share of new business creators aged 20 to 24 dropped from 34.3% to 24.7%. “http://www.inc.com/magazine/201505/leigh-buchanan/the-vanishing-startups-in-decline.html
What’s causing the decline in American entrepreneurship?
1) Student loan is stifling small business creation among Millennials. Nearly 70% of graduates earning a bachelor’s degree leave school in debt. Seniors graduating from college this year owe about $37,000 up from an average of $35,000 incurred by graduates of the class of 2015. This is nearly double the average debt that encumbered graduates in 2004. In the ASA study, nearly half of respondents (47%) indicated that student debt had an impact on their decision to start a small business. Is it any wonder that due to huge college debt, 71% of Millennials are not engaged/actively disengaged at work? http://www.investors.com/politics/commentary/the-cascading-effects-of-student-debt/
2) Baby Boomers are anxious about retirement. 45% of Baby Boomers have zero retirement savings, and a growing number intend to work until at least age 70. In 2015 according to the Bureau of Labor Statistics, 18.6% of Americans age 65 and older were still working full or part time compared to 10.8% who were working in 1985, and the percentage is expected to grow.
3) Venture capitalists are not investing enough in start-ups. In 2014, VC firms invested $48 billion in deals, the most since 2000. But according to Mattermark, which tracks startup data, between 2005 and 2014 the size of seed investments by VCs stayed flat, while the size of C, D, and E rounds roughly doubled. According to PitchBook, the number of small seed rounds has recently dropped with investments below $500,000 declining 61% between Q1 of 2013 and Q4 of 2014,” according to Leigh Buchanan, ‘American Entrepreneurship is Actually Vanishing, Here’s Why.’
So what’s the opportunity? Millennials and Boomers are uniquely positioned to empower each other, launch start-ups together and create an exceptional company culture. But first, they have to set aside their differences. Many Millennials have “the idea” but lack the Boomer’s experience, connections and capital (or access to). Here are four reasons why Millennials and Boomers should co-found companies together:
1) Millennials can empower Baby Boomers: Tech-savvy Millennials make valuable allies for Baby Boomers who need some help navigating the digital space. As digital natives and the best-educated generation, Millennials through their positive force, fresh ideas, and edgy attitude bring an intensely disruptive perspective to Boomers. Millennials can also teach Boomers how to work fewer hours and rejuvenate workers in the process.
2) Boomers can empower Millennials: According to Michael Hyatt, Boomers can empower Millennials by bringing (4) critical types of capital to the table: life capital, intellectual, social capital: “Younger entrepreneurs may have large followings on social media, but older entrepreneurs have stronger friendship and networks who can invest," and financial capital: “Money matters, and middle-aged entrepreneurs are more likely to have the resources (or know those who have) to back new ventures. "
3) Huge opportunity to invest in “grey hair” start-up founders: Research proves that youth is not the key to entrepreneurial success; by investing resources only in the young, business culture is missing a huge opportunity. In an analysis of billion-dollar startups (or “unicorns”) reported by TechCrunch and conducted by Allen Lee of seed stage fund Cowboy Ventures, the average founder on the unicorn list was 34. The founders of LinkedIn, the second most valuable unicorn in their study averaged 36; founders of the third most valuable, Workday, averaged 52.
Researchers at Duke and Harvard Universities looked at startups earning at least $1 million and discovered that founders’ median age was 39; twice as many were older than 60 as were younger than 20. According to Venture Beat, research by the Kauffman Foundation found that in every year from 1996 to 2013, Americans in the 55-64 age group started new business at a higher rate than those in their 20s and 30s.
4) Baby Boomers comprise the hottest start-up market: According to Constance Gustke, NY Times, August 3, 2016, “with an estimated 74.9 million baby boomers, the biggest market opportunity for start-ups is older Americans rather than hip millennials. As members of the generation that defined rock ‘n’ roll grow older, they are adding a wide range of goods and services to their lifestyle.” Moreover, AARP holds yearly pitch events and even has its own incubator, “the Hatchery.”
What some Millennials and Boomers say: “Having the insights and experience from a Boomer along with the innovative ideas and positive force of a Millennial is a great combination... I think the differences between these 2 generations is what makes multi-generational teams more dynamic when they work together... As an aging Boomer, my creativity is an integral part of who I am… My only wish is that those younger than me would have an open enough mind to see the passion burning in my eyes... Millennials act towards Boomers with the attitude of: ‘Boomers, your mindset is too old to solve the problems of today’ and the Boomer reacts: ‘Why do Millennials always think they are right and never listen?’ Isn’t it time to stop this conflict and say: “Hey, you two better work together and stop complaining about each other.”
4GenNow is an international membership-based community founded on the principle that the more generationally diverse the startup, the more successful the company. We connect 4 generations of entrepreneurs (Gen Z, Millennial, Gen X & Baby Boomer) to found and grow intergenerational startups. We match intergenerational entrepreneurs to found startups and advise them how to grow their businesses. With Free meetups in 15 US and 5 international cities, begin the process of finding your intergenerational business partner today!