They’re ambitious, collaborative, individualistic and 80 million strong. They created a platform where we can keep in touch with friends and family, a way for us to get from point A to point B and a place for us to find love online. They’re the infamous millennial generation vying for a chance to become a population regarded for their entrepreneurial thinking. For the last two decades, some of the greatest products and services society knows and loves have been a product of millennial thinking. Yet still, they remain the least entrepreneurial generation.
No one can deny the desire and drive of the generation to launch successful businesses, but these qualities are often impeded by external and internal factors such as student debt, a lack of risk-taking, a decline in lending, lower homeownership, federal policies and concentrated risk capital.
Ask a millennial how entrepreneurial they think their generation is and nine times out of ten we’ll claim we’re the most innovative generation. With millennial icons like Brian Chesky, the co-founder of AirBnb, Mark Zuckerberg of Facebook and countless others, one would think the millennial generation is doing pretty well in the entrepreneurial department. However, this is far from reality. According to a 2016 Small Business Administration report, millennials are on track to be the least entrepreneurial generation in recent history. Despite the launch of numerous successful start-ups in the early to mid 2000s, less than two percent of millennials reported self-employment in 2014. There’s no question that millennials have the entrepreneurial mentality, but there’s an obvious disconnect between the ideas and putting them into action.
It’s not a lack of drive that holds us back, despite the claims of older generations. As a matter of fact, there are several, very real factors that keep our tenacious generation from launching start-ups. Starting a business is no easy task. It’s daunting, expensive and risky. Last year John Lettieri, the Senior Director for Policy and Strategy Economic Innovation Group testified before the U.S. Senate’s Committee on Small Business and Entrepreneurship and reported that the U.S. ranks 49th out of 189 countries for the ease of starting a business, an abysmally low performance for a country with a historical connection to entrepreneurship and innovation. When the recession hit in 2008, many community banks never recovered. The closing of banks has led to a lack of available funds for those individuals looking for a loan to start a business. It’s also no surprise that concentrated risk capital tends to be awarded to start-ups located in large, urban cities on the coasts, compared to rural communities in the central U.S. Lower homeownership has also contributed to millennials’ lackluster results as entrepreneurs. Without this equity, it has become difficult to start businesses. Crippling student debt also deters millennials, making many afraid of falling even further into debt.
No matter how business-savvy or entrepreneurial we think, millennials aren’t showing much follow through. We’re all talk and no action. We are youthful, idealistic and well educated. We need to take that and start performing. Without us, there will be fewer jobs, less innovation, less competition and lower productivity. Sure, we have the guys that created Facebook, Spotify and Lyft, along with the women that created Spanx, Bumble and The Skimm, but it’s not enough. We need to take a risk and make the leap. If there’s anything we pesky millennials have in common, it’s the desire to prove everyone wrong. So let’s…