“It’s not about ideas. It’s about making ideas happen.” – Scott Belsky
Members of Gen Y, famously known as millennials, are independent thinkers, technologically-savvy, and on track to be the most educated generation in history – but there is one problem that seems to stand out with this generation: where are our millennial entrepreneurs? While there are statistics to show that millennials are very keen to be entrepreneurs, results show that very few of them are actually doing it.
Yes, we all know about Mark Zuckerberg, and there’s David Karp, creator of Tumblr, and Ben Silberman and Evan Sharp, who built Pinterest, not to mention Mike Krieger and Kevin Systrom of Instagram fame: all tech innovators and social media faces. Airbnb, Lyft, and Spotify were all created by millennials – but despite spectacular success, they are still in the minority among their peers.
A Bentley University survey in 2014 found that only 13% of millennials said their career goals involved climbing the corporate ladder in organisations, while almost two thirds said their goal was to start their own business. Millennials see chaos in established corporations and have a yearning to find a better way: fewer than half believe these businesses behave ethically. The entrepreneurial spirit should be strong in Gen Y – so what’s stopping them?
The current situation
The same survey showed that only 32% of millennials identify as entrepreneurs, compared to 41% of Gen X and 45% of baby boomers. Not only that, the number of people under 30 who own businesses has fallen by 65% since the 1980s, meaning it is now at a quarter-century low. Even the world’s most entrepreneurial country, the United States, is seeing these issues with its millennial generation. In 2016, John Lettieri of the Economic Innovation Group testified before Senate that millennials were close to being the “least entrepreneurial generation” in the past 100 years.
But why?
With all the praise the millennial generation receives, they get a lot of flak as well. “Spoilt”, “lazy”, “entitled” are just some of the many critiques thrown at Gen Y. It would be easy to use those accusations as reasons why millennials seem to steer away from establishing a business from the ground up, but the situation is a little bit more complicated than that. Millennials have grown up with access to the internet, which has given them a broader view of the world and its problems. The 2018 Deloitte Millennial Survey found that young workers are increasingly uneasy about the future and are pessimistic about their own futures. After the 2008 recession, the start-up creation rate dropped sharply and has yet to recover. And the world is a lot more expensive to live in that it was before.
Research from EY and the Economic Innovation Group shows that nearly half of millennials who have expressed interest in starting their own business cite insufficient financial means as keeping them from becoming entrepreneurs. With the amount of money required to start and run a business, in addition to student loans, most millennials are just not in a position to become entrepreneurs.
That doesn’t mean it’s impossible
If insufficient funds are a big enough reason to hold a potential millennial entrepreneur back, there is good news – there are alternative financing ways to overcome that.
- Government schemes and grants
With a little bit of research, an aspiring entrepreneur should be able to find multiple government initiatives aimed at helping businesses get started. One of the many grants available in Singapore, the Capabilities Development Grant (CDG), is a financial assistance programme designed to assist SMEs to grow their business. Not only do these initiatives aid with funding, many also provide opportunities to be partnered with a mentor. However, if giving away equity from day one is not part of your game plan, there are other options.
- Crowdfunding
Crowdfunding is the practice of funding a venture by raising small amounts of money from many people, usually via the internet. The most popular crowdfunding sites are Kickstarter, Indiegogo and GoFundMe. In 2015, an estimated $34 billion was raised worldwide specifically by crowdfunding. Today, with the internet playing such a big part in our lives, many businesses have used it as a way to raise funds – albeit some unsuccessfully. This may seem like a risky move to make, but what is being an entrepreneur all about if it doesn’t include taking a few risks?
- Invoice financing
This option is the least well-known of the three, but one that has a rich history. Invoice financing has been practiced since the 1300s and 1400s as a way for businesses to borrow based on invoices owed to them by their customers. Since then, the concept of invoice financing has remained the same and continues to play a huge role in business finance. Some well-known invoice financing companies are Funding Societies, Capital Match and Capital Springboard. This is a perfect way for SMEs to get that much-needed cash flow to continue doing business and growing.
Although the reasons millennials aren’t becoming entrepreneurs are completely valid, there are solutions to their problems. Millennials may be praised for being an innovative generation, but that does not easily translate to entrepreneurship. I believe that if they can educate themselves on the different aspects of running a business, secure the most suitable form of funding and work hard, the millennial generation could be the ultimate entrepreneurial generation.
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