From selling shark tooth necklaces to his neighbors during summer vacations in Florida to running an online auction site that benefits charities, he’s no stranger to the hard work that comes with starting a business.
“I’m interested in new things and looking into new things,” said Gough, who is among a burgeoning group of young entrepreneurs not content to work for others.
They’d rather strike out on their own. In fact, nearly 71 percent of the 1,474 youth who participated in a 2006 Junior Achievement survey said they wanted to be self-employed sometime in their lives-up by 6.9 percentage points since 2004.
Credit the opportunities that come from growing up in a technological society, experts said.
That trend is not expected to stop any time soon, said Donald F. Kuratko, executive director of Indiana University’s Johnson Center for Entrepreneurship and Innovation.
“In 1990, I was called about the fad of [young] entrepreneurs stopping and I said, ‘No, it’ll escalate and gain greater speed,'” he said. “Seventeen years later, I was correct and I think I’m correct in saying it won’t stop or be a fad, but be a fabric of the economy and continue on to excellence.”
That’s not to say there haven’t been downtrends throughout the years. Reasons for the trend
About 3.9 percent of adults ages 20-34 started a business in 2005 and 2006, according to the Missouri-based Ewing Marion Kauffman Foundation’s 2006 Index of Entrepreneurial Activity, up slightly from the 3.7 percent who took the plunge in 2000-2001-but down from 4.3 percent in 1996-1997.
Not many other national studies track the age of entrepreneurs, but experts agree that an increasing number of startups have young people at the helm.
Downsizing and layoffs in corporate America gave rise to what Kuratko calls the “e-generation” of young entrepreneurs.
“First, younger people are starting to realize, based on what happened in the past, that their future lives through themselves not in the institutions,” said Kuratko, 54. “Second, when we came to the dot-com era of the late ’90s it showed the potential to a lot of people that they could start a business. … Third, the rise of technology is demonstrating that they don’t have to build a brick-and-mortar business, but they can start a business overnight and be effective. And that’s powerful.”
Younger people also have less to lose than the older generation because they usually do not have big mortgages or kids in college, said Larry Cox, director of the Entrepreneurship Center at Ball State University.
“In my father’s day, you worked for a big company after college,” said Cox, 53. “Now people see working for a large company isn’t what they want to do.”
Indeed, the corporate world has not created an appealing culture for youth, said Sharon O’Donoghue, director of the Central Indiana Women’s Business Center, which assists and supports owners of very small businesses.
“The younger people have said no to that, and if you don’t accept the rules or like how the environment works, you create your own,” she said. They think “there’s a whole world to experience and participate in. [There’s] a new philosophy … in that they’re taking on more experiences and more opportunities by changing jobs, environments and lines of work.”
When they have the necessary skills, many choose to be their own boss, said O’Donoghue, 49. Getting up early, wearing business attire and working 55 hours a week are not as appealing as setting their own rules and managing their own results. If they can earn more money on their own, all the better.
Challenges and opportunities
Starting a business is not for everyone, however.
Individuals must take a step back and find what they are good at and what is important to them, said Erin Albert, founder of two Fishers-based businesses. Then, they must determine what career will fit.
“I never planned [being entrepreneurial] or went to college thinking I’d go out and be my own boss,” she said.
A professor at Butler University’s College of Pharmacy, the 30-something Albert created Pharm LLC in 2005 when she had difficulty finding a place to publish her research data. The online site also is a service for coaching medical science liaisons on how to work with researchers and physicians. She founded social networking service Yuspie LLC last year to help connect young professionals. Both were started because she saw a need for those types of businesses.
Unlike her peers who avoid traditional jobs Albert started her businesses while working elsewhere.
“I think of it as baby steps,” she said. “A lot [of entrepreneurs] still have day jobs and split themselves into multiple areas. … It’s safer to start something part time as well as keep a day job versus keeping one day job because if you get that pink slip, what’s your plan B?”
Kuratko said he advises his students to start a business if they have an idea, experience in that field and the opportunity. If not, then they need to get the experience first, he said.
“The answer I give when people ask if they should start now or wait is, ‘Do you have a passion for the idea beyond just the money?'” he said. “Passion is what’s going to drive the idea beyond making money.”
Youth and inexperience can make it difficult to raise money, manage people and grow a business, Kuratko said, but young entrepreneurs want to put their skills and energy toward something worthwhile.
“They’ve got an opportunity to grow something special and because they’re young, they have a long career ahead of them with … a lot of options,” he said. “I think in the entrepreneurial domain you have the opportunity to … put your stamp on that business and make an impact.”
Improving the economy
Immigrants came to the United States in the early 20th century in pursuit of the American Dream of starting their own businesses. Today’s younger generation is seeking the same thing.
“It’s a rebirth of the old virtue that was started by our ancestors,” Kuratko said. “We got pacified with working with big businesses, but now we’re seeing a rebirth of the movement.”
Small businesses are the backbone of the U.S. economy-60 percent of the work force is employed by companies with 40 or fewer workers, O’Donoghue said.
“It’s not the [corporations], but the micro businesses that are taking off and fueling this economy,” said Albert, the professor-turned entrepreneur. “If we don’t have the people out there taking risks and trying things, we won’t be an economic powerhouse.”
This is especially true in the Midwest, which she said does not adopt new concepts readily.
“I’d like to see the Midwest become a little more progressive in terms of their openness to new ideas, and that’s one of the biggest things that holds our state back from competing with California or Boston or large meccas for ideas or concepts,” she said.
The Kauffman Index supports her claim, showing the Midwest had the lowest rate of entrepreneurial activity in the country. Indiana averaged 210 entrepreneurs per 100,000 people in 2006, ranking 43rd nationwide. Montana leads with 600 per 100,000.
Entrepreneurship is associated with economic growth, said Rob Fairlie, author of the index and director of the master’s program in applied economics and finance at the University of California Santa Cruz. Since the Midwest is part of the country’s rust belt, it’s not surprising that it has fewer entrepreneurs.
Still, entrepreneurship creates a dream along with jobs, said Gough, the 23-yearold business owner.
“Without entrepreneurs, America would not have the mindset of anything is possible,” he said. “Entrepreneurs are what have made that dream a reality.”
Gough founded the online auction site Bidaroo in February after working about four years developing his concept. The site sells items cheaper than market value and gives at least 25 percent of the proceeds to charity.
“I’ve always kind of liked the new and innovative things or the new way to do it,” Gough said.
Take his marketing plan, for example. By using the Internet-and redirecting resources that otherwise would be spent on things like an office lease-Gough markets Bidaroo globally.
“A shop is [marketing] only in that town, but with the Internet I can spend the same amount of money but reach the entire world,” he said. “It opened up my market.”
The market demands flexibility and new ideas, said Ball State’s Cox. At some point in time, innovators and entrepreneurs will replace big businesses that get locked into a certain way of doing things.
“Some [young people] have social aspirations to change the world,” he said, “and entrepreneurship is a great way to change the world.”