When people hear the phrase “start-up company,” most think of airy offices with open floor plans and a Millennial boss dressed in jeans and sneakers, overseeing his or her similarly young and stylish staff. While this might make for an attractive image in the media, new research shows that the boss in this scenario might actually be older than pictured.
Though the media has heralded Millennials as “the most entrepreneurial generation” for years, new statistics reported in the Atlantic says the exact opposite. While it might be true that Millennials are certainly a creative and innovative bunch, the actual practice of entrepreneurship is lagging for this generation. According to a recent Wall Street Journal analysis of Federal Reserve Data, the amount of people under 30 who own a business has fallen by 65% since the 1980s and is now at a quarter-century low.
Data from the Kauffman Foundation, a think tank focused on education and entrepreneurship, found that the average age for a successful startup founder is about 40 years old. They also found that the only age group with rising entrepreneurial activity in the last two decades is people between 55 and 65!
The reason for this discrepancy? The answer may lie in the very Millennial burden of student debt. The decrease in Millennial entrepreneurs seems to directly coincide with the increase of average student debt. And even for those who are able to manage their student debt as just another monthly payment, a steady salary is often more appealing than taking a chance by starting a new business. In fact, according to a recent Inc.com article, more than 40 percent of 25-to-34-year old Americans said a fear of failure kept them from starting a company in 2014; it 2001, just 24 percent said so.
Perhaps the decrease in Millennial entrepreneurship can be attributed to life stage. Similar to how Millennials are waiting longer than previous generations to get married, have children, and buy cars and houses, it might all be a matter of time before Millennials take the big step into opening their own businesses. However, if it isn’t a result of life stage and Millennials never reach the point where they feel financially comfortable starting a business venture, it could have a lasting effect on the American economy.
The good news? The study found that most successful founders of companies begin their careers as devoted employees! This doesn’t mean that the entry-level Millennials on your staff are gunning for your managerial job, but it does mean that fostering their talents and skills now can make for a stronger class of leaders in the future.
Another bright point? The number of entrepreneurship classes on college campuses has increased exponentially since 1985, which could better prepare younger Millennials and Gen Z –the next next generation of workers and entrepreneurs – to start businesses at an earlier age.