One year after I risked everything to launch my own venture, I penned a short article chronicling my journey up to that point. One commenter responded with near-vitriol, wondering how I could be so misguided as to influence – encourage, even – others of my generation to take on extensive levels of risk in order to successfully launch a new business.
Millennials with that mindset, while sometimes possessing an entrepreneurial spirit, vastly lack the drive, initiative and stomach to take the risks necessary to create a thriving business on their own. In fact, Millennials are less likely to become entrepreneurs than any recent generation before them. The share of new entrepreneurs between the ages of 20 and 34 has dropped to only 23 percent, compared to 35 percent in the same demographic in 1996. Moreover, only 3.6 percent of households under the age of 30 have any stake in a private company.
But it is not just Millennials – entrepreneurship is dropping in every demographic. The media highlights the hottest unicorns, young tech companies and thriving social media sites, but the PR coverage on single case studies is painting a misleading picture. The rate at which new startups were formed fell by more than 50 percent between 1978 and 2011. In fact, the number of newly formed companies fell by nearly 40 percent between 2006-2010 alone, and it has remained there since.
While no single event, person, regulation or political administration is to blame for the precipitous decline in entrepreneurship, there appear to be a few common justifications for Millennials not to take on unseemly risk.
#1. The financial crisis hit young people and recent college graduates the hardest.
Nearly 30 percent of Millennials still live with their parents, having moved back in after they were unable to find a job following graduation. Also, a staggering 72 percent of Millennials have less than $1,000 in savings. Of those who do have savings, 52 percent keep it in liquid, low-yield investments like cash.
#2. Millennials have unprecedented levels of debt.
Recent graduates have a high amount of student debt, which makes them afraid of any additional risk or the responsibilities of being an entrepreneur. Between 2007 and 2014, the average outstanding loan amount for millennials rose from $18,233 to $27,689. Millennials with such significant loans are obviously apprehensive about shouldering the responsibility of an entrepreneurial endeavor; they need a stable job with health insurance so that they can repay what they owe.
#3. While technology is thought to be the greatest aid to startups, it is a double-edged sword.
As much as technology has increased globalization, it has made it possible for any business to compete online. While it gives entrepreneurs the opportunity to expand their reach, it creates cluttered markets that can serve as a great hindrance to entrepreneurial success.
But the greatest hindrance to success is believing that any of these reasons is a valid excuse.
Actually, every single one of these is a great reason why now is a better time than ever before for a new entrepreneur to risk it all. In fact, with levels of entrepreneurship plumbing to new depths (entrepreneurial activity for those aged 18-24, between the years 2007-2012 was at an all-time low) the competition is lower than ever before.
There are few higher-growth opportunities for young people than launching a startup. The stagnancy of behemoth firms makes it easy for a lean, agile startup to compete against them. Student loans typically come with ultra-low interest rates and possible deferrals, making them prime targets for paying off after a company has been successfully launched.
As Millennials delude themselves with excuses and decline to take on risk, they hurt more than themselves. Startups are the backbone of the U.S. economy. Unless new young business founders take risks, the economy will eventually decline. In five years, 1 in 3 adults will be a Millennial. By the year 2025, 75 percent of the workplace will be made up of Millennials: Millennials who will still be on the hunt for jobs. Without entrepreneurs among the Millennial generation, there will be little new-job creation. The economy will remain stagnant without anyone to create and scale modern businesses.
Fear is a natural sensation when venturing out into the unknown – or jumping off a cliff – as I like to describe the process of quitting a stable job to launch a new business. But Millennials must not let fear paralyze their dreams or dilute their success. As Mark Twain once said, “Courage is resistance to fear, mastery of fear – not absence of fear.”
That is my answer to that commenter: You must master your fear. You must embrace risk and arm yourself with the education and skills you need to pursue your passion. In doing so, you could not only change your country and your generation – you might just put a dent in the universe.
Brian Hart is an award-winning communications consultant and founder of Flackable, a national public relations and digital marketing agency headquartered in Philadelphia. Follow Brian on Twitter at @BrianHartPR.