STARTUP WEEK 2020: A Gap in the Market: Young Entrepreneurs Are Missing Opportunities
The Techstars Alaska Startup Week op-ed series features entrepreneurs and entrepreneurial ecosystem builders sharing their thoughts and ideas on a variety of topics related to startups and innovation. Techstars Alaska Startup Week is a week-long series of events hosted by entrepreneurs and business leaders from across the state. In 2020, all events are virtual, and you can find them here: Startup Week Schedule. All are welcome, please join us!
As the number of Americans under 30 who own private businesses continues to dwindle into a 24-year-low, the opportunities for entrepreneurial investment increases. In 1989, the number of young entrepreneurs was at 10.1 percent. In 2017, that number was just 4 percent.
Yet in one year alone, businesses in America increased 4.4 percent — from 770,000 to 804,000. Small business America continues to grow without our youth.
Alaska is no exception to this inverse effect. Entrepreneurs over 65 are found three times more often than entrepreneurs under 35. It’d be easy to blame it on an older population, but the average Alaskan is 34-years-old.
So where have all the young entrepreneurs gone? Were they even there to begin with?
Of course we are. But we face considerable hurdles to overcome including systemic disadvantages even after we find our footing. Adultism (assuming young people are inferior to adults simply because of their young age) and lack of experience aside, young adults are less likely to have substantial personal savings, access to loans or credit, or a robust enough network to rely on for capital, mentorship, and opportunities.
For the largest and most educated generation of youth in history, we’re certainly spoonfed one single path to success—which, as any entrepreneur knows, doesn’t mirror reality. And with student loan debt now at about $1.56 trillion, the youth are starting to explore their options—with or without help.
The simple truth is that the world has changed since 1989. There are hundreds of businesses you can start with less than $100, and there are millions of more avenues to making money for yourself because of the internet.
Challenging the existing perspectives and assuming leadership roles where we normally wouldn’t isn’t the only way forward, but it’s certainly a good start. Naivety and gullibility don’t have to coexist — in many ways, naivety is the best place to learn.
The number one reason we’re afraid to take the leap is the fear of failure. Roughly 90 percent of millennials think entrepreneurship isn’t just starting a business — it’s an entire mindset they’ve got to learn.
And that mindset starts sooner than we think. The seed is planted very young by supportive communities, encouraged creativity, and ushered problem-solving. Programs like Lemonade Day from Alaska’s Small Business Directory and nonprofits like Junior Achievement of Alaska help cultivate this mindset, but the solution lies at a larger scale.
The reality is you don’t have to go to college to be successful, and the trends showcase that: 16 percent fewer college freshmen have enrolled this fall compared to last year. The majority of entrepreneurs have a college degree of some sort, but only 9 percent have a bachelor’s in business. The general consensus is go to college because you should, but don’t assume you’ll actually use your degree.
Programs like the Center for Economic Development’s Upstart Alpha (open to the community but with a preference given to student applicants) and Center ICE’s Students2Startups are wonderful opportunities for students of UAA and UAF respectively, but they showcase a gap in the ecosystem: Where is the support for young entrepreneurs uninterested in secondary education?
Ultimately, it’s not just a matter of plug-and-play programs. The solution lies in a cultural shift—one that needs to take place in order for Alaska to continue to innovate and move quickly.
For young and new entrepreneurs, the barriers of entry are lower than you think. There are thousands of established businesses eager to collaborate with young minds and naive leadership. And there are millions more waiting to be founded by you.
The old paradigm tells us, “Wait until you’re ready.” It tells us to slow down, think before you act, and consider the future consequences. All things the “invincible” youth are terrible at.
The new one asks us, “Aren’t you ready now?” It challenges our perspectives in the same way we should challenge others. Everything that’s set up for you doesn’t have to be the path you accept — whether that’s in employment, relationships, or the place that you live.
Our biggest strengths as young entrepreneurs is our naivety, our ability to become a sponge and learn from everything around us. It isn’t in spite of it.
And the sooner we encourage this way of thinking for every person individually—youth or not—the sooner Alaska can begin to attract opportunities as much as we export them.
Sarah Katari is a 22-year-old writer and entrepreneur. They’ve worked on projects with the Municipality of Anchorage, Silicon Valley startups, and a variety of local small Alaskan businesses. They do not hold a degree of any kind, and rather opted to spend two years abroad living and working in Australia. You can find them on LinkedIn or email them directly at [email protected].