A smartwatch that detects falls or strokes in seniors. Blockchain applications that increase birth registration rates in developing countries. Advanced object detection algorithms powered by AI.
What do these business ideas all have in common?
Their creators are all some of the youngest entrepreneurs I know — members of Generation Z.
As an investor and advisor, I’ve been lucky to work with all kinds of entrepreneurs over the last decades. But seeing the youngest cohort in action has been especially inspiring. While I’ve been mentoring them, I’ve learned a lot about their approach to business and the factors that have shaped their ambitions.
Here’s a look into what drives them and lessons we can all take from Gen Z’s unique approach to entrepreneurship.
Gen Z by the numbers
Born between 1997 and 2010, Generation Z succeeds the Millennials, and while they’re similar in some ways (their facility with digital media in particular), their approach to business and entrepreneurship is very different.
Gen Z is rapidly becoming known as the most entrepreneurial generation ever, with 62% of Gen Zers indicating they have started — or intend to start — their own business. And those who have already started down this path are not only embracing entrepreneurship, but also transforming it with unique approaches to brand building, upskilling and operations. With their oldest members just a tender 24 years old, Gen Z is already finding widespread success with their entrepreneurial exploits, from apps and YouTube channels to beauty products and hand-made bow ties.
In some ways, these entrepreneurs are no different from their predecessors. They’re still coming up with products and services that fill basic human needs — to eat, play, connect and be productive. And in order to succeed, they still have to match what they’re offering with what people want.
But they also bring some unique qualities and formative experiences to the table, traits that are giving their generation an edge in business. Here’s a look at what sets them apart.
They’re social natives who use digital connections to build their brand
As a young entrepreneur in high school, I was limited to connecting with the kids in my neighborhood — or whoever happened to be at the park nearby. But Gen Z literally has the world at their fingertips. They’ve never lived without instant, real-time social connection, and that has exposed them to a broad range of influences, perspectives, ideas and opportunities.
Because Gen Zers spend so much of their time online (roughly two hours and 55 minutes each day — almost an hour longer than the average Millennial), they’re comfortable with the latest tools and channels, and innately understand the value of branding and self-promotion. They embrace collaboration and inclusivity, and use their networks to test their ideas and see what sticks.
This generation of creators is unafraid to put their work — and themselves — out there, to build an audience and find ways to monetize it, whether through ads, paid promotions or productization. Case in point: of the 50 million creators on YouTube, and the two million of those who are making six-figures, Gen Z constitutes an outsized (and growing) cohort.
This “new” social way of doing business just feels natural to them, much like leasing a storefront or setting up a website was for prior generations.
They’ve seen entrepreneurship normalized, and have embraced it
When I was growing up and exploring my business interests, my entrepreneurial role models were limited to my immediate family: uncles who had small businesses and my dad, who always supported my ambitions. But “being an entrepreneur” definitely wasn’t an established career path.
Gen Z, on the other hand, has role models in abundance — from Elon Musk to YouTube influencers — and mentors are easily accessible. Close to home, I think of the example of Tara Bosch, the founder of SmartSweets. She grew up watching Shark Tank religiously, before experimenting with creating sugar-free candies in her kitchen. After some Googling, she discovered a two-day course on “how to launch a food biz” on Google, then connected with an accelerator for young entrepreneurs — all while still in university.
I still remember talking to Tara and being impressed with how “comfortable” she felt pursuing entrepreneurship as a career path. Fast forward a few short years and last year she sold her business for $400 million! All of which goes to show what can happen when a generation sees “entrepreneur” as just as viable of a career as any other option.
They’re happy learning on the fly, and don’t get hung up on barriers
As the best educated generation yet, Gen Z highly values learning, but that doesn’t mean they’re hitting the books the way you and I did.
From online incubators to MasterClass to Google’s new career certificates, these kids are taking their lessons wherever they can get them (generally online), and finding it’s no longer necessary to get a business degree or formal education in order to go places. Gen Zers can read case studies on Reddit threads or literally Google “how to be an entrepreneur” and get started.
Armed with the confidence to jump right in, get their feet wet, and fill in the knowledge and skills gaps as they go, these youngsters aren’t waiting until they have it all figured out to start their businesses.
Gen Z also seems less hung up on barriers than preceding generations — after all, equality is non-negotiable to them. Hierarchies and glass ceilings are inconveniences to navigate around for sure, but tackled in stride. They may lack formal credentials, but they don’t let imposter syndrome or self-doubt stand in their way.
They’ve got cheaper tools (and more of them) than ever, and they use them wisely
Between servers and development costs, I spent several hundred thousand dollars to get one of my first businesses off the ground, an online dating company I started back in college. Today, any entrepreneur using cloud storage and plug-and-play apps could do it for a fraction of that amount. And a recent study by Wells Fargo shows that the average business startup uses less than $10,000 in launch capital.
Gen Z ventures often start as passion projects they share on their social networks — think makeup tutorials on YouTube or maker projects on Instagram. Demand from family and friends leads them to easy-to-use e-commerce platforms like Etsy or Shopify. Audience-building communities like TikTok help them grow their brand and get buyers into the sales funnel. Apps like Stripe and Square make payment a breeze, while drop-shopping eliminates the need for warehouse space.
Before they know it, they’ve got the beginnings of a business they’ve launched using apps on their phone. These convenient tools also free up their time and capital for more important tasks … like figuring out how to save the world.
They’re driven to make a difference, not just a profit
This generation is driven by big ambitions, but their goals extend beyond personal accomplishment. They want to fix problems like climate change and social justice issues. And though they’re not the first generation to put their passions to work, for Gen Z there’s a recognition that their very survival may depend on their success.
This past pandemic year may have given Gen Z their first glimpse of the kinds of serious challenges they’re up against in their quest for entrepreneurial glory. An overdue market correction, political instability and climate uncertainty all loom on the horizon. Will the struggles these young entrepreneurs face in the years ahead change their path? Or will their empathy and willingness to take risks—no matter their age—continue to propel them to business success? My guess: Gen Z’s best entrepreneurial ideas are yet to come.