Why Gen Y Entrepreneurship Will Be a Disaster

There's plenty of survey data and anecdotal evidence to suggest that Gen Y will be a generation of entrepreneurs. Assuming that's true, and I have no reason to doubt it is, you've got to wonder what impact that'll have on their careers, corporate America, and the nation's economy.

Regardless of whether Millennials are doing this out of necessity or choice, the popular opinion seems to be that it's all well and good, a sign that the American Dream is alive and well. Hell, somebody even wrote a book suggesting that Gen Yers should Never Get a Real Job. No kidding.

Maybe we should just change "the land of the free and the home of the brave" to "the land of the entrepreneur and the home of the internet" and get it over with. Too many syllables, I know.

Well, I hate to be a stick in the mud, but I couldn't disagree more with the popular opinion. Not only that, but I think that Generation Y's predilection for entrepreneurship will be bad for their careers, bad for corporate America, and bad for the nation. Here's ...

Why Gen Y Entrepreneurship Will Be a Disaster

1. The question of necessity versus choice is actually an important one. If it's necessity - bad economy, no capital, no jobs - then where's all the capital going to come from to fund all these startups? And who's got the cash to buy all the new products and services all these new entrepreneurs will be creating? That's right, nobody.

2. If, on the other hand, Millennials are turning to entrepreneurship by choice, what impact will that loss of next generation executive talent and leadership have on corporate America? What impact will that have on a nation trying desperately to compete with China and India in a global economy? Not a good one, that's for sure.

3. How about their careers? If you haven't spent a lot of time with entrepreneurs who've spent their entire careers in startups, here's a dose of reality. Sure, they've got great instincts for what their generation wants to see in a video game, but as for management acumen and business savvy, forget it. Where are they going to learn that stuff? Big company experience taught me everything I know about management and leadership.

4. Sure, startups run by entrepreneurs can succeed, but an important ingredient has always been a rich pool of operating managers with big company experience to complement the entrepreneurs' lack of management experience and business savvy. If that talent pool is dry or significantly reduced, that's half the equation for successful ventures, gone with it.

5. Besides the virtual world, Generation Y also has a passion for all things green and sustainable. How do you think that supply will fulfill the demands of a nation of wealthy baby boomers who could care less about video games and whether their cars are gas, electric, or nuclear, but are in desperate need of major advances in medical technology and health care? Not well. Looks like more importing technology and exporting jobs overseas.

6. What we really need to do to get the economy growing again is to figure out how to bring manufacturing jobs back to America. Instead we'll have a workforce that, having been denied those types of jobs, gave up and went their own way. Unfortunately, internet and green businesses only exacerbate our shift to becoming a service nation that outsources all its manufacturing jobs.

7. While small businesses are nearly half the U.S. economy, the vast majority are boring old mom and pop businesses like auto repair shops, gas stations, cleaners, and fast-food franchises. I could be wrong, but how's that unglamorous, hard working, long hours kind of lifestyle going to play out with folks who grew up dreaming about designing video games and futuristic cars that can drive themselves?

8. Startups are indeed the flywheel of corporate America, but for every Google, Facebook, and Twitter, there are hundreds of banking, transport, and consumer goods companies. Who's going to create, manage, and grow the next Walmart, Starbucks, GE, Boeing, FedEx, Southwest Airlines, or Procter & Gamble?

9. The virtual world is one of empowerment and entitlement. Everybody's got a voice, everybody's got a platform, and everybody's a "CEO of one." Well, like it or not, corporate America was built on a foundation of organizational structure, work ethic, and discipline. Sure, flatter organizations where decision-making is in the hands of those closest to the problems and the data are more effective, but only to a point. I've written about what a democratic workplace might be like. It isn't pretty.

10. Finally, my biggest concern: Gen Y entrepreneurship will fuel the mother of all Internet and green tech bubbles. And when those bubbles slam into that brick wall of Baby Boomers who want no part of it, they'll burst like never before. And when that happens, we'll look back at our current sluggish economy, high unemployment, and Occupy Wall Street protests, and realize that was just the tip of the iceberg.

Look, those of you who frequent this blog know I'm not a fear-mongering type. Far from it. But the truth is that I didn't sit down to write this post the way it turned out. For me, it started out as an open question, but the more I thought about it, the more all the factors pointed in the same direction. So be it.

As always, your dialog and ideas are welcome and informative.

Also check out:

• Irreverent Career Advice For Up-and-Comers
• Where Does Leadership Come From?
• Why Experience is Overrated

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Image: Andrew Feinberg via Flickr

[EyesOnBusiness]

As a colleague and speaker on Gen-Y and Cross-Generational Communication, I find your comments interesting and accurate, however I also find your perspective far too narrow for the broad statements you've made about Gen-Y and the potential (likely ?) efficacy as entrepreneurs.

Speaking directly to several of your specific comments:
-The capital is bottled up in large corporations, billions of dollars of it, and it's creating pressure on the organizations holding it for some release. Corporations have an unending ability to throw ridiculous amounts of cash away on opportunities ranging from downright ignorant to simply foolish. There are enough smart entrepreneurs out there young or otherwise to figure out how to get it, and enough foolish money managers to spend it.
-'...the loss of next generation executive talent and leadership...' The true loss came from the Baby Boomers (of which I am one) failing to raise our kids properly and with no sense of a) obligation and b) personal responsibility. And that would be Generation X. They want it all and they want it now. They have no interest in learning how to do much of anything right, just "GIVE ME THE MONEY!" Personally, I find Gen-Y has recaptured that spirit of 'teach me what's right and what's wrong and help me learn how to do it better.' Than any Generation since we transitioned away from an agrarian economy over 100 years ago. How can that be bad for executive leadership?
-'as for management savvy...big company experience...' Well, basically the same as above. I don't find Gen-Y shunning corporate American any more than any other generation has in their youth. This is one of those areas where painting a generation with a single, broad brush does disservice to the best AND the worst of its members. Personally I find Gen-Y employees to be some of the most diligent, caring, hardworking people under 45 I have ever worked with, short of the WWII Generation.
-Internet & green business will only exacerbate...' How is this the fault of Gen-Y? The problem here is that the government has been sucking on the *** of big oil for decades and until the will to bite the bullet and adjust our global energy profile changes, we're going to keep being suckled by oil unless we run out of it before we run out of clean water.
-boring old mom and pop businesses are the grass that keeps the conglomerate cow fat. Without those boring old businesses the GE's, Intel's, Siemen's and other large manufacturing organizations wouldn't have the services necessary to support their workforce's.
-and as far as growing up dreaming about video games, I think you're talking (again) about the wrong Generation, I think you're talking about Gen-X. They are the generation that was bored and went looking for games. Gen-Y'ers came out of the womb to a keyboard and found the power to be incredible. My experience is that they are more focused on ways to use that power more productively than any other Generation before them. And you can't complain about any entrepreneur looking for $ regardless of where they find it, or the fools that spend their money on it (can you say pet rock?) and then say Gen-Y Entrepreneurship will be a disaster. It's working...where's the problem?
-'America was built on...' Personally, I see the 'flat organizational model as being good for some, bad for others, but it's not a panacea any more than it's a lethal virus. It's just another model so don't get all hot and bothered about it.
-...and last but not least, "...when those bubbles slam into that brick wall of Baby Boomers who want no part of it" sounds to ME like it's the Baby Boomers who are going to create the problem, not the Gen-Y entrepreneurs! I mean, the Boomers (that would be we, as in me) are the problem. We're the ones who screwed up an entire generation!

I say we give the Gen-Y'ers a chance. They're not all good, and they're not all bad either.

I have written about this a bit in my blog at http://mandelberg.biz/blog-home-page/ and would truly welcome and appreciate YOUR comments.

[KevinDee300]

Steve, I'm not sure I agree that there is a big problem. For all the hype about Gen Y wanting a different kind of work I think the difference will be marginal. They will be operating in adifferent world than when we boomers started on our career ... so of course things will be different. Will a bigger percentage of GenY'ers be entrepreneurs than from the boomer generation? I doubt it. Will more GenY'ers be "free lancers", perhaps but as much because of the changing demands of the markets as in a different "free spirit" attitude ... I think Gen Y are generally as risk averse as most Boomers.
Some differences that will come into play ...
1. More GenYers will have the financial security to start their own thing, be a free lancer, not chase the corporate dream ... because they have wealthy Boomer parents.
2. Demographics mean there will be big demand for talent as the boomers retire ... companies will need to work harder to attract and retain the best talent, and companies will also need to increase their use of the flexible workforce (free lancers).
3. Cheap labour in the global marketplace will drive more Western societies to knowledge based industries. I expect that shift in the demand for labour to affect the Gen Yers ... perhaps pushing them to be more entrepreneurial?
Again, I see the changes as incremental ... not wholesale. Most GenYers will work for other people, just like their parents. Some of these factors will shape the percentages.