We’ve all heard the terms, Millennials, Generation Z and while we’re at it, let’s look at Generation Alpha, as well. So, as we look at the entrepreneurial tendencies of these generation groups, let’s understand the actual definitions for each.
Researchers and popular media use the early 1980s as starting birth years and the mid-1990s to early 2000s as ending birth years, with the generation typically being defined as people born from 1981 to 1996. Most millennials are the children of baby boomers and early Gen Xers; millennials are often the parents of Generation Alpha.
Researchers and popular media use the mid to late 1990s as starting birth years and the early 2010s as ending birth years. Most members of Generation Z are children of Generation X.
Researchers and popular media use the early to mid 2010s as starting birth years and the mid 2020s as ending birth years. Named after the first letter in the Greek alphabet, Generation Alpha is the first to be born entirely in the 21st century. Most members of Generation Alpha are the children of Millennials.
These groups are the future of business. They are the future of entrepreneurship. For now, we can look at Millennials and Generation Z as the two groups most likely to start businesses today. Although, as both groups make up a large portion of today’s workforce, it’ll be Gen Z that will own more businesses in the long run than their millennial counterparts.
Difference Between Gen Z and Millennials (credit to DifferenceBetween.net)
Millennials and Gen Z are typically characterized as technology savvy and they daily use social media sites like Facebook, Instagram, Twitter, and YouTube. Also, they are passion-oriented, development-focused, driven to make a difference, and motivated by entrepreneurship.
In the book, Generations, it was predicted that during the adulthood of the majority of the millennials, family ties would be stronger, criminal behavior would be lessened, and those in their 20s would take less risks. Apparently, these predictions all came true. The millennials are also knowns as “generation Y” or “the me generation” due to the claim that they are prone to be self-centered.
The following are some research-based characteristics of millennials:
- Internet dependent
- Upbeat and receptive
- Atheists or agnostics
- Mix business with pleasure
- Believe that money cannot really buy happiness
Generation Z or Gen Z is the next batch after the generation Y or the millennials. This makes other sources refer to them as the post-millennials. Also, they are sometimes called “iGeneration”, “Gen Tech”, or “Gen Wii” due to their exposure to the internet since (and even before) birth. According to several studies, the following are some of the characteristics of the youngest generation:
- Highly value authenticity
- Prefer person-to-person contact
- Involved with the community
What are the differences?
Due to the influence of apps and speedier technology, Gen Z tend to have shorter attention spans as compared to millennials. This also implies that millennials could wait longer and endure less entertaining situations than those from the generation Z.
- Since the millennials experienced the recession, they tend to be more frugal than their younger counterparts. In fact, a survey concluded that millennials have higher preferences to visit a website just to get a discount coupon as compared to Gen Z. Similarly, millennials follow products’ ads before buying them.
- The most used devices of Gen Z are smartphones, TV sets, and laptops. On the other hand, millennials most often use desktops, smart phones, and TV sets.
- As compared to millennials, those from the Gen Z are more difficult to be reached by advertisements since many of them are on multiple platforms and they are more active in using adblocking software.
- Though both Gen Z and Millennials actively use social media sites, a survey indicated that millennials tend to use Pinterest more frequently while Gen Z are more into Vine. This implies that the older generation is more comfortable with sharing and browsing pictures while millennials prefer videos more.
- The working personality of most millennials veer towards independence while that of Gen Z reflect the team player attitude.
- As compared to millennials, Gen Z thinkers are better at multitasking since their brains have been conditioned to perceive various stimuli which is largely caused by newer apps and devices.
- As compared to millennials, Gen Z friends look for more quality relationships as compared to meaningless connections. They have apparently learned from their seniors as they have seen how millennials’ quantity-based friendships resulted to less genuine conversations.
- Gen Z entrepreneurs are more adventurous with their greater desire to start businesses as compared to their predecessors. One of the possible reasons is the lesser amount needed in setting up shop as online entrepreneurship does not need that much financial support. In addition, the mushrooming of start-up companies has encouraged bolder business moves.
“The next generation will always surpass the previous one. It’s one of the never-ending cycles in life.” – Masashi Kishimoto
A New Generation of Entrepreneurs: Millennials and Gen Z (credit to SBA)
This new generation of entrepreneurs is more focused on social impact than ever before. Millennials and Gen Z are values-driven, demanding social change and accountability, from themselves, their peers, businesses, and political leaders.
The top three areas of concerns are healthcare/disease prevention, climate change and protecting the environment, and unemployment. They are also more community oriented, keen on taking action to create meaningful change, and prefer to shop with businesses whose products and services benefit their communities and focus on sustainability.
Younger business owners tend to be sole proprietors or operate with less employees than previous generations. According to the US Office of Advocacy, as of 2017, they made up 26% of non-employers and only 6% of employers. This points to a rising trend for self-employed individuals and gives rise to an opportunity for more resources for solo entrepreneurs.
One of the most prominent barriers to starting their own business is that of the entrepreneurs born between 1982 – 2000, 42% say they don’t have the financial means to start a business as 82% of this demographic has at least one source of debt. This can include credit card debt, mortgage, student loans etc.
Entrepreneurship Considerations for Millennials & Generation Z
The Millennial and Gen Z generations continue to grow, and a big reason for this is the increasing number of young immigrants and refugees arriving in the United States.
Thanks to Adecco’s ‘Way to Work’ survey, which surveyed 1,001 Americans who are mostly currently in college or recently graduated and in their late teens to mid-20s, the primary differences between the two generations and how these differences might play out in the workplace have been identified.
Three key takeaways, or differences between Millennials and Gen Z regarding work include:
- Members of Gen Z are more concerned about the cost of education (21% of respondents), compared to Millennials (13% of respondents).
- Millennials value stability (34%), while Gen Z puts more of an emphasis on finding their dream job (32%).
- More Gen Zers follow their parents’ influence (42%), compared to their Millennial counterparts (36%).
According to an article in Inc. Magazine, Why Millennials and Gen Z are Going to Take the Small Business World by Storm:
There’s great potential in these groups. Despite reservations and setbacks, many young people are pursuing side hustles, creating their own opportunities, and going into business for themselves. In fact, even though some economic conditions have worked against young entrepreneurs, Millennials and Gen Zers have several natural characteristics that will lead them down the path of small business ownership.
Entrepreneurship and new ventures have the most significant impact on the economy, driving job growth, shaping the future of work, and creating entirely new products and services. Millennials and Gen Zers hold the power to do this, as we will soon see them start small businesses in ever-increasing numbers.
What about franchising, once the American Dream of Baby Boomers?
Franchising is not often considered by the approximately 139 million Millennials and Generation Z population (as of 2020). But, with so many qualified people looking to start or extend their careers, and on their own terms, every job option merits consideration.
Here are five important considerations for Millennials and Gen Z open to this path of entrepreneurship:
- Affordability. Most people between the ages of 18 and 35 cannot afford $800,000 for a brick-and-mortar business but a home-based business might cost between $40,000 and $60,000. There are a vast variety of franchises. Millennials and Gen Z can find one that fits their budget as well as their ideal income, lifestyle, wealth and equity.
- Digital Minds. Both groups are digital natives who can capitalize on the Internet to grow their business. Every type of franchise can benefit from someone proficient in the cyber realm, whether that be growing an at-home business in pajamas, creating a digital work force or driving business with a creative social media campaign.
- Control. Some franchises have a web presence that is systemized from the top. If that’s the case, Millennial and Gen Z candidates need to decide if controlling the social presence is important to them or not, then choose a franchise accordingly.
- Do Good. Many young people are as concerned their life work be meaningful and socially responsible as they are with money. A franchise allows Millennial and Gen Z candidates the opportunity to “do good” while being their own boss. Franchises exist for dog sitting, tutoring and healthy food, among countless options available for those looking align livelihood with their social mission.
- Difficulties. Both generations like their own voice on social media, their own marketing plan and are generally excited to execute their next big idea. Franchisors offer a replicable model so customers know what to expect. A Millennial or Gen Z candidates who decide to become a franchisee must be sure they completely support the system they choose.
As the future of works rests on the shoulders of Millennials and Generation Z, changes to the work force will continue and most likely, not return to any semblance of what was common pre-pandemic.
I guess the most important questions (concerns) for me are, will Millennials and Gen Zers pull professional culture in opposite directions, or do both generations have common ambitions? After all, the workplace structure cannot be a work in progress forever.
Have a great day. Make it happen. Make it count!