As we progress further into the 21st century, Generation Z is becoming a significant force in entrepreneurship. Born between the late 1990s and early 2010s, Gen Zers are redefining the future of work, balancing traditional jobs with side hustles, and actively building their own businesses.
The Growth of the Creator Economy
A key aspect of Gen Z entrepreneurship is the growth of the creator economy. Influencers and content creators have become powerful, using their online presence to build successful businesses. CBS News reports that 86% of young Americans want to become social media influencers due to the earning potential that surpasses traditional jobs.
For example, Kylie Jenner became the youngest self-made billionaire with her beauty brand, Kylie Cosmetics. Gen Z entrepreneurs understand the importance of authenticity and have built strong relationships with their audiences, giving them an edge in business.
Gen Z’s comfort with the digital world is a major factor in their success. They are digital natives who have grown up with social media, enabling them to easily navigate the online space. This has helped them build personal brands and monetize their influence through partnerships, sponsored content, and merchandise sales. Profiles of successful Gen Z influencers and creators are shared by The Social Standard and Go Daddy.
However, in my opinion, being an influencer alone does not lead to real innovation. The focus on personal branding and fast-paced content creation can limit deep exploration into entrepreneurial ventures that tackle pressing global issues.
What Makes Gen Z Different?
Gen Z approaches entrepreneurship differently than previous generations. The entrepreneurial landscape has changed, with lower barriers to entry for starting a business and different priorities. Business Insider highlights some of these differences:
1. Ease of Starting a Business: Thanks to accessible technology and platforms like Shopify, starting a business is easier than ever. What once took months and significant capital can now be accomplished in days.
2. Data-Driven Decision-Making: Gen Z entrepreneurs use data analysis tools to make informed business decisions, helping them streamline operations and focus on the big picture.
3. Personal Branding: Building a strong personal brand is a strategic necessity for many Gen Z startups. They understand the importance of personal branding to attract opportunities and partnerships.
4. Acceptance of Differences: Gen Z values inclusivity and diversity, which influences their business and innovation approaches.
5. Social Responsibility: Gen Z entrepreneurs are concerned about social issues, the environment, and helping their communities.
The Side Hustle as a Necessity
While Gen Z entrepreneurs have many advantages, they also face challenges. Many young people juggle multiple side hustles due to financial pressures and the desire for control over their time. This can lead to burnout and the need for balance.
In today’s economy, many Gen Zers feel that a side hustle is necessary to afford the lifestyle their parents attained. Data from the Bureau of Labor Statistics shows an increase in people working multiple full-time jobs, with Gen Z leading the way. A Paychex survey found that about half of Gen Z work at two or more places, compared to other generations.
Deloitte’s 2022 Gen Z and Millennial Survey found that a third of Gen Z respondents worry most about the cost of living, 45% live paycheck-to-paycheck, and over a quarter doubt they’ll retire comfortably. A Freddie Mac survey found that about 34% of Gen Zers don’t think they’ll ever afford to buy a house.
Often, the side hustle becomes a main hustle, creating necessity-based entrepreneurs rather than innovation-based ones. McKinsey suggests that in this economy, where Gen Z faces high inflation, student debt, credit card debt, and high housing costs, they are seeking stable paychecks over chasing side hustles.
Can Gen Z Change the World?
The big question is: Can Gen Z entrepreneurs change the world? If current trends continue, Gen Z’s pursuit of entrepreneurship could lead to significant growth and innovation. They have the potential to create disruptive companies that challenge traditional industries and bring fresh perspectives to longstanding problems.
However, business failure rates are high, with 50% of small businesses failing within five years according to the Small Business Administration. Not all ventures will succeed. Nevertheless, Gen Z’s ability to adapt, innovate, and use digital tools gives them a fighting chance.
Let’s look at the innovative ideas from places like MIT and how these startup success stories can influence future entrepreneurs.
Innovation-Based Startups
In my former role as the Executive Director of MIT’s Martin Trust Center for Entrepreneurship, I worked closely with some of the smartest young entrepreneurs. I saw firsthand how innovation-based startups can succeed with access to proven frameworks, mentorship, and resources that support impactful ventures. By guiding students from ideation to execution, the center helps transform groundbreaking ideas into successful startups that address significant global challenges.
Here are a few innovation-based startups I personally worked with through delta v – MIT’s capstone program for entrepreneurship:
1. Biobot Analytics: Analyzes sewage with molecular technologies and AI to provide early warnings of population health threats worldwide.
2. Podimetrics: Develops medical technologies like the SmartMat, which monitors foot health in diabetic patients to prevent complications.
3. Ori: Invented a new type of apartment that improves the resident experience in smaller spaces using sophisticated engineering and design.
4. Infinite Cooling: Develops future cooling towers to help industrial plants have safer, more reliable, and sustainable cooling towers by optimizing thermal performance and eliminating cooling tower plumes.
5. Bloomer Tech: Focuses on smart wearable technology for women’s health, such as bras with embedded sensors to monitor heart health.
Innovation-based startups focus on solving global challenges through advanced technology and research. These startups prioritize creating groundbreaking solutions to complex problems in health, the environment, and other critical fields.
In contrast, ventures centered around influencers and content creators often focus on personal branding and monetizing online presence through partnerships and merchandise sales. While both types of entrepreneurship involve creativity and a desire to succeed, innovation-based startups typically involve deep research, long-term planning, venture capital fundraising, and a focus on sustainable impact. Influencer ventures are often more focused on immediate audience engagement and revenue generation.
As we look to the future, one thing is clear: Generation Z is not content with the status quo. They are ready to take on the world. Although not every entrepreneur can attend programs like those at MIT, I urge today’s entrepreneurs to aim high. Use the resources you have – whether it’s taking classes, reading books and articles, finding a mentor, or working with an entrepreneurship coach – and use this information to explore the difference you can make in the world.
