As we move further into the 21st century, Generation Z is showing its impact on entrepreneurship. Born roughly between the late 1990s and early 2010s, Gen Zers are reshaping how we view work, blending traditional jobs with side gigs, and actively launching their own ventures.

The Rise of the Creator Economy

A notable aspect of Gen Z entrepreneurship is the rise of the creator economy. Influencers and content creators wield significant influence, leveraging their online presence to build thriving businesses. According to CBS News, a whopping 86% of young Americans aspire to become social media influencers due to the lucrative prospects it offers.

Take Kylie Jenner, for instance, who became the youngest self-made billionaire through her successful beauty brand, Kylie Cosmetics. Gen Z entrepreneurs grasp the importance of authenticity and have forged strong connections with their audiences, giving them an edge in business.

Gen Z’s comfort with the digital realm is a major factor in their success. Growing up as digital natives, they navigate the online landscape effortlessly, enabling them to build personal brands and monetize their influence through partnerships, sponsored content, and merchandise sales. Both The Social Standard and Go Daddy highlight profiles of Gen Z entrepreneurs who’ve made it big as influencers and creators.

However, merely being an influencer may not foster real innovation, in my opinion. The emphasis on personal branding and rapid content creation may limit exploration into entrepreneurial ventures aimed at tackling pressing global issues.

What Sets Gen Z Apart?

Gen Z approaches entrepreneurship differently from previous generations. Several factors contribute to this shift:

1. Ease of Starting a Business: Thanks to accessible technology and platforms like Shopify, launching a business is now quicker and more straightforward than ever before.

2. Data-Driven Decision-Making: Gen Z entrepreneurs rely on data analysis tools to make informed decisions, enabling them to streamline operations and focus on overarching goals.

3. Personal Branding: Establishing a robust personal brand is crucial for many startups in this generation, as it attracts opportunities and partnerships.

4. Embracing Differences: Gen Z values inclusivity and diversity, shaping their approach to business and innovation.

5. Social Responsibility: Gen Z entrepreneurs prioritize social issues, environmental concerns, and community welfare.

The Side Hustle Phenomenon

Despite numerous advantages, Gen Z entrepreneurs face challenges. Many juggle multiple side hustles due to financial pressures and the desire for autonomy, which can lead to burnout and the need for balance.

In today’s economy, a side hustle often feels necessary for Gen Z to attain the lifestyle their parents enjoy. Data from the Bureau of Labor Statistics shows a rising trend of people, especially Gen Z, working multiple full-time jobs. According to a survey by Paychex, roughly half of Gen Z holds two or more jobs simultaneously, a higher rate compared to other generations.

Deloitte’s 2022 Gen Z and Millennial Survey indicates that a significant portion of Gen Z worries about the cost of living, struggles with paycheck-to-paycheck living, and doubts they’ll retire comfortably. Additionally, a Freddie Mac survey reveals that a considerable number of Gen Zers doubt they’ll ever afford to buy a house.

Often, the side hustle becomes the main hustle, creating necessity-based entrepreneurs rather than innovation-driven ones. McKinsey suggests that, in an economy marked by higher inflation, student debt, credit card debt, and housing costs, Gen Z prioritizes stable paychecks over chasing side hustles.

Can Gen Z Make a Difference?

The pivotal question remains: Can Gen Z entrepreneurs make a significant impact? If current trends persist, Gen Z’s entrepreneurial endeavors could lead to remarkable growth and innovation. They have the potential to establish disruptive companies that challenge traditional industries and offer fresh solutions to enduring problems.

However, business failure rates remain high, with 50% of small businesses folding within five years, as per the Small Business Administration. Nonetheless, Gen Z’s adaptability, innovation, and adeptness with digital tools give them a fighting chance.

Examining innovative ideas emerging from institutions like MIT provides insight into how these startup success stories can influence the next generation of entrepreneurs.

Innovation-based Startups

During my tenure as the Executive Director of MIT’s Martin Trust Center for Entrepreneurship, I had the privilege of closely collaborating with some of the brightest young minds globally.

I witnessed firsthand how innovation-based startups thrive with access to established frameworks, mentorship, and resources that facilitate impactful ventures. By guiding students from idea conception to implementation, the center transforms groundbreaking ideas into successful startups addressing significant global challenges.

Here are a few innovation-based startups I worked with personally as they progressed through delta v – MIT’s entrepreneurship capstone program:

1. Biobot Analytics: Utilizes molecular technologies and AI to analyze sewage, offering early detection of population health threats worldwide.

2. Podimetrics: Develops medical technologies like the SmartMat to monitor foot health in diabetic patients, preventing complications such as foot ulcers.

3. Ori: Inventors of a novel apartment design that enhances resident experience in smaller spaces through advanced engineering and design.

4. Infinite Cooling: Aims to revolutionize cooling tower technology for industrial plants, optimizing thermal performance and eliminating cooling tower plumes for safer and more sustainable operations.

5. Bloomer Tech: Specializes in smart wearable technology for women’s health, such as bras with embedded sensors to monitor heart health.

Innovation-based startups prioritize solving significant global challenges through advanced technology and research. These ventures focus on creating pioneering solutions to complex issues in health, environment, and other critical domains.

In contrast, entrepreneurship centered on influencers and content creators often revolves around personal branding and monetizing online presence through partnerships and merchandise sales. While both types of entrepreneurship involve creativity and ambition, innovation-based startups typically entail extensive research and development, long-term planning, venture capital fundraising, and a commitment to sustainable impact, whereas influencer ventures often prioritize immediate audience engagement and revenue generation.

Looking ahead, it’s evident that Generation Z isn’t satisfied with the status quo. They are poised to make their mark on the world. While not every entrepreneur may have access to programs like those offered at MIT, I encourage today’s entrepreneurs to aim high. Utilize available resources – whether it’s taking courses, seeking mentorship, or reading relevant materials – to explore the difference you can make in the world.