Donna Fenn Interview: Gen Y Entrepreneurs Guide Future of Business
We interview Donna Fenn, author and Inc. magazine contributing editor, about her new book: Upstarts: How GenY Entrepreneurs are Rocking the World of Business and 8 Ways You Can Profit From Their Success, which chronicles the entrepreneurial adventures of a whole new young generation of innovative, game-changing CEOs.
1. What inspired you to write about young entrepreneurs?
I’ve been writing about entrepreneurship and small business trends for twenty-five years now as a writer for Inc. and other publications, so I’m very passionate about the topic. I wrote my first book in 2005, Alpha Dogs: How Your Small Business Can Become a Leader of the Pack. It focused on eight ordinary small businesses that have become extraordinarily successful because of the specific business strategies they used to beat the competition.
Two or three years ago I began to notice an increasing number of younger CEO’s. I saw them on lists like Inc.’s “30 Under 30 Coolest Entrepreneurs” and Business Week’s “Best Young Entrepreneurs” and it seemed like every other PR pitch I received was about a young CEO in his or her 20’s with a multi-million-dollar company. I wanted to know who these people were, why they were starting companies, what kinds of companies they were starting, and if they were really so different from the entrepreneurs I’d covered in the past. I wasn’t interested at all in people who seemed to get rich quickly – the “I made my first million before I was 22” crowd doesn’t appeal to me. I care about people who are building companies, employing people, coming up with innovative ideas, and changing the entrepreneurial landscape, not just fattening their wallets. What I found is that we truly are in the middle of a youth entrepreneurship revolution in our country and that these young company-builders really are different, and that they are, and will continue to be, a force to be reckoned with.
2. Why are there so many new young entrepreneurs?
I think there are a few reasons. Generation Y is the first generation to grow up with entrepreneurial role models such as Bill Gates, Steve Jobs and Anita Roddick – and these people enjoy rock star status. When I was their age, the word entrepreneur was not a positive noun; it meant you couldn’t get a job anywhere else, or your dad had a company and you were signing on to do sales. There’s been such a vast change in perception – these kids have no memory of “entrepreneur” being a negative word. The Kauffman Foundation has been talking about the huge increase in the number of entrepreneurship programs and endowed chairs at U.S. colleges and universities, and this is largely because there’s now a hunger for this kind of education. So they have the motivation; they have academic resources; they’re highly comfortable with the kinds of technologies that make starting a business faster and cheaper than it’s ever been; and they have a huge disincentive to join the corporate world. Between the corporate scandals of recent years, and now the recession, big companies don’t look terribly safe or attractive these days. I think that all adds up to “perfect storm” conditions for these young people to start their own businesses.
3. How is the way young entrepreneurs are running companies different than in the past?
The way they’re running companies is quite different than in the past. In Upstarts! I talk about the different characteristics of young entrepreneurs. They are:
SitterCity is a Chicago-based company that is an online matchup for babysitters and people who need them. Babysitters can upload their own security checks. Parents can rate sitters and vice versa. SitterCity is another company that entered a fragmented industry and created a national brand – they just landed a significant amount of venture capital in the middle of the recession.
The Hundreds is an urban culture clothing company with an unexploded bomb as a logo. Fans can download wallpaper and get stickers for free. Customers are participating in the brand and love it because it’s not a mass-market brand. Their mission is to never be in Target or Wal-Mart, although they’ve had that opportunity. They want to keep distribution limited so that people who wear their clothing can feel like they’re part of elite, cool group.
TerraCycle was started by Tom Szaky who began making organic plant fertilizer out of worm poop back when he was a sophomore at Princeton. He packaged it in discarded soda bottles and spray tops and marketed it as the first product made totally out of garbage. Now, he partners with major consumer goods companies like Kraft to collect used packaging (like Capri Sun pouches) and “upcycle” them into entire new products (such as backpacks). The products are sold at Wal-Mart and Target and other large retailers.
5. Do any “older” companies share some of the same traits as Gen Y companies?
I don’t want to give the impression these “Upstart” traits are exclusive to GenY, but they are concentrated in this generation to a remarkable degree. I think that great companies of all generations share many of these characteristics, but that Upstarts are putting their own spin on these best practices in ways that give them a competitive edge and that others can definitely learn from. They really are changing the competitive landscape for all of us.
Donna Fenn Bio:
Donna Fenn is the author of Upstarts! How GenY Entrepreneurs are Rocking the World of Business and 8 Ways You can Profit From Their Success (McGraw-Hill, 2009). She is also a contributing editor at Inc. Magazine and the author of Alpha Dogs: How Your Small Business Can Become a Leader of the Pack (Collins 2005). A business journalist for more than 20 years, Fenn is also a featured expert on SBTV, a blogger on Inc.com, and an experienced keynote speaker. She was a correspondent for The Associated Press in Riyadh, Saudi Arabia from 1988 – 1992. She now lives in Pelham, NY with her husband, Guian Heintzen, and is the proud mom of two GenYers.
We interview Donna Fenn, author and Inc. magazine contributing editor, about her new book: Upstarts: How GenY Entrepreneurs are Rocking the World of Business and 8 Ways You Can Profit From Their Success, which chronicles the entrepreneurial adventures of a whole new young generation of innovative, game-changing CEOs.
1. What inspired you to write about young entrepreneurs?
I’ve been writing about entrepreneurship and small business trends for twenty-five years now as a writer for Inc. and other publications, so I’m very passionate about the topic. I wrote my first book in 2005, Alpha Dogs: How Your Small Business Can Become a Leader of the Pack. It focused on eight ordinary small businesses that have become extraordinarily successful because of the specific business strategies they used to beat the competition.
Two or three years ago I began to notice an increasing number of younger CEO’s. I saw them on lists like Inc.’s “30 Under 30 Coolest Entrepreneurs” and Business Week’s “Best Young Entrepreneurs” and it seemed like every other PR pitch I received was about a young CEO in his or her 20’s with a multi-million-dollar company. I wanted to know who these people were, why they were starting companies, what kinds of companies they were starting, and if they were really so different from the entrepreneurs I’d covered in the past. I wasn’t interested at all in people who seemed to get rich quickly – the “I made my first million before I was 22” crowd doesn’t appeal to me. I care about people who are building companies, employing people, coming up with innovative ideas, and changing the entrepreneurial landscape, not just fattening their wallets. What I found is that we truly are in the middle of a youth entrepreneurship revolution in our country and that these young company-builders really are different, and that they are, and will continue to be, a force to be reckoned with.
2. Why are there so many new young entrepreneurs?
I think there are a few reasons. Generation Y is the first generation to grow up with entrepreneurial role models such as Bill Gates, Steve Jobs and Anita Roddick – and these people enjoy rock star status. When I was their age, the word entrepreneur was not a positive noun; it meant you couldn’t get a job anywhere else, or your dad had a company and you were signing on to do sales. There’s been such a vast change in perception – these kids have no memory of “entrepreneur” being a negative word. The Kauffman Foundation has been talking about the huge increase in the number of entrepreneurship programs and endowed chairs at U.S. colleges and universities, and this is largely because there’s now a hunger for this kind of education. So they have the motivation; they have academic resources; they’re highly comfortable with the kinds of technologies that make starting a business faster and cheaper than it’s ever been; and they have a huge disincentive to join the corporate world. Between the corporate scandals of recent years, and now the recession, big companies don’t look terribly safe or attractive these days. I think that all adds up to “perfect storm” conditions for these young people to start their own businesses.
3. How is the way young entrepreneurs are running companies different than in the past?
The way they’re running companies is quite different than in the past. In Upstarts! I talk about the different characteristics of young entrepreneurs. They are:
- Extreme Collaborators: They build collaborative tribes to knock out the competition. In Gen Y, you don’t find a lot of “lone wolf” entrepreneurs. They’re highly likely to start companies with partners who complement their strengths; they draw in professors and parents, mentors, and sometimes even complete strangers to help them with the start-up phase, with raising money, and with developing products and business models. For instance, the founders of Grasshopper, which provides virtual phone systems, used resources at Babson College extensively to get started; and the founder of Restoration Cleaners started an industry peer group to learn about his industry.
- Technology Mavens: Technology is a great enabler for this generation. But Gen Y entrepreneurs are not just starting technology companies – they’re using technology as a tool to gain a competitive foothold and to operate their companies more efficiently and innovatively. For example, College Hunks Hauling Junk – you can’t get lower tech than that – uses highly sophisticated technology to manage its franchisees and to make the business operate like clockwork. And of course there are high tech wonders such as Sam Altman, who started Loopt when he was 21, and Aaron Patzer, who just sold Mint.com to Intuit for $170 million.
- Game Changers: Gen Y entrepreneurs are really disrupting the status quo. For example, Justin Brown at First Global Express (FGX) competes directly with UPS and Federal Express by offering an international courier service that’s cheaper and faster than what those industry giants can offer. He does it by partnering with commercial airlines like Virgin Atlantic and putting packages in the cargo holds of their flights. So he doesn’t have the cost of maintaining his own aircraft or managing a “hub and spoke” system. It’s a disruptive model but one that’s been highly successful.
- Market Insiders: GenY’ers are highly skilled at marketing to their own very large, affluent and somewhat quirky generation. A great example of that is a little start-up called Ignighter, an online dating site where members register and meet in groups rather than as individuals. GenY is very social and they tend to travel in groups; so a blind date feels uncomfortable and even unsafe to them. If Match.com or eHarmony had thought about how to reach this generation, they might have done the same thing and gained a competitive edge with a new, younger demographic. But like so many mature companies, it seems that they were not really focused on how to reach GenY.
- Brand Builders: GenY is a very brand conscious generation. Not just as consumers, but as company builders. There are very aware that to build a brand, you have to have a dialogue with customers, and that a company’s brand identity evolves along with that dialogue. This is the generation that has built Facebook, Yelp, YouTube, Digg, Threadless, Etsy — beloved brands that users love because they helped build them.
- Social Capitalists: I have never seen so many companies in my life that have a social mission from the start. In the past, the attitude was “ I’ll build my company, then think about giving back.” In this generation, it’s really not unusual to have a social mission from the outset. Happy Baby Food makes frozen organic baby food and for every unit they sell, the feed a child in Malawi through Project Peanut Butter. They started doing this right at the start-up stage, before they made a dime in profit. This isn’t at all unusual. I surveyed the 150 people I interviewed for the book and 70% of the respondents said that their company has a social mission.
- Workplace Renegades: Upstart entrepreneurs are really changing the world of work and creating the kinds of companies they would want to work at. They value creativity and flexibility and are not rigid in terms of employee management. They understand how to get the best out of people – particularly employees of their own generation — with frequent feedback and rewards. You hear about dogs at work, video games, free energy drinks, and foosball tables, and while all that can be true, it’s not the whole story. GenY employees place a huge emphasis on training, so you find a lot of GenY CEOs who integrate that into their companies, like the founder of Eved Services in Chicago, who started her own corporate university.
- Morph Masters: Upstarts are very agile. If they start a company and sense a shift in the market, they will change on a dime. Perhaps that’s because they tend to be an impatient generation and they like to see results quickly, or possibly because they’re so technologically astute and technology changes so quickly. The founder of College Prowler, for instance is now experimenting successfully with his third business model largely because the world of publishing college guide material has changed so vastly since he first started out. If he hadn’t been quick to morph, his company probably wouldn’t exist today.
SitterCity is a Chicago-based company that is an online matchup for babysitters and people who need them. Babysitters can upload their own security checks. Parents can rate sitters and vice versa. SitterCity is another company that entered a fragmented industry and created a national brand – they just landed a significant amount of venture capital in the middle of the recession.
The Hundreds is an urban culture clothing company with an unexploded bomb as a logo. Fans can download wallpaper and get stickers for free. Customers are participating in the brand and love it because it’s not a mass-market brand. Their mission is to never be in Target or Wal-Mart, although they’ve had that opportunity. They want to keep distribution limited so that people who wear their clothing can feel like they’re part of elite, cool group.
TerraCycle was started by Tom Szaky who began making organic plant fertilizer out of worm poop back when he was a sophomore at Princeton. He packaged it in discarded soda bottles and spray tops and marketed it as the first product made totally out of garbage. Now, he partners with major consumer goods companies like Kraft to collect used packaging (like Capri Sun pouches) and “upcycle” them into entire new products (such as backpacks). The products are sold at Wal-Mart and Target and other large retailers.
5. Do any “older” companies share some of the same traits as Gen Y companies?
I don’t want to give the impression these “Upstart” traits are exclusive to GenY, but they are concentrated in this generation to a remarkable degree. I think that great companies of all generations share many of these characteristics, but that Upstarts are putting their own spin on these best practices in ways that give them a competitive edge and that others can definitely learn from. They really are changing the competitive landscape for all of us.
Donna Fenn Bio:
Donna Fenn is the author of Upstarts! How GenY Entrepreneurs are Rocking the World of Business and 8 Ways You can Profit From Their Success (McGraw-Hill, 2009). She is also a contributing editor at Inc. Magazine and the author of Alpha Dogs: How Your Small Business Can Become a Leader of the Pack (Collins 2005). A business journalist for more than 20 years, Fenn is also a featured expert on SBTV, a blogger on Inc.com, and an experienced keynote speaker. She was a correspondent for The Associated Press in Riyadh, Saudi Arabia from 1988 – 1992. She now lives in Pelham, NY with her husband, Guian Heintzen, and is the proud mom of two GenYers.
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