As spring ushers in graduation season, a significant number of college students are bypassing the traditional job market to carve out their own entrepreneurial paths. According to a recent survey by American Express, a notable trend has emerged where 20% of Gen Z and Millennials have transitioned directly from academia to entrepreneurship. This is a stark contrast to previous generations, where only 3% of Gen X and Baby Boomers started businesses straight out of school. Most of the latter group gained experience by working traditional jobs before venturing into entrepreneurship.
The survey, which focused on owners of businesses with 500 or fewer employees, reflects a shifting paradigm towards starting businesses at a younger age. Conducted by Morning Consult from March 15 to March 28, the study involved 1,127 small-business financial decision-makers.
### Here’s Why Recent Graduates Are Leaning Towards Entrepreneurship:
- **Ease of Entry**: Young entrepreneurs like Jake Danehy, a 2016 Colgate University alumnus, exemplify the increasing tendency to start businesses at a younger age due to fewer personal responsibilities. Danehy turned down a job offer from the popular athleisure brand Outdoor Voices to focus on his apparel startup, Fair Harbor, which he founded with his sister Caroline when he was a college junior and she was a high school senior. This early start is feasible partly because younger individuals often have fewer family obligations and financial burdens, allowing more freedom to experiment and take risks.
This trend highlights a generational shift in career preferences and the broadening appeal of entrepreneurship to younger individuals, empowered by their fresh perspectives and innovative ideas right out of college.
"There is no better time to start a business, in my opinion, than when you're in college or just out of college. You have no responsibilities," says Danehy, whose New York-based company recycles plastic bottles into beachwear. "The opportunity cost of starting it right out of school is so much lower than when you're in your 30s or 40s."
Instead of signing up for a regular paycheck, Danehy moved back into his parent's house in Larchmont, New York, working out of the basement and packing orders in the garage. "If you are really serious about this, you have to do it full-time," says Danehy, now 30. "If it becomes a side project, then no one's going to care about it." He adds, "Entrepreneurship, it's not something you can dip your toes in."
By the time Caroline, now 27, graduated college in 2019, working on Fair Harbor full time was, "a no-brainer," she says. Within two years, the sibling duo landed on the Inc. 5000.
And even when it is hard -- that is if you have a job offer already lined up -- betting on a business idea can still make sense. You're still young enough to recalibrate if your startup efforts sink. In the fall of 2016, Nathan Kondamuri started his senior year at Stanford University with a job offer from consultant Bain & Company. His friend and co-founder Sophia Edelstein earned her own offer from consulting firm McKinsey & Company, plus admission to medical school. Instead, the two classmates turned their idea for eyeglasses with interchangeable frames into a real company and launched the New York City-based Pair Eyewear.
In hindsight, that may look like a safe choice. Pair landed on the 2024 Inc. Regionals after notching 1,305 percent revenue growth over the past two years and raising $140 million to date. But as a college kid, Kondamuri, 29, says it was terrifying to say no to a full-time job. After graduation, the co-founders deferred their offers for a year before rejecting them for good, so they had a backstop if they needed it.
In the end, "we both decided -- even though we weren't really that far along -- to just take a leap of faith," says Kondamuri, who also serves as co-CEO. "As a founder, you invariably are going to have to learn on the job, regardless of whether you've been in the industry for some years or not. Time was on our side to be able to do that while we were young, while we obviously didn't have very much life responsibility."
The survey also found that technology and social media were some of the most important factors driving young people to start businesses. Millennial and Gen-Z founders were most likely to learn about entrepreneurship online or on social media, while Gen-X and Baby Boomers were most likely to have been introduced to entrepreneurship through a business owner they knew personally.
"People told us that we were too young to start a business and we didn't have enough experience," says Fair Harbor's Caroline Danehy, who landed on Inc.'s Female Founders list last year. "Technologies like Shopify, social media, it does give the individual person more power to start if they want to, rather than our parents' generation where it was so different to start a business."
She adds, "The world is at your fingertips right now."
For younger founders, digital tools also played a much larger role in day-to-day operations. Millennial and Gen-Z entrepreneurs are much more reliant on technology, according to the survey, with one-third of respondents citing it as a solution that helped them run their business, compared with 18 percent of Gen-X and Baby Boomers.
For Pair, social media provided an engine to spearhead early customer acquisition and growth. Videos of customers swapping their frames attracted millions of likes and views on TikTok.
"You could build a website and start selling products and running payments through a platform like Shopify very quickly. Then the social-media side allowed us to quickly gain access to consumers," says Kondamuri. "That also gives confidence to young people. If you see other young founders changing the world and various industries... you start to believe, 'Why can't we do that?' "