When Academy-Award winning movie The Social Network was first released in 2010, reviewers were quick to call the flick a film that defined a generation. Facebook founder Mark Zuckerberg arguably represents the aspirations and attitudes of Generation Y—opportunistic, determined, entitled, bent on not simply achieving recognition but grasping for world domination. And it all starts in a dorm room.
But there’s another, humbler dorm room story, one that perhaps better represents 20- and 30-somethings, who’ve entered a brave new world of tarnished, rotting financial institutions, expansive technology, and a youth unemployment rate the highest it’s been since the government first began collecting such data in 1948.
This particular story begins in 2003, when Rice University undergraduate Shelby Joe, now founder and CEO of General Academic, along with a high school friend then attending Emory, decided to turn their tutoring hobby into a business.
Talking about the early days, when General Academic garnered only fifteen clients, Joe explains, “It was really just a hobby. And we reinvested all of the profits into playing around with new ideas that weren’t necessarily profitable.”
The young entrepreneurs initially stirred the ire of the Rice University administration, once university officials discovered Joe and his colleagues were illegally using a dorm landline and mailing address to conduct business. Afterwards, General Academic acquired a P.O. Box and a cell phone, and the fledgling tutoring service slowly but surely took off from there.
Now, General Academic boasts hundreds of clients, operates out of a headquartered, Houston office, and plans to expand further—in both different parts of the country and online. GA’s growth has been astounding, while the focus still remains local, personable, small.
I spoke with Joe over lunch at an upscale steakhouse in the heart of Houston’s downtown district, where gleaming corporate edifices house suit-and-tie professionals, where all but a few work for Big Oil, Big Law, and Big Banks. Joe was ushered into this very world upon graduation, when a major management-consulting firm hired him as a strategy consultant.
In 2008, at the height of the recession, Joe became yet another number in a slew of layoffs which left him unemployed, and for a time, directionless. After exploring various options, including working for the State Department, Joe returned to his pet project, General Academic, devoting his energy to the startup full-time in 2010.
I explained to Shelby the heated media debate about Generation Y’s penchant for starting small businesses. One camp contends that cultural factors have imbued Millenials with a specifically entrepreneurial spirit, while other critics argue that it’s not the zeitgeist. It’s, as they say, the economy, stupid. Gen Y, far from being harbingers of a new cultural attitude, are merely victims of economic circumstances, which have left them with no other option but to strike out on their own.
Joe, skeptical of any attempt to pigeonhole an entire generation, notes:
“It’s not one or the other; it’s both. I know that sounds like a copout, but it’s true. If you think about it, historically the most successful small businesses have been born in recession. Why? You have lower opportunity costs. If you’re unemployed, you have nothing to lose. At the same time, we [Millenials] have been raised with the understanding that we’re ‘special,’ that we can do anything.”
Dr. Charles Heying, a Portland State University professor, author of Brew to Bikes: Portland’s Artisan Economy, and founder of The Artisan Economy Initiative, has spent his academic career researching the emerging trend of small-scale businesses whose focus is local, autonomous, and handmade, which he collectively dubs the “artisan economy.”
Heying concedes Joe’s point, explaining that the story of young people’s entrepreneurial motivations is more complex than the mainstream media would have us believe.
“A certain part of this whole artisan explosion has a lot to do with the displacement of young people. But there’s a push and pull phenomenon. They’re being pulled into it because it has all kinds of things that young people are attracted to—independence, autonomy, creativity, the opportunity to do something that’s really interesting and engaging. When you think about it, that’s really attractive when you’re early in the workforce.”
The “push” factor, Heying argues, is that the traditional market economy, with all its excesses, has essentially forced young people out. Heying notes that despite the insecurity of engaging fully in the artisan economy, the other options may not be any better.
“Young people are looking at the insecurity of traditional employment structures, and they’re saying, well yeah, it’s supposed to be more secure, but my dad just got laid off and he’s fifty and he lost his pension and has nowhere to go,” Heying points out.
“Young people are looking at all this and thinking, well, I may not be any worse off [starting my own business].”
Dr. Heying, who came to academia relatively late at fifty, was before then an artisan jack-of-all-trades. From gardening to farmer’s markets to cabinet making to other forms of woodwork, Heying’s focus, whether academic or not, has always been on the handmade.
But how does Facebook, the monstrous start-up with dorm room beginnings, the “small business” to which many Millenials aspire to, fit into all of this? While Heying admits that the profit returns on tech startups have the potential to be much larger, distinguishing between tech and craft businesses is counterintuitive. So much so, in fact, that Heying included an entire chapter on tech startups in a book that largely examines artisans.
“Many of the aspects of the artisan economy fit very well into the tech startup,” Heying explains.
“While it doesn’t seem like this, in the tech world, it really is a kind of hands-on craft. There’s a lot of teamwork involved, a lot of creativity. So many of the aspects of craftwork —the flexible work life, small firms, the assemblage idea of just pulling together resources—are all there in tech.”
Central to Heying’s theory about the burgeoning artisan economy, one in which the tech startup is part and parcel, is ease of entry. At no other time in history has pulling together disparate resources and knowledge for specific projects been such an effortless undertaking.
“Think about Zuckerburg,” Heying points out. “He’s twenty-eight years old. How did he learn to run a twelve billion dollar business? He just pulled the resources together and assembled what he needed.”
Perhaps no one’s experiences align more closely with what Heying investigates than those of Jason Schultz, a former researcher for a biotech startup who now plans to open a craft brewery with close friends Adam Hanley and Justin Harris.
Schultz began his post-academic research career with Rincon Pharmaceuticals, a startup that employed technology he helped generate and refine which focused on human therapeutic uses of algae. Eventually, a company interested in using the technology for biofuels bought out Rincon, at which time Schultz left to work with Eli Lilly, a large pharmaceutical corporation.
Schultz has the uncommon experience of having worked for both a successful but now defunct startup and a large corporation. He believes that his experiences will serve him well in the craft beer industry.
“Rincon never had more than 10 or 12 employees total, and the main thing that brought that company down was lack of adherence to the mission statement,” Schultz explains.
“One of the biggest lessons I learned going forward in any other venture, particularly the brewery, is that effort needs to be concerted among all aspects of the business—in the case of Rincon, the scientists, the board, the founders, and business units. When that started to get fragmented, the company started getting fragmented.”
Starting a brewery, as with so many ideas, initially came to Schultz over conversations with friend and future business partner Adam Hanley, who also worked for Rincon. At this time, Hanley and Schultz developed a close friendship.
“[When Adam started], the company started to go downhill and I saw the writing on the wall. Often I’d ask Adam, ‘Want to go to a fancy beer bar in Pacific Beach down the road to talk about our sorrows as this company goes down the tubes?’”
Five and a half years later, what started as idle chatter has now gestated into the beginnings of a serious business plan. While both Hanley and Harris had previous experience making beer at home, Schultz made his first attempts a little over a year ago. After only a few sessions brewing beer, the friends realized that they had a knack for working together.
Above all, what carries Schultz forward is his passion for both science and beer.
“Beer allows me to do science, which is really what I love and what I’m good at. Starting a brewery is really a way to get into an industry that’s, well, exploding at the moment, but also a way I can do the science that I actually want to do.”
Echoing Dr. Heying’s research, which always returns to the concept of the artisan as creator, Schultz explains the close relationship between maker and product in the craft beer industry.
“It’s the embodiment and application of an idea,” Schultz notes. “Many craft brewers like to talk about how they’re very hands on in the process. There’s a lot of thought that goes into every ingredient. [Craft beer] is something that’s more artistic in a way. It’s something more than just trying to make a product that simply fits your efficiencies of cost and production.”
Though each of the young entrepreneurs I spoke with has pursued their dreams with tenacity and passion, all have shared the same fears and concerns.
The biggest misconception about starting your own business, according to Joe, is that it’s easy.
“No one ever really talks about how hard it is. And if they do, it’s usually glossed over,” says Joe.
“You really have to ask yourself if you’re qualified to start something. Do you have the innate ability to grow into multiple roles as your business grows? You’ll have to be your business’s strategist, marketing director, HR director, receptionist, and everything in the beginning.”
Bethany Perryman, a young professional who recently started 4snax.com, an online snack delivery service that serves the Houston area, also emphasizes the difficulties of starting your own venture.
Many budding entrepreneurs, argues Perryman, think that “they deserve success just because they offer something good. You’re in charge here; it’s not the world’s job to serve you.”
Money was another common fear. Shelby Joe, who’s had substantial experience raising money for not just General Academic, but future ventures as well, explains part of the process.
“You have to demonstrate to investors that their return on investment will be fast. You have to show them that your business will take up a huge percentage of the market, that your idea is truly paradigm-shifting, and that you know the market like the back of your hand. You have to take all this and put it into writing. You start with a thirty page business plan that outlines all the details, including all potential risks. Then you have to condense this into a ten slide presentation.”
Perryman, on the other hand, advises beginning entrepreneurs to start small, with ideas that don’t necessary need outside funding.
“Look for inspiration everywhere and start with low-risk ventures,” notes Perryman, whose startup costs ran only a few hundred dollars. “You learn valuable lessons about yourself and the marketplace doing this, and can usually maintain another job for guaranteed income.”
Schultz, whose brewery venture necessitates funding from private investors, says without doubt that money will be the hardest obstacle to overcome.
“How many people can you convince? And can you convince enough people to give you the money you need? It’s no short amount of money that we’ll have to raise, and that’s definitely going to be the biggest challenge.”
Despite the obstacles, young entrepreneurs feel empowered by both the flexibility and creativity that running a small business affords, along with the knowledge that, for the first time in the sordid history of our industrial economy, striking out on your own successfully is actually possible.
“There’s definitely an attitude that we’ve started to develop, both in this country and around the world, that favors the individual entrepreneur,” notes Schultz. “[During the dot-com boom] so many people were able to enable a small idea with a just a few people. It’s part of human nature to craft or create your own thing and to see that idea realized. The current climate of our civilization is one that promotes our ability to do just that.”
And the idea that doing your own thing is entirely possible is not just coming from entrepreneurs, who must be optimistic by necessity. Through his research, Dr. Heying believes that the artisan economy is more than merely a passing fad.
“[The artisan economy] is a trend, sure, but I think it’s going to be a persistent trend,” argues Heying. “I think it’s an indicator species of something that’s changing in how people work and live. It will come sooner to some places than others.”
Whether we call it the “artisan economy”, or, as Fast Company contributor Bruce Nussbaum dubs it, “indie capitalism”, something big–but at the same time, small–is afoot. Maybe, just maybe, the Millenial narrative can be recast into something else, something more than just Facebook. It’s the Horatio Alger story of our time, but “rags-to-riches” is not its ultimate, forgone conclusion. Rather, our ambitions are local and connected and homegrown; our ambitions are smaller. And that’s not a bad thing.