Why are there so many successful young entrepreneurs running businesses straight out of university or during university these days?
New Zealand is well known as a breeding ground for entrepreneurs, with 21% of businesses in this country employing between one and five staff. At this age, entrepreneurs only see opportunity, they do not fear risk. With little to lose and everything to gain, this attitude is encouraged, to a certain extent, by the fact that many have parents, relations or friends who have run their own businesses successfully for many years. There has also been great publicity in recent times about young entrepreneurs who have been extraordinarily successful with products like Trade Me, Facebook and a host of others.
Are some bright young things meant to be out there creating businesses rather than sitting in lectures themselves?
There are benefits, especially long-term, of attending university. University can be very theoretical, but often the real value, is in the people you meet. Contacts made at university can be extremely beneficial later on, be it in the networks that are established and the contacts that emanate from that. Growing companies often need extra skills and finance, and these networks can provide this. University is about structured learning and thinking; skills that entrepreneurs will need to call on once they are established. Being able to put theory into practice while studying also has significant learning advantages, so they are not mutually exclusive.
What advantages do young people have over their more seasoned business owners? What are their skills?
The ‘no fear’ mentality of many young entrepreneurs makes them decisive in terms of taking up opportunities and implementing them. They do not see the barriers that more seasoned business owners see, due to past experience. Set-up costs, especially for start-ups in the software, phone applications, new media sector are often extremely low compared with traditional business sectors, enabling young entrepreneurs to ’have a go’ without too much of an economic downside. More often than not, young entrepreneurs are targeting their own age group with their inventions. This group also has a similar ‘no fear’ approach to embracing new technology and processes. By and large they are ‘early adopters’ who can quickly propel a new application, device or software into a sharp climb.
Where do they need guidance?
Acting ‘without fear’ and being able to start a business with very little capital essentially means you need very little in the way of structures or established processes in the early stages. However, once there is reasonable growth, a lack of processes can quickly create problems. Entrepreneurs are often driven by opportunity. They seize the moment and opportunities can end up driving their business strategy instead of the other way round. The first opportunity is often not the best for the long term. These companies are generally owner centric and that person needs to learn to let go, to empower others and to establish a solid foundation, which is about the business, not the person who set it up. As a business grows, so do the complexities, much of which has to do with dealing with people. This is not necessarily the strength of an entrepreneur.
In which sectors do you particularly see young business owners being successful?
Success is being achieved across a range of industries, including entertainment, software, or those that are engineering based. Some common threads are creativity in development and delivery of the business offering and the integration of online technology and social media into the business model. Shannon Harris is an example of this, using YouTube not only as a marketing tool but also as a service delivery platform. Setup is inexpensive, there are few barriers and the distribution channels are simple but have a very wide open mass market.
Are there business experts who deal specifically with young business owners?
There are business experts available, the key is to look for advisers that have extensive networks and can help the business implement operational plans that will grow the business, not just manage compliance issues.