Why are More Millennials Working For Startups Instead of Creating their Own?

A recent MIT study debunks the young founder myth and shows the average age of founders in the fastest growing new ventures is actually 45. Find out why and what it means.

Why are more millennials flocking to jobs at startups instead of creating their own companies?

Despite the popular image of the young founder tinkering away at their startup idea in their garage, those born between 1981 and 1996 have been labeled the “least entrepreneurial generation in recent history”[*].

And a new MIT study shows the mean founder age for the fastest growing new ventures is actually closer to middle-aged at 45[*].

So why is this and what does this mean?

Why Millennials Would Rather Work for a Startup Instead of Create One

Most millennials possess many of the traits needed to work at a startup.

But what they lack is the capital and experience to start their own.

Millennials Lack Investment Money

The Great Recession occurred just as many millennials were leaving college and entering the job world.

With fewer positions, and even fewer raises, many couldn’t afford to save money while keeping their head above the rising costs of living.

And since the number of students borrowing money for loans jumped 89% between 2004 and 2014, millennials graduated with mounds of student debt to pay off, and didn’t earn enough money in their job to do so[*].

In a world of hard-to-impress angel investors and venture capitalists, finding the funding necessary to support a startup from idea to finished product isn’t as easy as it used to be.

What’s more likely is the one with the vision has to pour out their life’s savings into their idea to attract funding, and millennials simply don’t have the cash.

What’s even worse is millennials don’t have a fallback plan of borrowing money; their credit scores may be suffering from their student debt-to-income ratio and their friends and family, equally affected by the downturned economy, don’t have any money to lend them either.

There is a silver lining here: 45% of millennials save at least 10% of their income each month, which is twice as much as working baby boomers stash[*].

What are they saving this money for?

A surprising 29% of millennials say they’re using their savings to help them fund the work they want to do in the future[*].

Competition for funding and attention is fierce since there are more startups than ever to throw money behind. The ones gaining all the attention now serve niche markets many young millennials don’t have experience with.

Only Niche Startup Ideas Make Waves

With so many heavyweights like Google, Apple, and Amazon dominating the tech scene, new startups need to find underserved niches and problems in overlooked industries if they want to stand out.

But it’s almost impossible to create a specific niche product without knowing the problems facing that industry firsthand.

As millennials gain more work experience post-recession, they’ll be better able to identify issues and work on ways to improve them in the future.

They should also have a bit of money saved from their current job to fund their idea.

Since surveys show over half of millennials want to start their own business, there’s no better place to learn how without risk than a startup[*].

To Experience Startup Life Without the Risk

Working at a startup, and learning the ins and outs of what it takes to get a business off the ground, is the apprenticeship many young, budding entrepreneurs need but never get.

Since startups have such limited resources, including money and manpower, everyone has to wear multiple hats and juggle several different responsibilities simultaneously.

This is in stark contrast to the layers of management and designated job roles in an entry-level corporate job.

New employees work alongside founders at a startup, and millennials get to learn a diverse set of skills and what it means to work on a team.

This first-person view of what it takes to birth a company means millennials will know exactly what to do (and what to avoid) when they eventually go off to start their own.

Startup culture is another reason millennials favor this type of work over the steady paycheck and job duties of a corporate job.

Millennials Want to Meaningfully Contribute

Company culture is one of the best ways to know whether a startup is a good fit for you.

Millennials more than any other generation want to believe the product of their workday contributes to something greater than corporate wealth and extravagant bonuses for executives.

It’s not enough to have an exciting career; millennials want to make a difference in the world.

They value experiences over salary and know there’s more to life than commuting, sitting in a cubicle, and climbing the proverbial ladder.

The freedom to use their diverse skills, the ability to be their authentic selves, and a motivating, stimulating work culture in which they can grow are what attracts millennials to startups.

And now it’s never been easier to find a startup to work for.

It’s Easier to Find a Job at a Startup Now

A few years ago you could only find a job at a startup if you moved to hubs like Silicon Valley, Austin, or New York.

But just as the global digital workspace is set to take over the traditional office environment in the next decade, companies and startups are learning the value of hiring top talent remotely.

So in addition to more startups in cities like London, Helsinki, Berlin, and Stockholm, you may be able to work remotely for one too.

Sites like Unicorn Hunt make it easy to find and apply for jobs at a startup so you don’t waste forever searching job boards rife with boring corporate positions.

Before applying to work at a startup, make sure you know how to screen a startup’s viability and whether working there will be a good fit for your goals.

If you’re one of the many millennials hoping to work at a startup before you’re ready to found your own, the experience will teach you everything you need to know for it to be a future success.