Donna Fenn is author of the book Upstarts! How GenY Entrepreneurs Are Rocking the World of Business and 8 Ways You Can Profit from Their Success. In this interview, she describes how young entrepreneurs are changing the game when it comes to everything from attracting and retaining employees to interacting with customers. She also offers her advice for what b-schools can do to help students build stronger companies earlier out of the gate.
What’s the connection between young entrepreneurs and outside-the-box people practices that help attract people to their mission and products/services?
I think this is a generation that is, first of all, hard wired to think of work and life as a 24/7 mashup. They like flexibility, they want to work with their friends and they want work to be fun and meaningful. In exchange, they’ll work until 10, 11, or 12 at night or on weekends if they have to, but they need to know what the payoff is.
I think part of that has to do with being young; many of them are without families and small children at this point. But it’s really also about managing your time differently in a world where you’re always connected. I also think in terms of work environments, this is a generation that craves teamwork and that that places a high premium on training and continuous learning. They also want to have a voice in the company, to be able to express their ideas and to see their best ideas implemented. So these are the kinds of companies that Gen Y creates because they’re the kind of company in which they want to work.
Do you see “Upstarts” as better equipped than entrepreneurs in other generations to bring the U.S. economy out of the recession? Why or why not?
I think they may be better equipped to do that than some companies run by older founders or CEOs because they’re probably more able to bootstrap. They’ll eat Ramen and sleep on the futon or live in mom and dad’s basement. And they’re typically not paying mortgages and college tuition. So they can cut back on expenses and they can work virtually, which they’re very comfortable with. They’re better positioned to really go lean than a lot of other companies might be.
You describe how Upstarts are innovative when it comes to customer service. What are some common themes here that business leaders who are older can learn from to improve their competitive advantage?
I think one of the things that Gen Y entrepreneurs are really great at is drawing customers into their brands. You can see that for example in companies like Threadless, which is a crowdsourced T-shirt design company that has at its core a social network. The customers are not just connecting with the company, they’re communicating with one another in their own community. So there’s this important element of community-building.
In your book you point to a Winning Workplaces Best Boss, Nick Thomley of Pinnacle Services, as an example of one of the themes you identified as common among Upstarts – that capitalism can go hand in hand with a social mission. How is Nick a model for this theme?
Pinnacle Services is now a $10 million company and they’ve been on the Inc. 500/5000 list for three years. They provide housing, employment, financial and in-home services to the elderly and people with developmental disabilities. So at their very core is a social mission. It’s the kind of company where when you hear what they do you think, “Oh, it’s a not-for-profit,” but Pinnacle is very much a for-profit operation and is probably serving the needs of that constituency more efficiently and effectively than a not-for-profit might.
Moreover, like many CEOs in his generation, Nick doesn’t view doing good and making money as conflicting interests. I think that’s a very interesting characteristic of Gen Y; you see it also in CEOs like Tom Szaky of TerraCycle, who is at the forefront of creating a worldwide upcycling industry.
You write that one of the primary incubators for Upstarts is grad and undergrad schools of business or entrepreneurship. What can these institutions do more of, or better, to ensure that tomorrow’s leaders are fully prepared for the challenges that await them in the marketplace – especially on the HR/workplace practices side?
What I’ve been hearing from professors of entrepreneurship is that they’re getting an increasing number of incoming freshmen with established businesses. And if they’re asked to sit in the classroom and take accounting and marketing, and not given the opportunity to apply what they learn directly to their companies, they’re going to drop out.
Also, I think where many of these entrepreneurs trip up when their companies grow is in the people management area. So I think some of what colleges and universities can do is to place a bit more emphasis on people skills and the management. Maybe a solution is to pair students with a management mentor – the CEO of a more mature entrepreneurial company that does that particularly well. They need to be exposed to the innovative practices that will help them manage and grow their companies.
I think colleges are doing an increasingly better job of training future entrepreneurs, and that you’ll see many more start entrepreneurship programs because the demand is going to increase. I’m finding that young people are starting businesses at younger and younger ages. Inc. magazine has a 13-year-old on their “30 Under 30” list this year. She started her company when she was 10, and her nine-year-old sister is the vice president!