The next wave of business disruption is already here, and it’s more than an unusually high tide. A tsunami of young, aggressive business owners are entering your market, hell-bent on taking what’s yours. More challengingly, they will not be doing so out of spite, anger, or a lack of other opportunities like previous generations. They will be taking over simply because they are equipped to be better. Meet the Gen Z business owner.
Gen Z is generally considered as those individuals born during the late 1990s and early 2000s, making them roughly 12-27 years old. Those on the older end have grown up mostly during a time of prosperity but also experienced 9/11 and the great recession of 2008, emerging as adults into a world-shattering pandemic. Their generation has experienced (and embraced) societal and social change unseen since the 1960s while surrounded by technological growth unmatched in human history. Theirs is the generation most impacted by shifts in family dynamics and structure, newly acceptable collective standings and self-identity, and an influx of world-wide communication available 24/7 through digital connectivity.
A recent study by the Family Equality Council found that over 77% of Gen Zers believe the definition of family goes beyond blood relatives or legal arrangements, showing a stronger willingness to prioritize emotional and friendship bonds as well as lean into recognized social groups. Or what those of us who like to throw around business buzzwords call culture. While organically building a diverse and strong culture may be somewhat of a recent priority for businesses across North America, for Gen Z it’s all they have ever known.
Something else that makes Gen Z (referred to as the laziest generation) so unique is that they are the most entrepreneurial generation since those born in the 1910s and 20s (referred to as the greatest generation). A 2022 survey by Microsoft revealed that 62% of Gen Zers had started or intended to start their own business. Several follow-up surveys by others have found even higher results—up to 84%. But why worry, right? This new generation is entitled, refuses to break a sweat, and can’t find their way from the bedroom to the bathroom without watching a half-dozen TikTok videos, so what’s the big deal?!
If you are over the age of 35, you probably think I’m full of crap. I get it. Trust me, as a Gen Xer, I don’t enjoy writing this stuff. But in the end, there is truth in what I am telling you, and it’s my job to communicate what you need to hear. Sure, complaining about younger generations is a time-honored tradition going back at least as far as the fourth century B.C. That’s when Aristotle said of Greece’s young people at the time, “They think they know everything and are always quite sure about it.” But that doesn’t make it right. Was your parents’ generation right about you?
Understanding that there are going to be a lot of Gen Z entrepreneurs opening competitive businesses in your market over the next decade, let’s look at what they believe.
Results found in a recent study by Square show the following:
- 72% of Gen Z business owners believe that times are economically tougher for them than for previous generations. (They are; more on this later.)
- 39% of all Gen Z-owned companies employ five or more employees, believing that developing and utilizing a strong team is beneficial for growth. (And it is.)
- 80% of all Gen Z entrepreneurs started their businesses online or had a mobile component, allowing them to have lower start-up costs and additional flexibility. (Huh, right again!)
These Gen Z entrepreneurs sure are a pesky bunch! So, what do we think we know about them? Let’s explore some common generalizations of Gen Z and see how it applies to successful entrepreneurs.
Gen Z is Lazy!
Study after study continues to show that this generation is no more or less lazy than Millennials, Gen Xers, or Baby Boomers. But they view work differently, and it’s not a means to a corner office for them. It’s an opportunity to provide a lifestyle.
After growing up watching mom and dad come home tired and stressed and missing school plays and soccer practices, they learned early on the value found in time, not title. What matters to them is creating a flexible work-life balance. Financial wealth is great but not at the expense of mental health.
Even though it’s Common Core Math and takes longer, they can subtract the dates on tombstones and divide the limited years of happiness. They don’t want that. They want the freedom found in balance. You know who else wants that same healthy work-life balance? The thousands of small business owners I have spoken with over the last 13 years!
Gen Z entrepreneurs are setting up their companies from day one to be able to spend time elsewhere. Previous generations of owners expected this to happen eventually, then put into place systems and responsibilities to ensure it wouldn’t, and now are consumed by the company they created.
Gen Z Won’t Commit to a Job Long Enough to Make a Difference!
Well, the facts do sort of bear this out. According to ResumeLab, 83% of Gen Z workers consider themselves job hoppers. But the issue is in the why. Those of us with more wrinkles than acne on our faces believe that Gen Z has no loyalty, and sure, there are those who fit the accusation. But so do many in every generation.
Among the main reasons given as to why Gen Z workers are willing to job hop so quickly is because they want to take on new challenges and see themselves as a hero in different roles. They are curious and like being part of something exciting that pushes them. They seek the shiny new coin and want to see what they are capable of. Who else does this describe? Entrepreneurs!
The characteristics of a great entrepreneur—confidence, resiliency, risk-taking, self-awareness, flexibility—all describe your average Gen Zer. Just as Batman villain Bane quipped, “Oh, you think darkness is your ally. But you merely adopted the dark. I was born in it, molded by it,” it’s not too far off to see a 23-year-old start-up business owner thinking the same about someone twice their age who is launching a business, mimicking their behavior.
Another significant Gen Z reasoning for switching jobs is the desire to make more money, and they, more than any other generation, are quite sure about this and willing to tell you. But here again, the stats back up their reasoning.
ADP’s data from September 2023 shows that staying at a company in a high-growth industry may earn you an annual raise of 5.9%, while jumping to another opportunity may result in an increase of 9% or more.
Through low unemployment and high inflation, we created a need to want to get the next job and find the next dollar. I know plenty of older entrepreneurs who also chase jobs and dollars. As well-known podcaster Gary Vee states, “Gen Z is not lazy. Gen Z just knows the game. They don’t want to work for you, K-mart, for $12 bucks an hour … They’ve got options.” So, let’s deep dive into why they job hop for more money.
All They Care About Is Their Salary or Hourly Wage!
First, so what? I care about my salary, and so do you. The common belief is that Gen Zers want to be highly paid but haven’t done anything to earn it. I will agree with this, but on one condition.
Going back to the great Patrick Ewing quote, “We might make a lot of money, but we also spend a lot of money,” do you know why a 25-year-old wants more money his first day on the job than you got on yours? The average cost of a house in 1980 was $73,600. That same house today is $443,860. 25% of Gen Zers don’t believe they will ever be able to retire due to the high costs of living, and they may be right.
Extrapolating data from the last three generations, the value of the dollar is being decimated. The following numbers are on an inflation adjusted basis representing income and costs for the average 25-year-old.
Why do they care about salary? Because the cost of housing, transportation, insurance, medical, staple, and discretionary spending is at an all-time high in modern history. This isn’t the world they created. They were born into it.
They are Screen Obsessed!
According to a study by Stanford University, they absolutely are. On average, Gen Zers spend 6 hours and 5 minutes on their phone daily compared to Baby Boomers who spend just over half of that. It’s estimated that Gen Zers will shell out over 12 years of their life staring at their phone screen. And if all that time is consumed on YouTube, it’s wasted. The advantage for them is that Gen Zers are also far more likely to use the time on their phones to expand their social network, perform research, and explore new options and ideas. They have 98% of recorded human history in their pocket and so do you. The difference is they crave utilizing it and are better at finding what they need. Here is where they win—the usage of AI.
While frightening for those of us who grew up watching The Terminator, AI has the potential to be the biggest adaptation in world history as to how information is generated, stored, and utilized. The generative AI market alone is projected to hit $1.3 trillion by 2032. Adopting AI-driven automation has already demonstrated substantial gains in productivity by significantly reducing time on repetitive tasks, allowing additional focus on more complex strategic initiatives. To date, 59% of Gen Z trusts AI-generated information versus only 33% of Boomers. They are already using it and it’s making them smarter, faster, and more relevant.
All They Want to Do is Save the Planet!
I’m not sure which generation takes pride in desiring to be the one that destroys our planet, but let’s go there for a minute. A generation of talented young people who have been told their entire lives that they are lazy, ungrateful, and entitled are now angry and looking for ways to strike back. The 60s and 70s were decades of counterculture and Abbie Hoffman. The 80s and 90s sparked decadence, John Hughes movies, and indie bands. Then came the Occupy Movements in the 2000s.
Today’s emerging young men and women have found a host of ways to show independence from their parents, but they view their role as more active in being not just angry but leading change. They value improving social, environmental, and ethical concerns, and today’s Gen Z entrepreneur is using their business to advance community betterment. Their inspirational mission statements are to make those around them live in an improved world. That’s the culture they are recruiting employees and customers into. My question to you is, “What’s your mission?”
While we can all agree that the typical Gen Z workers in entry-level jobs are a challenge and tend not to stay long in their positions, they are not the ones who will ultimately pose the biggest potential peril to your business. Assuming you have built a strong culture and support system and treat employees well, you will eventually find talented individuals. It’s the Gen Z entrepreneur who either has or is about to launch a business that is the greatest threat; one unlike anything you have seen before.
By demanding a flexible work-life balance from day one, they leverage technology and AI to prioritize innovation. They are comfortable with digital tools and platforms to streamline processes and reach broader audiences. They are proactive in seeking support and mentorship from the outset. And here is the final nail in the proverbial coffin: In tomorrow’s business landscape, content is king.
Whether it’s on a website, a video or podcast, or on social media, Gen Zers have grown up finding their identity by creating and consuming content at a record pace. What’s coming in the next 10 years in the content world will be unimaginable in scope and creativity. While your customers continue to get older and eventually cycle out, they will be replaced by younger versions who do research and find answers on Reddit, TikTok, Instagram, and whatever the next big platform is. The people dominating the content on these sites already exist and have legions of followers. They are 12 to 27 years old, and they are about to open a business right next door.
*Writers note: No, I did not use ChatGPT or any other AI platform in writing this. If I did, it would have shortened the time spent creating from multiple hours to multiple minutes. It also would have come across as cold, without human emotion. AI isn’t ready yet to beat you, but it does level the playing field. The ability to build relationships, be honest, tell stories, and deliver empathy will always matter, and all of us, regardless of generation, are capable of excelling at that.
Published in C&R Magazine
