- It may seem like we’re in a golden age of entrepreneurship, but in reality, entrepreneurship is at an all-time low.
- Strapped for cash and aware of a high-failure risk, millennials aren’t starting businesses.
- Grow Wire is a new media network dedicated to fueling entrepreneurs and small business owners.
Everyone’s an entrepreneur today. Right?
It’s never been cooler to tell people that you’re the cofounder of startup or that you just joined an entrepreneurial outfit. Right?
That’s what we thought too. Then we discovered the ugly truth.
In the U.S., entrepreneurship is at an all-time low. And entrepreneurship is far from thriving globally.
We didn’t believe it either. But it’s true.
In the U.S., the number of startup debuts per year has dropped significantly.
It’s also true that there has never been a better time to be a smaller, growth-focused business.
As our friend and best-selling author Kevin Maney argues in his brilliant new book "Unscaled," the power and cost of modern technology makes size and scale a liability.
Today, smaller entities can use the same business practices and tools -- particularly artificial intelligence software -- as the world’s most successful enterprises.
Netflix runs on Amazon’s cloud services platform. And so can Bill and Ted’s Excellent New Company.
The playing field between big and small has been leveled by technology.
The headquarters of GumGum, an image-recognition startup that runs on Amazon software.
You’d expect this to cause a boom in entrepreneurial business. Right?
Instead, we have a crisis.
And in our opinion, not enough people are talking about it. Never mind doing anything about it.
So Grow Wire is. And we hope you’ll join us.
We are committed to sparking real dialogue about how to turbo-charge the growth of individual entrepreneurs and entrepreneurship as a concept.
We want to empower people to start and grow businesses.
In that sense, Grow Wire is a lot more than a media network. Grow Wire is a call to arms.
We want nothing less than to help spark a global wave of entrepreneurial success by celebrating fast-growing businesses that have cooked up great recipes for success and commiserating with those who have stumbled along the way, then recovered and raced ahead of the pack.
Entrepreneurship is in a sorry state.
According to a recent New York Times article, the rate of new company creation in the U.S. is half what it was 40 years ago.
The Times goes on to pull a metaphorical fire alarm:
“Most notably, the economy’s ability to generate and support new businesses -- agents of creative destruction that bring new products and methods into the marketplace -- appears to be faltering across the world… it is slowing in many industrialized countries.”
In the U.S., the average number of IPOs per year has decreased significantly from the 90’s.
Even though small businesses are still considered the lifeblood of the U.S. economy -- generating the bulk of the new jobs created annually -- U.S. government data suggests American entrepreneurs have been steadily losing ground for decades.
As a matter of fact, things have gotten so bad that The Wall Street Journal in March 2016 declared "A Crisis In American Entrepreneurship.”
Where are the entrepreneurs?
We could spout plenty of excuses, reasons, theories, data. All of them valid, none of them entirely the root cause.
Here are some of the more obvious reasons for entrepreneurs’ recent disappearance.
1. The demographics
The millennial generation (roughly defined as those born from 1982 to 2000) seems less inclined to work for themselves than their elders who are still in the workforce.
In 2014, fewer than 2 percent of under-30-somethings identified as self-employed.
And even though they like the idea of being “entrepreneurial,” they’re not actually starting new companies, per a 2017 Entrepreneur writeup of research data.
Perhaps they’re shackled by the heavy weight of student loans, as the U.S. Small Business Administration suggests. Maybe they just have a smaller appetite for risk than their parents.
Whatever the case, it’s not a rosy long-term trend indicator.
“Low entrepreneurship among millennials implies fewer new businesses and may therefore have negative implications for economic growth,” the SBA noted in a 2016 analysis.
2. The financials
Outside of Silicon Valley, it’s criminally difficult for entrepreneurs and small businesses to rise without funding. The most common model is “bootstrapping” with personal or family savings.
Spanx founder Sarah Blakely (L) famously bootstrapped her brand at age 27 with personal savings.
Only 4.5 percent of entrepreneurs use loans from financial institutions to grow their ideas. That’s at least in part because they’re so darn hard to get.
This makes Christopher want 20 seconds alone in a room with a few bank CEOs.
And we don’t want to get political, but the salt in this wound is that in 2008, American taxpayers invested $700 billion in bailing out the exact banks who now won’t lend to the American entrepreneur.
The people who broke the economy now won’t fund the people who build the economy.
3. The rate of business failures
It’s tough to keep a company afloat, let alone profitable, over the long term.
Government statistics show that roughly 20 percent of all new companies don’t make it through their first year. Half make it through five years, and only one-third live to celebrate their 10th anniversary.
That’s a pretty high mortality rate.
Grow Wire is a call to arms.
We believe it’s time for people who care about the growth of our economy to shine a light on the state of entrepreneurship.
We believe it’s time to get deep into what it takes to design a legendary business and a legendary life.
We believe that many entrepreneur-porn websites care more about clickbait headlines and asinine “success secret” crapola than actual substantive content and conversation.
Now is the time for serious people to come together to spark a new entrepreneurial fire.
Entrepreneurs are the people who slay the cynicism of our time with their dreams. Entrepreneurs are the people who drive real innovation and job growth.
Entrepreneurship is the ticket to a better life. For some it’s a way up in life. For others, like us, entrepreneurship is a way out.
Regardless of the motivation, when one entrepreneur rises, she improves her standing and she takes her employees and community with her.
That’s why we’re excited to be part of Grow Wire, and we hope you are too.
Christopher Lochhead hosts the popular "Legends & Losers" podcast and is coauthor of the upcoming book "Niche Down: How to become legendary by being different."
Heather Clancy is an award-winning journalist specializing in coverage of transformative technology and innovation. She’s the editorial director for GreenBiz.com, and her work has appeared in Entrepreneur, Fortune, The International Herald Tribune and The New York Times. Heather is coauthor of the upcoming book "Niche Down: How to become legendary by being different."