“We’ve seen a lot of reinvention and a lot of digital transformation during the pandemic, which I think has really fueled what we see as a small-scale entrepreneurship boom,” said Travis Walter, vice president of retail at Microsoft Store.
According to data from WP Engine and the Center for Generational Kinetics, nearly two-thirds (62%) of Gen Z say they have or plan to start their own business.
According to government data, 4 million Americans filed applications to start their own business. The traditional notion of “hustle culture” has evolved over the years, and while the routine that Gen Z creates looks a little different than that of Millennials, that doesn’t mean they do any less work.
Instead, these employers wear multiple hats with flexible work schedules, work vacations, and more consideration for personal time. Nearly half of Gen Z, roughly 48%, have multiple secondary issues, compared to 34% of small business owners, according to Microsoft’s Wakefield
Research survey of 1,000 small business owners with fewer than 25 employees. Many of these businesses overlap with the rise of social media marketing.
According to Microsoft data, entrepreneurs who use TikTok for their business (48%) are almost twice as likely to have multiple side activities as those who don’t (27%).
“I think it’s important to let people work the way they have to work because then they can do their best work, like we see entrepreneurs and Gen Z,” Walter said.
Data from Microsoft shows 91% of Gen Z entrepreneurs work non-conventional hours; 81% say they work while on vacation, compared to 62% of business owners overall.
“What do I really want to do?” is a question that’s becoming more common, according to Philip Gaskin, vice president for entrepreneurship at the Ewing Marion Kauffman Foundation.”It’s part of that Gen Z energy,” he said.
Gen Z graduates are entering the workforce during the pandemic’s “rediscovery” period, Gaskin said, reassessing the personal and professional aspirations of many Americans across generations.
Some people who were bored with their work at the company or who felt outdated at some point in life were given time to stop and reevaluate. Many people who saw an opportunity during the pandemic jumped on it, often with new technological ideas.
The boom in start-ups is not entirely an optimistic scenario.In some cases, Kauffman’s analysis says, it’s a function of hardship, as people who have lost their jobs need new forms of income.
This change correlates with a growing rate of new entrepreneurs for several years, with 2020 showing the highest increase of all, according to data from the Kauffman Foundation.
It has a big impact on the job market. “Most of the jobs created in the last five years have been provided by companies younger than five years old,” Gaskin said.
GenZ are also more inclined to take the entrepreneurship route rather than getting involved in corporate America straight out of college because many see it as a way to accelerate their retirement.
About 61% of Gen Z small business owners believe they can retire faster than if they had gotten a job at the company, compared to 40% of all small business owners who think so, according to Microsoft’s survey.
For the broader small business community, accumulating retirement savings across investment vehicles has historically been a challenge, as much of their income has been reinvested directly into the business, raising financial security concerns among businesspeople.
Gen Z Entrepreneur Driven by Mission and Problem Solving
Ritwik Pavan, a Gen Z entrepreneur, has founded several companies. “I’ve been on the entrepreneurial path since high school and I’ve always wanted to build something because I’ve always had a problem-solving mindset,” Pavan said.
The big idea he landed on, having worked in various tech niches since college, including app development, was urban mobility. Launched in 2018 with co-founders Matthew Schaefer and Christian Burke, Vade helps reduce traffic congestion and carbon emissions by providing citizens with real-time parking data.
“I help all these people solve problems and come up with their ideas, but I’d like to find something that’s close to my heart, and for me that problem was parking,” Pavan said.
“The best thing about being an entrepreneur is that we’re very mission-driven and believe that what we’re going to do will change lives for the better and help cities become better places to live,” he said.
According to the Microsoft survey, about 88% of all small business owners who prioritize social good say it has helped their business grow, including 82% of Gen Z respondents.
Pavan is an example of how the frenzy of work is changinga Has. His favorite aspect of being a small business owner is the flexibility that comes with the job, but that doesn’t mean working fewer hours than a CEO like Jamie Dimon or Elon Musk demands.
“The truth is that my co-founders and I worked 18-hour days, sometimes even 20-hour days for the first three years,” Pavan said. But being able to make decisions for your own business is worth the long hours, even if it means being responsible for the bad ones.
According to Microsoft data, many Gen Z entrepreneurs, like Pavan, start this decision-making process before college, and many don’t see a degree as critical to their success: 78% of Gen Z entrepreneurs say a college education gives them this enables company to run.