The face of the modern entrepreneur is changing. Once strongly linked to the Gordon-Gekko-like strive for financial gain at all costs, innovations in business are moving the goal posts.
The millennial entrepreneur is tossing aside the double-breasted suit and is at once more modest and far grander than its predecessor; less driven by personal gain and more determined to change the world.
Guo Deying can relate. His venture, Springwoods, is introducing agri-tech practices to the Chinese market. He is also the founder of Coolpad, one of the largest smartphone companies in China. "It is not just about making money anymore," he says. "Entrepreneurship is all about discovering society's direction of development, identifying demands and aligning that with your personal interest."
The social role of entrepreneurship is a mainstay of the millennial. According to Mark Winterflood, the global head of collaboration at HSBC Private Banking, "our research shows that they are more driven to influence the world around them and exert a positive social influence than their parents' generation. The emerging attitudes amongst millennial entrepreneurs point to the dawning of a new age of entrepreneurship."
Both literally and figuratively, HSBC Private Banking invests in socially savvy entrepreneurs, locally and around the world. They've shared their expertise in their recently launched Essence of Enterprise 2017 Report. Based on the feedback of 4,000 business owners in 11 markets, they found a clear difference in attitudes between millennials and baby boomers.
Stuart Parkinson, Chief of Staff at HSBC Private Banking, notes the stark difference. "We are increasingly seeing millennial entrepreneurs setting up businesses that balance financial returns with sustainability goals. They are making a positive impact on their communities by putting social and environmental credentials at the heart of their business models."
The boomers, not so much. One in four twenty-something entrepreneurs want to have a positive impact on their communities, compared with 13 per cent of those in their fifties. And although only 42 per cent of the younger generation stated that they were particularly driven to work for themselves, compared with 57 per cent among the older cohort, millennials aren't afraid to create and take opportunities when they see them.
Richard Roaf, founder of Alter Eco, is among them. He set up his digital communications company, which provides social media content for NGOs, because "the established companies weren't innovating fast enough. I went to university at the time that YouTube was launching, so I could see the potential for speaking to people through it. The bigger companies couldn't. It made sense for me to start my own business."
He directly links his passion for driving social change with the generation he grew up in: "I was at university in the mid-2000s, when society was facing major environmental, economic and humanitarian challenges. The establishment our parents had promoted to us seemed to be falling apart. It was clear to me and my contemporaries that the system needed fixing, and that getting a job in the City wasn't going to be the answer."
As it happens, entrepreneurs like Roaf have a ready-made market to dive into. They inherently understand their millennial consumers because they are among them. Where many struggle to get a job, never mind get on the property ladder, millennials put their limited pocket money where their mouth is when it comes to issues that matter. Like ‘going green.' In a Nielsen global study, nearly three quarters of millennial respondents stated that they were willing to pay a premium for sustainable offerings.
We are increasingly seeing millennial entrepreneurs setting up businesses that balance financial returns with sustainability goals.”
Grace Farag, Senior Vice President of Public Development & Sustainability at Nielsen, comments on the impact of these findings: "Brands that establish a reputation for environmental stewardship among today's youngest consumers have an opportunity to not only grow market share, but build loyalty among the power-spending millennials of tomorrow, too."
This savvy lot can also turn support into investment in a way that their forerunners could not. Crowdfunding is a fairly recent phenomenon, but its power is expanding dramatically. A joint study by tonic and the European Crowdfunding Network found that start-ups with a quantifiable social benefit raised well over USD1 million in capital from nearly 1,000 investors. Social impact, it seems, is high on the global agenda.
That said, the majority of SMEs still prefer the tried and trusted route of approaching financial institutions for financial support. Money & Co commissioned a study revealing that only four per cent would consider crowd funding as an initial means to secure finance, with a whopping 72 per cent planning to approach a bank first. According to Parkinson, this is because “the objectives of entrepreneurs vary greatly and so do their financial needs.”
Winterflood says: "The change in attitudes amongst millennial entrepreneurs raises the question of whether their future businesses will have the same economic impact as those of older, more established, entrepreneurs. What is certain is that their focus on social purpose and sustainability is a significant trend which is likely to grow as millennials gain more and more economic power."
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