On a balmy morning during Beaufort’s annual holiday parade, Christina Baker and her husband, Richie Carroll, sit by the front window of the Beaufort Linen Company — their luxury home goods shop on the town’s picturesque waterfront — to reflect on a year of radical change.
“We opened our doors for business exactly one year ago today,” explains Christina, 29, a 2009 N.C. State University business school graduate who bailed out of a promising career as a private wealth management consultant to chase her dream of owning and running a retail business with her husband.
“We planned out every detail as well as we could,” adds Richie, 36, who left the same Raleigh investment firm months earlier than his wife to oversee the transformation of a prime spot once occupied by the town’s lone drugstore. “But it was still kind of scary to think we were leaping out there on faith, not knowing what we would find.”
“I think my parents were a little anxious that we were abandoning good corporate careers we’d worked hard to get,” Christina says. “But they understood why we had to do this. We had faith in God, each other and instincts. We were ready. The timing just felt right.”
Christina and Richie could be poster children for a generational change sweeping over the landscape of American culture and business, the maturing of a dynamic millennial generation that social demographers and economic forecasters agree will reshape how Americans do everything from raise a baby to start a business. As of last June, according to the U.S. Census Bureau, the nation’s millennials topped 83 million, representing a quarter of the country’s population, or roughly 8 million more than their baby-boomer parents, formerly the largest and most influential generation. The precise definition of a millennial varies: The census defines millennials as those born between 1982 and 2000, though other sources peg their birthdates anywhere from the late 1970s to the mid-2000s.
Depending on whom you talk with about this shift, the coming of millennials either holds the promise of transforming the nation into an economic powerhouse fueled by new technologies and a more integrated way of living — the “Next Great Generation,” as the authors who coined the word “millennial” back in 1987 put it — or represents a group of bright young people with big dreams, rich experiences and high ideals — yet no practical clue how to make their aspirations happen.
“Whatever you think of millennials, whichever view you embrace, they are an extraordinary group of people, so different from anything that’s preceded them,” says Wake Forest University Provost Rogan Kersh, who has studied the rise of millennials in American culture for nearly a decade.
“The millennial view of life and work is already radically changing the way we all will work in the future,” Kersh says. “They have big hearts, broad talents and much greater exposure to experiences and ideas than any group before them. The big unresolved question remains what they do with these assets — and whether this turns out to be a good or not-so-good thing for our economic future.”
Kersh, 51, adds with a chuckle: “If I could offer just four words that describe the millennial way, it would be this: They are not us.”
Make no mistake, they are coming in unprecedented numbers. More than 10,000 millennials turn 21 every day, and 40 million are already in the workplace — probably sitting right next to you. They are the first generation to have access to the Internet during their formative years and grow up shaped by technology. Though they have yet to reach the traditional peak age of entrepreneurship (40s and 50s), more than half report they plan to start a business within the next five years, and 35% already working have started their own businesses on the side. More than a quarter are self-employed.
Like Christina and Richie, Alex Hubenthal, 24, embodies the rising “Innovation Generation,” as one national business journal recently called millennials. After graduating from business school at the University of Central Florida two years ago, Alex and two fellow grads formed Finology Analytics Inc., a data analysis firm targeting the hospitality industry. Alex, the company’s chief financial officer, moved home to North Carolina to kick their business plan into gear.
Perched at the counter at the Dean & Deluca coffee shop in downtown Charlotte with his tablet and double espresso at his elbow, Alex is fresh from a weekly meetup seminar titled “Starting and Financing a Venture in N.C.” at the popular Garage at Packard Place, just around the corner on South Church Street.
The startup incubator, one of at least a dozen similar enterprises that have taken root in mostly urban settings across the state over the last five years, is housed in a former showroom that once sold Packard cars. About 3,000 people have been involved in networking and meetup groups that started in 2011. With its edgy, youthful vibe and five floors of wood-and-glass shared meeting and workspaces kitted out with everything a budding entrepreneur could possibly need, from Wi-Fi to bottled water, Packard Place is essentially in the business of fueling entrepreneurial dreams.
Finology’s goal is to bring advanced analy-tics to local restaurants and small businesses that can’t afford the expensive data mining done by major corporations. The company’s software, for instance, could tell a local restaurant which day of the week customers tend to buy apple pie with their coffee, or how they prefer their coffee — thereby selling more of each.
While the Packard Place seminar didn’t give Alex any revolutionary new ideas, he sees value in mingling with other millennial entrepreneurs. “The people who attend these events are pretty savvy, I find — even the older ones you see showing up more at meetups. Being an entrepreneur these days is a mindset, and sharing war stories is a great way to learn what’s really happening out there, to pick up ideas and share contacts.”
The Internet has made it easier to start a business than ever, he says. “That’s the good news. Anyone can get a domain name and start a business. And millions are doing it every day. That’s one advantage millennials may have over others. We were born on the Web and are completely comfortable navigating it. The challenging part, however, is that we’re also competing for attention and business with everyone else in the world — not just someone across town who has a similar idea.”
Finology seems to be making headway just months out of the starting gate. Alex’s goal for 2016 is to add several employees and find a permanent workspace. Right now, his founding partners live in Florida and Alexandria, Va. They stay in contact via cellphones and laptops, personal mobility being another key marker of the millennial way of working.
In Alex’s case, there’s also another factor that commonly shapes millennial motivations. During the Great Recession, Alex’s father lost his IT job in Burlington and had to uproot the family for new work in Florida and later Georgia. “My parents even had to live apart working different jobs for a while,” he explains. “It’s been tough on them, but they’ve somehow managed to send my brothers on to college and have supported me at every turn. … I want to be a success so someday I can take care of them.”
Halfway across the state, a trio of equally promising millennial entrepreneurs and their mentor are diving into Friday afternoon pizza at Launch Chapel Hill on West Rosemary Street. Last year, the busy Chapel Hill workspace was recognized by Stockholm-based UBI Global as one of the top five university-based business accelerator programs in North America.
Ted Zoller, director of the Center for Entrepreneurial Studies at UNC Chapel Hill’s Kenan-Flagler Business School, is one of the key architects of Launch Chapel Hill. The group gathered around the table are some of his most promising protégés, products of the project’s innovative mentorship programs, each in their own way models of the emerging millennial mindset.
Morris Gelblum owns Sweeps LLC, which employs hundreds of college students to perform affordable ordinary services from moving furniture to walking someone’s dog. He started the company as a cleaning service 11 years ago with his mom, Mary Lou, while still in high school in Raleigh.
Charlotte Guice, 27, and two siblings run a lifestyle clothing company, called Olly Oxen, started in 2009 during her last semester at N.C. State University’s College of Design. This spring, she will earn her MBA from Kenan-Flagler.
Austin Helms, 22, is founder and chief executive “buddy” of Waterless Buddys LLC, an auto detailing company that uses eco-friendly chemicals to clean cars. A native of Valdese in Burke County, he’ll graduate this spring from UNC Chapel Hill with a bachelor’s degree in business.
According to Zoller, this trio typifies the 70 or so creative, high-energy student entrepreneurs who’ve come through the incubator’s portals since its inception in 2013, resulting in at least 20 successful ventures.
“Every millennial has a slightly different take on business, but they share core values that are potentially transformative to our society. Entrepreneurship is being demo-cratized as we speak. The Web has blown up corporate America. These kids don’t know what they don’t know and are eager to try anything that speaks to their values and sparks their imagination.”
Millennials are products of some of America’s most dysfunctional years, turned off by Wall Street greed and the gridlock of conventional politics — institutions that no longer seem to function as intended — and colleges that sunk them up to their eyeballs in student debt.
“As a group, they don’t believe in big government or big business because they’ve seen everything unravel before their eyes. They are the first generation that’s actually been told that they aren’t going to do better than their parents did. But they want to be part of a better world, and they’re perfectly happy to go out and create it.”
The good news, Zoller says, is that North Carolina is already one of the country’s leading hubs of entrepreneurial energy and fertile ground for sustainable business growth and innovation. He credits startup incubators including Durham’s American Underground and Google Tech Hub, HQ Raleigh, Charlotte’s Packard Place and Winston-Salem’s Innovation Quarter with creating a “rich climate for innovation and cooperation that is affecting every corner of this state.”
Ten other U.S. regions also stake legitimate claims as entrepreneurial hotspots, “but the reason we enjoy a real edge is our legacy of making authentic things,” Zoller adds, citing furniture, textiles, computers and other products. Combined with a good quality of life and a highly educated workforce that has adapted to major change, “you have the basis for real success across the business world here.”
Zoller points to Charlotte’s rise as a national center of finance and the Triad’s transformation into a hub for science, advanced medicine and the arts. “Down in Wilmington, I have a former student who has just opened the city’s first incubator. He just opened the door, and the young entrepreneurs are pouring in.”
The key to long-range success, he cautions, will be helping millennial entrepreneurs not just launch their business dreams — but get them into sustainable orbit and go on to larger business platforms.
“The business learning cycle is now so quick. But that’s a slippery slope. Startups are just that, a beginning. Millennials are great at beginning things. They brim with ideas. But what happens when, for one reason or another, they fail — as most probably will. The real challenge is what will they have learned they can carry forward into a new venture, wiser and better equipped for success, one that has real staying power and will create transformative entrepreneurs.”
With this goal in mind, Zoller and Kenan-Flagler in 2015 launched the Adams Apprenticeship, an outgrowth of Launch Chapel Hill aimed at matching 31 high-potential UNC student entrepreneurs with successful alumni across a spectrum of businesses. (The program is a partnership with the John and Patricia Adams Foundation, led by the founder of the Natural Resources Defense Council.) “The idea is for these talented young people to learn real-world lessons from top alumni executives who’ve built great companies and made
a genuine impact in the business world, building a lasting relationship.”
Building those mentoring relationships will be key to providing stability to a generation that changes jobs at a record pace, says Jim Johnson, a Kenan-Flagler professor who studies demographics and economic development. He worries whether the “Innovation Generation” will have the depth and staying power to make it through radical ups and downs of a world that’s changing faster than ever.
In December, he cautioned UNC Chapel Hill’s winter graduates that “you will have to demonstrate an ability to deal with ambiguity, a willingness to take incalculable risks and the capability to be tenacious and decisive in responding to unanticipated crises and opportunities.”
Johnson worries that the cultural traits that identify millennials as a big-hearted, socially engaged, independent-minded generation that prefers to share the ride could have unforeseen complications down the road if they don’t learn to focus on the task.
He points to record student debt and chronic underemployment that are driving many millennials home to live with mom and dad, delaying their entry into the broader economy. The affection for the “sharing economy,” symbolized by the success of Uber, Lyft, Airbnb and other icons of millennial commerce, means the largest generation in American history won’t be buying cars, financing houses or purchasing washing machines anytime soon. Already, construction of apartment units outpaces new home construction in America by a rate of nearly three-to-one.
In a dynamic generation that’s at least 45% nonwhite, Johnson also worries that the noticeable absence of minority representation — apparent at almost any North Carolina entrepreneurial meetup you duck into — means a large segment of the future population may be left behind.
“It’s good to want to shake up business and change the world,” Johnson says. “But unless we find a way to be much more inclusive than we’ve ever been in terms of integrating business opportunities, we’ll wind up with the same old problems and even more challenged to find the right solutions.”
None of these larger worries seem to concern the pizza eaters at Launch Chapel Hill, perhaps because they see a world being remade by dint of personal imagination and ingenuity. Ideas are typically funded by interested friends and family instead of banks, which are not particularly trusted by millennials, studies show.
Charlotte Guice models her company, Olly Oxen, on Ralph Lauren’s lifestyle company. The name is taken from fond memories of games played with her brothers growing up in Charlotte. Her strategy is based on a strong Web presence and traditional hand-sewing. “We’re very quality-focused,” she adds. “And I think that’s what will set us apart.”
Austin Helms, who last year started his car-detailing business with two college friends, has a simple philosophy: “Make money. Make a difference. Follow my passion,” he says. “I don’t think I’ll be washing cars for the rest of my life … but college has been a true launch pad for me, providing a tool kit for whatever’s ahead. Being an entrepreneur is either in you or it isn’t. You don’t meet many entrepreneurs who say they want to work in corporate America.”
Morris Gelblum, the geezer of the trio at age 28, has seen his cleaning business expand into a network of more than 900 college students across the state. Services now include everything from yard work to tutoring. Workers are paid $15 an hour.
The UNC Chapel Hill graduate worries about growing too fast and large. “We’ve had inquiries from people who’d like us to take this bigger. And maybe we will. But right now, Sweeps allows us to live a lifestyle that means almost as much as the work itself. I have a house in the country, a horse and a dog,” he says. “We’re interested in quality growth, not quick growth. This has to be meaningful on several levels or else, why do it?”
A short Uber ride over to Raleigh’s hip Glenwood South neighborhood finds Mark Saad, 29, sitting in the new office of his company, Feelgoodz Holdings Inc., thinking much along the same terms as Gelblum, though on a considerably larger scale. Mark attended the same high school as Christina Baker in Garner and, in fact, helped inspire Christina and husband Richie to abandon the corporate fast track and start Beaufort Linen down east.
The son of Egyptian immigrants who own a Garner appliance store, Mark grew up working various jobs for his father and almost dropped out of N.C. State until he decided to give the school’s newly created Enterprise Initiative a closer look. After his 2008 graduation, he spent the worst days of the recession researching potential businesses. After reading that traditional rubber flip-flops were bad for human feet, he decided that re-inventing footwear would be his meal ticket.
“It probably wasn’t something anyone in my dad’s Rotary club would have picked,” says Mark with a laugh. “In fact, he asked me why anybody would pay more for a pair of flip-flops.” (Feelgoodz retail for about $25 to $45, compared with a few dollars for traditional flip-flops.) Not long after he kicked off sales of his better-for-you, high-quality leather flip-flops under the name Kinder Souls, a mutual friend introduced Mark to Kyle Berner, who was selling a version of New Age footwear under the Feelgoodz name to Whole Foods Market Inc. “We decided to merge the companies, pool our knowledge and resources and grow bigger,” Mark says.
This year, with the new corporate office, a bank-lending relationship and 14 full-time employees — all millennials — Feelgoodz projects annual sales in the range of $10 million within the next few years. Whole Foods currently buys 40% of its production, and Costco has expressed interest in carrying the colorful, eco-friendly footwear.
Last June, to celebrate National Flip-Flop Day, Mark and the company convinced 690 people to run a mile in flip-flops through downtown Raleigh. New lines of footwear are flying out of the company’s small retail shop on Wilmington Street, and his outlook has started to change.
“I kind of miss the old days when I had to do everything from visit the workers [in Vietnam and Guatemala] to pack shoes in the warehouse,” he laments. “But I’m a married father now myself. So I guess life changes even for millennials. I probably won’t be joining the Rotary anytime soon, though. We’re too busy.”
Are these the voices and faces of North Carolina’s business future?
Down on the waterfront in Beaufort, Mark Saad’s success hasn’t gone unnoticed by Christina and Richie, who recorded a profit in their first year in business at elegant Beaufort Linen.
“Richie and I like to say we created our company for $60,000 of savings, less than the cost of a new Tahoe,” Christina says. “The truth is, though, we really did this on faith in the Lord and ourselves, a ton of hard work and realistic planning and — most of all — trusting our gut feelings that this was the thing we really needed to be doing.”
Internet sales are important for the business. “Our website has been an amazing sales tool, better than we even expected,” she says. “Online sales have been strong enough to cover the overhead of the shop. We’ve exceeded our sales projections by 38%.”
She adds that foot traffic has been constant, and an unexpected demand for her interior design skills is growing rapidly among the town’s summer visitors and nautical set — perhaps setting the stage for her own line of signature home goods.
“It’s more than I ever hoped it would be,” she says, “the reward for a lot of 100-hour weeks. Richie and I talk about this all the time. We’re so glad we did this. The biggest rewards are the people we’ve come to know, our customers and the community we’ve found. It really feels like coming home. Any millennial will tell you that’s what it’s all about.”