Young entrepreneurs are full of ideas – but they face a range of obstacles in starting their business.
We talk to Innovate UK‘s executive chair, Ian Campbell, about today’s youth innovators and how other young people can achieve their goal of running a business.
The entrepreneurial ambition of young people
The aspiration of young people to be entrepreneurs is definitely there; statistics say about two in five have an idea for a business. They wouldn’t necessarily self-identify as being entrepreneurs but 54 per cent would like to run their own company at some point.
Young people do sometimes have more insightful ideas, but not necessarily the mechanisms to start and run the business.
I think roughly eight per cent of young people in that age bracket would class themselves as an entrepreneur. Others just self-class as people who may have an idea for a business, but perhaps wouldn’t be committed to seeking investment or putting time into it because, like everyone else, they have pressures in their lives like paying their bills.
“The aspiration of young people to be entrepreneurs is definitely there”
There’s a risk-averse option where they go into employment rather than seek to exploit an idea which by its nature is insecure.
Exploiting business ideas can lead down different avenues – it helps to take a risk at a time in their lives where they’re better able to do that.
The challenges that they face
Getting a plan together is tough. Is the idea good enough? Are they being somewhat circumspect? Is there a product – can it be made cost-effectively? Can they then build a career out of it?
The difference here is that the size and scale are smaller, but they wouldn’t necessarily know where to go to attract sources of funding. The risks are a) the idea being secure and b) testing it on the market.
Other issues include costs and making the business profitable over the longer-term. Having the personal risk makes that barrier seem a little higher.
In some cases however, the business requires too much investment. They might also need additional support that they can’t get access to.
Again, I think the solution to this problem is all about planning. If you’re an aspiring entrepreneur, know where you want to get to, what skills you have at your disposal, where you can leverage it from within your group, like your parents, peers, siblings. At the same time have an understanding that if you get to a certain stage, you might need more money.
How do you source it? Then how do you protect the idea? It doesn’t take a lot of money. It may be the most valuable thing you do, because you may not have the perfect product, but if you have protection for it, that’s value in itself.
Issues with confidence
Everybody is nervous about their business idea, particularly young people. If they’re not in education or employment then how are they going to get the finance behind them to support themselves? Are they just living a pipe dream?
But they need that step to make it real for them. I think that’s true for males and females, but particularly females. The adage goes, ‘If there’s a job description and you have two of the ten criteria as a male, you’ll apply – if you have nine of the ten as a female, you’re reluctant to apply.’
It’s about realising that there are different thought processes involved; trying to encourage someone to apply and make themselves a success is key.
University vs entrepreneurship
Now is a great time to be an entrepreneur. When we talk about the ‘young agenda’, we think of clean growth or AI and data. We’re in a smartphone-friendly society where people understand the importance of using data well and using it safely. We need more entrepreneurs with ideas that we can make and scale.
University isn’t the right route for everybody. It’s the traditional perception, but one of the things we need to do to get in the R&D-rich, highly-skilled employment base is value vocational subjects and entrepreneurship as highly as university degrees.
It’s a balance, and some would argue that going to university will be wasted if you can’t get anything at the end of it. But if you’re studying for three or four years, you’ll miss out on a whole host of business and life experience that you’d never have got if you went to university.
It all depends on your personality type, what you’re trying to achieve, the risks that you’re willing to take, the skills that you’ve got and the investment in yourself.
If you’re starting up a business as a young person and you don’t have all the skills, you’ve got two choices: seek help or learn more skills. Build a network and learn from each other.
Advice for young entrepreneurs
There are a number of things – first of all, be realistic. Translate your idea using some kind of project flow. Go from a drawing to a cut-out to a model to a working prototype.
Don’t go straight to the working model and start bending metal or smashing wood before you’ve thought through what you need to do because you’ll get frustrated. Secondly, know that it’s a non-linear process so you’ll have ups and you’ll have downs. There are many days where you’ve been down and you want to give up so you’ve got to keep persevering.
Nobody is going to believe in an idea for you. Do your market research. Understand if there’s someone out there doing something similar or doing something better. If they are, either learn how you can do it differently, cheaper or both.
Don’t think that your idea in isolation is the only idea. Avoid getting so fixated that you’re curing one problem because you might get to a fork in the road and decide that your product fits in a different area. Almost all inventions end up in a different form than they were expected to be in at the start.
Don’t be afraid; be prepared to change. Most of all, you can’t give up. And if you decide the idea isn’t right, don’t see it as a failure. See it as a learning. Because next time, if you start something else off, you won’t make the same mistakes again. You can always use your experience to make better decisions in future.