Darien 20-somethings and the age of the entrepreneur
Published 10:51 am, Thursday, July 11, 2013
They were applying for a business license. They were just out of college and ready to get Thrifty Knits -- an online thrift store for people in their 20s -- off the ground.
"Our initial idea was to buy cheap stuff and sell it for a little bit more, but in terms of turnover rate, it would be too fast and we wouldn't have been able to make enough profit to keep it going," Ross said. "So we decided to look for things that actually had value that we could find at thrift stores or from our friends and sell it closer to the value."
So they got to work on creating a business plan and an online presence while working full-time jobs. They would meet at night after work to refine their plan.
Ross and Morant are not alone in their endeavors in Darien.
Within the past two years, more companies started by 25-and-under Darienites have been created, a trend that is apparent outside of town as well.
"The economic times have changed drastically and the career landscape has shifted to the point where more entrepreneurs and young people have realized that the corporate ladder of yesteryear doesn't apply anymore," said Scott Gerber, founder of the Young Entrepreneur Council, which provides tools and mentorship for young entrepreneurs, and the author of "Never Get a `Real' Job."
More InformationThe following are the top 10 entrepreneur graduate business programs for 2014, as ranked by U.S. News Business, with their tuition and current enrollment:
1. Babson College $91,180 408
2. Stanford University $57,3000 803
3. Massachusetts Institute of Technology $57,920 816
4. Harvard University $53,5000 1,824
5. University of Pennsylvania $57,026 1,685
6. University of California Berkeley $51,422 (in-state), $53,969 (out-of-state) 490
7. University of Michigan $50,000 (in-state), $55,000 (out-of-state) 992
8. University of Texas-Austin $33,926 (in-state) $48,832 (out-of-state) 504
9. University of Southern California $48,575 431
10. Indiana University $24,478 (in-state) $43,460 (out-of-state) 398
Each year, the YEC conducts a survey of people between the ages of 16 and 39, and it has discovered that the number of young people leaving college and entering into their own businesses is increasing. This year 1,600 people were surveyed.
Since last year, there has been a 7 percent increase in young people who are self-employed, up from 26 percent. Additionally, there has been a 2 percent increase, up from 13 percent, in the number of businesses that are formed while the owner is still in college, like the owners of Pelican Breeze, a clothing company created by six Darien men last year. Their clothing is now available in the Darien Sport Shop.
In November 2012, Stout texted Johnston about his idea of bringing the doughnut machine that they had seen at fairs and festivals around the country to southwest Connecticut. Johnston graduated from Darien High School in June and Stout recently completed his first year of college and owning a business full-time post-graduation is not at the top of either of their goal lists. Both are engineering majors.
Their parents were willing to help -- but only if 17-year-old Johnston and 19-year-old Stout provided them with a business plan. In roughly a week's time, the two teenagers had put the plan together and presented it to their parents. Success: Their parents fronted the $8,000 needed for the doughnut machine necessary for Non-Stop Donuts Shop.
"We might do it again next summer," Stout said. "The plan is to break even with our parents." They said that the business has been doing better than they anticipated. They set up their machine at the Rowayton Farmers Market each Friday as well as at other events in the area.
The two intend to pay back their parents for the machine.
There really is no average cost of a start-up business, according to Jean Schaefer, owner of Artemis Startup Consultant, a consulting company based in Mystic that she created two years ago. While Schaefer has never worked with start-up clothing companies, she has been involved in bio-science start-ups, an incredibly expensive ordeal.
"It can take a lot of funds to prove your concept," Schaefer said about acquiring the research needed for a bio-science company. "A lot more expensive than making a great pair of jeans and getting 10 of your friends to like them."
Many students coming out of college are leaving with debt from years of student loans.
"They're not going to have a huge bank account and Mommy and Daddy are probably drained from paying for college," Gerber said. "But today, you can set up a virtual office, set up an email account and start a simple service business with less than no money down."
When Gerber created his company, Sizzle It!, a marketing firm that packages press clips, media assets and statistics into engaging video reports, he only had $700. Within three years, he had transformed the company into a "huge conglomerate."
"We basically had to go knocking door to door," Gerber said. "The key is to start a business that is a simple services business that you're selling X product to Y people for Z amount."
Johnston and Stout have been doing just that when not heating up the oil to sell their doughnuts at fairs and farmers markets. They send out email after email and make phone calls to different locations for the chance to set up shop and build brand awareness.
Despite their young ages, Stout and Johnston understand that there must be a balance in how much product they buy to make sure they don't over-order and waste goods.
"One wrong move and you can spend too much," Gerber said. "One right move and you can land a huge client."
Kristin Farrell was going on interview after interview right after college trying to land a job with her advertising design degree. To each interview she would bring her portfolio of her projects. Sometimes, she would ask if she should include a project she had worked on after college -- packaged dry cookie mix in a glass jar -- in her portfolio.
They told her she should make her project a reality.
As a result, In a Jar Foods was created in November 2011.
For now, the business is run out of her mother's Darien home where she lives and she delivers the jars to the Balducci stores, Palmer's Market, Whole Foods, the Darien Sport Shop and others.
Farrell intends to develop more In a Jar possibilities, such as granola mixes for the summer or soup for the fall.
She had little business experience to support her throughout the creation of her company, but she said she learned along the way.
"I had to learn a lot," Farrell said. "There was a lot of Googling involved."
Entrepreneur programs are not common in the colleges across the country and are primarily found in master's degree programs, something that Gerber said is an issue with the country's academia.
The YEC study of recent graduates this year found that 88 percent think that entrepreneurship education is important today but that only 26 percent of those were offered any classes on entrepreneurship.
"If you're a teacher, you know how to run a tutoring business if there was a teacher lock-out," Gerber said.
Of those surveyed, 72 percent found that the entrepreneurship classes they enrolled in did not help them in knowing how to start a business.
"The reality is for the academics in the country is that for this generation, there needs to be real-world practicuum in their institution to teach them that there is a real world out there," Gerber said.
"One thing I often tell clients is that new business owners are really excited about their work and they like to tell their story but they often forget about their timelines and they need to keep on task and focused," Schaefer said. "They sometimes need to be reminded that we were working on their goals."
Ross and Morant looked to Nasty Gal, an online women's clothing store, for their business inspiration. It, like Thrifty Knits, started in an eBay store and elevated to selling goods off its own website.
"What we're doing is a challenge in its own right," Ross said. "Women are more inclined to buy vintage clothing."
One of their first sells was a J-Bay surf tournament jacket.
"We realized that people are only going to buy something that has value to it," Ross said.
"If we were to sell the sweater off Lukas' back -- while it's a nice sweater -- we wouldn't get much for it because its not unique," Ross said.
But, they soon realized -- before investing a lot of money into the company -- that their business plan would need a change.
"Other than a couple exceptions, the majority of inventory did not sell in the price range we needed it to on eBay," Ross said. "The items that sold were unique and location specific, such as a South African shirt. Part of the problem had to do with the competition and low demand. There were more competitors than we originally anticipated. Even expensive, luxury inventory, such as a Mitchell's cashmere sweater, was not selling at the price target we thought possible."
Thrifty Knits is not the only clothing company recently started by Darien residents.
Pelican Breeze clothing was created by six 20-year-old college students -- Chris Hobart, JP Walsh, Richard Gregarg, Andrew Silard, Harry Perkins, Will Hayden and Dylane Torre -- who were after comfortable, high-quality clothes that wouldn't cost them an arm and a leg.
"We agreed on a price that was enough for the time and effort and money we put in, but not too high to be greedy," Hobart said. "We know what people want, we know what people will pay. I'm pretty confident that we can get upwards of $70 for a polo and $35 for a T-shirt but we don't want to do that. We're just trying to find a price point for kids, like us, in college with limited money can get the shirts."
Gerber notes that business should grow organically.
"You should be thinking smart with both feet on the ground," Gerber said. "Think smart, not stupid." Continuously watching to see if an idea is a money maker or a money pit is key.
"If you are constantly changing, investing money into a business and not seeing any progress, change it."
The creators of Pelican Breeze have done just that: proceeded slowly.
"You shouldn't be in any position to launch your website until you have the product to really sell clothes," said Hobart. "So we made sure we didn't make an order until we had enough money together and so that's where we're at."
"There's no question that Gen Y is more entrepreneurial and tech driven in this world," Gerber said. "The ever-evolving technical innovations allow new businesses to compete on a level playing field."
However, Gerber said there needs to be self-regulation within the industry.
"You can't have a million people being entrepreneurs and a million customers," Gerber said. "The winners are going to be the ones who can show growth and show metrics increasing and show team building."