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Why so much youth entrepreneurship in the U.S.?
Here is my latest column, featuring wunderkind Ben Casnocha; it has been titled "The Loose Reins on U.S. Teenagers Can Produce Trouble or Entrepreneurs." Here is an excerpt:
The longstanding criticism of the American school system is that even in the better schools, too many students just “get by” rather than engage in a rigorous curriculum. This academic leniency is bad for many average or subpar students, but it also allows some students to flourish. Relatively loose family structures have similar effects; American children are especially likely to be working on their own projects, rather than being directed by parents and elders.
American philanthropy is also a significant and unheralded factor behind American youth entrepreneurship; many young entrepreneurs used elders as mentors or asked them for financial assistance. Furthermore "selling to the young" is much derided by critics such as Juliet Schor or Benjamin Barber, but it has its benefits. Sometimes advertising inspires the young to start marketing themselves, as did Ben Casnocha.
You can read more about Ben, who started his successful company at age 14 (he is now 19), in the article. Here is Ben's blog. Here is the web site for Ben's new book. Ben will soon be attending Claremont McKenna college, I am curious to see whether or not it drives him crazy.
Posted by Tyler Cowen on June 14, 2007 at 06:48 AM in Economics | Permalink
Comments
Does Epstein cite any data like this in his Case Against Adolescence book? It seems to fit right in with his primary thesis.
Posted by: AZ at Jun 14, 2007 8:07:07 AM
I know this anecdotal evidence should make me hopeful and proud of our entrepreneurial system, however I am am somewhat cynical about this. I grew up in Ohio where the "dream" of every kid was to become a professional sports player. It was encouraged above all else in school, family, etc. However, guess what? The true odds of actually making money as a professional sports player are very small. Even when one factors in the "free" education on scholarships (which was squandered by quite a few of the recipients drinking and carousing their way through school only to drop out because their sports careers stalled.) This reverence of sports success was nothing more than "survivor bias" at its worst.
I really want to share in your vision of all of these freedom loving youngsters tossing off the shackles of the past with creative vision and "creating" new companies. Sounds like the Internet boom only more permanent. Unfortunately I am reminded of the book "Conquest of Cool" by Thomas Frank which details how dull and boring "business" suddenly became all "counter-cultural" and exciting.
While I admire Ben and certainly hope him nothing but the best. My question to you is how many Ben's are out there that fail? More importantly, how many Ben's are there out there that seize the possibility of becoming Ben and forsake the harder and presumably duller path of getting a good foundation. Is Ben a true role model or the lucky recipient of a lottery ticket? And I do not mean "lucky" in the sense of him receiving some good genes and talent, but rather "lucky" in these sense of starting the right business at the right time. Of course when it is successful it passes as "vision." When it fails...well I guess it is "experience? I believe the refrain is "better luck next time." I would humbly suggest that I would like to hear about the losers as well. Then maybe I could find some value.
Sorry. I am sounding like an old Calvinist minister suggesting hard work and discipline. But I feel that everything in life is now dominated by celebritization. I guess that is what happens when all of our material goods are actually made by foreigners. The only thing left is entertainment.
Posted by: GeorgeNYC at Jun 14, 2007 9:48:27 AM
Somewhat like GeorgeNYC, I found it interesting that the article title acknowledges the costs of adolescent freedom, but the article glowingly describes only the successes. However, it is the rashness and rejection of rules embodied by kids that spurs creative development in the form of those relatively few successes by the most brilliant youngsters. For many of those that have the "loose reigns" but lack the vision and drive, there is a quintessentially American rise and fall with its apex somewhere between senior year of high school and senior year of college.
I think it must be acknowledged that this is the reality of the American Way in practice. We live and die by high-stakes innovation, and the game produces many losers. And also, daring failure has a unique ability to produce canny, productive adults. To throw the whole thing out would come at a great cost.
Posted by: Anselm at Jun 14, 2007 11:29:00 AM
What the US needs is a free market school system so those that NEED a a rigorous curriculum can get it, and those that NEED a less rigorous and more creative curriculum can get that as well.
Posted by: Mr. Econotarian at Jun 14, 2007 11:33:10 AM
I also attended Claremont McKenna College. I think it's a perfect school for a budding entrepreneur, and Ben will be respected by many students for trying to do it. We had several students start successful businesses in my college class of just 330 students.
Posted by: Sisyphus at Jun 14, 2007 1:58:28 PM
Good article, but looking at the title I thought "Can't a teenager be both an entreprenuer and trouble?" The obvious examples are drug dealers, but there are many others. For instance, when I was in eighth grade, I rented out pornographic magazines and videos that I stole from my brother's collection to my peers (at Boy Scout meetings nonetheless). I think that's both entreprenuerial and trouble. Another example could be Napster, which while most consumers of music loved it, the record companies certainly considered trouble.
Posted by: John Payne at Jun 14, 2007 2:20:57 PM
Nonegalitarian? Depends on what you think "egalitarian" means, Tyler. If you think it means that society believes it's OK to start your own business and get ahead, then sure. But if egalitarianism means "equal opportunity for all," then egalitarianism is exactly what has allowed America to be so entrepreneurial. In many societies, only the rich are able to start businesses; in America, anyone can. That's been to our advantage.
Posted by: Mr. Noah at Jun 14, 2007 3:36:12 PM
Inspired by what seemed an interesting story I went to the Comcate web site and came away slightly disappointed: on a first look, there is very limited information on the company - no names mentioned other than Ben's, plus a plug for his book; limited information about the products; lists of clients and partners but no real data; lots of jargon and marketing speak; nothing about employees or a Board; in fact it could just be a cardboard cut-out.
Intrigued by wonderfully fluffy statements like: "If you wander through our corporate headquarters in San Francisco, you will find a collaborative environment where dedicated and thoughtful technologists, former public agency employees, and client service representatives share ideas and work hard to best meet a customer’s needs" I called the only number listed and got an answering machine message. Presumably all the client service representatives were busy?
Perhaps someone who reads this can confirm that Comcate has more than one employee and that "Comcate is the leading provider of web-based software for public agencies"?
I have no idea who Ben is, but his blog is engaging and he strikes me as clever and very, very good at networking and self-publicity. There's no doubt that starting a company of any sort at age 14 is an outstanding achievement, but based on what I see of Comcate today (5 years on from start-up) I will probably stick to looking for business lessons from Gates and Dell.
Posted by: Galazi at Jun 14, 2007 4:45:33 PM
You must know different teenagers than I do if you think they have loose reins. I concede the vast disposable income, but most of the (largely suburban, wealthy) teenagers I know are scheduled to the hilt, because God forbid they be allowed unstructured time (they might do something rash with it or, perhaps worse, not have devoted every second to getting into Harvard).
Posted by: Andromeda at Jun 14, 2007 4:46:03 PM
A big reason why the young in America are better is that America (at least Silicon Valley) is less ageist than Europe. There is help and there is respect. Help helps but the potential for respect is necessary. There is very little respect for business ability of the young in Europe. There are also huge network effects in the valley and in college. The article misses the college angle completely due to the focus on Ben. It would have been a more interesting and relevant article if the focus was on Zuckerberg (Or any other recent young entrepreneur whose success building a business is greater than their success at marketing themselves).
Posted by: agent00yak at Jun 14, 2007 6:17:20 PM
I agree...but the vast majority of this biz kids are the sons and daughters of lawyers and high up business men who have the financial resources and know how on how to start a business and wade through the specter of regulation and tax code. I know several people who have the ideas and talent for great business ideas, except they all get bogged down trying to get past all the legalese. There would be a whole lot more of them if we stopped strangling and mangling our entrepreneur startups with all that rigamarole. Disclosure: I have helped two businesses start up, and even with a degree in business and finance, it was a daunting process.
Posted by: Dan at Jun 14, 2007 7:28:41 PM
As a young person who's lived/worked in both the Bay Area and in Asia, I can definetly say that I never appreciated the entreprenaurial culture in silicon valley until I left it. When I left, a good friend was interviewing for VC funds at Ycombinator. I on the other hand, spend the whole day worrying who not to piss off in the firm hiarchy.
Loose reins mean more time thinking of the next idea and less time on not taking the boss's doughnut. Agent00yak is completely right - in San Francisco mentors are much more common and help given more freely. Outside of the States (asia in particular?) it's much more a climb up the stairs to a mountain top master. Think Kill Bill 2.
Posted by: Steve L at Jun 17, 2007 5:55:19 AM
Young people want to succeed, and the majority realise that working 9-5 at a big corporation won't get you success until you retire with your 401k and stock options aren't restricted any more. Young people want to be responsible for their own success, so they start businesses on the side, and many take the plunge into self employment or running a business of their own. What you learn in school has very little to do with what you need to know to succeed in life, so young people teach themselves.
Posted by: writeups at Jun 19, 2007 2:41:57 AM
::ahem:: Professor Cowen: How does the Economic Scene column work? Did you apply with writing samples? Is there an editor who approves your work? Are the reins loose or tight?
Just curious... and I figure your other readers might also be interested.
Posted by: Steve at Jun 21, 2007 11:49:55 AM
In my research, I am finding evidence that colleges are a great place to start a new business -- for a variety of reasons. From time shifting and institutional structures to free technology and open marketplaces, there are many reasons why young entrepreneurs (especially those on campuses) have a some great advantages.
Posted by: Campus Entrepreneurship at Jun 22, 2007 3:29:58 PM
Entrepreneurship gives most of the youth the choice to achieve a level of success without going to school. It also allows the entrepreneurs to learn lessons of life on their own pace, rather than studying on subjects (at school) that doesn't have to do anything with living your life later on.
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