You say one thing about Millennials. The data says another.
“The young people of today think of nothing but themselves. They have no reverence for parents or old age.”
Taken out of context, these sound a lot like the things people say about the so-called “millennials” today. But really, the first quote is commonly attributed to Socrates in the 4th century AD, and the second to Peter the Hermit, in 1274.
Older generations have historically despised the younger ones as frivolous, good-for-nothing, and responsible for ruining the world. The perception of millennials today is no different. One telephone survey found that 71% of Americans believe millennials to be selfish, while another 65% find them entitled. People make sweeping generalizations about millennials, ranging from how all they do is spend their parents’ money to just calling them flat out losers.
Replace the word “millennial” with any individual race, religion or gender and you’d rightly spark mass outrage. Somehow, though, it is okay to make sweeping generalizations about the largest and most diverse generation in American history, at 81.1 million of the population, born between 1981 and 2000.
Why is it this generation is painted with such generalizations? Why is it okay to pull one person out of a pack, like the New York Times recently did, and assume they speak for the masses? Are millennials really that different from previous generations, or are we just describing young adults?
As Patrick Wright, business professor at the Darla Moore School of Business at the University of South Carolina said, “From my standpoint, it’s not a generational thing. It’s actually a stage of life issue.”
With an endless supply of articles trashing millennials, we decided to take a closer look at the data to better understand real trends versus tired stereotypes.
As someone born in 1978, I sit in an interesting position where I’m close in age, but (by definition) not a millennial. More importantly, as a startup investor, I’m constantly working with millennials who are designing new products largely created for other millennials. My impressions are much different from those that put down this generation. Not only are millennial founders some of the most focused, hard-working people I’ve ever met, but also their products resonate with millions of users for emotional and behavioral reasons that don’t align with the generation’s stereotypes.
Let’s separate underlying shifts in behavior (urbanization, connectivity, education, the workplace) from traits that are more specific to location, economic, relationship or employment status. Most of the stereotypes they face are almost a decade old now. It feels overdue for us to take a fresh look at the reality.
Millennials are “the worst workers in the history of the world”
Rather than typecasting millennials as unmotivated, lazy, or disloyal, it’s crucial to look at the larger macro trends in play. Companies used to invest significant amounts of time training new employees. It made sense, because the expectation was that these employees would stick around for decades. Investing in new blood was a long-term bet that paid off over time.
According to Adam Cobb, a professor of management at Wharton, this began to change in the 1980s, when “you started to see healthy firms laying off workers, mainly for shareholder value,” as well as “cuts in employee benefits—401(k)s instead of defined benefit pensions, and health care costs being pushed on to employees.”
A Closer Look at Some Data:
- Jobs switching is a broader trend. In a recent study, the U.S. Bureau of Labor Statistics found that Baby Boomers changed jobs just as frequently, holding on average of 11.7 different jobs between the ages of 18-48. Most of the bouncing around happened when they were young—from the ages 18 to 24.
- Millennials are more competitive than we give them credit. 59% said competition is “what gets them up in the morning,” compared with 50% of baby-boomers. Hardly the generation of slackers they’re cut out to be, 69% of millennials see themselves in managerial roles in 10 years.
- Millennials are more likely to comply with authority than their parents’ generation. 41% of millennials agree with the statement, “Employees should do what their manager tells them, even when they can’t see the reason for it,” while only 30% of Boomers and Gen Xers agree.
- Millennials are well prepared. Almost 70 percent of managers say that their young employees are equipped with skills that prior generations are not, around 82 percent are impressed with their tech savvy. Around 60 percent of managers say that the generation is full of quick learners.
- Millennials are the best-educated generation. The White House Council of Economic Advisors states that in 2013, 47% of 25 to 34 year-olds had attained some kind of degree after high school, while graduate school enrollment saw a 35% jump between 1995 and 2010.
Beyond compensation and opportunity, millennials are looking for a sense of purpose in the workplace. When they can’t find it, the new generation is taking matters into its own hands. A further study by Elance-oDesk—now Upwork—claims that 79% of millennials would consider the opportunity to work for themselves. Meanwhile, Babson College’s 2014 Global Entrepreneurship report claims that in 2014, 18% of Americans between 25 and 34 were either running or starting new businesses.
Millennials “Enjoy Living at Home”
While more millennials are living at home, they’re not doing it for the reasons you might think. Millennials are the first generation in American history that are projected to make less than their parents did, and they’re burdened with massive student loans. The financial crisis of 2008 had a disproportionately high impact on their economic prospects, just as many entered the job market for the first time.
A Closer Look at Some Data:
- Millennials want to own houses—when they’re able to. A Goldman Sachs report shows that for 40% of millennials, home ownership is extremely important, while for another 30%, it’s important, but not an immediate priority.
- Millennials get married later. The same report shows that in the 2010s, the median age of marriage is 30 years old, compared to 23 years old in the 1970s. Because millennials settle down and start families later, they’re also buying houses later as a result.
- Home ownership drop comes from migration to cities. It’s not just millennials—it’s boomers, too. As more Americans overall migrate back to the cities, the higher cost of urban living means that they’re renting too. The Harvard Center for Housing Studies reported in 2015, that “while households in their 20s make up the single largest share [of renters], households aged 40 and over now account for a majority of all renters.”
- Home ownership is tied to affordability. In cities where housing is more affordable, millennials are buying houses. In Des Moines, for example, “60% of borrowers who use a mortgage to buy a home” for the first half of 2015 were between the age of 25-34.
With greater economic instability, and high home ownership prices, it makes complete sense that millennials are renting instead of buying. The same goes for boomers moving back to cities. However, some indeed are, in fact, adhering to older trends. This is especially true of married millennials who either have or are expecting to have kids. The housing trend doesn’t have to do with age at all; it has to do with family status.
Millennials are “Financially Irresponsible”
Millennials are often portrayed as financially illiterate and naive, constantly living beyond their means. They allocate the majority of the money they have to cash, rather than stocks or retirement funds. How irrational is this though? Many millennials entered the workforce during the most pronounced downturn since the Great Recession. There’s been lots of volatility in the global financial markets, while interest rates are near zero. With this uncertainty, it is difficult to trust the traditional savings channels even if you ignore the $1.2 trillion of student debtthat needs to be paid back first.
A Closer Look at Some Data:
- Millennials are conservative when it comes to investing money.According to a UBS Study, millennials have “similar conservative risk tolerance tendencies as the WWII generation”—52% of their assets are cash. Even the older segment of the generation with at least $100,000 in assets holds onto 42% in cash.
- Millennials are ready to leave conventional banks. A Deloitte study on “Millennials and Wealth Management” says that 57% of millennials would swap their bank for a “better technology platform solution.”
- Millennials believe that technology is recreating the financial landscape. According to The Millennial Disruption Index, 68% of millennials believe that within 5 years, they’ll be able to access money completely differently, while 33% believe they won’t even need a bank.
- Millennial investors are socially conscious. Millennial investors are 2x more likely than other generations to invest in companies with a stated social or environmental impact.
As the above UBS and Deloitte studies point out, the financial crisis has had a profound effect on millennial faith in investing as a long-term rainmaker. At the same time the Deloitte study claims that “84 percent of millennials seek financial advice.” While the data might show that millennials are comfortable sitting on their cash for now, it also reveals that they’re on the lookout for technology-oriented solutions to investing and financial management. As the generation comes into its 30-trillion dollar inheritance, banks have a good reason to get nervous. As unemployment drops and millennials start looking to make larger purchases, opportunity opens up for new trusted institutions.
Millennials are “Deluded Narcissists”
One especially pervasive trope about millennials is that they’re inherently narcissistic, as documented by their attachment to their phones, their penchant for selfies, and their desire to share every aspect of their lives online. Toss this together with the hotly-debated “Coddling of the American Mind” debate, and it quickly sounds like a formula for a self-absorbed generation that cares more about their own image and well-being than interacting with their family or society as a whole.
A Closer Look at Some Data:
- Across the world, millennials are supporting older family members: In a number of countries, the net flow of resources is reversing direction for the first time in decades, from younger to older. Beyond the burden of student debt, millennials are taking on responsibility of multiple generations—and actively taking care of family.
- Millennials aren’t the exhibitionists you think they are: 50% of millennials say they keep their majority “real” selves private, and almost 20% say that none of their real selves are online. That time spent on their phone is less about projecting their own image and more about absorbing other content.
- Millennials engage with politics: 85% say keeping up with the news is at least somewhat important to them, while 69% read or watch news daily.
- Millennials care about causes, and influence each other to care even more. The Millennial Impact Report shows that 84% of employed millennials donated to charity in 2014—and 46% are more likely to donate when asked by a co-worker.
Millennials’ hyper-connectivity isn’t necessarily a symptom of self-absorption. Instead, it indicates a desire to be connected. The desire to be connected isn’t new, but the tools today make it far easier. For millennials, there’s evidence that connectedness breeds empathy. A Boston Consulting Group report shows that48% try to support brands that are actively socially responsible—and that recommendations from friends and family are far more likely to influence their purchasing decisions than with other generations.
Do you really know your customer?
These days, I see many businesses aiming to be the millennial solution. “Uber for X” has been replaced with “X for millennials.” While the opportunity to create new products and services hasn’t had this ripe of an audience for almost a century, over-generalization here can mean death to a new startup.
Part of what makes people go bug-eyed when it comes to millennials is that they’re so incredibly hard to pin down. Instead of focusing on millennials-at-large, it is critical for entrepreneurs to look more specifically at audiences and their particular need. Instead of trying to get x% of millennial adoption, focus on specific groups with specific pain. The best products are loved by a small audience before they’re liked by a larger one.
So, before assuming millennials are lazy, ill-informed narcissists, get to know your customers as deeply as possible. Understand the challenges and opportunities related to coming-of-age in today’s society. Understand the differences between being fresh out of college, looking for a more challenging job and settling down to start a family.
These realities are so different, yet they all get bucketed into the same stereotype. By looking a bit closer, you may be pleasantly surprised by the diversity and passion coming from today’s young adults. As the data shows, they are some of the most competitive, altruistic and educated people this planet has ever seen.
This article first posted in Forbes