Programs Provide Help For Gen-X and Boomer Entrepreneurs
CLEVELAND: When we think of tech entrepreneurs, we tend to envision 20-something coders with Macbooks and skinny jeans. But with thousands of underemployed Boomers and aging Gen-Xers finding it hard to re-enter the workforce as employees since the 2008 recession, many are reinventing themselves as entrepreneurs.
Several programs have emerged across the country to help. AARP and the U.S. Small Business Administration have been teaming up to host events around the country targeting entrepreneurs over the age of 50 to provide guidance and assistance to make the transition.
"AARP knows that many older Americans pursue entrepreneurship as a way to generate income and strengthen financial security," said Debbie Banda, AARP interim Vice President, Financial Security. "And for many of these workers, it is also a way to turn a hobby or passion into a paycheck. AARP creates real possibilities by connecting experienced workers with the resources and guidance they need to help start or grow a small business," Banda added.
"The SBA is working hard to increase opportunities for small businesses of the baby boomer generation and we believe 50-plus entrepreneurs will drive significant new business growth in the coming years," said Tameka Montgomery, SBA Associate Administrator for Entrepreneurial Development.
According to a recent AARP survey, "Staying Ahead of the Curve 2013: AARP Multicultural Work and Career Study," 15 percent of workers 45-74 are self-employed. Additionally, 13 percent of those who are current wage and salary workers say they plan to start a business once they retire. Small business ownership is a good option for many baby boomers. Small business owners who get long-term counseling may see bigger sales, hire more workers, and their businesses have more longevity.
In the Midwest, LaunchHouse, a business accelerator in Cleveland, Ohio, is targeting people over 50 with manufacturing experience, providing funding and mentorship for those who want to start a tech hardware business.
Through the end of August, the accelerator is seeking entrepreneurs to apply for its intensive 16-week accelerator program, which includes $20,000 of initial funding for ten companies focused on user-interface or hardware/robotics technology.
While the program is open to people of all ages, organizers say that they are focusing on applications from Gen X and boomer entrepreneurs who may be underemployed or seeking a new challenge. The young entrepreneurs who founded LaunchHouse see the region's experienced engineers and businesspeople, who may be looking for a way to reinvent themselves, as an untapped trove of talent.
"There are all these experts in manufacturing around the Rust Belt and all over the country who have the knowledge and passion to create great new products and they're getting up in the morning and wondering what to do," said Todd Goldstein, CEO and Managing Partner at LaunchHouse. "We're saying come start a business. Share your talent and skills."
The statistics bear out Goldstein's observations. According to a 2013 Associated Press-NORC Center for Public Affairs Research poll, nearly 40 percent of unemployed workers are over the age of 45 -- a 30 percent rise from the 1980s. A 2010 Census Bureau study revealed a total of 1.8 million U.S.-born individuals with engineering degrees who are either unemployed, out of the labor market, or not working as engineers.
The New York Times observed, "When there are many more applicants than jobs, employers tend to impose over-exacting criteria...[and] offer tightfisted pay packages." This environment does not favor older workers who are perceived to be more expensive to hire and insure, and who may lack specific knowledge of the most recent industry practices.
For skilled workers, particularly those who have reached their 50s, launching a startup and becoming their own boss can be the best option to remain productive and generate income that reflects their skill levels. LaunchHouse hopes to facilitate that transition by providing advice, funding and services for candidates with viable business ideas.
"With a rich history in manufacturing, Cleveland is now at the cross-section between technology and manufacturing," said Goldstein. "By focusing on hardware and interface technology we can marry the seasoned talent pool we have in this country with digital innovation and create new products that serve the region and the country."
Goldstein added that LaunchHouse welcomes out-of-town applicants for the September program in Cleveland and can provide temporary, low-cost housing to accommodate them during the program.
Both the AARP/SBA programs and business accelerators like LaunchHouse provide advice and assistance to would-be entrepreneurs using a combination of one-on-one mentoring and directing participants to vital business resources.
AARP/SBA efforts have already helped 120,000 people with counseling, mentoring and training resources for starting or growing a small business, connecting entrepreneurs with mentors such as those from SBA's network of Small Business Development Centers, Women's Business Centers, and SCORE chapters, who can help throughout the life of an entrepreneur's business.
Cleveland's LaunchHouse has invested in 51 diverse portfolio companies since opening in 2008 and raised more than $15.5 million in follow on funding. While many parts of the country are trying to attract tech startups, the organization is among the first to focus its efforts on tech hardware and interface technology.
According to Goldstein, entrepreneurs who enter the program embark on a series of rigorous workshops, employing various methodologies including customer development, design for manufacturing, business modeling and human-centered design. Goldstein said the program is structured to provide startups with an increased ability to achieve accelerated market validation within 90 days.
With mentorship programs like these helping older American across the country, many of our currently unemployed may turn out to be future employers -- and that would be good for people of all ages.