Experts believe Gen Z to be the generation with the most entrepreneurial spirit, inclination and talent. A study by Millennial Branding found more Gen Z’s (17%) than Gen Y’s (11%) planning to start their own business.
However, as they work towards growing their ‘hobby’ and an idea into a real business, the first stumbling stone Gen Z entrepreneurs face remain issues related to fund raising and management. It gets difficult for these young, aspiring entrepreneurs to convince investors to provide funds for their business. Most of the banks show a rather reluctant attitude when it comes to financing their business as they lack a credit history and a career history.
Without funds, it’s difficult to make your dream business idea breathe to life for everything, from infrastructure to resources and from web presence to professional graphic designs, has a cost. But, your financial difficulties can be solved by crowdfunding. Websites such as Kickstarter, Crowdfunder, GoFundMe, and RocketHub are great online sources that can help you get funds for your startup.
But getting funds doesn’t necessarily translate to startup success. While there are plenty of cardinal rules that small businesses live by, one of the most important is to keep operating expenses low. Remember, venture-backed start-ups fail at far higher numbers than the rate the industry usually cites. A report by Geekwire.com reveals that 75% VC-backed startups fail. But why do they fail? Often their cash runs out and investors refuse to throw it a lifeline. This is where crowdsourcing provides an optimal solution to Gen Z startups.
Crowdsourcing helps drive startup growth and success at low to zero costs. With crowdsourcing, Gen z startups can get services everything from high-quality content to the best graphic designs and efficient accounting solutions at rates that won’t clean out their bank accounts. Not only have the startups, big brand too take the help of crowdsourcing for better results.
According to yannigroth.com, the world’s best global brands used crowdsourcing only 6 times in 2006, 40 times in 2006 and 131 times in 2013. This clearly indicates that the trend of crowdsourcing is gaining momentum. Pictured below is an image that shows big brands that used crowdsourcing since late 2005.
But crowdsourcing isn’t just a low cost set-up that promises big savings. There is a host of other reasons young startups should take advantage of crowdsourcing. Here we present to you some such benefits.
1. Quick Results: Remember the popular American game show – who want to be a millionaire? On the game show, the audience’s accuracy rate outperformed that of the experts. According to an article on blog.fieldagent.net, the combined wisdom of the audience (91% accuracy rate) is often more reliable than a single, perhaps even well-informed “expert” (61% accuracy rate).
Moreover, it is important for Gen Z startups to quickly gain their grounds and earn recognition to survive the fierce competition. And for that, a startup needs many helping hands to get to the finish line sooner. According to Fieldagent.net, since its launch in 2008, Starbucks has collected more than 216,000 ideas on beverages, ambiance, payment, social responsibility, etc. at its website.
2. Flexible Choices: Entrepreneur.com explains that an increase in choices can lead to the best results. Crowdsourcing helps young entrepreneurs get many design ideas, inspirations and styles to choose from. When you working in-house, you may get stalled for choices when it comes to crafting a unique logo design that shares your business passion or to creating content to get your audiences involved and engaged. Whereas the diverse mechanism of crowdsourcing offers flexibility in terms of choices. With many ideas and inspirations, you’re sure to find more than a few to match your project expectations. Diversity drives the machine here.
3. Resource Management: As revealed by Entrepreneur, most Gen Z startups are run by young entrepreneurs. Quite expectedly, they don’t know how to manage and run a successful business. Allowing design seekers to give specific, constructive feedback to the artists, crowdsourcing platforms allow novice business leaders to launch logo, social media page and web design contests and sharpen their resource management skills. This also helps Gen Z leaders get their dream designs at a supremely low cost, with just a few tweaks and adjustments.
4. No Overhead Expenses: Since the Gen z entrepreneurs want to keep their expenses low, they aim for a smaller team. Crowdsourcing allows startups to source creative, durable and professional designs at rates that don’t cost as much as hiring a designer. Moreover, there is no fear of having to shell out money for insurance coverage premiums, paid vacations, sick leaves and taxes for the onboard staff. According to Forbes, there are almost 28 million small businesses in the US and over 22 million are self-employed with no additional payroll or employees. Moreover, an article in startups.co.uk reveal that 52% of all small businesses are home-based.
5. Space Saver: Lack of proper infrastructure and space is one of the major challenges of the most Gen Z startups. According to Businessinsider.com, a fair share of startups initially operate from a makeshift office and lack proper infrastructure. Crowdsourcing, however, vanishes this anxiety of such bootstrapped startups. Since almost everything is done online, so startups get to save up on space and furniture costs.
So, there you it! Reasons why crowdsourcing is the biggest advantage for the Gen Z startups. So if you too are an aspiring business leader, don’t forget to give crowdsourcing a try for your next business venture!
Did we miss out anything important? Please leave your comments and let us know in the comments below.