by Michael Houlihan, coauthor of “The Barefoot Spirit: How Hardship, Hustle, and Heart Built a Bestseller“
The holidays are here, and too many parents are wondering if they need to buy Santa gifts for the kids who are helping them deck the halls, swill the eggnog, and carve the Christmas goose. Okay, “kids” is a bit of a stretch. But what are the rules when “Little Johnny” is twenty-eight and back in his old room, jobless, his expensive grad school diploma about as useful as a trunk full of Monopoly money? And while most of us are glad to provide our kids shelter from the storm — especially at the holidays — we can’t help wondering, How in the world did this happen?
While the terrible economy bears some of the blame for the epidemic of boomerang kids, there’s another, deeper problem. The world has fundamentally changed — it’s a lean and mean entrepreneur’s playing field now — and too many young people have never developed the skills and the street smarts to compete.
The marketplace we’re preparing our kids to enter doesn’t exist anymore. Credit is hard to come by, and the world is getting flatter, more fast-paced, and more competitive by the day. Young people are going to need more than book smarts and a perfect résumé to navigate it.
The blunt truth is that many young people (at least those unwilling to settle for a “McJob”) will have to start their own businesses — or at least be able to demonstrate to an employer that they can think and work like a cash-strapped entrepreneur.
I know firsthand what it takes to bootstrap a business from the ground up. My partner Bonnie Harvey and I are the founders of Barefoot Cellars, the company that transformed the image of American wine from staid and unimaginative to fun, lighthearted, and hip. And when we started the company in the laundry room of a rented Sonoma County farmhouse, we knew almost nothing about winemaking or the wine business.
The truth may come as a shock to young people who’ve grown up in a world that led them to believe textbooks have all the answers. If you’re the parent of a boomerang kid (or if you yourself are the boomerang kid in question), don’t despair. Given enough determination, it’s never too late to acquire the skills and the mindset you need to bootstrap a start-up.
But first, it’s important to figure out what went wrong (and why). Here are some reasons so few young people have what it takes to hack it in the Age of the Entrepreneur:
They’re not street smart.
It’s common to hear stories about college students who can’t do a load of laundry and who automatically call Mom when they’re having trouble deciding what to eat in the dining hall. In many cases, parents’ good intentions — “We just wanted our child to have everything we didn’t” — backfired by creating kids who have never had to face real-world challenges, who aren’t resilient or independent, and who aren’t equipped to solve their own problems (much less those of an employer).
By the time they hit the workforce, many young Americans are still surprisingly helpless because they have been overparented. That’s a problem, because entrepreneurship demands resourcefulness, imagination, self-reliance, patience, hustle, and tenacity. Every single one of those qualities was key in Barefoot’s development and survival, and they’re also qualities Bonnie and I looked for in our employees.
Actually, “The Barefoot Spirit” is one comprehensive case study on problem-solving. We wanted to walk the reader through the entrepreneurial journey so they could see how challenge after challenge crops up along the way and how you have to think creatively to meet them. We wanted to show ‘street smart’ in action.
They think money can solve their problems.
The issue isn’t so much that parents have spoiled their kids (though maybe they have) — it’s that parents themselves grew up in times of easy credit and generous budgets. In other words, they developed the mindset that throwing money at the problem is always the solution. Is it any wonder that many young people have adopted that mindset too? Here’s the problem: When you’re bootstrapping a business (especially in a sluggish economy), money can be in short supply, if not outright nonexistent. You have to figure out how to do things without a budget, or at least with one that’s dental-floss thin.
Actually, money squelches creativity. Bonnie always says she feels sorry for entrepreneurs with money, because it often keeps them from developing the most innovative and efficient processes. One of Barefoot’s best-ever ideas — worthy cause marketing — came about because we just didn’t have the funds to pay for traditional marketing.
Barefoot ended up partnering with nonprofit organizations (NPOs) that believed in the same causes we believed in — specifically, environmentalism and civil rights. We donated product at fundraising events, worked festivals, and got out into the community to talk about causes we were passionate about, Barefoot wine, and our NPO partners — all in the same breath.
In this way, we gained access to lots of potential customers and gave them a ‘social reason’ to buy Barefoot wine. And in return, the NPOs received donated product and manpower at events, as well as publicity via Barefoot’s distribution channels. Multiple problems solved—all without spending money up-front. And because WCM isn’t costly, it has been a mainstay throughout Barefoot’s existence.
Some kids (certainly not all) are raised to think the world revolves around them, and this often results in adults who think they must stay ahead of the competition for personal gain. No entrepreneur can succeed with this me-centric mindset. Rather, to bootstrap a business, you have to share the wealth in terms of money, perks, and credit for a job well done. You have to give employees skin in the game or they won’t stick with you through the rocky beginnings of your company.
Increasingly, it’s becoming clear that what people want from their jobs is appreciation, validation, and understanding from their employers — just as much as they want a healthy paycheck. At Barefoot, we understood that from the beginning and were generous with vacation time, recognizing accomplishments, and compensation, when it was earned through performance!
Over the years, our experience has proven to us that the absolute best way to achieve growth is to include others — employees, yes, but also the community, suppliers, contractors, and so forth—in our success. The more people who have a stake in the results, the more brains and hands you’ll have working to achieve your goals.
They lack discipline and want instant gratification.
Too many of today’s young people want what they want — right now — without having to work for it. For college students, in particular, that sense of entitlement translates into the expectation that their careers will be lucrative and obstacle-free right out of the gate. However, to bootstrap a business you have to be able to start small, work really hard, and accept that the payoff will come later — sometimes much later.
Barefoot’s first ‘office’ was the laundry room of a rented farmhouse. Our ‘desk’ was an old door laid on top of two old sawhorses. We outsourced our grape-growing instead of doing it ourselves. And it took almost two decades of tireless work — I mean, long, long hours, schlepping from store to store, and so forth — before we really felt established. As Bonnie likes to joke, after nineteen years, we were an overnight success.
They’ve been taught to conform to existing frameworks.
Our education system has a lot of strengths, but one of them isn’t teaching kids to think outside the box. In school, there’s only one real path to success: Go to class, do your homework, and study for your tests. This framework prepares kids for a once-valid, but now outdated professional life: Get a job, go to work every day, toe the company line, get regular promotions, and retire. But unless they want their businesses to be very short-lived, entrepreneurs can’t have this kind of tunnel vision. They need to be able to design solutions for problems that others don’t even recognize as being problems.
The ability to think outside of established parameters separates great entrepreneurs from merely good ones. When Bonnie and I decided to open up the wine world to average Joes and Janes — to make wine that was reasonably priced, tasty, consistent, and approachable instead of exclusive and confusing — everyone else in the industry thought we were crazy.
For example, at Barefoot’s inception, it was expected that wine labels would be fancy with pretentious, often French, names. But Bonnie refused to give her blessing to a name she couldn’t pronounce. She wasn’t about to be embarrassed ordering her own wine. And because she insisted on doing things differently, our label was embraced by many an intimidated consumer who just wanted a reliably good wine with dinner.
They don’t value the wisdom of experience.
Kids have always believed they know more than their parents. It’s an occupational hazard of being a teen. But the most recent crop of youngsters is in danger of believing that myth well into adulthood. Why? Technology. Gone (or, going) are the days of young people learning about life, love, and everything else from their elders. After all, why have a face-to-face conversation when you’ve got Google? The danger here is that by not connecting as much, kids are severely limiting themselves and their potentials.
I doubt Barefoot would ever have gotten off the ground if Bonnie and I hadn’t picked as many brains, at as many levels, as possible. Because we weren’t afraid to talk to people who had been there and done that, we avoided a lot of mistakes and incorrect assumptions, and we got a fuller picture of the industry than many longtime professionals.
I’ll never forget asking one supermarket chain’s gruff wine buyer what our logo should look like. He told me, ‘Don’t make it a hill or a leap or a run or a valley or a creek… Don’t put a flower on it. And for crissakes, don’t make it a chateau. Make the logo the same as the name… And whatever you do, put it in plain English… And Houlihan, make it visible from four feet away. [The shopper] has to be able to see it when she’s pushing her cart down the aisle. Now get outta here. I got work to do.’ Turns out, that advice was solid gold — and it’s not the kind of thing you can get on the Internet.
They believe texting, emailing, and “friending” are relationship builders.
While technology has revolutionized the way we conduct our personal relationships and our businesses, it has also made face time less of a necessity. Kids who grew up emailing and texting will naturally want to carry those habits over into their professional lives, especially since this “crutch” allows them to remain safely within their comfort zones and avoid the sting of direct confrontation and rejection. Unfortunately, start-ups require trust, and trust can’t be built from pixels on a screen.
No matter how technology-driven the world becomes, there will never be a substitute for a face-to-face connection. I can’t tell you how many retailers, suppliers, and potential customers I visited in person. What I can tell you is that I would have never gotten satisfactory results if I had tried to build those relationships via email and social media. Honestly, I worry that young people’s dependence on virtual communication has stunted the social skills they’ll need to attract customers. People don’t just buy your product; they buy you.
Don’t get me wrong — I don’t think that the up-and-coming generation isn’t capable of creating and growing their own businesses. Many young people I’ve met are smart, driven, and imaginative. But we as a culture need to be producing more of them.
We — their parents, teachers, and mentors — need to realize that it’s our responsibility to cultivate the qualities that will help kids reach their full potentials, and nip in the bud those that will end up being barriers to success. The way we work is changing, and our young people need to adapt to the new reality.
Michael Houlihan, coauthor of “The Barefoot Spirit: How Hardship, Hustle, and Heart Built a Bestseller“, started the Barefoot Wine brand with Bonnie Harvey in their laundry room in 1985, made it a nationwide bestseller, and successfully sold the brand to E&J Gallo in 2005. Starting with virtually no money and no wine industry experience, they employed innovative ideas to overcome obstacles and create new markets.