The digital natives and early adopters of the millennial generation are a central focus for many startups that are attracting major interest — and major funding.
Mentor and innovation advocate Sue McGill has been a central driver in the startup space for years, and can point to one of the many reasons why this is the case: “Given their impact – socially, culturally and economically – ventures that are specifically catering to (millennials) stand a good chance of enjoying huge wins and outperforming the market in the long run. As a result, this category of startup is attractive to investors.”
TechPORTFOLIO: Are startups focused on millennials seeing an upswing in funder interest?
Sue McGill: Investors place bets on companies that have the potential to become big exits and create significant returns on their capital. Having said that, there is a powerful generational shift happening in the market. By 2020, millennials will form 50% of the global workforce and will be a major driving force in the global economy.
TechPORTFOLIO: What should founders seeking to cater to millennials focus on?
Sue McGill: Tapping into millennials has become a growing focus for startups and many other enterprises. It’s important to note that the largest (and fastest growing) millennial populations are located in emerging markets like India, China, Brazil and Indonesia.
Reaching millennials in these regions requires founders to rethink every aspect of their go-to market strategy – this includes product, marketing, communications, supply chain and talent. It also demands a deep understanding of cultural trends and regulatory frameworks. Building ‘local context’ into a startup’s strategy is critical and often overlooked.
Another key variable is timing. Driving growth in these emerging millennial markets is rarely linear, so timing matters as much as having a great product or service.
TechPORTFOLIO: At MaRS, you work with many millennial founders. What sets them apart as drivers of new companies and ideas?
Sue McGill: We work with founders that span all ages and backgrounds at MaRS. There’s a relentless, ever-ambitious force that underpins them all. However, our millennial founders do share a few unique characteristics that are worth highlighting.
Millennials want to make a difference. They consider themselves to be global citizens, but also supporters of locally-driven solutions. They have huge expectations around the consumer experience, thanks to their inherently digital DNA. Plus, they think more broadly about sustainability. It is the convergence of these forces that is inspiring our millennial founders to create and unlock exciting and new sources in the market.
TechPORTFOLIO: Is it a mistake to look at the millennial demographic as different from Gen X or Boomers when it comes to how they engage with new products and ideas?
Sue McGill: No, not at all. Each consumer segment has unique needs and consequently creates unique product and market opportunities. With life expectancy increasing and birth rates falling in many parts of the world, there’s a very large and growing concentration of people aged 65 and over, in addition to millennials at the other end of the spectrum.
Startups that are capitalizing on this demographic trend and innovating across areas such as digital health, targeted pharmaceuticals, assistive technologies and more stand to benefit greatly.