Tom Haire and two colleagues seized the day when a major trade organization in their industry, performance marketing, closed and a second one got folded into another entity.
Haire, 47, who was then the long-time editor of a trade magazine in his industry, knew that pros in his field would still want to gather, network and exchange ideas. Performance marketing is a type online marketing in which the marketing companies get paid based on the performance of the ad.
Haire teamed up with two other industry colleagues, John Yarrington and Bill Sheehan, to start their own trade organization. The Performance-Driven Marketing Institute (PDMI) launched in September 2018. “It was the right time, location and business for us to jump in,” says Haire.
They attracted 1,100 attendees to their first industry event and are now planning a second one in Las Vegas for September. “The opportunity struck but it was also time for us to seed that opportunity,” says Haire. So far, PDMI has no employees, relying on a couple of freelancers for the time being, but Haire envisions scaling it up in the future.
Haire and his cofounders are among the 27 million Americans are starting or running new businesses, based on 2017 data reported in the Global Entrepreneurship Monitor (GEM) United States Report: National Entrepreneurial Assessment for the United States of America, recently released by Babson College. The sweeping U.S. GEM report– the largest on entrepreneurship—is sponsored by Babson College, the founding institution, and The Global Entrepreneurship Research Association.
“In the general adult population, more and more people are recognizing entrepreneurship and entrepreneurial opportunities again,” says Babson Entrepreneurship Professor Julian Lange, leader of the U.S. GEM team.
Many of the entrepreneurs run nonemployer businesses like the PDMI–meaning they have no W-2 employees. “As we look at the results and try to break them down, there are a large number of one-person entrepreneurs who are involved in all of this,” Lange says. Many, like PDMI, plan to hire while others are content to stay the size they are. The survey found 29.3% of owners don’t expect to create new jobs.
Here are some other key findings:
The majority of Americans consider entrepreneurship a good career choice. On a global basis, attitudes toward entrepreneurship vary considerably by culture, but here, 63% of people believe it is a good career choice, and 75% believe entrepreneurs have high status in society.
Americans see opportunities all around them. As in the case of the Performance-Driven Marketing Institute, 86% of U.S. entrepreneurial activity driven by opportunity—higher than the 78% average for the 23 innovation-driven economies studied. The survey found 64% of respondents to the survey saying there are opportunities close to home to start a business.
“People recognize there are entrepreneurial activities they can pursue in their own backyards,” says Lange.
Opportunity is percolating in the information/knowledge economy: Information technology and finance make up 18% of opportunities entrepreneurs pursue in the U.S.
Both men and women are becoming more entrepreneurial. The total entrepreneurial activity rate among men hit 16.7%. For women, it reached 10.7%. In the most entrepreneurially active age group, ages 35-44, their rates are almost equal with 17% of men and 16% of women involved in early-stage activity.
Minority entrepreneurship is on the rise. One-third of early-stage activity is taking place among minority-owned businesses. Among Africans and African/Americans, 20% are starting and running new businesses—up 15.5% from 2016; 4% are running established businesses. Hispanic American entrepreneurs are running startups at a rate of 12% and established firms at rate of 5%. Among Asian Americans, 17% are running startups and 7% are running established businesses.
In contrast, 12% of white Caucasian entrepreneurs are starting businesses, and 9% are running established businesses.
Many older people are starting businesses.The report for the first time expanded the age range for the study to include the 65-74-year-old age group, even though the global version of the report stops at age 64. “It has become common for individuals over age 64 in the United States to continue or begin entrepreneurial activity,” the report notes.
In this group, 6.6% expressed intentions to start a business, and 2.1% were involved in starting or running a business. Interestingly, this is the only age group where women are involved in entrepreneurial activity at higher rates than men, with women’s rate hitting 3% and men’s at 1%.
Startups are percolating. Nearly 14% of adults are involved in early-stage entrepreneurial activity—twice the average of 23 innovation driven economies studied.
Entrepreneurs are highly educated. 88% have a college degree or higher; among established business owners, 79% do.
Entrepreneurs are making money. 85% of established business owners expect to be profitable in the current year, and 76% were creating jobs on payroll. In 2017, nearly 44% of U.S. entrepreneurs expected to employ six or more people in the next five years, the second highest rate in two decades.
The most common reason for all entrepreneurs to exit their business was to pursue another opportunity, mentioned by 30%. In many countries, the most common reason is lack of profitability.
Owners of mature businesses are investing in others. 10% of established business owners said they have invested in starting or running a new business, and 12% said they had invested in other entrepreneurs in the past three years. “They realize this is a great advantage to the established business,” Lange says.
This is worth noting if you are looking to raise money for your own business. 87% of established owners’ investments go to family and friends. The median investment among established business owners was $10,000.
Often an entrepreneur’s former employer can be an ideal backer. “Given the relationship started within the company, they are very happy to do that,” Lange says.