What will "fix" young America?March 6, 2012: 12:25 PM ET
Scott Gerber is leading a movement to promote entrepreneurship as a solution to youth unemployment. But is one man's enthusiasm enough to keep such a campaign together?
By Colleen Leahey, reporter
FORTUNE -- Words tumble from Scott Gerber's mouth so passionately that he gasps every few sentences for air. The topic: American entrepreneurship. Launched less than two years ago, the Young Entrepreneur Council (YEC) is the brainchild of the baby-faced 28 year-old and is now the driving force behind the #FixYoungAmerica campaign, which launched Monday on fundraising website IndieGoGo.
"We live in a very partisan society, where unfortunately not much gets above the fray if it's not headline news," says Gerber. "The real issues oftentimes fall by the wayside."
Gerber and his crew think that the importance of entrepreneurship often slips through the cracks. In response, the YEC has launched a campaign with over 40 partner organizations to promote entrepreneurial education, increase access to capital for startups, and encourage entrepreneurship within the Fortune 500 -- all in hopes of addressing youth unemployment. (The campaign tagline: "A solutions-based book and movement that aims to end youth unemployment and put young Americans back to work -- for good.")
Indeed, youth unemployment has remained stubbornly high. According to the Bureau of Labor Statistics, 23% of 16-19 year olds, 13% of 20-24 year olds, and 9% of 25-34 year olds are jobless, as of January 2012. Since 2010, unemployment has decreased across the board. But the jobless rate for younger Americans is still higher than it is for those above the age of 34.
The foundation of YEC's campaign is an ambitiously entitled book called #FixYoungAmerica, the first release under the nonprofit's new publishing imprint YEC (thanks to a partnership with Advantage Media Group). With 33 contributors, the book -- which will be released in May -- covers entrepreneurship from several angles: Babson College President Len Schlesinger provides a blueprint for public and private colleges to build entrepreneurship programs; The Education of Millionaires author Michael Ellsberg discusses entrepreneurship as an alternative to college; Jack Kosakowski explains how his nonprofit Junior Achievement has worked to produce more entrepreneurs and entrepreneurially-minded students.
Gerber hopes that the IndieGoGo campaign will raise enough funds to put a copy of #FixYoungAmerica in the hands of every U.S. politician, college president, and major education leader. "[The contributors] have all proven that something works. And now we just need to copy and paste."
Gerber, who published Never Get a Real Job last year, believes youth unemployment conversations don't have to be negative. "We've done a fundamental disservice to young people throughout their lives, because we've taught them about the traditional 'work hard, go to school, get good grades, get a good job' mindset," he says. "Frankly, it's on its way out or no longer applies in the new economy." What does apply, he says, is this new entrepreneurial model the YEC's proposing.
Is this an education problem?
Educating America's younger generations about entrepreneurship certainly sounds nice, but it's not the only thing (or even the primary issue) keeping young Americans from going out on their own. Scarce access to startup capital causes a chicken and egg dilemma.
One response to this problem: Congressman Patrick McHenry (R-NC), a contributor to #FixYoungAmerica, has been pushing for legislation that would allow crowd-funding for companies hoping to raise $1-2 million. In November, McHenry's Entrepreneur Access to Capital Act passed in the House, loosening the Securities Act of 1933 that strictly defines investor eligibility. (As an individual, your salary must be $200,000 or your net worth over $1 million to be eligible. "The chairman of the Federal Reserve," says McHenry, "doesn't make enough money to be an accredited investor.") To address the potential risks of such a move, the bill limits potential crowd-funder investments to $10,000 or 10% of an investor's annual income.
McHenry's bill has been reshaped to fit into new House legislation, packaged as the Jumpstart Our Business Startups (JOBS) Act. Sponsored by House majority leader Eric Cantor (R-VA), the legislation includes four stand-alone bills like McHenry's that have already been passed, as well as additional bipartisan ideas. "We need to update significant portions of our federal regulation. But legislation is slow…. Online activists can raise their voices and get broader support," says McHenry.
Ingredients of an able entrepreneur
YEC partner Babson College is consistently ranked as a top entrepreneurship school, yet its president has no experience in starting his own business. Since taking the reins at the school amid a down economy in 2008, Schlesinger says he has learned the importance of understanding the mindset of entrepreneurs -- they think and behave differently, he says -- and hopes to spread this idea to other colleges. "The vast majority of peer institutions have a very narrow view of entrepreneurship; entrepreneurship is a life skill," he claims. "We need to teach the power of adapting and reshaping to current times."
Working with the YEC, Schlesinger wants to raise awareness that entrepreneurs are made, not born. Stories about uber-successes like Facebook and Google (GOOG) create hero worship, intimidating those without the nerve to "hang on a mountain by a fingernail," as Schlesinger puts it.
An NYU film major turned serial entrepreneur, Gerber is no wilting flower. He has little issue cold calling a potential new business contact multiple times before he gets what he wants. This unwavering persistence is partly how he's been able to get so many entrepreneurs to join the YEC (from Living Social CEO Tim O'Shaughnessy to Mint founder Aaron Patzer), but Gerber shrugs it off. "Everybody's like, 'My God, how did you pull this momentum so quickly?'" he laughs, before growing serious "Well, because I have incredible members that take the ball and run with it. They believe YEC is like a badge of honor."
Plenty of ideas to go around…
#FixYoungAmerica includes countless opinions and goals on what can help young Americans find their economic way, with one man holding them all together. Gerber recently locked down legal document services firm LegalZoom as the first sponsor of the campaign -- with a $20,000 check; he hopes to sign on several other companies. His energy is obviously contagious, but is it enough to keep this web of different partners intact?
Those uninvolved with the campaign, like Next Street Financial founder Tim Ferguson, certainly support the idea of raising awareness about entrepreneurship. Ferguson notes, "America is already pretty entrepreneurial. But not everyone is an entrepreneur. So I don't see this campaign fundamentally changing that." Ferguson does believe that the conversation should be skewed more toward improving financial literacy and expanding the types of available capital that Rep. McHenry's legislation addresses.
After Gerber brings up yet another venture of his (startup accelerator GenY Capital Partners, which is currently funded by YEC members), seconds after talking about Dell (DELL) entrepreneur-in-residence Ingrid Vanderveldt's involvement in #FixYoungAmerica, he responds to my where-is-this-campaign-going look of bewilderment. In simple terms: "My priorities are to first change the national discussion surrounding youth unemployment. Second, we're going after the decision makers -- the educators, the policy makers."
Armed with a somewhat vague but ambitious strategy, Gerber is determined to make his project more than just an awareness campaign. (Though a 10-city promotional tour is already in the works.) With a catchy name like #FixYoungAmerica, it's sure to gain some attention. But for the campaign to offer tangible solutions to this complicated problem, Gerber faces quite the organizational challenge. "I'm in this for the long slog. We can keep people engaged, because there's a lot on the line," Gerber says. "What I am doing personally is my calling; it's what I live for. I will not let this campaign fail."