Why New Graduates Should Consider Entrepreneurship

Entrepreneur Scott Gerber on thinking outside the corporate box and tips for starting a business.

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Entrepreneurship is on the rise: More people worked for themselves in 2010 than during each of the previous 15 years, according to a report by the Ewing Marion Kauffman Foundation, a think tank that focuses on entrepreneurship.

But is self-employment a good choice for new college graduates? Scott Gerber, founder of The Young Entrepreneur Council and video-production company Sizzle It!, says so.

U.S. News talked with Gerber about thinking outside the corporate box, tips for launching a business, and how he jumped on the entrepreneurial train. Excerpts:

Why is entrepreneurship so hot right now?

Job numbers are terrible, youth employment especially is in the toilet … There needs to be some other way of creating an income. Because frankly, you've got all these boomerangs, as they're called, kids that go and get in [school] debt up to their eyeballs and then come back home and don't have any way out based on the system that taught them to get to that point. So what we're seeing for the first time is young people in droves are looking at the low-cost barriers of entering the youth entrepreneurship space.

I think entrepreneurship is on the rise, but at the same time, I don't think it's ever gone away and had a resurgence. I think it's been a steady increase for decades.

[See 6 Tips for the Hopeful Entrepreneur.]

You mentioned the low-cost barrier to entrepreneurship. What do you mean by that?

For example, today you can have a virtual office instead of having a office in New York City and save hundreds of thousands of dollars a year on the startup in rent alone. You can work out of your parents' basement as long as you have a URL and programming skills. You can sell products before you buy them from your vendors based on careful deal-making. Now more than ever, there's a lot of different ways to enter the entrepreneur ranks without necessarily the old inventory or large footprint needed in a retail location.

I view it as a positive that banks aren't lending, because it's making people smarter by thinking about, how can I get started immediately rather than depend on [a loan] that I really don't have control over? So they're thinking of ways to scale back their businesses rather than relying on the good old, hey, we can just go to the bank and get a loan—which can ultimately make people sloppy because they then, all the sudden, have a pocketbook they think they can spend.

You're obviously an advocate of entrepreneurship, but it's not right for everyone, right? How can recent graduates figure out whether it's right for them?

I think there's a lot of young people, especially now, entering the non-traditional workforce, the entrepreneurial workforce, not because they thought for their entire life they were going to be entrepreneurs, but it may be out of necessity and desperation. And I think they're finding a love and a passion for it where they didn't know that existed.

There are always going to be people who are natural entrepreneurs verses non-natural entrepreneurs … Not everyone can be the forefront person of their company, but I certainly think if your back is against the wall [without a job], and you're smart about thinking who your partners can be, who can fill in your weaknesses with their strengths, I think that anyone can learn to become an entrepreneur.

What is the Young Entrepreneurship Council? Can anyone join?

No. It's an invite-only organization [with 275 members]. It's basically an exclusive group of the top young entrepreneurs right now in America—soon we're going to expand internationally—with two goals. One is to connect with like-minded individuals so we can further develop relationships and business-building ideas. And the other [goal] is to try to teach young people today how entrepreneurship can be considered an a viable career path, [an alternative] to youth unemployment and underemployment.

How can aspiring entrepreneurs who can't yet join the YEC benefit from the organization?

We have theYEC.org, which is basically a help desk for young entrepreneurs. We create a lot of original content … We also allow young people to send us their questions about building a business and we have the collectives answer these questions. We do a variety of off-line programming like panel discussions.