Four impressive Millennials reveal what drives them
Power at a young age is what's made the Millennial generation so different to those that preceded it. Empowered by technology and cheap capital, this generation is shaping how the world operates, breaking down hierarchies, traditions and rules that have existed through the ages. Facebook and Airbnb are the flag-bearing companies of the Millennial epoch, but behind those behemoths are millions and millions of start-ups, democratising everything from white collar jobs to how we catch a cab.
Millennials, born between 1980 and 2000 and formerly known as Gen Y, are the most digitally fluent generation ever, having grown up with the internet. They dominate the global workforce but half, by some estimates, want to start their own businesses. Not to get rich – that's for materialistic Baby Boomers and Gen-Xers – but to make the world a better place. Cue their eye-rolling antecedents.
Here, four Australian Millennials who have created businesses on the world stage talk to The Australian Financial Review Magazine about how they started – and about those negative attitudes and behaviours attributed to their tribe.
Co-founder of FashionStake
Daniel Gulati isn't your average 32-year-old – or is he? A serial entrepreneur, he's sold several start-ups, worked as a management consultant, an author, attended Harvard Business School, won a multitude of prizes from organisations as varied as Princeton University and JP Morgan, and is now a New York venture capitalist for Comcast, the world's largest broadcasting and cable company✓.
Along the way he's made millions. Gulati sees such achievements as typical of his generation. "There's this very strong urge to be successful and to climb really quickly," he says of Millennials.
Why? Many reasons, beginning with social media. "Every time you log onto one of these social media platforms, you're constantly forced to compare yourself in real time to the progress of other people, and this really stokes this sense of competitiveness and comparison, which can lead to premature job hopping. There's this kind of existential question Millennials face. Why am I not the most successful person I know?"
Millennials want a meaningful vocation, says Gulati, who grew up in Wollongong, which also helps explain their outsized ambitions. "If you ask Millennials to rank what's important to them in their professional lives, compensation ranks four or five. Intellectual stimulation, sense of purpose, those are the things ranked at the top."
Baby Boomers and Gen-Xers, who held such lofty ambitions until the reality of a mortgage and providing for a family kicked in, might ROFL – in Millennial speak. But what's sobering is that Millennials are closer than any previous generation to achieving these ideals.
The power of the internet and access to cheap money has dramatically lowered the barriers to starting a business or climbing the work ladder at home and abroad. Twenty years ago online job sites were in their infancy; now, with one click you can find a job in New York, London or Shanghai – and it's only a cheap airline ticket away.
Gulati estimates the average tenure of a Millennial in a role is about four years. It's certainly the case for him. "It's a real skill these days to focus on one thing and do that really well and not get stuck in this trap of jumping at the next shiny new thing."
After leaving school Gulati took a KPMG cadetship. A year later he left to pursue a pop-up urban apparel company that featured on the TV series Big Brother, while completing his commerce degree. Next he co-founded Erbario Toscano, a bath and body products business, and juggled that while holding down a full-time job at Boston Consulting Group.
After four years Erbario Toscano was sold to Bumblebee Investments. Impatient working as a management consultant, Gulati quit and headed to Harvard Business School, which he believed would round out his business experience. Over networking drinks there he met Vivian Weng, a former investment banker and management consultant.
From an initial discussion FashionStake was born. The pair identified an untapped segment of the fashion market: selling the ranges of a huge number of upcoming American designers, who would otherwise struggle to get commercial traction. It was 2009 and Gulati was 26.
Gulati says FashionStake was profitable from its inception, since it took a 35 per cent cut on every transaction. The average order was $US300 ($387). Over the next two years, Gulati and Weng grew the business with the backing of venture capitalists. They sold to Fab.com for an undisclosed sum. "It took our business to something like a $US30 million run rate."
Gulati co-wrote a book about young business leaders, titled Passion and Purpose, while working at Fab.com for a year before returning to Boston Consulting Group in a more senior role. Two years later he was working at Comcast, deciding which new start-ups to back and offering advice such as make sure if you have a co-founder in business that it's an an emotionally intelligent marriage.
"Your co-founder is by far is the closest relationship in the start-up environment and if you're not on the same page in how to react to those things emotionally that tends to fracture founding teams," he says. "Viv and I were a good pair in that sense whenever something didn't go to plan we didn't blame each other or jump to conclusions or get greatly stressed out.
Gulati believes Millennials will be remembered as the generation that tried to democratise everything. "The theme of the next 50 years is to unbundle, democratise and make cheaper services and products that were previously controlled by big corporations. Profit pools completely controlled by large companies and shareholders are now accessible to you, me and people we know."
Co-founder of Expert360
Bridget Loudon believes everyone aspires to shape the world in some form but often the trade-offs are too much. "It's not that people don't want to change the world – it's that you have to give up too much wealth or material things that you have accumulated and put that on the line," says the 28-year-old co-founder of Expert 360. "If you value those things less in comparison to having an impact on society, you don't care about giving them up. What drives me is this hunger to have an impact on society."
Loudon and co-founder Emily Yue are driving change in the $US200 billion management consultant market. It's an industry that hasn't changed for 50 years and where the structure is to send costly teams of consultants in to advise companies. Loudon and Yue set up a platform where consultants can freelance their services to companies that don't want to recruit a whole team from the likes of McKinsey & Co or Bain & Co. Loudon and Yue both worked at Bain.
Within 48 hours of their 2013 launch, Expert360 had 700 management consultants signed up. This figure has grown to 7000, of which a third are based in the US. In April the business, which employs 26 staff, opened an office in New York. Loudon is planning to relocate there.
Consultants bid on jobs ranging from $1000 to $80,000 for government and business projects, involving strategy, customer supply chains, data and analytics. A consultant's average hourly charge is $100. Companies that have used its services include Australia Post and Virgin. Expert360 adds a margin on consultant's rates.
Loudon says the inspiration for the system came about in 2011 when she and Yue, who had been at Bain for a year, noticed clients had problems that couldn't be solved within the existing management consulting structure. "Companies were saying they didn't need a full team but they did need high-calibre people."
Loudon says Expert360 works because it's not just companies seeking flexibility – consultants want it too. "The second you say I'm pregnant or I want to go part-time or can I have flexibility, you're put in this bucket that you don't fit into our conventional model," she says. "We'll look back in 10 years time and say that was absolutely crazy. For me the purpose now is creating a workplace in which people have choice and they don't have to step off."
The start-up has received $5.1 million in funding from investors such as Frontier Ventures, r&ersand and wealthy individuals, among them former Macquarie Bank boss Allan Moss. However, it will be a number of years before Expert360 is profitable.
"We're now spearheading a global macro shift in the way people think about work and in particular professional services."
Loudon believes purpose is the root of her success thus far. "If you set out to be rich you will struggle to be successful. Success and happiness are greatly constrained in building a business if you don't have purpose." Loudon says at no point will she trade her happiness in what she's doing. "Excuse my French, but f--- that."
Loudon was born in Australia, spent most of her childhood growing up Ireland, and did a double degree in commerce and French. After university she established a clothing wholesale business, which was sold to an Irish retailer for a modest sum in 2008 just as the global financial crisis was wreaking havoc.
It wasn't her first venture. Throughout her school and university years she'd shown an enterprising streak, buying textbooks from Amazon and selling them cheaper than the university bookstore to fellow students. At school she managed a group of tutors, taking a cut of their fees.
After selling her clothing business she moved to Australia and applied for a job with Bain. "I had never really worked for anyone and I wanted to learn from people. There was only so much I could do by reading, trying, failing and succeeding. I wanted to work with people who had scars and success stories of building big businesses."
After three years, Loudon left Bain to launch Expert360, setting up a website that cost $180 and sending out 1000 LinkedIn messages to consultants asking them to sign up. In the first year, Loudon and Yue maxed out their credit cards but were already getting interest from private equity firms wanting to use some of Expert360's consultants.
Loudon believes it's easier for Millennials to start a business than for previous generations. "A tech start-up in 1990 cost $US5 million to get off the ground. Today it costs south of $US50,000 for that same start-up."
Then there's the power of technology. A smartphone packs more processing power today than the computers that took the first rocket to the moon during the Baby Boomers' time. "The barriers to starting something are super low – that's a big part of it," says Loudon. "Millennials, because they can change things, they question things more. They question traditional hierarchies and traditional ways of doing things."
She says her generation is less focused on working for a big name corporation. "They value skills, relationships, experience, learning more than say a company's brand. They realise a brand is not forever."
Loudon believes it would be very hard for a competitor to knock Expert360 off its perch because of the talent pool it has built up and its review system of consultants by clients. "What we have is a track record of three years, good reviews, more dynamic professional profiles than anywhere else in the world. It's hard to replicate."
Founder of Kaggle
How do you know when you've made it? Is it when Microsoft lets you know it's about to begin competing with your start-up? Or when some of the world's biggest organisations become your clients?
Microsoft this year launched an arm to compete directly with Kaggle, a business started by Melburnian Anthony Goldbloom. "I don't lose any sleep over this," says Goldbloom of the Microsoft challenge. "About eight or so companies, including Microsoft, have tried emulating Kaggle."
He may sound cocky but Goldbloom's confidence is backed up by the numbers. Half a million data scientists use Kaggle, while its nearest competitors boast only a few thousand users. Kaggle hosts competitions in which data scientists compete against each other to solve problems using data sets.
Companies using the service are seeking computer algorithms or technical expertise to help finish a product and are tapping talent beyond their own employees. Some of Kaggle's clients have included NASA, Facebook, Expedia, General Electric, Merck, Deloitte and Ford.
Kaggle is offering what some have dubbed the solution revolution. It recently hosted a competition to develop algorithms that could diagnose heart failure from MRI scans – a role usually performed by doctors. GE sponsored a competition that looked for ways airlines could optimise travel times and save millions of dollars. NASA used Kaggle's community of data scientists to more accurately image dark matter. In the latter competition's first week a glaciologist developed a solution so advanced the US government said it had outperformed the best algorithms used in astronomy.
Companies using Kaggle offer prizes to individuals or teams of data scientists who come up with the best solutions. These can be as little as $US150 and as much as $US1 million. Kaggle clips the ticket along the way, charging companies a fee for the use of its contest platform and a consulting fee for helping clients to set up their problems. It also hosts a jobs board for data scientists.
Kaggle was born out of Goldbloom's love of coding and statistics – and of boredom. At Melbourne University he studied econometrics and afterwards took a job working on macroeconomic models with the federal Treasury. From there he joined the Reserve Bank of Australia, where the modelling was more theoretical and mathematically interesting but – as he saw it – less practical.
"A lot of people who are much smarter and better credentialed then me do believe these models are useful," says Goldbloom. "I just happened to not see the magic. I felt like that type of model was mental masturbation. I didn't have a lot of freedom in my role as it was pretty closely defined and that made me a little restless."
This pushed him to start Kaggle. It was 2010 and he was 25. Goldbloom says being restless is often portrayed as a negative Millennial trait but it can be a positive too. "One of the really good things about a start-up is that it allows me to channel that restlessness productively."
He believes technology has helped offset the experience deficit often found in go-getting Millennials. But technology also has its downsides. "I get bored very quickly," admits Goldbloom. "I always need stimulation. If I'm waiting more than two minutes I will pull out my smartphone. That's not necessarily an instinct my parents have."
Kaggle came about when Goldbloom won a three-month internship on The Economist. The idea grew from interviewing company executives for articles and hearing them talk of problems he believed could be solved by data scientists. "I was thinking, 'Wow, I would love to work on your problems and I would do a very good job.'"
The company now employs 14 people in its office overlooking the San Francisco Giants baseball stadium. Goldbloom moved to the US four years ago at the insistence of investors who have poured $US11.5 million into Kaggle. Among them are Index Ventures, Khosla Ventures and Max Levchin, a Paypal co-founder who's now Kaggle's chairman. The US was also home to Kaggle's biggest customers.
"Bringing something new into the world is both rewarding and a good way to spend your life," says Goldbloom. "It's nice to leave a mark that does change people's lives. I would be thrilled if we could build Kaggle into the size of Amazon."
However, it hasn't been an easy road. "The process of starting a company and managing people really teaches you a lot about yourself, about human nature, how to build teams that work well together and how to manage people," he says. "You become much more emotionally intelligent. I used to just try and hire the smartest people I could find but that's not enough." He won't hire anyone with a big ego.
"A lot of companies end up falling apart because a founder doesn't figure it out fast enough.I probably didn't figure it out as quickly as I should have but I was lucky in that Kaggle had raised quite a lot of money in our earlier round of financing and we spent quite conservatively, which gave me the runway to learn what I needed to learn about managing people and building a business."
For now, Goldbloom, 32, is ploughing Kaggle's profits back into the business. His team is building a commercial platform alongside the competition platform, where data scientists can share and collaborate among themselves or directly with companies. "We're well aware of the fact we can't rest on the first thing we built," he says.
Founder of Aimed Capital
At 33, Daniel Weston runs a $US30 million hedge fund in Munich, which he founded only three years ago. Last year it ranked among the top hedge funds globally by performance.
It's Weston's dream job and he's been working towards it since he was a precocious adolescent growing up in Perth. At 15, Weston began trading stocks with $500 given to him by his public servant dad. By the time he was 23, he'd grown that into a $114,000 portfolio. He then blew the lot on a single bet against Rio Tinto.
"I got sucked into this one story," he recalls of investing all $114,000 – and a bit more that he borrowed – in Cazaly Resources. The latter had snapped up an iron ore tenement that Rio Tinto had let lapse and overnight it became one of the hottest stocks around. The tables would eventually turn on Cazaly when Rio got state government support to get the tenement back.
"I spent that weekend in my bedroom thinking 'Oh my God', I'm going to get wiped out." Well, almost. At 23, Weston may have lost his stock portfolio but he still had Westware Computers, a business he founded that looked after computer network infrastructures for private schools and small businesses. It employed seven staff.
Along the way he also taught himself to code, played cricket for Western Australia, studied for a commerce degree and bought a house to renovate in a hot property market. But it was trading that he really loved and now he had cash flow problems. Weston couldn't service his mortgage and he couldn't draw money from his business as it had year-long contracts which weren't renewed until December.
"In all my reading of successful business people, whether it was Richard Branson or Steve Jobs, they had a really big blow up at the start, which was a turning point for them knowing what they wanted, who they were and how not to blow up again."
It was April 2006, and Weston proceeded to max out his credit cards with cash advances to cover the mortgage repayments. He was forced to do the house renovation himself. By year's end, he'd sold the house for $120,000 more than he paid for it. He also sold his business, for just under $1 million. "It wasn't a WhatsApp, YouTube, Google or Facebook exit unfortunately," he jokes.
Early the next year, he packed a laptop to continue his share trading and set off backpacking around Europe, with a plan to eventually find a job at a London hedge fund. His first stop was Munich. Days after arriving he spied a Macquarie Bank sign that would change his future. Weston dropped Macquarie's Munich office an email and his CV. The reply came back swiftly: we're not hiring. The following day, however, he got a call from Wilhelm Schroeder, a former head of Macquarie Bank Munich, who was setting up on his own. He offered Weston a job as an assistant portfolio manager with Schroeder Equities.
Weston worked for Schroeder but after hours developed his own diversified global macro investment process with the aim of one day starting a hedge fund. . "It gave me the freedom and flexibility to look into my own ideas," he says of the lucky break. He spent his time writing a software program that collected and analysed as much global economic and inflation data as possible. He based his research and investment strategy on that data.
Weston sent his research to anyone he knew in the hope it might build him a reputation. Eventually the research got picked up by Gabriele Manferdini from the Zurich-based family office KTS Capital Management. Weston recalls: "They contacted me and said, 'What you're doing is making us money and we think it's very good. What are you plans? I said, 'I want to start a hedge fund', and they said, 'When you do we'll be your first investor.' "
In 2013, Weston founded Aimed Capital, which is short for his four favourite words: Aspiration, Inspiration, Motivation and Dedication. It started with $US2 million, half was from KTS and the other half was Weston's money and that of family and friends. He managed to double that to $US4 million but it still wasn't big enough.
"I went without a salary for the first two-and-a-half years. I had to keep costs down as far as possible so the business could work. The success of a hedge fund is based on how many years it's running."
Weston's solution was to find another investor who believed in what he was doing. He approached Patrick Picenoni who ran Altrafin, a Zurich-based asset manager. Picenoni declined to give him any money initially but asked Weston to send him Aimed's research for three months and a daily update of its trading performance. At the end of the three months, Picenoni put in $US500,000 of his own money. Over the next six months he invested a further $US5 million of his own and clients' money.
"I feel quite blessed having the support of the guys who saw me as a young, ambitious, hungry guy to give a chance and not only to invest their time but also money and their belief in," Weston says. "When you're an entrepreneur people often want to know you and pat you on the back and tell you how great you are. But it's very rare that those people want to invest in you."
His fund made a 31 per cent return in Australian dollars last year. Aimed employs five staff including Schroeder. Its chairman is Axel von Rosen, who also chairs Macquarie Funds Group in Europe.
"For our generation it seems so much easier to achieve your goals," says Weston. "Millennials have got so much more access to different ways of making the world a lot smaller so we can achieve things a lot earlier."
"Over the last 20 to 30 years or so it has been a really good time to be alive. The economic conditions have been pretty good and you couple that with technology which has made the world a lot smaller. The opportunities to travel are far greater, giving people freedom to chase their dreams."