K8 Ventures Gen-Z Spotlight: Volume 1

We’re starting a GenerationZ perspectives blog, authored by “Z’ers” across the country. It seemed fitting that we should start series about our newest generation on the eve of America's birthday. Well done Rosario! And Happy Fourth to all! - Kurt

Generation Z: Create or Innovate?- By Rosario, Sophomore

Generation Z is defined as the generation after Millennials, those being born from 1995 to 2010. Generation Z is not radically redefining our world. Yet. Gen Z is just starting to enter the workforce. That said, a few characteristics are apparent; they’re obsessed with pragmatism. When it comes to business and technology, the question is not, “What technology will disrupt the industry” but rather, “What technology can we utilize to make a realistic impact?” This trickles down into their decision to follow the inventive path, to create a new technology, or the innovative path, to improve upon existing technology. More often than not, Gen Z has chosen the path of innovation.

57% of Baby Boomers, Generation X, and Millennials, the generations preceding Gen Z, believed that a radical change in industry or innovation would be required to “change the world,” compared to only 49% of Gen Z participants (McKinsey). Uber, Facebook, Airbnb, Spotify, Kickstarter, Instagram, and Youtube are all part of a growing list of Millennial founded companies disrupting the industries they occupy. These companies are labeled as disruptive as they take a stagnant industry that hasn’t seen much change and give it a complete overhaul, flying against the traditional rules of the industry. Generation Z has taken general business a different way than Millennials. With a quick google search of entrepreneurs from Gen Z a pattern will emerge very quickly. All of the companies are focused around innovation, not invention. Whereas Millennials were off at work developing industry disrupting businesses, Gen Z have been very pragmatic with their development decisions. For example, George Matus raised $2.8 million for his company Teal which sells commercial drones and its first product, an unmanned aerial vehicle. Instead of reinventing the wheel, Gen Z makes it rounder, sleeker, and more efficient. Matus was able to take an industry which already existed, and introduce a more efficient solution. They’re actively working on improving the technology we have now to make it realistic and usable for our uses instead of setting out to be new and disruptive.

In a survey conducted at a STEM high school to analyze Gen Z’s view on innovation, 77% of participants stated that innovation would be more influential to their career than invention. One response stated: “I’m looking to go into tech entrepreneurship and there are lots of things which exist already that just need to be improved, and I think there is a bigger market for innovation than introducing an entirely new tool to the market.” Gen Z doesn’t see the need to spend valuable resources to introduce new technology when there is already so much technology that currently exists and needs to be improved. Another stated that, “I think innovation will be more relevant as I look for a career in artificial intelligence since it makes the most sense to improve this existing technology.” Most, if not all, of the responses were focused around what makes “sense” for the market thereby finding the path of least resistance to sell their product. One response especially summarizes this process in a few words, “Innovation = invention * commercialization. If you can't commercialize an invention, it means nothing.”

This pragmatic innovation is heavily reflected in Gen Z’s consumption habits. Gen Z has grown up with many of prior generation’s consumer products transforming into services. In other words, they want access to these products without owning them. Instead of buying a car, they have ride sharing services. Instead of cable, 71% of Gen Z has a Netflix account. Gen Z has recognized that they may only need a ride occasionally, so instead of having a $400 monthly car payment they make the financially sensible option of using a ride sharing service which may only be $200 per month. Generation Z is less likely to consider themselves as “big spenders” compared to previous generations. This ties into the innovation aspect of Gen Z because it allows them to be flexible; they don’t get tied into one option for too long. Gen Z was the only generation to grow up with these service based companies that are constantly innovating their products. This has caused Gen Z to be accustomed to the constant stream of innovation available to them every day, not just when they buy a new product every few years. This allows them to be able to quickly adapt to new innovations and not get cemented into old technology.

From what I have witnessed as a member of Gen Z, most members of my generation are insecure in their abilities to invent. This is part of the explanation for their interest in innovation, the other part being their life experiences thus far. Generation Z has heard all of the stories of inventing from Baby Boomers, Generation X and Millennials. Most are what I like to call the Garage Stories, stories of highly intelligent, driven, and ambitious people working out of their garages to develop the next revolutionary technology. While educators and parents tell these stories to motivate Gen Z that anything is possible, it creates this fear that inventing is only for people who are incredibly talented enough to develop something revolutionary out of their garage. Companies like Dell, Apple, Microsoft, Google, Amazon, and Facebook were the subjects of these Garage Stories. 50% of startups don’t make it past their 5thyear, which because of news being accessible at our fingertips, my generation hears quite often. Shyp, Beepi, Juicero, Peppertrap, Sprig, YikYak, and Doppler Apps all raised hundreds of millions of dollars in funding, and received wide amounts of press coverage. All went belly up in the end. These were companies that were deemed to be the next titans of industry, and widely coveted for their great ideas and inventive nature. From my observations of Gen Z they feel that with inventing, the success is too far away, meaning you have to be the next Apple to really succeed, and the looming fear of failure is all too close. Gen Z was the first generation to have technology widely implemented in the classroom, and therefore Gen Z has a strong understanding on how the technology works from the user side. The reason that Gen Z is focused on innovation rather than invention is because we have the most experience with the newest innovations from a young age, and it’s through these interactions that we can learn what doesn’t work and needs to be fixed. That is why Gen Z has taken the innovative approach.

Inventing the next Apple is a daunting task that seems unachievable to even the most intelligent of young adults. Competing with some of the biggest names seems unrealistic, but with our huge amount of experience with these big names, we can make them better. From an early age we have used and experimented with technology, so we know the in’s and out's of efficiency and user experience. This allows Gen Z to have an easier time innovating than dealing with the fear of inventing. Many of the responses from the survey mentioned above cited that it was not sensible to invent something new because of all the things that come along with getting that item to market and because of the imperfect technology around us. From a simple probability standpoint, innovation piggy backs off of technology that is already in the market, and invention needs to break into the market. Which one is going to have a better chance entering the market? Innovating is a more realistic, achievable and comparatively less risky way of inventing that my generation, or at least my peer group, favors.

Generation Z views the world a little differently, to say the least. They look to find the most realistic path centered around sensibility and carefully calculated probability. In a world with an already established abundance of technology, they ask, “How we can improve rather than how we can create?” Gen Z may not show up to be the most radical generation, but stay tuned.

Because as far as we’re concerned, the “Z” isn’t the end, it’s the beginning!

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