Joline

What Launch Looks Like

It used to be simple: graduate from high school, move on to college (with varying lengths of professional preparation), get an entry-level job, and, voila—you were “launched” into adulthood, a career, and self-supporting behavior. The launch was a rite of passage, a move from the shelter of Mom and Dad to a bracing life of independence and career “success” (whatever that meant).

But, as 21st century grads ready themselves for worldly participation, the once normative passage from college to first job grows increasingly challenging. Underemployment, unemployment, global mobility, and a lengthier “launch stage” have made internships, temp work, entrepreneurial ventures, and stints in a variety of “disorderly” experiences more common.

Source: “Millenials: A Portrait of Generation Next,” Pew Research Center, February 2010

Well educated, well connected, motivated, socially networked twenty-somethings are competing with older non-retiring workers and people willing to take lower pay for entry level jobs that are now as rare as rain in the Atacama Desert. It is, on some level, shocking.

A friend’s daughter had her heart set on being a writer for Gourmet magazine some day. She was disconsolate when disruptions in the magazine world caused that venerable old magazine to close and it took her a while to “re-envision” her life path. Education and connections still matter—indeed they may be more critical than ever—but they are not a guarantee of entry into careers and professions that once assured the realization of ever more comfortable lifestyles.

One in seven millenials with jobs still rely on parental subsidy. A successful “launch” today requires more than a good school pedigree and connections. This generation will need new strategies and tools to achieve independence and well-being.

Whether 5, 15, or 25, preparing young people to launch into a purposeful adulthood and develop their own safety nets means helping them envision themselves less inside specific jobs and professions and more as contributors to great work. Effective safety nets will be self-invented and self-managed, not provided by “the company” or even Mom and Dad. Salaries as we have known them are likely to be less reliable than one’s ability to create income solutions.

Our job is to help kids prepare for a world we can barely imagine, whether that means helping the 10-year old consider himself as a freelance animator or suggesting teens become experts in anything. Adaptability, flexibility, and entrepreneurial attitude will be hallmarks of kids well prepared for the brave new world flying at them.

A version of this article appeared in the March 2010 edition of our client publication.

What Do You Do When You Can Afford to Lose Money on Your Kids?

Last week, Ron Lieber wrote a great piece about the $2 million investment that Georgia’s gubernatorial candidate, Nathan Deal, put into his daughter and son-in-law’s business. The failure of that business, a subsequent loss of the investment, and bankruptcy, is making Deal’s run for governor of Georgia a lot more challenging than it needed to be. One commonsense conclusion Lieber draws from this tale of fatherly support is: don’t invest money you can’t afford to lose.

But what if you can? What if a few thousand, or a few million dollars in an entrepreneurial education is feasible—and seems like a good thing to do for a highly motivated kid? Let’s assume that amazing twentysomething you raised has a good idea, lots of energy, and great passion—maybe even some relevant experience. They pitch an idea. How do you respond? I know  families for whom the investment in a child or in-law has been a great experience. The kids make money; the family realizes a return and pride reigns in the family. The next generation is focused on wealth-building, not just living on legacy. How great is that?

With twentysomethings facing an unemployment rate around 15% (for 20 to 24-year-olds), starting a business may be a good alternative. Developing the next generation’s entrepreneurial muscle is exactly what families need to do. But whether you have a daughter poised to make a breakthrough in neurotechnology or a son with rock star ambitions, helping them make their dreams financially sustainable is as important as encouraging the dream itself.

So if you can afford to support the dreams of the next generation, how do you make it work? Children of means have an abundance of opportunity—philanthropic and commercial. Friends, relatives, and strangers who think your kids have large pots of “discretionary” funds will provide endless opportunities to “make a difference” or be “in on the ground floor”.

Last Sunday, Nick Kristof shined a light on what he calls the DIY Generation: young people who see problems around the world and decide to fix them with their own NGO, using their intelligence, their social networks—and their own (or their family’s) financial resources. Venture opportunities don’t just come from outside, many kids think up there own “investment opportunities.”

So Sally or Sam come to you with an idea for an enterprise, commercial or philanthropic. What do you do? How the “investment” in the first lemonade stand was handled is a clue to how families will handle investments in adult children. If you practiced what Lieber refers to as “radical honesty“  when they were seven, the practice will seem like normal family policy today. But if you bought all the ingredients for the lemonade and then purchased the finished product so your kids could make some money, a refusal to make an investment in an adult idea may feel like a betrayal.  (Don’t let that deter you now—they’ll get over it.)

For each family there is a specific set of responses regarding how to respond to an adult child’s request to invest in their business. But there are also a few universal guidelines:

• It’s self evident that making an investment in an adult child, no matter how accomplished they are, without doing due diligence is a bad model to set. If they actually are going to run a business, they will need to do due diligence in plenty of instances. This is the act of a good mentor—and may turn up information that could help their business success. Just do it and don’t write any checks until the process is complete.
• Treat them as the adults they are (even if their own self image is less than “adult” just yet). They want adult responsibility; give them the respect and obligations that accompany that. Ask the hard questions; insist on a serious, rigorous business plan. Give them the help they need to create a solid plan if necessary, but making an investment based on hopes and promises does no favor to the would-be entrepreneur. It’s a set-up for future failure.
• Think about family policy. What practices have worked in the past and what precedent might this set? Exceptions are fine, but where family policies are clear and explicit, next-gen entrepreneurs can be prepared for what they have to do to get a family investment.
• Avoid crisis investments with your offspring. However much you want to protect them from the harshness of business, early failure offers a bounty of opportunity to learn. Even if you can afford for them to lose a healthy sum of capital, the lesson is that you will subsidize them, not that they will gain strength by making hard decisions and learning from their experience. Often the imperatives of due diligence, healthy balance sheets, and financial sustainability, come in the second business, not the first. Don’t rob them of teachable moments by protecting them as though they are still children.

Many investors say they invest in people, not ideas. If your kids are not yet those people, help them become the person you will invest in. Say, “let me help you get ready”, not just “no” or, worse, “yes” with misgivings.

Launching the Next Generation: Extreme Networking

I just heard from one of the presenters at our upcoming Fashion and Finance NYC retreat (there are a couple of open spots for the June 24-26 event, if you want to join us). Claire Meunier and her mother are going to do a joint session on the “Extreme Networking” it took for Claire to get established after earning an MBA from one of the top schools in the country. Their story is compelling and instructive. More than 16 percent of 20 to 24-year are unemployed and, short of a miracle, I am not feeling Pollyanna-ish about a big improvement anytime soon. The economy is undergoing a massive restructuring that no one wants to talk about.  But more on that another day.

Not Enough:

At Fashion and Finance NYC (June 24-26) we about the "Extreme Social Networking" it takes to get great jobs now.

Claire and her mother are going to talk about what it took for Claire to land on her feet in a meaningful position, commensurate with her experience and education. It took Claire almost a year of relentless conversations, meetings, inquiries, reminders, letters, emails, more meetings, and outreach to everyone she had ever met in her life (You think I’m kidding; I’m not.) She understood she had to build a vast web of relationships—REAL relationships, not just Facebook friends or LinkedIn connections. She had to be relentlessly tenacious. She was and she succeeded. And her parents, used to a world in which hard work and a good track record are rewarded, had to adapt to the new environment their daughter faced.

Claire’s story is an important one because in many ways she had EVERYthing going for her: a great experience, top level education, supportive family, intellect, sense of humor, and social network that was already strong. Even with all those assets, her journey was challenging.

The implications for kids who don’t have such resources, or who are not prepared to attack the quest for meaningful, sustaining work are significant. Without Herculean effort, many young people will be left out of the pool for ‘great work’. And if they are counting on less challenging work where they can ‘get by’ they are still in trouble. Those entry-level jobs that used to soak up the energy of American kids are shrinking. Think of all the ticket booths, airline jobs, and retail functions once manned and womanned by actual people, now handled by bank ATMS, airline kiosks, self-service restaurants and electronic touch screens. The entry-level world that launched millions of boomers is vanishing.

Everyone coming to Fashion and Finance next week will enjoy the mother/daughter tale of how Claire got ‘launched.’ I plan to reprise my ‘Launch Webinar’ later this summer and will include stories from their presentation. This new economy requires that families manage their ‘human capital’ with a new attention to developing entrepreneurial kids with extreme networking skills and the capacity to build authentic relationships that will help them find a place in this new and changing economic web.

My mantra for families

I got an email from a reporter the other day I thought I’d share with you all! Because I am preparing for the webinar on “The Launch” coming up later this month (email me for more info), his email triggered a small rant (below). I’d love your comments.

Here’s what got me started:

The reporter, Steve Fox, writes for SPAN, a publication produced by the U.S. Embassy in New Delhi with the objective of explaining America to a high-end audience of Indians–lawyers, doctors, legislators, executives, etc. He’s working on a piece explaining why, as he puts it, “we in the U.S. put such a high value on working voluntarily at an early age—the paper route, the lemonade stand, clerking in a store, helping out on the family farm or in the family business, that kind of thing. I’ve explained,” Fox continued, “that things have changed in the U.S. and that, in the current environment, with high unemployment and the prevalence of illegal workers, many jobs that might have been done by teenagers or college students are being filled by someone else.” But they [SPAN] want an article nonetheless, partially because the value system in India is much different—middle-class kids there would not be encouraged to work. So I wonder if you would be wiling to give me your thoughts. Is it the Protestant work ethic, capitalism, or values of learning self-reliance that make a difference here?

Because of the webinar and the white paper we’re about to publish on “How Great Families Launch Twenty Somethings,” I have spent a lot of time thinking about this question. This is what I wrote back to him:

The values you describe (work ethic, early work for success) are still core and active across dominant US cultures. And there is still an equation linking work with worth here in the US. Across all income groups, the idea that you do nothing and pursue idleness is anathema, embarrassing somehow. Philanthropy in the United States is another genuine form of meaningful work. But you’re right that the game has changed.

The work we’re doing on ‘The Launch’ phase of family development emerged from families asking us for help getting twenty-somethings ‘launched’ into independent, self-sufficient lives. Subsidy of adult children is a rising problem in this country, across all income groups and the drive to ‘help kids get on track’ is a reflection of our sense that work and worth are connected.

As I first started to work on this issue, I admit to having leaned toward the bias that we were dealing with ‘slacker kids’ and overly protective parents (my own work ethic writ large, front and center). But I was wrong. Even very well connected families with kids who are quite accomplished are finding that entry into the work world—and even the volunteer work world—is pretty challenging.

Here’s why: whole industries are shifting and collapsing. Publishing, which use to swallow up thousands of entry level kids hardly exists as we once knew it. It’s social media now and at the entry level it doesn’t pay. Finance has consolidated and replaced low level jobs with technology, law firms are parking associates in non-profits until things ‘pick up’, taking up non-profit slots entry level kids might have taken. And as manufacturing collapsed, ‘middle class’ and working class adults are moving into what would otherwise have been entry level jobs.

The work ethic is very much alive. How to exercise it is getting more challenging. Meanwhile the department of labor just issued guidelines on internships, making the unpaid route to your first job harder. They had to, abuses were rampant. But still, getting a foot in the door for kids who can AFFORD to work free and want to work is even harder.

Which takes us to my new mantra and the new cry you will be hearing more of (and that we’re working with families on): “You can’t assume your kids will be able to take a job; they will have to learn how to MAKE a job.” Slacker kids will in fact have an ever harder time getting established, but the worry is that kids with a driving work ethic will be struggling too. Everything we’re doing with young people these days is aimed at building their entrepreneurial skills, supporting their most tenacious drives, trying to buttress that connection between early work and experience and later engagement in purposeful, meaningful lives (this is not JUST about the money, it’s about building great lives).

It may be that out there in the future I cannot yet see there is a more laid back, less work driven vision of existence that the next generation will morph into. And maybe that’s a good thing. For the moment at least, the best I can say is that we are ‘in transition.’

What do you think? Is there a new work ethic? Is our thinking unique?

Committed to the Manifestly Important and Nearly Impossible

Don’t undertake a project unless it is manifestly important and nearly impossible.
Edwin Land, inventor, founder of Polaroid

Edwin Land challenged the laws of physics to invent instant photography, in the pre-dawn days of digital imaging. Land was still in his lab when I worked for Polaroid (I was very young) and to be in that environment in those days was to know what it meant to work for someone who believed in his bones that impossible is just a state of mind.

image via SavePolaroid

Friends and colleagues know that I carry Land’s conviction with me. Like a tube of lipstick in my purse, I am never without it. And three pieces of news in the last few days reinforced my adherence to Land’s directive.

The first is the passage of the Health Care Bill. Though still under siege, I know that families concerned about the safety of uninsured 20-somethings will rest easier as they understand the implications of what the bill means to them.

Fifty percent of all college grads under 25 are working at jobs that do not require a college degree. This suggests that millions of twenty-somethings work at jobs that don’t offer health insurance. And though you hope young adults are healthy, life happens, and an emergency appendectomy, an accident, or a virus picked up while traveling can undermine the economics of the most financially secure families.

As one dad said to me: “My son [23] doesn’t want to spend the money to get health insurance. But if anything happened to him I would of course spend whatever it takes to care for him. Of course, that has consequences for the rest of my family…” Giving kids a chance to ‘launch’ without the extra burden of hefty healthy insurance bills is a boon to family economics and peace of mind.

The second bit of news is the Impossible Project’s Announcement that the film made famous by the SX-70 camera) has in fact been recreated and is available to serious photo buffs. Read more about this improbable story.  I love watching people challenge the notion of ‘impossible!’

And finally, some impossible news of my own. Going through old files this week, our editor came across an 2002 WSJ article profiling financial education firms. Of six companies mentioned, only two on are still operating. Building a company, any company, is an almost impossible task. And that our vision—‘financial education, it’s not JUST about the money’ still resonates with clients, friends, investors, and partners is encouragement enough for me to stay committed to the ‘impossible.’