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The online magazine,, was started by Stephanie Kaplan and Windsor Hanger, both 22 and is now turning a profit.

Five years ago, after graduating from New York University with a film degree and thousands of dollars in student loans, Scott Gerber moved back in with his parents on Staten Island. He then took out more loans to start a new-media and technology company, but he didn’t have a clear market in mind; the company went belly up in 2006.


It made me feel demoralized and humiliated,” he says. “I wondered if this was really what post-collegiate life was supposed to be like. Did I do something wrong? The answers weren’t apparent to me.”

Still in debt, Mr. Gerber considered his career options. His mother kept encouraging him to get a “real” job, the kind that comes with an office and a boss. But, using the last $700 in his bank account, he decided to start another company instead.

With the new company, called Sizzle It, Mr. Gerber vowed to find a niche, reduce overhead and generally be more frugal. The company, which specializes in short promotional videos, was profitable the first year, he says.

Mr. Gerber, now 27, isn’t a millionaire, but he’s paid off his loans and doesn’t have to live with his parents (he rents an apartment in Hoboken, N.J.). And he thinks his experience can help other young people who face a daunting unemployment rate.

In October, Mr. Gerber started the Young Entrepreneur Council “to create a shift from a résumé-driven society to one where people create their own jobs,” he says. “The jobs are going to come from the entrepreneurial level.”

The council consists of 80-plus business owners across the country, ages 17 to 33. Members include Scott Becker, 23, co-founder of Invite Media, an advertising technology firm recently acquired by a Google unit; Lauren Berger, 26, founder of the Intern Queen, a site that connects college students with internships; Aaron Patzer, the 30-year-old who sold to Intuit for $170 million; and Josh Weinstein, 24, who started, a social networking site that is backed by a PayPal founder.

The council, which has applied for nonprofit status, serves as a help desk and mentoring hotline for individual entrepreneurs. People can also submit questions on subjects like marketing, publicity and technology, and each month a group of council members will answer 30 to 40 of them in business publications like The Wall Street Journal and American Express Open Forum, and on dozens of small business Web sites.

Council members assert that young people can start businesses even if they have little or no money or experience. But whether those start-ups last is another matter. Roughly half of all new businesses fail within the first five years, according to federal data. And the entrepreneurial life is notoriously filled with risks, stresses and sacrifices.

But then again, unemployment is 9.8 percent; Mr. Gerber’s in-box is flooded with e-mails from young people who have sent out hundreds of résumés for corporate jobs and come up empty. According to the National Association of Colleges and Employers, only 24.4 percent of 2010 graduates who applied for a job had one waiting for them after graduation (up from 19.7 percent in 2009). What do some people have to lose?

The lesson may be that entrepreneurship can be a viable career path, not a renegade choice — especially since the promise of “Go to college, get good grades and then get a job,” isn’t working the way it once did. The new reality has forced a whole generation to redefine what a stable job is.

“I’ve seen all these people go to Wall Street, and those were supposed to be the good jobs. Now they are out of work,” says Windsor Hanger, 22, who turned down a marketing position at Bloomingdale’s to work on, an online magazine. “It’s not a pure dichotomy anymore that entrepreneurship is risky and other jobs are safe, so why not do what I love?”

Mr. Gerber argues that the tools to become an entrepreneur are more accessible than they’ve ever been. Thanks to the Internet, there are fewer upfront costs. A business owner can build a Web site, host conference calls, create slide presentations online through a browser, and host live meetings and Web seminars — all on a shoestring.

Can’t afford a Madison Avenue address? Try borrowing one instead. That is what Mr. Gerber did, for $300 a year, from, which forwards mail from a recognizable address. He says it saved him $100,000 in rent and gave Sizzle It the credibility it needed to start attracting clients that now include Procter & Gamble and the Gap. He does most of his actual work at home and in coffee shops and shared work spaces.

“If this were the 1980s, I’d need a corner office,” says Shama Kabani, 25, a Y.E.C. member and founder of Marketing Zen, a digital marketing firm in Dallas, with yearly revenue in the seven figures. “All you need today is a laptop, patience and willingness,” she says. Ms. Kabani hired all of her 24 employees virtually; 15 are in the Philippines. “I’ve never met any of them,” she says.

Open-source software can reduce or eliminate the need for consultants and tech support. When Annie Wang, 21, co-founder of, wanted the articles on the site to rotate in a slide show, she didn’t hire a Web designer. She found a free online resource and spent a day teaching herself how to create the slide show.

Being a young entrepreneur means coming up with creative ways to fill your knowledge gaps, says Eric Bahn, 29, a council member and founder of, an M.B.A. applicant community that generates close to seven figures in revenue. Mr. Bahn, who does not have a technical background, found a free resource on the Web and taught himself HTML to build his site.

Most of the business owners who belong to the council did not need much physical space to start their companies. For the person who wants to start a restaurant, a bakery, an exercise studio — or any other business that requires renting or owning property — the barriers and expenses are still high. Mr. Gerber warns that anyone starting a brick-and-mortar business still faces the same cost barriers they always have — including high rent. He advises young people to start a business that does not require expensive space.

But start-ups do need some financing. So Mr. Gerber is also starting the Gen Y Fund, from which young entrepreneurs can seek funding. Council members will have the option of investing in the fund starting next year.

Could it be that the council and separate fund are mainly a way for Mr. Gerber to identify new investing opportunities? He emphatically says no, adding that helping young people succeed as entrepreneurs through the council is his passion.

As far as the fund is concerned, “We are looking to spearhead a major shift in how resources are allocated to our generation, because no one from above is going to do it,” he says.

The goal of the fund is not to find the next Facebook or sexy Web start-up, Mr. Gerber says; instead, it will look for practicable and marketable business ideas. In fact, a favorite phrase of his is “boring is better.” He’ll be looking for businesses that are incubated outside of Silicon Valley.

The council and fund do add visibility to Mr. Gerber’s entrepreneurial empire. In addition to running Sizzle It, Mr. Gerber writes a widely syndicated column for young entrepreneurs, and he recently published a book called “Never Get a ‘Real’ Job: How to Dump Your Boss, Build a Business, and Not Go Broke.” He also runs Gerber Enterprises, his personal investing fund, and is an investor in a restaurant group.

Mr. Gerber has never taken a business or economics class; he says he took a lot of people out to lunch to learn about the nuts and bolts of the business world. “I didn’t go to my third-tier upper-management boss,” he says. “I e-mailed people in my circle and figured who knew what I needed to know.”

Lack of experience can actually be an asset to young business owners. When Ms. Kabani first started Marketing Zen, she tried to hide her age through a combination of wardrobe choices and trying to sound “older.” “I thought I was fooling all these people, but then one of my clients told me he hired me because I was 23. He wanted someone who spoke digital as a first language, not a second. It was a mind-blowing moment for me.”

Ms. Hanger, co-founder of along with Ms. Wang and Stephanie Kaplan, 22, says being young helps attract advertisers like New Balance and Juicy Couture to the site. “They like that I am my readership. I was in college six months ago,” she says. The site recently started turning a profit.

Many of the council members aren’t bankrolled by their parents. Only a third of them received outside funding to start their businesses. In fact, Mr. Gerber’s message to young entrepreneurs is “No one will give you money” and “Start on a shoestring budget,” something many of them did.

For many of these entrepreneurs, success didn’t happen overnight. Mr. Bahn started in 2005 as a blog that developed a following over the course of a few years. It was three years before he quit his day job in a general management program at Intuit to work on the site full time.

Even if these 20-somethings pulled it off, the reality is a vast majority of entrepreneurs, of any age, don’t succeed. “The first business is probably going to fail,” says Arel Moodie, 27, a Y.E.C. member and co-owner of the Extreme Entrepreneurship Tour, which educates college students on starting a business. Mr. Moodie’s first two businesses — a calendar company and a protein drink company — flopped and put him $30,000 in debt. (He has paid it off.)

Ben Brinckerhoff, 28, who is not a member of the council, started, an online tool to test computer software in 2008. The company folded last spring.

Mr. Brinckerhoff was formerly a software developer at Microsoft. “There are very real cons to starting a company. It can hurt your ego, and financially it’s a big hit. If I had stayed at my old job at Microsoft, I would have been better off financially,” he says.

The silver lining, however, was that Mr. Brinckerhoff got inquiries from 10 companies about working for them after they read on the Web or heard through word of mouth that his company had failed.

“Employers like the entrepreneurial skill set,” he says. “They want to hire people who are risk-takers and can make quick decisions.” He is now working as a freelance Web and technology consultant in Boulder, Colo., and hopes to start another company.

When deciding whether to start a business, “You have to really want to do it,” says Maia Josebachvili, 27, a council member and founder of Urban Escapes, which organizes outdoor trips. She quit her job as a derivatives trader on Wall Street to start her company, which grew to 45 employees and was recently acquired by LivingSocial, a consumer site.

“It takes a lot of discipline. I didn’t eat out for the first six months, and I lived on my friend’s couch,” Ms. Josebachvili says. “Unless you are independently wealthy, it’s a lifestyle adjustment.”

Via New York Times