Audio Making work: Young entrepreneurs turn away from weak job market (story audio) Photos "Freeze" founders, and friend Maddux: "I don't see any shortage of ideas" Philippi and one souped-up suspension system Resources "The Entrepreneur Next Door," a recent study by the Kauffman Foundation Anderson Entrepreneurial Center, St. Cloud State University John M. Morrison Center for Entrepreneurship, University of St. Thomas PIK Fabrications College Nannies Freeze.com Your Voice Join the conversation with other MPR listeners in the News Forum.

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Making work: Young entrepreneurs turn away from weak job market
by Jeff Horwich, Minnesota Public Radio
April 29, 2003

Nate Philippi, 22, with one of his recent projects. The truck belongs to another young business owner, 25-year-old Caleb Nelson, whose autobody and painting shop is next to Philippi's. (MPR Photo/Jeff Horwich)

Since the economy turned sour, the job market has become a rather forbidding place for young people. Corporate scouts don't stake out college campuses the way they used to. Many 20-somethings send out reams of resumes, only to wind up in jobs that don't make them happy. But a few bypass the job market altogether to start a new business of their own. Some of these young Minnesotans say in some ways, there's no better time to be your own boss.

Waite Park, Minn. — Nate Philippi is 22 years old. To demonstrate how he makes his living, he opens the door of a brightly painted truck, grabs a bulky remote control covered with silver switches, and makes the truck jump up and down. Bursts of compressed air can be heard from under the vehicle.

Three years ago Philippi designed a new trick suspension kit for his car, using a system of air bladders. What Philippi built seemed faster and more dependable that anything he could buy at the time. He took the system out of his car and put it up for auction online. The bidding was furious.

I wasn't looking to make a fortune off of it or anything ... but as it sits now I'm making decent money [and] it's just fun owning your own business. - Nate Philippi

"I threw another one up there and it sold really quick too, and I started selling them on EBay just kind of as a part-time thing," Philippi said. "Within six months to a year it had turned into a huge overwhelming demand for these new air-ride systems."

Today he does about 75 percent of his business online, and also serves local clients at his shop in the St. Cloud suburb of Waite Park. Some of the fun is gone; now about half his time goes toward bookkeeping and other tedious aspects of running a business. But it's worth it.

"It's not like you have to go work for someone else and make them money, and make eight or 10 bucks an hour and work for them all day," Philippi said. "I can work for myself instead of having some other guy determine if I'm going to be fired today or tomorrow or how much money I'm going to make."

Another 22-year-old striking out on his own is Joe Keeley. Keeley graduates from the University of St. Thomas in St. Paul this spring to devote himself full-time to his business, College Nannies. Keeley nannied in the summer for extra cash, and realized how hard it is for families to find a good nanny. For $700 does background checks, in-depth interviews, and puts families in touch with a reputable college student who can use the part-time work.

"I have a lot of friends and classmates with very good resumes who are out there looking for jobs, and it's a tight job market, it's very tough," Keeley said. "It's not like 1997, where there were $40,000, $50,000 consulting jobs right out of school."

Keeley changed his major to entrepreneurial studies to pursue his business and education at the same time. This made for a busy schedule, but Keeley wouldn't have done it any other way.

"It's actually been a very good blessing. I could grow slowly while having a business, instead of worrying about making those profits, getting those sales," Keeley said. "And I'm very confident it made the business better."

	Maddux: "I don't see any shortage of ideas"

Even the best ideas can benefit immensely from a business education, according to Ken Maddux, who heads the Anderson Entrepreneurial Center at St. Cloud State University. He says one unfortunate legacy of the economic boom years is the romantic notion of the effortless dot-com millionaire.

"Some of them still have that residual thought that, 'Gee, a few years ago it was so easy. Anybody that had a good idea became successful,'" Maddux said. "And now although the climate has changed, some of them don't realize that. They think that 'Gee, I've got this good idea, somebody ought to want to buy this.'

About two-thirds of the students Maddux talks with drop out before drawing up a business plan. There's a lot to learn about financing, patents, and government regulations. But it can be done, Maddux says, even by the young. A recent national study by the Ewing Marion Kauffman Foundation shows young men in particular are almost as likely as their older counterparts to launch a new business.

"I don't see any shortage of ideas out there," Maddux said. "I think it's now helping get information about the process and, eventually, the funding, that are really the roadblocks for folks."

	"Freeze" founders, and friend

Even a dot-com can still succeed. Twenty-three-year old twins Rob and Ryan Weber founded Freeze.com three years ago. The company uses the lure of free screensavers to collect information for telemarketers. Last year Freeze did $5.5 million in revenue from its office near St. Cloud, and makes a solid profit.

Rob Weber, still in college, advises young people to "use your sweat equity." No wife, no kids, lots of energy: Now's the time.

"That's a competitive advantage any young person has," Weber said. "You can go work a part-time job and make a very limited amount of money, or you can start up a business and really try to swing for a home run."

It's also possible to strike out, of course. Half of new small businesses are gone within four years. But until the job market recovers, more young entrepreneurs may be willing to take the chance.

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