Little entrepreneurial engines that could are driving U.S. job creation. A White House report found that within the third quarter of 2021, small businesses who employ less than 50 people created just under 2 million jobs. It was “the fastest 9-month start to small business growth in any year on record. These 1.9 million jobs represented 49% of net job growth across firms of all sizes over that period, the second highest share on record.” Entrepreneurial intention and small business creation is also increasing. According to Intuit QuickBooks’ 2022 New Business Insights survey, 57% of participants wanted to start a business. Of that, 20% planned to actually do so in 2022, which the survey finds is “equivalent to around 17 million people.”
Additionally, according to the Global Entrepreneurship Monitor’s 2021/2022 U.S. Report, the “total entrepreneurial activity” rate rose to 16.5% in 2021 from 15.4% in 2020. Entrepreneurial intentions also increased to 14.8% in 2021, with those aged 18 to 24 showing “high entrepreneurial intentions (20%), high entrepreneurship rates (19%) and high business closure rates (6.2%).” According to the report, entrepreneurial activity “typically exhibits peaks in the age groups 25-34 and 35-44.”
The startup ideas driving that growth seem very sector-specific, says Stewart Thornhill, Ph.D., Eugene Applebaum professor of entrepreneurial studies and executive director of the Zell Lurie Institute for Entrepreneurial Studies at the University of Michigan.
Here are the stories of some little entrepreneurial engines:
1. Data-driven service startup ideas
Matt Ehrlichman’s quest to build his dream house is a prime example of the possibilities of startup ideas in the online services sector.
A Seattle-based entrepreneur with two software company launches on his résumé, Ehrlichman was considering taking a year off to build a new home for his family. As he began the daunting process of identifying what he needed and how to find the right contractors, he learned there was no one source to provide all of that information.
“The way I’m geared, I started exploring for a solution,” Ehrlichman says. He began seeking colleagues’ help with his startup idea—“about 10 to 12 of us started meeting regularly in my basement,” he says—to organize inspiration, project data and word-of-mouth referrals in one place. Porch was the end result. Because he had a track record, Ehrlichman says he had no problem raising $6.25 million in seed money for Porch, which he co-founded in 2012 and launched the following year.
Ehrlichman didn’t get his year off after all (but he did build his dream house).
The company gained momentum in April 2014, when it launched a strategic partnership with Lowe’s 1,700-plus stores. The home-improvement chain points to Porch as an “in-store resource to help homeowners find the right home improvement professionals for nearly any project outside of Lowe’s current installation services,” according to a company press release. In February 2015, Porch added Better Business Bureau information, such as ratings and accreditation status, into their search results.
A staff that follows a laser focus—“no jerks, no egos, no bureaucracy” is one of Ehrlichman’s battle cries. And clear communication is crucial, he says, especially as a young enterprise encounters growing pains. The company’s principles are painted on the office walls and iterated in weekly all-hands Porch meetings. Ehrlichman has no five-year plan because Porch’s rapid year-to-year growth would render one useless, he says.
The market for online medical services seems to be growing. In his role at an R1 university, Thornhill sees robust research and development in health care data analysis, health informatics and medical devices. Expect major changes “in the online health treatment and services market over the next couple of years as the winners and losers get sorted out,” Thornhill says. “It’s going to be a really interesting shakeout.”
In preparing to launch MyDerm Portal, a website focused on follow-up dermatology visits and other appointments, Austin, Texas-based Paul Robichaux saw “a lot of stuff on the web that just didn’t work.” The co-founder’s partners are his dermatologist wife, former Chief Medical Officer Venessa Pena-Robichaux, M.D., and former Chief Technology Officer Victor Lyuboslavsky. Michigan-based Hamzavi Dermatology practitioner Iltefat Hamzavi and Clarus Dermatology founder and medical director Neil Shah, M.D., FAAD, are two of the participating physicians.
While she was in medical school, Peña-Robichaux—who had grown up with limited health care access in South Texas—became interested in dermatology and technological solutions for providing better care. (The subject also fascinated her husband, who was doing IT consulting at the time.) During her residency, she pursued research in telemedicine and started a teledermatology pilot and report health system.
Robichaux and his co-founders focused on the startup idea of teledermatology. They created software that allows a doctor and patient to engage in an online exchange of follow-up information, updated images of patients’ skin conditions and treatment solutions, a process that is more convenient for patients and doctors. “Our goal is to provide a solution that is easy for physicians to take care of their patients outside of the clinic in between visits,” Paul Robichaux says. “Our goal is to have every dermatologist using our platform.”
MyDerm Portal’s development process, bankrolled by the couple’s savings and money from their partners, took about 18 months. “It always takes longer than you think,” Robichaux said just before the launch. “You plan to the best of your ability, but you’ve got to be prepared to change your plan and be flexible. All of us see eye-to-eye on the sort of values that we have, and that’s been incredibly important.
“There’s a segment of telemedicine that’s called direct-to-consumer, in which a physician whom you’ve never seen before will diagnose you. It’s been tempting to move into that model because there are some companies that have been somewhat successful doing that. But it’s really against our values and the way we think health care should be practiced.”
3. Green and sustainable startup ideas
The popularity of green and sustainable companies is growing among business leaders, employees and consumers.
Melissa Tashjian is the founder of Milwaukee’s Compost Crusader. In 2014, the company began picking up food waste from clients and delivering it to a compost facility. “Initially, being an entrepreneur never really crossed my mind,” Tashjian says. She’s also the founder of Kompost Kids, a Milwaukee nonprofit volunteer-run organization that helps divert organic materials from the waste stream through community composting.
“At the time, I was trying to maintain Kompost Kids’ programming,” she says. While doing this, she began considering how to address the bigger picture of community composting. “My boyfriend [Matt Scannella, owner of Steel Farmer LLC] and I were having dinner, and I was talking about this concept. And he responded, ‘What’s holding you back?’” she says. He volunteered his services as a mechanic, and a composting power couple was born.
Tashjian used savings earmarked for remodeling her kitchen to buy a 25-year-old dump truck for her startup idea, which she and Scannella fitted with overhead forks for collecting refuse. After reaching out to the city of Milwaukee and its entrepreneurial programs, she received mentoring (including helpful number-crunching) and business templates (for a business plan, cost projections and other basic financial data) to follow.
Compost Crusader’s client list is comprised of “schools, restaurants, grocers, municipalities and anyone else that realize the positive impact they can make in their community and environment by composting their waste,” according to their website. The company hauls about 10,000 pounds of material a week, diverting it from Milwaukee’s choked landfills, which are about 75% full, Tashjian says.
Food waste comprises about “24[%] and 22% of landfilled and combusted municipal solid waste, respectively,” according to the Environmental Protection Agency.
In the summer of 2015, Compost Crusader started using a bigger garbage truck for pickups. “My goal is to be able to fill that truck every day,” Tashjian says. “Right now I’m still recouping my investments. Matt drives the truck, and I get out there and move the receptacles around. He’s got the sweet end of the job when it’s below zero outside, and I look like a big giant green monster because I’ve got eight layers on. But it works; it works great. I’d love to hire my first employee this summer and have a one-person route with somebody I could actually pay to do what I’m doing now.”
This article was updated July 2023. Photo by NDAB Creativity/Shutterstock