Millennials Will Aspire to Elected Office, Not Startups
There’s still a long way to go until the 2018 midterm elections, but already there’s a surge of interest. It’s not just among people following campaigns, but also among an unusually high number of people thinking about running for office. There’s good reason. It’s the modern equivalent of starting a tech company in the late 2000s -- a play for power, where the odds are most favorable.
The tech startup boom that began in the late 2000s and has tapered off over the past few years occurred because of a combination of technological, economic and demographic forces. The technological opportunity came about because of the simultaneous explosive growth in social media and the mobile internet brought about by the development of smartphones. Facebook, Google and Apple may have created the dominant social and smartphone platforms that we all use today, but they weren’t the only beneficiaries. Gaming companies like Zynga and King Digital, the makers of Farmville and Candy Crush; ride-sharing companies Uber and Lyft; social media platforms like Instagram and Snapchat; and many other startups owe their existence to the growth of the social and mobile internet.
But all that technology didn’t get created in a vacuum -- the economic fallout from the great recession was responsible for stoking the entrepreneurial spirit of America as well. With the unemployment rate near 10 percent, and even higher for younger workers, the opportunity cost to take a shot on a startup was low. For entrepreneurs, post-recession office rents and salaries were low, allowing the money they raised from venture capitalists to go a long way. And for venture capitalists, tight credit conditions allowed them to get in on the ground floor of attractive startups at a low valuation.
Still, none of this would have been possible without the people to make it happen. At this time, the biggest "hump" of the millennial generation, those born between the late 1980s and early 1990s, were entering college and the workforce. This provided a steady stream of young people -- some interested in working on tech startups, many more interested in consuming their products and services.
Startups are tapering off in part because the environment has changed. Rather than creating new platforms like Facebook did, upstarts now find themselves competing with the likes of Facebook, a daunting task. The economic expansion over the past several years has raised the opportunity cost for workers thinking about working for a startup; it’s riskier to take a chance on stock options when large companies like Facebook and Google are offering attractive salaries. And entrepreneurs find themselves having to pay much higher office rents and salaries than they did in 2009 or 2010. For now, the social and mobile frontier may be closed.
In 2008 a young person could envision striking gold with a tech startup. Now that seems implausible, but rising through the political hierarchy seems imaginable. In 2017, conditions are in place for an unprecedented surge in the number of people looking to run for office.
Part of the attraction of running for office in 2018, at least on the Democratic side, is the high level of attention and financial engagement the party’s base is showing already in the wake of President Donald Trump’s election. Jon Ossoff, the first-time Democratic candidate in Georgia’s 6th congressional district special election, raised over $8 million for the race’s recently completed "jungle primary," with the race possibly on its way to being the most expensive congressional race ever. The vast majority of his money came from out of state, much of it raised via viral social media campaigns. Whereas in the past to run a successful congressional campaign a candidate may have needed a slew of local media and elected officials’ endorsements, plus the financial backing of wealthy and powerful people in the community, today seemingly any candidate and campaign has the potential to catch fire and go viral nationally.
There’s a demographic component here as well. The same crop of people who were in their late teens and early 20s in the aftermath of the great recession are growing up, and are now old enough to run for office, like Ossoff, age 30 -- and their cohort could vote for them in the same way young people consumed the products of Zynga and Snapchat. At the same time, most of the elected officials and leaders of the Democratic Party are nearing retirement. Nancy Pelosi is 77. Bernie Sanders is 75. Elizabeth Warren is 67. If you’re an ambitious person in your late 20s, what’s more likely -- that you disrupt the businesses of Mark Zuckerberg and Jeff Bezos, or that you ascend through the ranks of the Democratic Party over the course of a few election cycles as the party’s leadership retires and baby boomers shrink as a share of the electorate?
Just as it’s true that the tech startup boom minted only a handful of mega-winners, the same will be true for this electoral boom. But that doesn’t mean these new political elites will be the only beneficiaries. There’s only one Mark Zuckerberg, but Facebook created thousands of jobs, and is a platform used by a billion people today. A new civic wave might elect only a few dozen out of the hundreds who are running for national office, but a new generation can take comfort in knowing that its values will be the ones being heard in Congress rather than those of the current generation that can’t seem to get anything done.
The trend is clear. The new tech ruling class has already claimed its stake. But government? It’s wide open.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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