How Millennials are changing product development forever

Who are millennials - Infographic

Millennials are the first generation to truly live by their own set of consumer and business rules. As consumers, they expect the brands they follow to share their principles (much as Gen X and Boomers did before them).

But as entrepreneurs, they’re also able to deliver on it. As employees, as consumers and as innovators millennials are acting as product development’s agents of change.

“If you want to connect with millennials, then you’re going to have to rethink the way you advertise and market your product to them. Instead of traditional advertising, which they ignore, brands have to publish authentic content as a way of building trust and loyalty with this extremely important and influential demographic.” – Dan Schawbel, founder of Millennial Branding.

Technology and Market Expectations

However, while the rate at which Millennials are taking over the work force is a compelling story in and of itself, a more telling statement, which Merrill Lynch published in their most recent Thematic Investing Report is that “technology is the number one entry point for investors wanting to tailor their investing strategy to Millennial themes”. What is surprising is the types of changes that we’re seeing in Enterprise Software Engineering that are directly related to Millennial influence.

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A key driver in tech companies either created by or largely run by Millennials is not a question of how to make existing technologies better, it’s a question of how to make the next big thing that people want to use. With the advent of deeper communication channels brought to us by social media, large corporations have become much more transparent to their consumer base – and as a result businesses are under a greater amount of pressure to deliver products that align with their constituents’ expectations and beliefs.

Millennials and Technology
Over half of Millennials said they would rather give up their sense or smell that their technology – Rosetta – Image source: leonardo.com

Business Approach and Growth

Many of today’s disruptive companies, from Facebook and Pinterest to Warby Parker and Airbnb, were founded by millennials; the companies that are changing how we build and use technology, like Nest and Tesla, have Gen X founders but are largely run by millennials. As the cost of setting up business drops, and social media continues to level the advertising playing field, a 24 year old can establish a company almost as easily as a seasoned businessman, and have a similar shot at success.

With Google and Apple making bigger strides to compete with Microsoft in the Enterprise space, and with companies like Slack (which recently reached a 2.8 billion dollar valuation) showing consumers and investors alike that workplace software can adopt the same types of fun and innovative modes of social communication that people use in their personal lives, we’re seeing just the beginnings of how the Enterprise Software Business will be perceived in the years to come, and Millennials are the key drivers behind this growth.

Millennial entrepreneurs don’t need to be persuaded, but even if they did the pace of technological change has rendered their idealistic approach a good business approach. It’s serving entrepreneurs well, especially in rapidly growing categories like connected homes, wearable devices, and the Internet of Things. These product categories often gain more from the speed and flexibility of local production than they can save through offshoring.

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Product Development

Right now the advantage of speed to market is most true with high-end products – which some have pointed out are the focus of the millennial-driven hardware renaissance – but eventually it will spread to mid-range, too. In fact, as global marketplaces become more fluid and production costs continue to drop, the millennial approach to product development is going to make sense in a lot of other categories.

Already, Tesla is making cars from scratch in a highly automated Bay Area facility that’s a fraction the size of the typical Detroit factory – and looks poised to make locally-produced cars the rule rather than the exception. Nike’s Flyknit process, which builds shoes from the outsole up, on a single sophisticated machine, opens the possibility of hyper-local factories that fit inside a city block. Both products represent a kind of millennial ideal, where high tech works to reduce environmental impact and boost local economies – and they’re both wildly popular. How long until automated rapid manufacturing and smarter supply chains make this approach viable for companies that make hardware, furniture, and apparel?

Consumer Demands

Consumer demand for new energy-related products and services is high, especially for millennials, demonstrating that this group is driving much of the future value for energy providers, according to research by Accenture. Millennials view energy and engage in a far deeper way with energy providers and from a completely different vantage point. While there’s obvious demand for new products and services in this space from them, they want information, and they want everything to be instantaneous and accessible on their terms.

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The message is clear:

“When looking at their career goals, today’s Millennials are just as interested in how a business develops its people and how it contributes to society as they are in its products and profits,” says Barry Salzberg, CEO of Deloitte Global.

“These findings should be viewed as a wake-up call to the business community, particularly in developed markets, that they need to change the way they engage Millennial talent or risk being left behind.”

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2 thoughts on “How Millennials are changing product development forever”

  1. Very well researched on millennials and fantastic writeup. Millennials are indeed changing the world with good work ethic and contribution to society, not just focusing on making money or growing business

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