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How Millennials Are Changing Product Development for Good

(This article was originally published on Wired.com.)

Like most of you, I’ve read dozens of articles over the past few years about all the ways millennials are different from previous generations: as employees, as consumers, and as innovators.

But it wasn’t until last summer, while meeting with a tech startup founded by a team of entrepreneurs in their early 30s, that I saw how millennials are acting as product development’s agents of change.

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We were working together to develop a new connected device for the home and we’d reached the point of discussing manufacturing options. Rather than scrutinizing a list of Asian manufacturers for the cheapest acceptable option, we spent most of our time talking about local manufacturers, and issues of environmental impact and social responsibility. For these entrepreneurs, sticking to their principles wasn’t even a question. It was part of business.

What most of the analysts I’ve read don’t get is that millennials are the first generation to truly live by its 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.

A Generational Closed Loop

In years past younger generations had to rely on companies run by older generations to sell them products and services. Those companies might have refreshed their marketing to appeal to new, presumably naive customers, but they saw no imperative to shift their underlying business practices.

These days greater access to information makes it harder for companies to market themselves one way (as green, local, or socially responsible) but behave another. Uber’s well-publicized ethical blunders, for example, have cost it a lot of goodwill among millennial consumers, and the once-unstoppable taxi app is certainly not alone.

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 found a company almost as easily as a seasoned businessman, and have a similar shot at success.

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This has created for the first time a kind of generational closed loop, in which young consumers can spend their money with companies from their own age group – companies who share their customers’ principles, as a matter of habit.

And these young entrepreneurs aren’t using their principles just as a selling point, or viewing them as a drag on their bottom line, to be minimized and eventually jettisoned. What I learned in that meeting is that, for a lot of millennials, principles like “make it local” and “take care of your workers and your environment” are simply viewed as the cost of doing business.

Product Development, The Millennial Way

It feels good to see idealism taken for granted. At Bresslergroup, we’ve encouraged sustainable development strategies for years. We’ve been most successful persuading clients to make incremental changes when we could demonstrate how using less material or less energy in the manufacturing process will help their bottom line.

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.

Some examples of millennial-founded connected device start-ups manufacturing domestically include Mimo, the wearable baby monitor that attracted attention last month at CES; Revolve Robotics, who handle the production of their Kubi Telepresence Robot in-house in San Francisco; and Flow, a Berlin-based tech startup who manufactures their programmable computer controller in their native Germany and has written about why hardware startups should manufacture locally.

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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?

It’s Rubbing Off

The good news is that this sort of principle-driven production doesn’t have to be limited to millennials. Accommodating our clients’ desire to look locally for manufacturing was surprising but not difficult, or even unwelcome: I was passionate about using design to make the world a better place as a 20-something, and I’m still passionate about it. What I lacked back then was a solid business case for letting my idealism take the lead.

As millennial entrepreneurs rack up commercial successes, and millennial consumers approach Boomer-like levels of buying power, there’s every reason to believe that they’re the ones who will define commerce – and product development – in the next couple of decades. The degree to which idealism drives that definition may be unfamiliar, but the principles themselves are not: Take care of your workers and your community. Reduce your impact on the environment. Be honest with your customers and your partners.

Any manufacturer or designer, of any generation, should have no trouble grasping these beliefs – all you need to do is shift them from the “nice-to-have” column into the “competitive advantage” one. And recognize that doing the right thing and doing the smart thing have never been so closely aligned.