From the November 1997 issue of Entrepreneur

Move over, Generation X--it's time to make way for a new breed of boomer children. Even prudent marketers are zeroing in for a closer look at the "Net Generation"--the youngest clad in diapers, the oldest aged 20.

"There are now, in the U.S. alone, 81 million N-Geners," says Don Tapscott, author of Growing Up Digital: The Rise of the Net Generation (McGraw-Hill). "What makes them a historic force for social transformation is not just their demographic muscle but that they're growing up during a communication revolution."

That revolution was fed by the Internet, says Tapscott, which transformed the early notion of computers as information management tools into the major communication mediums of today. The advent of cyberspace has, in turn, changed the way today's kids think as well as how they behave as consumers. When marketing to the Net generation, remember they prefer to shape the world around them. Give them options and don't force them to commit to anything.

Though we've attempted to define the Net generation, the lines defining the beginning and end of the Baby Boom are possibly the only ones that enjoy a general consensus. Since then, not only the labels but the years involved have blurred. Nonetheless, here are some of the more popular labels circulating today:

  • Baby Boom: 1946 to 1964
  • Baby Bust, also known as Gen X: 1965 to 1977
  • Net Generation: According to Tapscott, this spans 1977 to 1997.
  • Echo Boom: Though many claim the Echo Boom started in 1977, it truly began booming in 1988, when nearly 4 million children were born in the United States.

Crank Call

A new year - and a phone line fee hike.

By Janean Chun

The Federal Communications Commission (FCC) is changing telephone fee rules, and guess who's footing the bill? As of January 1, 1998, any business or residential consumer using more than one phone line should expect a monthly increase in costs of between $6 and $9 per line.

Considering many consumers establish second lines in their homes for Internet access, many predict the demise of some smaller Internet companies. "In a roundabout way, [the FCC order is] taxing the Internet," says Maura Colleton, vice president of information services and electronic commerce for the Information Technology Association of America.

The new rules are being implemented for two reasons: to revamp the fees that local phone companies collect to complete long-distance calls and to support a Universal Service Fund, which subsidizes service to rural and low-income phone customers while connecting schools and libraries to the Internet.

"In essence, they're putting the burden of universal service onto multiline businesses," says Colleton. "Businesses already pay into the Universal Service Fund as large users. So they're now being taxed twice. This is a subsidy, a back-door way of doing it. It's not in the spirit of the [Telecommunications Act of 1996], which says universal service support mechanisms should be transparent and explicit. We're supposed to be trying to get out of regulation, not back into it."

Still, Colleton says the rule is far from a done deal. "Several entities have questioned the order," she says. "This may be battled out in the courts."

Show Time

Playing a part in employee training

By Debra Phillips

It's dramatic. It's compelling. It's . . . employee theater? Sort of. As companies increasingly look to human resources specialists to calm workplace tensions, an innovative training method has taken center stage: "playback theater."

"People love it," says Riley Harvill, whose Dallas-based HarBeck Co. puts the method into practice for Fortune 500 and small businesses worldwide. "They want to come back and [do it again]."

Playback theater is a method by which professional actors re-enact workplace-related stories. Themes range from sexual harassment to workplace diversity. "We tell [employees] to think of something that's happened to them in a previous workplace," Harvill explains. "A good acting company can capture the essence of a story without having the exact dialogue."

Drawing from their backgrounds in psychology and counseling, Harvill and wife Rebecca Stallings, both 42, design their one- or multiple-day workshops according to each company's needs. There's a lecture portion, but playback theater is the real crowd-pleaser. And once the curtain falls, participants discuss what they've seen in the five- to six-minute "plays."

"We're getting more and more phone calls from [companies] that want something different," says Harvill of his 5-year-old human resources training company. "People say they feel validated by seeing their stories re-enacted." Bravo!

In The Net

By Charlotte Mulhern

Name and age: Caleb Murphy, 15

Grade: 10th

Location: Earlville, New York

Bits on bytes: "My parents have had a computer for as long as I can remember," says Murphy. Today he uses his computer to converse through e-mail, play games, do homework and visit chat rooms.

Internet opinion: "I love it," says Murphy, who first surfed the Net nearly two years ago. He's since cut down the time spent online "to make room for more important things."

Weekly computer use: 12 hours--more than he watches television

Favorite site: Ultimate Band List, a compilation of bands with links to their Web pages

All in the family: Murphy's younger brother plays games on the family computer; his younger sister uses the Internet.

Future focus: To become a doctor

Comparatively Speaking

Taking X-ception to stereotypes

By Debra Phillips

Nothing is certain in this world but death and taxes . . . and generational stereotypes. If you're a baby boomer, for instance, you're prosperous, idealistic and nostalgic for the 1960s--or, at least, you would be if you could remember them. If you're a member of so-called Generation X, you're underpaid, unambitious and--surprise!--unhappy. If you belong to the Net Generation, you're apparently lost in cyberspace. And so it goes.

But what do any of these labels ultimately mean? Are we really just generationalizing? Speaking as one of those "unambitious" Xers, I certainly hope to be more than the sum of my demographically assigned characteristics. (Heck, my favorite rock group is The Beatles, not Pearl Jam.) And, as far as the N-Geners go, is it inconceivable that some of these digital babies will stray from the technological fold?

This isn't meant as a slap against the study of demographics; it's merely a reminder that groups are made up of individuals, not the other way around. It's way too simple to stick a tag on somebody saying, "Hi, my name is (fill in generation here)." The trick is for business owners to factor in both the generation and the individual. Too much figuring? Get a bigger database.

Easier Access

Changes are in store for the 8(a) program.

By Cynthia E. Griffin

If changes proposed by the Small Business Administration (SBA) go into effect this month, an estimated 3,000 more small-business owners could be eligible to participate in the SBA's 8(a) Business Development contracting program.

Suggested modifications--which should be finalized by month-end--would lighten restrictions for entrepreneurs who are not American Indian, black, Asian-American or Latino and are trying to prove they are socially and economically disadvantaged, says the SBA's Calvin Jenkins. "[Currently], people who are not members of these groups can possibly get into the 8(a) program if they prove clearly and convincingly they are socially and economically disadvantaged," says Jenkins. "The new proposal lowers the standards to a preponderance of evidence." Among the groups expected to benefit are white women and the disabled.

Some worry that qualifying more people will shut some minorities out or encourage fraud. Fernando Galaviz, vice chairman of the Federation of 8(a) Companies trade association, doesn't totally share those concerns. "Just because you're a white woman doesn't mean you'll be a better manager than a person of color," he says. "[Minority businesspeople] shouldn't be concerned about their ability to succeed."

In addition to the proposed changes, the SBA and Congress are addressing the issue of more 8(a) businesses vying for the same dollars. The SBA is seeking an executive order from President Clinton that would require all federal agencies to increase the percentage of business directed to small businesses from 20 percent to 25 percent. Several Congress members have also proposed increasing the goal, Jenkins adds.

Among other key 8(a) changes being discussed are: establishing a mentor-protégé program to encourage private-sector relationships; changing affiliation rules to enable entrepreneurial firms that create joint ventures to take advantage of small-business benefits; capping the amount of sole-source (non-competitive) 8(a) contracting going to any one firm at five times the company's annual revenue or $100 million, whichever is less, over a nine-year span; allowing the SBA to delegate elements of its 8(a) contracting authority to other federal agencies to expedite procurement procedures; accepting applications from franchise operators; and giving Alaska-native corporations and American-Indian tribes more flexibility when hiring company management. For details on the proposed changes, contact the SBA at (800) 8-ASK-SBA.

Read All About It

What are business owners reading these days? The top 10 business books at press time (based on net sales) were:

1.Millionaire Next Door, by Thomas J. Stanley and William Danko, $22 (Longstreet Press)

2.Wall Street Money Machine, by Wade B. Cook, $24.95 (Lighthouse Publishing Group)

3.Stock Market Miracles, by Wade B. Cook, $24.95 (Lighthouse Publishing Group)

4.The Dilbert Future, by Scott Adams, $25 (HarperBusiness)

5.Success Is a Choice, by Rick Pitino, $25 (Bantam Publishing)

6.The Dilbert Principle, by Scott Adams, $20 (Harper Collins)

7.Investing for Dummies, by Eric Tyson, $19.99 (IDG Books Worldwide)

8.Bear Market Baloney, by Wade B. Cook, $22.95 (Lighthouse Publishing Group)

9.Financial Peace, by Dave Ramsey and Sharon Ramsey, $21.95 (Viking)

10.Personal Finance for Dummies, by Eric Tyson, $19.99 (IDG Books Worldwide)

Hot Spots

Start-ups are booming in . . .

1. Nevada

2. Alaska

3. Colorado

4. Utah

5. Oregon

6. Texas

7. Idaho

8. California

9. New Hampshire

10. Michigan

states ranked per capita

source: American Business Information Inc.

Contact Sources

Federation of 8(a) Companies, 4200 Wilson Blvd., #700, Arlington, VA 22203, (703) 528-1828

The HarBeck Co., (214) 953-1520, 2rebecca@airmail.net

Information Technology Association of America, (703) 284-5344

Don Tapscott,nplc@ mtnlake.com, http://www.growingupdigital.com

Small Business Administration, (800) 8-ASK-SBA.