From the July 2000 issue of Startups

Generation X, those people born roughly between 1965 and 1977, have changed the way America does business. They work differently, buy differently and just generally live differently than previous generations. And with 60 million to 80 million of them (about 34 percent of the work force), they're impossible to ignore. Businesses are willing to spend big bucks to learn what makes this group tick.

Explaining the behavior, translating the language and defining the work styles of his peers has become a full-time occupation for Bruce Tulgan, 33, founder of New Haven, Connecticut, Gen X consulting firm RainmakerThinking Inc. He's also the virtual founding father of the Gen X consulting industry. A former Wall Street lawyer, Tulgan tapped into a need with his book Managing Generation X (W.W. Norton, $19.95), which was first published in 1995 by Merritt Publishing.

"I started getting calls from companies asking me to come and talk about how they could manage their employees," he says, explaining his foray into the consulting business. Tulgan, along with friend Jeff Coombs, 32, now CFO of the company, scraped together $32,000 in savings and money borrowed from their parents to start the company out of their apartment.

Tulgan has since gone on to pen four more books and estimates he's given more than 1,000 talks to companies like J.P. Morgan, Ernst & Young and Subway. The company has come a long way since its humble beginnings. Tulgan now grosses $12,000 per 90-minute talk, for an average of $17,000 per day that he's on the road. As for projected revenue, the company expects to top $2 million this year.

Targeting Gen X

Tulgan is hardly alone. Alex Carter, 24, creator of Xstartup.com, a division of Idea Cafe, a Web site for Gen X entrepreneurs, predicts a profitable future for anyone who can tap this market. "Gen X is making its own rules," notes Carter, "and companies need a third party to help them understand why Gen Xers don't jibe with the standard."

Just ask Bradley Richardson, now 33, who started JobSmarts in Dallas five years ago. His firm has garnered a strong reputation for retention and recruitment of Gen Xers. Like Tulgan, Richardson jumpstarted his company with his book, Jobsmarts for Twenty-somethings (Random House, $15). "As the economy improved," he explains, "my focus shifted from how Gen X could find work to how companies could find good Gen X employees."

Richardson first set up shop in a back bedroom of his home. Since the only inventory needed in the consulting business is knowledge, little capital is required. "I set aside a few thousand dollars to bridge the distance between my day job and getting my first client," he explains, adding that it was a matter of a few months before the company was completely financed through sales. He now estimates his income in "the lower six figures."

For , 32, it wasn't a book but a master's thesis that launched her Palo Alto, California, business, Neely Consulting & Associates, three years ago. Graduating from the University of California, Santa Barbara, in the dark days of the late '80s when even jobs flipping burgers were hard to come by, Neely bounced from temp job to temp job until she finally landed a full-time job-only to be laid off within six months. "My generation realized there wasn't any such thing as loyalty in the workplace anymore," she notes. "We became a generation of workers with an entrepreneurial spirit. We're willing to work hard but aren't willing to sign up for lifetime employment at any one company."

Armed with statistical and anecdotal evidence, an established consultant referred her to her first gig at Hewlett-Packard. That experience opened the doors at other companies, and a career was born. Neely began working from a "storeroom/spare bedroom" at home. She already had a fax machine, a phone and a computer, so her initial investment consisted of a few good suits. "In graduate school, I lived in sweatpants," she explains.

The suit strategy worked. Today, Neely works for a myriad of high-tech firms, including Intel and Bay Networks, where she advises managers on how to do cross-generational marketing and how to bridge the gap between Gen Xers and other employees. Last year, Nealy earned enough to move into an office in downtown Palo Alto. And like any Gen Xer worth her salt, Neely has made lifestyle a priority. She's now willing to give up some money in exchange for time. "If I take all the work I could take this year," she says, "I anticipate I'd make between $80,000 and $100,000."

Gen X Consulting Business

Companies are willing to pay top dollar for Gen X consultants, not only because the population has a strong presence in the current work force, but also because of the new era Gen Xers have ushered in. It's one of flexible hours, a nonstatic work force, a perk-heavy culture, a stake in ownership and greater autonomy. The Gen X population broke the rules and made companies a lot of money. "There's been a radical shift in the way business is done and how wealth is created," says Jack Sweeney, editor of Consulting Magazine. "This change in the way business is done is the biggest since the Industrial Revolution."

Many old-school consultants who dismissed the impact of Gen X and missed the emergence of this new model are now scrambling to catch up. Xer consultants have a major leg up on the competition because they have an innate understanding of the issue. After all, it's one they've created. "While [traditional] consultants are struggling to get a handle on it, there's certainly an opportunity for younger startups," Sweeney adds.

Cam Marston, 31, founder of Marston Communications LLC in Charlotte, North Carolina, recognized this need in 1996. "I realized that Gen X just didn't fit the traditional roles and didn't follow the rules," he says. Marston started from a spare bedroom in his house with $5,000, a computer and some business cards. He first began speaking at his local Rotary Club, chambers of commerce and other community events, and he credits these groups with jumpstarting his career. "Don't overlook local organizations, because they're great marketing tools," Marston maintains.

Word-of-mouth spread, and Marston began leading seminars for managers at McDonald's and Duke University, among others. Marston averages about 75 speaking engagements annually and estimates he'll bring in more than $100,000 this year.

While Gen X consulting is still hot, some of the novelty has worn off. "Most companies now know what Gen X is about. Some Xers are even managers now," Richardson says.

What that means for startups is there isn't much room for generalists. "Niche markets are the best possibilities for fast profits," Carter says. "Study the market, find a need and fill it. If you can do that, you'll make money."

Tulgan, for one, says he's looking at the Asian and European markets, where the issue hasn't been tapped yet. Richardson is expanding his expertise to help clients like AT&T and Zale Jewelers recruit the next generation coming into the work force, Gen Y, or the echo boomers.

Although Gen X consulting is maturing and changing shape, the core of its focus remains the same: making sense of the new working model. Consultants who can help companies blaze new trails and master the territory of new business will lead the industry.

And there's another reason Gen X consulting has legs. Says Richardson, "There are so few of us to go around that Gen X will always, in one way or another, be the center of attention."

Brain Food

Several things are needed to jump-start a Gen X consulting business. First, do extensive research to ensure that you aren't duplicating what's already being done in the field. Second, talk to anyone and everyone you can from this demographic to get an idea of what makes Gen X tick. Third, since two-thirds of your work will involve giving talks, hone your public-speaking skills. Finally, devise a general consulting business plan. Some places to turn for the latter:

The Consultant's Survival Guide (John Wiley & Sons, $24.95, www.wiley.com) by Marsha D. Lewin

Become a Top Consultant: How the Experts Do It (John Wiley & Sons, $21.95, www.wiley.com) by Ron Tepper

The Consultant's Manual: A Complete Guide to Building a Successful Consulting Practice (John Wiley & Sons, $19.95, www.wiley.com) by Thomas Greenbaum

How to Start a Consulting Service (Entrepreneur Media Inc., $59)

Kennedy Information (603-585-3101), publishers of Consulting Magazine, offers advisory services to consulting firms and can help you with strategic planning and research.


Andrea C. Poe, a freelance business writer and a fellow Gen Xer, is still wondering what the X is all about.