Why more new grads are skipping entry-level gigs to start their own business

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When Jaiya Varshney graduated with a commerce degree from the University of British Columbia in 2023, she dutifully sent out resumes, hoping to land a job working in sustainability.

But when she couldn’t find one, she decided to try something different: start her own business.

She teamed up with two fellow UBC colleagues to launch Tydra Labs, a Vancouver-based biomaterials company that has developed a system to convert food and agricultural waste into chitin, a natural polymer that can replace petroleum-based ingredients in cosmetic, health and agricultural products.

“At this point in my life, I thought I could afford to take the risk,” says Ms. Varshney, now 26. “I was living at home. I don’t have kids. I could fully commit.”

Today, Tydra Labs has grown to eight employees. It recently launched pilot projects with customers, raised $1.2-million in pre-seed funding through Spring Impact Capital and, in June, won a Climate Solution Prize in Montreal.

Entrepreneurship as the new career launch pad

Unable to find the jobs they studied for, some young Canadians are doing what Ms. Varshney did: skipping the traditional career route and launching businesses instead. For these graduates, entrepreneurship has become the new entry-level job.

Several factors are driving the shift. One is a weak job market in Canada. Youth unemployment was 12.6 per cent in July, nearly double the 6.4 per cent national average.

“Job prospects appear a lot bleaker for those graduating now,” says Karen Greve Young, chief executive officer of Futurpreneur, a Toronto-based non-profit that provides financing and mentorship to entrepreneurs 18 to 39.

Futurpreneur saw applications for its services rise 15 per cent during its fiscal year ending in March. Since then, demand has accelerated, with applications up 60 per cent from April to June compared with the same time a year ago.

Ms. Greve Young says she’s noticed a change in how young people respond to a weak labour market. In previous downturns, graduates often took temporary jobs in restaurants or retail while waiting for full-time hiring to pick up.

Today’s grads, she says, “have a sense that the world of work is changing and it’s a systemic change. Many feel it’s better to create a job for themselves.”

Survey data suggests she’s right. A Harris Poll last year for TD found 73 per cent of Gen Z Canadians find the idea of starting a business appealing, the highest of any generation surveyed.

Charlie Frise is one of them. Growing up in Toronto, he loved building treehouses. So when he enrolled in architectural engineering at the University of Waterloo, he did it with one goal: to eventually start his own custom homebuilding company.

His original plan was to first gain experience at an architectural firm, perhaps earn a master’s degree and then go out on his own.

“I thought I would need to take a longer route,” says Mr. Frise, now 26. “Maybe by 30, I’d have a business.”

But while at home during the pandemic, he started designing backyard offices and discovered he was learning as much by working directly with clients as he would in a traditional entry-level job. As graduation approached in 2023, he felt he didn’t need to wait.

Mr. Frise and two colleagues launched Tinybox Systems, a Toronto-based company that creates modular home kits. The company describes its concept as “IKEA for housing.” Last year, it began shipping 10-by-16-foot backyard rooms, known as bunkies, that can be assembled quickly wherever extra space is needed. The firm’s goal is to eventually build larger homes that can also be assembled on site within a few days.

While Mr. Frise says the tough job market may be pushing some graduates to create their own jobs, he also points to other factors. Technology has made it cheaper and easier to test a business idea and get it off the ground. He also credits social media. In his case, he learned a lot about running a homebuilding business by watching the YouTube show 30X40 Design Workshop, hosted by Maine architect Eric Reinholdt, who shares design ideas and business advice.

“I think a lot of younger people are thinking the same thing as me: It’s easier and easier to start your own business,” he says. So why wait?

How universities are prepping future entrepreneurs

University students also have more support for launching companies now, says Eric Morse, a professor of entrepreneurship at Western University’s Ivey Business School in London, Ont.

“When I went to university in the 1980s, no one talked about entrepreneurship. You graduated and you got a job,” he says.

But starting in the late 1990s, universities began adding entrepreneurship courses, startup programs, pitch competitions and incubators. Since then, Prof. Morse has watched a steady increase in graduates launching businesses. In the past two or three years, the pace has accelerated, he says.

He thinks the sluggish job market is part of the reason.

“Large companies are laying off, and the contract that says if you put your head down and work hard, you’ll be rewarded, doesn’t hold anymore. Students see that,” Prof. Morse says.

It’s not just university graduates leaning toward entrepreneurship, but also those graduating from high school. A 2024 Future Skills Centre report found more than 56 per cent of Canadians 18 to 20 are interested in starting a business. That’s more than any other age group surveyed.

Madi Chilcott, founder of Multi Brand Sampling Co. in Vancouver, is an example. In 2022, at 19, she was preparing to attend film school when she decided to pursue a business idea she’d come up with instead.

Ms. Chilcott grew up helping her mom, who owns a small apple cider vinegar company, hand out samples in grocery stores. She noticed that sampling programs were expensive for small brands. Her solution: have three food companies share the cost of one table and sample their products together.

She wrote a business plan and today her firm runs events across B.C. and Alberta. Recently, it expanded into Ontario. Ms. Chilcott, now 23, works with hundreds of contract workers who hand out samples in stores, many of who are older than her. She also regularly meets with marketing agencies representing food companies.

“When I was just starting out, the biggest problem was being taken seriously because of my age,” she says. But now, with more experience and a growing business, that’s becoming less of an issue.

Four years after launching the company, Ms. Chilcott doesn’t regret skipping university to start a business.

“I really love what I’m doing. It doesn’t always feel like work,” she says.

The entrepreneurship ups and downs

Ms. Varshney at Tydra Labs notes that building a company brings plenty of highs and lows.

Among the highlights, she points to hiring the company’s first employee and securing its first investor. Among the toughest were a lab reactor explosion and early worries that the company had enough money to pay bills.

While many people her age with regular jobs can leave work behind at the end of the day, as Tydra Labs’ chief operating officer, she’s often stuck working evenings and weekends.

Still, she believes skipping a conventional entry-level job has fast-tracked her career.

“I feel like I’ve had a crash course in marketing, legal, HR and accounting,” she says. “You have to make a lot of sacrifices running a company. But you also learn a lot very fast.”