For decades much of the entrepreneurship in the U.S. has been dominated by the over 50 crowd, except, of course, for the young leaders of the computer and social networking revolutions. These days, young entrepreneurs are among the millennials, those between the ages of 18 and 30. And it turns out they often rely on a different business model in a market where credit for startups can be hard to find. Reporter Ben Skirvin sent this story from Bloomington, Indiana.

BEN SKIRVIN, BYLINE: According to the Indiana Department of Workforce Development, unemployment here in the Bloomington area hovers around 10 percent. What postings there are are often for low paying restaurant jobs. It's an industry 30-year-old Alisha Mustafa knows all too well.

ALISHA MUSTAFA: I have worked it all her in this town. I have worked for so many restaurants and last year was my year from hell in the industry, and it's why I started my own business.

SKIRVIN: Today, Mustafa is in her kitchen preparing a gluten free strawberry mango pie. She now runs the Mustafa Pie Company, a business she started last year at age 29. Like a growing number of young entrepreneurs, she dealt with the slow job market by circumventing it.

Don Kuratko teaches entrepreneurship at Indiana University. He says that happens every time the economy dips. When career track jobs dry up, more people strike out on their own. But he says this current surge of entrepreneurship seems to be attracting a new kind of business.

DON KURATKO: A lean start-up. It's become very popular. We actually teach it to some of our students now. It talks about starting from the very micro-enterprise idea and moving quickly into your market and, you know, testing it and getting customers right away and trying to generate some revenue and use that revenue to grow on that.

SKIRVIN: In Columbus, Indiana, about an hour's drive from Mustafa's Bloomington-based pie business, Steve Riche started a very different type of company - a specialized Web design firm. He says he hated his HR job at a big auto parts manufacturer and decided to work here out of his house instead. His desk is now covered in action figures and miniature super hero models spill out of his drawers.

STEVE RICHE: Since leaving my respectable day job to start my own business, I've kind of embraced the inner child again.

SKIRVIN: He mostly works from his couch and says that's a key to his business plan.

RICHE: We've been able to run the business and not have any kind of loan hanging over our head with the idea, you know, if things don't pan out, then, you know, OK, we'll walk away scot-free and find jobs elsewhere. We won't be indebted to anybody.

SKIRVIN: It seems unlikely he'll need to walk away anytime soon. His company currently has major contracts with several area banks and the city's hospital. Amber Fischvogt is with the local chamber of commerce here and helped Riche's business grow from a client base of a few friends into an established firm. She says this idea of starting a couch-based business has exploded, in large part because the Internet has made resources far more available.

AMBER FISCHVOGT: If you look at barriers to entry maybe 20 years ago and think about computers, technology, access to resources, and then you look at it today, the barriers are dropped tremendously.

SKIRVIN: But this lean start-up idea isn't just sensible planning on the part these entrepreneurs. In many cases credit just isn't there. According to a recent Federal Reserve report, small businesses are facing some of the strictest loan requirements in almost two decades.

But before you start calling this uptick in millennial entrepreneurship an economic victory, consider that it's still very risky to start a business from scratch. Studies show about 80 percent of all startups fail within the first few years. Add to that sobering statistic the finding of a University of Tennessee study, the number one reason new businesses fail? Inexperience.

For NPR News, I'm Ben Skirvin.

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