TL;DR
I’m Brian Burch, marketing exec with 15 years serving US SMB at HP, Symantec, AWS and Insight.
In Issue 004, I shared peer-reviewed research that explained why Great Recession-born startups outperformed on seven-year survival and sales & employment growth. I thought the reason would be founders with a better education, a stronger business background and more hustle. It wasn't. It was improved retention.
This Issue 005 presents my master thesis about studying and serving the SMB market. Cohorts born of crisis drive the market opportunity in SMB, and I'll share the two enduring ones that will be the focus of this publication.
Everything in this issue is free.
Every Tuesday. 6:30a ET.
Why Am I Obsessed With Cohorts?
According to Merriam-Webster’s dictionary, a cohort is a:
Companion, Colleague
Band, Group
A group of individuals having a statistical factor (such as age or class membership) in common in a demographic study
While I see all of you as colleagues, it’s this second definition that I have been obsessed with since I began marketing to the Small and Midsize Business market.
Since 1998, my master thesis as an SMB marketer has been this:
Tens of millions of small businesses in the United States exist at any given time and the dynamism of the SMB market is greater than all other major markets (enterprise, consumer, government, etc.). Times of crisis create new cohorts of startup companies that share more than an origin story—they share attributes, philosophies, access to new tools/infrastructure in a way that existing companies rarely do. Understanding new SMB cohorts and serving them during their time of need is critical to delivering the measurable growth and profits companies require when choosing which segments to serve.
My first cohort was 1998–1999 at Insight, where serving startups born of the Internet drove 50%+ annual revenue growth. In 2009, I focused on The Accidental Entrepreneurs at HP, then again at Symantec in 2011 — each time, those campaigns produced hyper-growth and the #1 US SMB market position.
In 2020, I joined AWS as its first Americas SMB marketing leader. I accepted the role in early March; by my first day, April 6, the country had basically shut down. The cohort the Pandemic birthed — digitally native, cloud-centric — delivered 40% over target in a year every other segment missed quota. I didn't name them at the time. When preparing The SMB Cohort, I decided to give them a name: The Airborne Entrepreneurs.
The Accidental Entrepreneurs
The Airborne Entrepreneurs
The Artificial Entrepreneurs
Below is a comparison table of these three cohorts. You will likely notice that there is data on this table that you are seeing for the first time. The Airborne Entrepreneurs will be described in full in this issue, because I have to introduce them, explain them and predict what becomes of them within these pages. You will see that the companies born of the Pandemic have had a dramatic impact on the American economy and the SMB market, but I believe their days as a defined cohort are numbered and I’ll explain why.
| Attribute | The Accidental Entrepreneur | The Airborne Entrepreneur | The Artificial Entrepreneur |
|---|---|---|---|
| Coined / Named | Brian D. Burch, January 2009, at HP | Brian D. Burch, July 2026 — named retrospectively | Brian D. Burch, July 2026 — a prediction, scored in public |
| Macro Trigger | The Great Recession — the Econoquake | The COVID-19 pandemic | AI displacement of white-collar work — my prediction, not an established finding |
| Formation Window | 2007–2011 | 2020–2021 | Opens 2024; still open |
| Formation Signal | Applications stayed below their 2007 level in every year of the window. The establishment population shrank in 2008, 2009 and 2010 — the only three years it has shrunk in 31.1, 2 | Applications jumped from 3.5M (2019) to 4.4M (2020) and 5.4M (2021) — the two largest one-year increases in the series.1 | The highest 12 months on record, through August 2026: 6.2M applications. But 94% of the growth since 2007 is in applications Census flags as unlikely to hire.1 |
| What the Evidence Shows | Over seven years, recession-born startups outperformed by 27.0 points on survival, 63.9 on employment growth and 68.1 on sales growth. The mechanism: the Mother of Retention.3 | Survival was ordinary, then poor. Establishments opened at the peak of the surge survived year one at 76.3% — the second-lowest rate in 31 years.4 | Moves from unemployment into incorporated self-employment rose every year of the window — 20k, 22k, 25k a month — above the Great Recession’s 17.1k. It measures the conditions; it attributes none of them to AI.8 |
| Composition | Broad-based small business, employer and nonemployer. In every year of the window, roughly half of Americans starting businesses were 45 or older (the 45–54 and 55–64 brackets combined).7 | Two-speed: nonemployer startups fell in 2020 and rebounded; employer startups rose.5 Firms whose owners held no wage job were 33% of 2020’s new nonemployer businesses, against 27–31% in other years — back to 27% by 2022.6 | Not yet measured. My definition takes in two populations — experienced professionals pushed off the career ladder, and newly credentialed people blocked from stepping onto it. Neither has been counted. |
| Status at Publication (Oct 2026) | Mature — businesses 15–19 years old; the oldest are inside the ownership-transition window | Graduating — does not persist as a standalone cohort; its founders move into The Artificial Entrepreneur by three paths | Conditions, not a confirmed wave. From 2007 to 2025, about 930,000 unincorporated self-employed were replaced by about 930,000 incorporated; the total barely moved.8 |
| Role in the Two-Cohort Future (a prediction) | Its oldest founders are entering the Silver Tsunami, alongside the older owners who make up most of that event. Adopting AI does not change its cohort. | Graduates into The Artificial Entrepreneur — no independent future | One of the two enduring cohorts, with the Silver Tsunami sellers |
Formation windows are editorial conventions, not measurements. Superscripts refer to the Reference Citations; derivations and limits are in Conventions a–f.
If you have read any of the Foundation Issues 001–004, you have undoubtedly heard of both The Accidental Entrepreneur and The Artificial Entrepreneur.
So, let’s spend some time on The Airborne Entrepreneur and allow me to explain why the remainder of year one of this publication will focus, in alternate weeks, on the present-day opportunities for only The Accidental Entrepreneurs and The Artificial Entrepreneurs.
In the next three Tuesdays, you’ll get:
· Issue 006 – the first issue dedicated to The Silver Tsunami—the business transition where trillions of dollars of enterprise value hangs in the balance. The companies founded and led by the Boomerpreneurs, the engine of the Accidental Entrepreneur cohort, need to plan their eventual exit. How can we help them?
· Issue 007 – the first issue dedicated to The Artificial Entrepreneur—I will share the parallels between the opening scenes of The Great Recession in 2008 and the AI displacement that’s hitting many mid-career and would-be professionals.
· Issue 008 – I will share my description of the paradox that sits at the heart of The Silver Tsunami. This single factor both makes a Boomerpreneur’s business successful while also often making the business unsellable at full value.
But to go forward, we have to go back.
The Airborne Entrepreneur Arrived With A Bang
The SMB Cohort Formation Index extended to 2022, with the Airborne Entrepreneur window marked.
Full underlying data, sources, and live formulas are in the companion Excel workbook.
Click the product button below to download the full SMB Cohort Formation Index 2006-2022 Data Workbook with methodology, key disclosed assumptions, sourcing information, raw data, plus projections for indexes that lack full data (e.g. the 2017 birth class is the most recent to have reported eight-year growth numbers).
The formation signal behind The Airborne Entrepreneurs was far louder than anything the Accidental window produced. Applications went from 3.5 million in 2019 to 4.4 million in 2020 and 5.4 million in 2021 — the two largest one-year increases on record. Through the Accidental window, applications never climbed back above their 2007 level. So why, you might ask, am I declaring that The Airborne Entrepreneurs don’t have an independent future and will be absorbed into The Artificial Entrepreneurs?
I believe absorbed is the key word.
The Airborne Entrepreneurs will not dissipate; they will graduate into The Artificial Entrepreneurs.
I believe The Airborne Entrepreneur founders were more solopreneur dense and more natively digital than any cohort before them. The solo share of new startups was already climbing as they formed — from about one in four in 2019 to more than one in three by 2025, among startups on Carta's platform.⁹ They will be early adopters and join the wave to Artificial Entrepreneurism because it’s the smart thing to do. They already know how to run a lean operation, how to run on cloud infrastructure and how to thrive without a significant support team. Compare that to a 65-year-old “Boomerpreneur” trying to evolve to AI-native operations—same technology, entirely different learning curve.
I believe The Airborne Entrepreneur becomes an Artificial Entrepreneur in one of three ways:
Path 1 — Displacement
Some Airborne founders who cycled back to corporate roles after the Pandemic will be displaced by AI over 2024–2028. I believe those roles (junior-to-middle management knowledge work at scale) are exactly the ones AI is substituting fastest. Displacement returns them to founding a company a second time — as Artificial Entrepreneurs.
Path 2 — Yearning
Some Airborne founders who cycled back to corporate roles AND weren't displaced will miss the autonomy. Anyone who's had the experience of running their own thing rarely forgets it. AI becomes the straw that brings them back — the tool that makes the second attempt materially different from the first.
Path 3 — Upgrade
Many Airborne founders who never left their businesses (they stayed founders through 2022–2026) simply upgrade to AI-native operations and become Artificial Entrepreneurs by adoption, rather than a second startup. They're the quietest path, but potentially the largest.
|
PATH 1 — DISPLACEMENT
Cycled back to corporate. AI displaces them 2024–2028. They re-found — now as Artificial Entrepreneurs.
|
PATH 2 — YEARNING
Cycled back to corporate, not displaced — but miss the autonomy. AI is the straw that brings them back.
|
PATH 3 — UPGRADE
Never left. Stayed founders through 2022–2026. Simply upgrade to AI-native operations.
|
| ↓ ↓ ↓ all three paths converge ↓ ↓ ↓ |
| THE ARTIFICIAL ENTREPRENEUR |
| The Testable Predictions This Framework Creates | ||||||
|
Did This Strike A Chord? What Do You Like? What’s Missing?
Are you in possession or have seen a piece of research that does a good job of x-raying the dramatic changes in SMB caused by The Great Recession? The Pandemic? The AI Revolution? Hit reply and tell me.
Were you a Profit Machine who started a company during The Great Recession? Did you know/do you know any? How did you/they fare?
I’d like to meet you/them and hear your/their story. With your/their permission, I want to share as much real-world experience from those who lived it and I may use anecdotes or case studies in future issues. Introduce us please.
I can deliver a better quality, reader-centric production if you are willing to provide me with real-world examples and logical, empirically supported feedback. Have some data that conflicts with my market assessment? Share it and I’ll respond and learn from you. Disagree with one of my conclusions? Tell me and we will have a civil discussion. Maybe you will convince me, and I will share with the group. Leave me feedback by replying to this newsletter or emailing [email protected].
Two Cohorts, Not Three
Three names. Fifteen-plus years apart. One underlying pattern. But run the numbers and I only see two cohorts with a future: The Accidental Entrepreneurs, now living their next chapter riding the Silver Tsunami, and The Artificial Entrepreneurs, absorbing everything the Airborne cohort built along the way. The Airborne Entrepreneurs won’t be forgotten. They graduate. That’s the thesis this publication is built on—and starting next week, you’ll watch me test it in public, one issue at a time.
In the next three Tuesdays, you’ll get:
· Issue 006 – the first issue dedicated to The Silver Tsunami—the business transition where trillions of dollars of enterprise value hangs in the balance. The companies founded and led by the Boomerpreneurs, the engine of the Accidental Entrepreneur cohort, need to plan their eventual exit. How can we help them?
· Issue 007 – the first issue dedicated to The Artificial Entrepreneur—I will share the parallels between the opening scenes of The Great Recession in 2008 and the AI displacement that’s hitting many mid-career and would-be professionals.
· Issue 008 – I will share my description of the paradox that sits at the heart of The Silver Tsunami. This single factor both makes a Boomerpreneur’s business successful while also often making the business unsellable at full value.
See you next Tuesday.
Know Someone Who Should Read This?
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Reference Citations
1. U.S. Census Bureau, Business Formation Statistics — Business Applications; High-Propensity Business Applications; Business Applications from Corporations; Projected Business Formations within 4 Quarters. Monthly, seasonally adjusted and not seasonally adjusted, July 2004 – August 2026; August 2026 data released September 11, 2026. Retrieved via FRED, Federal Reserve Bank of St. Louis, September 19, 2026; https://fred.stlouisfed.org/series/BABATOTALSAUS
2. U.S. Bureau of Labor Statistics, Business Employment Dynamics, Table 9 — Private sector establishment births and deaths, seasonally adjusted, Total private; https://www.bls.gov/web/cewbd/table9_1.txt
3. Bias, Daniel and Ljungqvist, Alexander. “Great Recession babies: How are startups shaped by macro conditions at birth?” Journal of Financial Economics, vol. 185, art. 104354, November 2026; DOI 10.1016/j.jfineco.2026.104354. Open access: https://www.sciencedirect.com/science/article/pii/S0304405X2600125X
4. U.S. Bureau of Labor Statistics, Business Employment Dynamics, Table 7 — Survival of private sector establishments by opening year, national total private, March-to-March; https://www.bls.gov/bdm/bdmage.htm
5. Fairlie, Fossen & Lyu. “A Tale of Two Startups — Loss and Gain of Startups in the U.S. Economy in the Pandemic.” Small Business Economics (Springer), 2025; https://link.springer.com/article/10.1007/s11187-025-01171-7
6. U.S. Census Bureau, Nonemployer Statistics by Demographics, experimental series (EXP-NESD), reference years 2017–2022, Table 1 — firms by owner wage-work status and firm age; https://www.census.gov/programs-surveys/abs/data/nesd.html
7. Ewing Marion Kauffman Foundation. “Who Is the Entrepreneur? The Changing Diversity of New Entrepreneurs in the United States, 1996–2020.” Trends in Entrepreneurship series, April 2021, Table 3; https://www.kauffman.org/wp-content/uploads/2021/04/Kauffman_Trends-in-Entrepreneurship-Who-Is-The-Entrepreneur-2020-Update_April2021.pdf
8. Flood, Sarah, Miriam King, Renae Rodgers, Steven Ruggles, J. Robert Warren, Daniel Backman, Etienne Breton, Grace Cooper, Julia A. Rivera Drew, Stephanie Richards, David Van Riper, and Kari C.W. Williams. IPUMS CPS: Version 13.0 [dataset]. Minneapolis, MN: IPUMS, 2025; https://doi.org/10.18128/D030.V13.0. Basic monthly samples, January 1994 – July 2026, ages 22–70, individuals linked across months. Underlying data: U.S. Census Bureau and U.S. Bureau of Labor Statistics, Current Population Survey.
9. Carta Insights. “Solo Founders Report 2025.” Carta, December 9, 2025; https://carta.com/data/solo-founders-report/
Conventions and Limits
a. Formation windows are editorial conventions of The SMB Cohort. No federal series defines when a founder cohort starts or ends; NBER dates recessions, not cohorts. The Artificial Entrepreneur is named for how a firm operates, and membership is set by founding into it from 2024. An Accidental Entrepreneur who adopts AI remains an Accidental Entrepreneur. Airborne founders who found again are the one named exception, because the calendar puts the two cohorts so close together.
b. BFS counts applications for an employer identification number — intent at filing, not operating businesses. Records were set by ranking the full series, July 2004 – August 2026, on both bases; a seasonally adjusted (SA) value is a model estimate, never a count of filings. The Accidental index uses calendar-year totals, not seasonally adjusted. Growth since 2007 compares the same January–August months in both years, not seasonally adjusted. The nesting: all applications contain the high-propensity series, which contains corporate applications; Census restates its 2004–2011 high-propensity series to the current definition. Corporate form is the entity box on IRS Form SS-4, so the series counts a tax election, not a legal form — a single-member LLC checks “Other.” Derived: high-propensity applications ran 133,972 a month (Jan–Aug 2007) against 153,423 (Jan–Aug 2026); the remainder rose from 94,179 to 389,741, which is 94% of the 315,013 increase. One in 19 = 28,501 projected formations ÷ 531,728 applications, both SA, August 2026. The contraction years are calendar-year sums of the four published quarters of BED Table 9, all 31 complete years 1994–2024 summed and ranked; March-to-March figures differ.
c. BED survival runs on March-to-March years: “year ended March 2021” covers establishments opened April 2020 – March 2021. Employer establishments only — blind to nonemployer firms. First-draw PPP required operation on February 15, 2020 and COVID disaster loans on January 31, 2020, so this opening class qualified for neither. A narrower credit for recovery startups (ERC, third and fourth quarters of 2021) and household stimulus through 2021 still reached it. The class opened April 2019 – March 2020, which was largely eligible, holds the record 80.9% — it is not the Airborne founding class.
d. An observed matched-sample CPS measure, ages 22–70, counting transition events rather than distinct persons; not comparable to national 16+ totals. Each year rests on as few as 28 surveyed people making the move and rarely more than 80, so no single year carries the trend — it holds because it holds across seven consecutive years. LLC owners often answer “incorporated”: treat the flag as directional. The baseline rises within its own window (7.0k across 1994–2000, 11.5k across 2002–2006), so the doubling is sensitive to endpoint choice.
e. Kauffman measures new entrepreneurs (CPS-based, self-employment included), not employer businesses or BFS applications. The 45-or-older figure is derived — the sum of two published shares, 45–54 and 55–64 — and runs 47–49% across the window. The top bracket ends at 64, so 45+ is a floor. These are shares at entry, not the cohort’s composition today; age at founding is eligibility for the Silver Tsunami, not participation in it.
f. Census’s experimental nonemployer demographics file, firm level, all sectors, measured in each firm’s founding year. A mass layoff mechanically raises the count of owners without a wage job, so the 2020 reading measures the size of a displacement shock and how fast it reverted — not a cause of founding. The latest reference year published is 2022.
g. On the “40% over target” AWS performance claim — this is an internal performance metric from my tenure at AWS, not drawn from an external published source.
h. On the SMB Cohort Formation Index 2006–2022 — the Kauffman component is the Rate of New Entrepreneurs, published annually by Kauffman Indicators of Entrepreneurship and used here for every year of the series (National Report on Early-Stage Entrepreneurship in the United States, 2025, Table 1, from Current Population Survey microdata). An earlier version of this workbook substituted the GEM US Total Entrepreneurial Activity rate from 2019 forward, on the mistaken belief that the Kauffman series had ended in 2016; that substitution has been removed. The Growth Index has published data only through the 2017 birth cohort, because the measure is a year-8 reading and cannot exist sooner; 2018 forward is projected as the trailing three-year average of the 2015–2017 cohorts, shown as a base case with a disclosed ±5% range. Nonemployer figures for 2006–2011 are read from the Census bar chart in news release CB13-99; 2013, 2018 and 2019 are interpolated; 2021 and 2022 are chained from Census-published year-over-year growth rates.
My Current Plan for Year 1
After the Foundation, the two parallel weekly threads run in alternating fashion, with crossovers.
| Name | Issues | Dates (approx) | Primary Audience Focus |
|---|---|---|---|
| The Foundation | 1–4 | Sept 8 – Sept 29, 2026 | All |
| The Silver Tsunami | ~20 | Oct 13, 2026 – Aug 31, 2027 | Boomerpreneurs + Financial Advisors + B2B Marketers |
| The Artificial Entrepreneur | ~20 | Oct 20, 2026 – Aug 31, 2027 | B2B Marketers + Analysts / Journalists / Podcast Hosts |
| Crossover Issues | 4 | Various | All |
| Full Year | 48 issues | Sept 8, 2026 – Aug 31, 2027 | All five (compounded) |
The SMB Cohort is independent research and commentary. Analysis draws on primary research, public and licensed data sources, and the author’s professional experience and judgment; while rigorously developed, it can be wrong. Nothing published here is investment, financial, legal, tax, or other professional advice, and nothing should be acted on without independent verification from other sources. Brian D. Burch and The SMB Cohort accept no liability for outcomes resulting from reliance on this content.