Is College Necessary for Young Entrepreneurs?
There's a growing debate around the role college plays in preparing entrepreneurs for the real world. Is it necessary in today's environment?
This last May, I judged the SAGE (Students for the Advancement of Global Entrepreneurship) USA Competition, which encourages high school students to start businesses. (Disclosure: I am on SAGE’s board.)
After their presentation, I asked one team’s members about their college plans. They had none. Instead, they were going to pursue the computer service businesses (yes, plural) they were running. I instinctively insisted that while their computer skills were obviously top-notch, they needed to learn about business operations.
But do they? If you want to be (or already are) an entrepreneur, how valuable is a college degree?
The Facebook phenomenon
Peter Thiel, PayPal co-founder and early investor in Facebook, made a lot of noise last year when he offered wannabe young entrepreneurs (under age 20) in the fields of science and tech $100,000 to drop out of college and pursue business ownership. On Slate, Jacob Weisberg wrote, “Thiel's program is premised on the idea that America suffers from a deficiency of entrepreneurship. In fact, we may be on the verge of the opposite, a world in which too many weak ideas find funding and every kid dreams of being the next Mark Zuckerberg.”
Nearly everyone touting a “who needs a college education?” philosophy cites Zuckerberg and Bill Gates as the poster boys for their point of view. But what are the odds you’re going to be the next Zuckerberg or Gates?
Actually, Curt DeBerg, founder of SAGE and professor of accounting at California State University, Chico, says if you want to be a small-business owner, you don’t necessarily need that college education. But, he adds, “to be a big-time entrepreneur, you need access to a social network that you can only [get] by being invited to a party” — where only the educated are welcome.
Of course, being an accounting professor, DeBerg has created a formula to explain this:
A (financial assets) + B (brains/intellectual capital) + C (connections/social capital) = E (entrepreneurial success).
The value of social capital
Going to college is about more than just academics. Gini Dietrich, founder and CEO of marketing firm Arment Dietrich, says, “The big thing college gives you is the social skills and ability to live on your own. I needed that … badly. It helped me come out of my painfully shy shell.” Dietrich majored in English (not entrepreneurship), but she says that’s a good thing: “[Studying entrepreneurship] probably would have made me less willing to take risks, because I'd know then what I know now.”
O2 Max founder Karen Jashinsky, who attended the University of Southern California (USC) specifically to study entrepreneurship, agrees, adding, “It wasn’t until grad school that I found my community.” Jashinsky thinks going to college is crucial, especially “if you don’t have a big network, and because it gives you access to more/new/different role models/mentors.”
Self-labeled “recovering entrepreneur” Norris Krueger, Ph.D., who is “passionate about understanding how entrepreneurs learn,” says, “Colleges are great aggregators of talent, whether it’s NYU or a community college.” His advice to collegiate entrepreneurs: “Find fellow entrepreneurs, faculty and alumni talent” and learn with them. Like Dietrich, Krueger believes “there’s nothing wrong with a good liberal arts education.”
Michael Simmons, co-founder and CEO of the Extreme Entrepreneurship Tour, and Jennifer Kushell, the founder of Young & Successful Media (now called YSN.com), see both sides of the issue. They agree that those who are self-motivated, proactive, ambitious and entrepreneurial can succeed without attending college. But Kushell says college not only teaches you to interact with others and think critically, but also increases your lifetime earning potential, and Simmons points out that some colleges “can serve as powerful accelerators of venture speed and size.”
James Barrood, executive director of the Rothman Institute of Entrepreneurship at Fairleigh Dickinson University’s Silberman College of Business, is obviously biased (but not wrong) when he says, “College is critical. It is not only a time to learn, but a time to build new relationships and expand networks. Today, more than ever, it is the strength of one's network and the ability to manage teams, local and virtual, that will prove the key to entrepreneurial success.”
The consensus about college
Nearly everyone I talked to thinks attending college is worthwhile. But Scott Gerber, author of “Never Get a ‘Real’ Job” and founder of the Young Entrepreneur Council, believes schools need to do more.
“With the class of 2011 facing the highest student debt load in history, it’s time colleges integrate entrepreneurship education into their collegiate ecosystems,” says Gerber. “Colleges must get beyond their antiquated ‘traditional-employment-is-the-only-way-we-know-how-to-measure-and-sell-our-success-to-new-prospects’ mentality, and instead begin to support and encourage entrepreneurship as a viable career path.”
So, is college necessary? Roozt.com founder and CEO Brent Freeman, who credits his success to studying entrepreneurship at USC, gets to the crux of the prevailing sentiments: “College opens your mind to the world, and when you open your mind, you open the door for entrepreneurial opportunities.”