What do Bill Gates and Mark Zuckerberg have in common, besides being two of the most influential entrepreneurs of our time? If you answered that they both dropped out of college, you’d be right … but if you added that they are in fact exceptions to what data shows makes a successful entrepreneur, then give yourself a bonus point. In fact, while there’s much noise about start-up pioneers finding success despite a postsecondary education, there are several — and substantial — reasons why serious entrepreneurs-to-be should consider pairing their trailblazing spirit with a college degree.
Learning the Hard Way
Many entrepreneurs who jumped into the industry without college preparation now recognize the value of postsecondary education. For example, Adam Toren, industry expert, tells Entrepreneur that, by not attending college, he and his brother had to learn about the nuts and bolts of such college basics as accounting and human resources the hard way. Those who fail to figure out the building blocks of business risk making huge mistakes that could cost hundreds of thousands of dollars more than the tuition required for an entrepreneurship degree. For most aspiring entrepreneurs, it is far preferable to gain a comprehensive understanding of the business world before making any high-stakes decisions.
Fallback Options and the Reality of Business Failure
No entrepreneur launches a business hoping for it to fail, and yet, research from the U.S. Bureau of Labor Statistics indicates that about half of all new businesses fail within five years. If, for whatever reason, your business does not work out, it is important to have a fallback option so that you can get back on your feet and try again. An entrepreneurship degree gives you exactly that. Although this degree is primarily pursued by aspiring business owners, it can be used in many other contexts. For example, many business consultants and management professionals began as entrepreneurship students. These and other professional opportunities are generally not available to those who lack extensive postsecondary schooling.
Entrepreneurship Degrees and Return on Investment
Today’s college students want to know that the money they spend on tuition and textbooks will ultimately result in better-paying jobs. In most professions, it is very easy to track the effect of a particular degree on an employee’s earnings. However, this is a bit murkier in the world of entrepreneurship, which features both numerous successes and failures. That being said, the bulk of the available evidence points to a clear advantage for college-educated entrepreneurs. A 2009 report from the Institute for the Study of Labor indicates that, not only do entrepreneurs on average experience more financial success than wage employees, formal education significantly enhances these entrepreneurs’ performance.
Perhaps the most convincing piece of evidence in favor of formal education for entrepreneurs is the list of the world’s billionaires. Of the 1,125 included billionaires, only 73 dropped out of school. Thus, as mentioned earlier, while Bill Gates and Mark Zuckerberg are constantly praised for their college abandonment, they are exceptions — and their path may not be worth following.
Ultimately, as with any other postsecondary academic program, an entrepreneurship degree is what you make of it. If used correctly, it can help you make valuable connections, all while providing much-needed insight regarding an increasingly competitive and cutthroat line of work.