Do I need a college degree if I plan to start my own business? I’ve heard this question in a number of forms, and there are more than a few articles dedicated to the subject of how valuable a college degree is for someone planning to start their own business. In full disclosure, I have two degrees, a B.S. in Molecular Biology from San Jose State University and Executive MBA from the Anderson Business School at the University of California Los Angeles. I have also been a successful serial entrepreneur, and often spend thought cycles mulling over what makes an entrepreneur successful.
I recognize that there are many notable examples of extremely successful entrepreneurs who never received a degree. Leaving off the historical examples such as Abe Lincoln and Ben Franklin (who lived in very different times, with vastly different education and job options), there are Steve Jobs (Apple), Mark Zuckerberg (Facebook), David Geffen (Dreamworks), and other billionaires who never completed even a bachelor’s degree.
Statistics, however, indicate that these savants and degree-less self-made men are not the norm among business owners. The stats from census.gov indicate that 64% of business owners had at least some college when they started their business, with 23% sporting a bachelors degree and 17% possessing a graduate degree. Less than 1 in 4 business owners from the same survey indicated they had a high school degree or less as their highest level of education.
Despite this, everyone has a story about someone they know who is a successful entrepreneur but who never made it past, or through, high school. As a nation we even idolize these individuals to a certain amount, with lists such as “The Top 100 Entrepreneurs Who Made Millions Without a College Degree.” compiled by an successful entrepreneur who has no degree himself. There are even those who exhort aspiring entrepreneurs to shun college completely, with lists of the negative effects of college that supposedly will then prevent you from being a successful entrepreneur, including stifling of innovation and risk taking as part of the process of a more formal learning platform. It would appear at first glance that those who decry college education as being antithetical to the very ubergeist of the entrepreneurial drive are mostly looking for headlines that will get their articles read, but they also appear to be tying into a common urban storyline that resonates with many. For additional proof just google “Successful Entrepreneurs WITHOUT a college degree” and “Successful Entrepreneurs WITH a college degreee” and you’ll find the latter search gives you stories of entrepreneurs without college degrees as well. No one seems to be interested in a story of how someone went to college, paid their dues, then used that experience to start a business and become more successful than their peers from high school who never sought a higher education.
Why is this? Is it because there is a baseline assumption by everyone, whether they dispute it or not, that having a college degree is more likely to make you successful that not having one? If so (and I think most people would agree with that assumption), one should carefully consider the choice to forgo a higher education, even if they are fully committed to starting a business that will not require one. By way of debate, some of the reasons that are given for not requiring, or even avoiding a college education have been cited as:
- Costs – college is expensive, no doubt. However, most things in life that are worth something have a cost to them, and there are numerous resources and options available for those who can’t easily afford college.
- Time – everyone would like results now, without having to wait 4 years or more to start to get the rewards of hard work. I know a co-worker who convinced his wife, who had been accepted to medical school, that 8 years was just too much time to invest and she ended up turning down her acceptance. My guess is that she probably regretted that decision for the rest of her life, and always wondered “what if I had….”.
- The need to take courses you’re not interested in, or that aren’t practical – in my EMBA program at UCLA everyone there had an existing professional career, yet during or within a few years after completing their EMBA, more than a few of them completely switched careers. Engineers went into marketing, marketing professionals went into finance, etc. Despite being well educated prior to the program, they literally “didn’t know what they didn’t know” and when they were exposed to an alternate career path they realized what they had been missing. Those courses that you may “never” use in your life may expose you to something that you never would have thought of and may lead you to a different set of entrepreneurial opportunities than you originally envisioned.
- The negatives of a formal educational structure – This argument, while it does have some valid points, smacks a bit to me of blaming “the system” for one’s own inability to succeed. There are thousands of universities, with thousands of different approaches towards education, including online, virtual, global, and practical approaches toward learning that for someone that must have “their own” education experience that leads to a college degree, they can probably find it if they are willing to put the time and effort into it.
- The presence and tendency in higher academia of a very specific political bent (in one study 18% of social science professors self identify as Marxists while only 5% identify as conservatives) may repel students who don’t identify politically or philosophically with their professors. I’ve found that college students who are conservative politically generally tend to have well refined debating skills and positions if they actually engaged with their professors instead of keeping a low profile to avoid conflict and/or to try to secure a higher grade. Nobody promised that everyone will agree with your positions in life, but developing the skills to explain and substantiate a position is a skill that will benefit you well in business.
I think it’s clear that there are those who have been very successful entrepreneurs without a degree, so to argue that a degree is absolutely necessary does not make sense. However, I think there are some very good reasons for going to college and getting a degree, whether you intend to be an entrepreneur or not. Here are just a few reasons:
- Career changes – at 47, I am now on my third career, being an entrepreneur. My first two careers (Naval officer and IT consultant/professional) both required college degrees, and also gave me skills that have been critical to success in my ventures. Having a degree gives you career options, including taking a “sentry position” at a senior level in a field you with to start a business in to learn the business on someone else’s dime.
- Knowledge and skills – There are many things in college that don’t appear to be relevant to one’s eventual job, not to mention starting a business. However, it’s very likely that in every course you take, there will be something that will affect a decision you make while running your business, or at least give you another perspective on that business.
- Development of patterns to hone intuition – Some people feel that they do better from just relying on intuition, rather than a formal education. All intuition is, according to some researchers, is the subconscious recognition of patterns and data points and comparing those patterns against known good/not good baselines to come up with a decision. From that perspective the more data points and patterns you are exposed to, the better your intuitive decisions will be. Why forgo a compressed 4 years of exposure to information that will let you rely more confidently on your intuition in the future?
- Connections – you will make connections during college whom you will be able to tap for the rest of your life. As an entrepreneur, you will need access to experts in accounting, marketing, sales, law, etc. and your college connections will let you tap into a known network of people who can help you.
- Credibility – When you go to ask investors for money, hire employees, form partnerships, or do any of the other tasks that an entrepreneur does on a daily basis, you will have more credibility, particularly in the beginning, with a degree. If you were to invest into a technology business would you prefer to invest your money with a founder who had a PhD in Electrical Engineering or a high school dropout who had never held a job for more than 6 months? If you fall in the latter category, you will have to compensate for the lack of credentials with a huge amount of smarts, charisma, and ideally a track record of making millions. Without those things, you’ll be facing an uphill battle to secure funding or partners.
- Developing a pattern of lifetime learning – This is probably the number one reason for pursuing a degree. The most successful entrepreneurs, and people, that I know all embrace a life of learning. Now many of them do not have degrees. One of my good friends and mentors dropped out of UC Berkeley after 2 years to write software and never went back, but he has taken every opportunity to learn everything that he can about business and now knows more than many professionals in marketing and finance about their own respective fields (he is the president of a Telemedicine division for a billion dollar company). Bill Gates noted in a 60 Minutes interview that he has the entire Teaching Company “The Great Courses” library (a set of digital audio and video college level lectures across a wide variety of subjects, including Game Theory, Philosophy, Art, Mathematics, you can pretty much name it and they have it). Life should be about learning continually. On a personal basis, I listen to the Great Courses (currently listening to the “Art of Critical Thinking”), take French, Spanish and Japanese lessons, take regular classroom courses related to my business (both the business side and the cybersecurity side) and generally try to learn daily. There is a danger of complacency, however, when stating that one is a lifetime learner. Without metrics for completion and improvement. one can come to the conclusion that they are becoming smarter every day when they really are just going through the normal routine of life. Without metrics for measuring learning, however, success will be intangible, fleeting, and in the end non-existent.
So in conclusion, and to answer the initial question, a college degree is not required to start a business, but your entrepreneurial path, and your life path, will likely be easier with it. The most important thing to gain from any educational experience is to learn how to learn, not what to learn. A great college experience (which is highly dependent upon having great instructors) will teach you how to learn, and this skill will allow you to be far more successful in whatever path you choose to follow.