How much education does an entrepreneur really need to be successful?
We’ve all heard the stories of billionaire college dropouts. Does that mean you shouldn’t go to college?
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June 21, 2021
5 minutes to read
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Common sense can tell you that the more educated an entrepreneur, the greater their chances of success. Going to college, getting a graduate degree, and taking several training programs should equip them with more knowledge and experience that they can use to grow their business.
But at the same time, there are a lot of stories of entrepreneurs who dropped out of college (and even those who dropped out of high school) and still did something amazing. So how much education does an entrepreneur really need to be successful?
The anecdotal evidence
First, we need to recognize the fact that you can find anecdotal evidence to back up your claims, no matter what your position. For example, Tumblr founder David Karp dropped out of high school and is now a billionaire, along with fellow billionaires Henry Ford, John D. Rockefeller, Amancio Ortega, and François Pinault.
Likewise, you can find stories of entrepreneurs who dropped out of college and had a huge success. Famous, Bill Gates, Larry Ellison, Michael Dell, Larry Page, Mark Zuckerberg and Steve Jobs all left college at some point – and many of them did so so they could focus on their business full-time. Lighthouse.
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And of course, there are many stories of entrepreneurs who only succeeded after graduating from college.
However, anecdotal evidence doesn’t tell the whole story.
Drop out of university to become an entrepreneur
By zooming out, we can see that the alluring story of the “college dropout entrepreneur” is a bit unfounded. While there are specific examples of people who dropped out of school and succeeded, these tend to be the exceptions rather than the rule.
By looking at the data, we can confirm this. Among the Forbes 400 (the richest 400 people in the United States), 362 people have publicly available school records. Of these, only 44 were college dropouts, meaning 12.2% of billionaires were college dropouts. In fact, the vast majority of wealthy people have at least a bachelor’s degree.
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It also doesn’t take much research to confirm the idea that education leads to better outcomes for the average person; with a college degree, on average, you will earn something like $ 630,000 to $ 900,000 more in lifetime income than your high school graduate counterparts.
The benefits of education
Whichever way you envision it, education has compelling benefits for entrepreneurs, including:
Knowledge. First and foremost, going to school gives you more knowledge. Depending on where you go to school and what you study, you might get information that will help you plan and run the business, or you might know your target audience better. Whatever the case, you will be prepared for more situations and you will be able to make better plans.
Job opportunities. Sometimes going to school can give you more immediate employment opportunities. Having a degree increases your chances of getting hired, making it easy for you to gain more experience than you can use in your entrepreneurship.
Exhibition and perspective. Going to school also increases your exposure and possibly your perspective. You will meet a wide range of different people with different ideas and philosophies. Collectively, it can help you think more creatively and open your mind to new ideas.
Networking. Don’t underestimate the importance of networking. During your studies, you will have the opportunity to connect with hundreds if not thousands of people, many of whom may be able to help you grow your business in the future. This is difficult to make up for lost time in the network.
Disadvantages of education
However, there are a few downsides to getting more education:
Schedule. If you have a great idea for a business that you’re starting in college and it starts to take off, you might miss the opportunity if you give it up in favor of finishing your studies. Giving up to work on the project full-time might be on you, allowing you to capitalize on an opportunity that might not happen again.
Debt. Depending on your situation, taking higher education programs will likely leave you in debt. While this doesn’t stop you from starting a business, it can make the financial side of things more difficult to manage.
Subjects of no interest. Not all forms of education are particularly useful for entrepreneurship. For example, a philosophy degree may not help you as much as a business degree (especially if your business has nothing to do with philosophy).
Some specific situations may require a person to drop out of college or high school to pursue their dream of becoming a successful entrepreneur. But overall, the advantages of education far outweigh the disadvantages – and more education will increase your chances of success. Don’t let stories of dropping out entrepreneurs convince you otherwise.