Do Entrepreneurs Really Need to Go to College?
With the average cost of tuition at a private school topping $30,000 per year, many students interested in entrepreneurship are trying to decide whether they really need to go to college to achieve their goals. The main concern further propelling this question is the large amount of debt students carry upon graduation. According to the Wall Street Journal, the average Class of 2014 graduate with student-loan debt has to pay back some $33,000 of principal. Over ten years, depending on the interest rate, this can be over $45,000 that needs to be paid back.
Showcasing this attention to the increasing college costs is an organization started by Peter Thiel (cofounder of PayPal). His Thiel Fellowship offers an alternative route. It gives young entrepreneurs the opportunity to receive $100,000 and mentoring from Silicon Valley veterans. The only requirement is that they need to work on their business full-time. Theil believes that students that graduate with debt will be more risk-adverse as they struggle to pay off their student loans, resulting in less innovation. In this way, he thinks that going to college first can actually hurt an entrepreneur.
Another knock against a college education is that they may offer outdated teaching methods. Many students excel in college through simple memorization of material rather than learning the critical thinking needed to be successful in business. Having the real world experience of working on someone else’s start-up may force these high level skills and have the potential to be more educational than any college degree.
However, the classroom can still have an important role in an entrepreneur’s development. College provides students with the tools to identify opportunities and develop successful business models. It plays an important role in building one’s professional network and general socialization that will be needed in starting any company. In fact, I met the wife of my future business partner at Brandeis University (in fact, she hadn’t event met him yet!) who later connected me to her husband.
So, is college worth it? Here are some questions to ask to help decide:
What does the curriculum look like? Colleges that offer experiences with start-ups or encourage students to create business plans may be worth the investment. Find out how much of it is memorization and what will instead build critical thinking skills. Learning how to work as part of a team on assigned case studies is an important skill that can be developed in college.
Is there a better opportunity right now to gain real-world experience? College does not have to immediately follow high school. There is time to wait. Is there something right now that will provide a faster learning experience, and the meeting of more interesting people than going to college right now?
Does it pay to wait? Business is not about ideas, but about their execution. Is the perfect team assembled now to build the company that will not be there in four years? If so, a student can defer admission.
Look for choices and don’t be on college bound autopilot. Critically examine the value of investing four years and an incredible amount of money into a university education versus other alternatives available.
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