Is university a waste of time for the entrepreneur?


Elon Musk sold his company Zip2 to Compaq for $307 million.

Scott Banister founded ListBot, the largest ASP for business email, and IronPort, the anti-spam company that Cisco acquired for $830 million.

Bill Gates… but then you probably know about Bill Gates.

And what do Messrs Musk, Banister and Gates have in common? They didn’t get their College degrees. Not that there was ever much chance of Elon Musk getting a degree – he left before classes even started…

Why do I mention this? Because I read a newspaper report last week which said that total student debt in the US now exceeds total credit card debt in the country – which I think is quite staggering. And you know what they say: where the USA leads, the UK follows…

Let me turn to another American who’s not short of a bob or two: Peter Thiel. If you’ve seen The Social Network you’ll know that Peter Thiel was the first outside investor in Facebook. He now owns around 3% of the company, and Facebook’s worth about $50bn – so not a bad day’s work.

Peter Thiel has just launched 20Under20. It’s a simple scheme: Thiel finds 20 entrepreneurs under 20 and gives them $100,000 each to fund their start-ups. They also receive business advice and mentoring. What they don’t do is go to College and get a degree, because Thiel thinks nothing beats the real world. And when a business is ready to launch, it’s ready to launch – there’s no point waiting for graduation. He also believes that the long term future for America is pretty uncertain without radical innovation in technology – so he’s doing something about it.

Come back to this side of the Atlantic. Every time I open the paper another university course has pushed its fees up to £9,000 a year. A four year course and that’s £36,000 before you’ve bought a textbook, put any food in your mouth or a roof over your head. And will tuition fees increase in the future? Of course they will. Will students increasingly follow the American example and incur expensive private debt because they can’t get borrow enough money on their student loans? Quite probably…

So if you’re an entrepreneur – if you’re sitting there with the code for the next Facebook burning a hole in your pocket – is university worth it? Or should you accept that nothing matches the real world and in the words of Scott Banister and the Nike ad, “Just do it.” After all, can entrepreneurship ever really be taught?

I think real life experience is great – if you’re surrounded by the right people and you’re prepared to learn – and it can easily be as good as a university education. I just happen to think that both is better. (Maybe I’m getting cautious in my old age!)

As I look across the dining room table, am I worried by the prospect of Dan and Rory coming out of university with around £50,000 of debt? Surprisingly, not that much: the system seemed to work well in the US and Australia – at least until the recent downturn. (NB I reserve the right to change that opinion if they both say they want to do Media Studies…)

But how would I feel if they dropped out of university – or didn’t even go – so they could start a business? The same as most parents: worried sick. Probably more so, as I know the failure statistics for new businesses. But then, I agree 100% with Peter Thiel: as a country, we have to innovate and we have to create – businesses, jobs and wealth.

I’d be fascinated to hear your views. Did you have too much education? Not enough? And how much did you learn from the School of Hard Knocks and the University of Life…

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20 comments

  1. jessica kemp · April 20, 2011

    University gave me the opportunity to get involved in the ‘Enterprise Centre’ at Newcastle and network with like minded individuals at an early age

    • edreidyork · April 20, 2011

      Hi Jess – great point – there are plenty of great universities who are “switched on” to working with their local business community

  2. Andy Douse · April 20, 2011

    I didn’t go to University and my English teacher said I would never amount to anything because I chatted too much in class. But I couldn’t wait to leave school and start ‘working’. I started at the bottom and worked my way up and have enjoyed every moment. I am an accomplished newspaper journalist and now run my own corporate publishing agency, so take that Miss Mills (my old English teacher). That was just over 20 years ago. I think today’s students are under a huge amount of pressure to achieve first class grades and obviously some jobs require specific qualifications. But I certainly wouldn’t turn an applicant away if they didn’t have a degree. Gumption, common sense and hard work still rank highly on my list of desirable attributes.

    • edreidyork · April 20, 2011

      Andy – as ever, great comments. Let’s wait to see what Miss Mills has to say…

  3. James A. Lamb · April 20, 2011

    Hey, Ed.

    I think your examples are fringe exceptions to the norm. For every Bill Gates, there are 100 (1000? 10000?) entrepreneurs that can’t get their vision off the ground. I’ve always had great plans for my own business, but chickened out and went to college. If I ever pursued those plan, I think college will have given me a leg up.

    Regarding debt, you’re right. It’s a lot, and probably will get more expensive. The military paid for all of my college, I never spent a penny. Of course, I had to get shot at first…

    Tony
    http://tonylamb.wordpress.com

    • edreidyork · April 20, 2011

      Hi Tony – thanks for your comments – fully agree that my examples are fringe exceptions – but still valid in terms of making the point I think. Not sure that getting shot at would be everyone’s cup (jerrycan?) of tea though!

  4. Jim Swift - NYCOM · April 20, 2011

    “Gumption” what an ace word; no University can teach it.

    +1 with Andy

    £9000.00 a year with most courses lasting 4-5Years, what a joke, who benefits?

    The student or the greedy politician

    • edreidyork · April 20, 2011

      Jim – as ever, no mucking about from you with your thoughts on the cost of uni education in the future! So are you saying you’re not going to stump up when the need (possibly!) arises?

  5. Rory Ryan · April 20, 2011

    An interesting conundrum! With or without University. I recently judged a transition year mini company exhibition which included about 50 companies. The night before I read through the reports. Bassed on what I read I was not expecting much from the exhibition. I was amazed when I met the people and saw how their companies were in real life. Most of these kids couldn’t report on what they had done if it was a matter of life and death. The winners were two girls who had a great company and a great report. I reckon both girls will go to college and both have the potential to run great businesses. So for me, I think a dual strand approach is the key.

    • edreidyork · April 20, 2011

      Rory – we’re singing off the same hymn sheet (to plunder a great bit of jargon from one of my previous blogs). Long live the dual strand approach!!

  6. Andy Gambles · April 20, 2011

    I never went to University. Although I am often asked “Which University did you go to?” as though that is a pre-requisite to owning your own professional business.

    I think some university degrees have their place in professions such as law, accountancy, civil enginnering, medical etc but I believe the worth of a degree has de-valued in industries such as marketing, media, IT.

    • edreidyork · April 20, 2011

      Andy – interesting point about whether degrees in certain areas have been de-valued – perhaps those sectors you mention are more interested in hard-won practical experience? Thanks for you comments!

  7. Dave Rawlings · April 20, 2011

    Education isn’t only about getting qualifications for a job – it’s also about developing all of the “character” qualities that are supposed to come from experience, as well as gaining specific knowledge and the ability to think. I tend to the liberal view that education is how society invests in its own future.
    A common criticism of schooling at all levels is that it overvalues the “academic”, abstract way of thinking at the expense of practical, physical and emotional “intelligences”. Qualifications are vigorously sought and generousy rewarded, but are nowhere near enough on their own to guarantee that their holder can actually do anything – except study.
    So, I’m in favour of university education that gives depth in a chosen discipline whilst being balanced by a broader awareness of how the world works – including how people work. Anyone who has all of that would be worth hiring.
    The comedian Josie Long has started her own charity to support students so that they can pursue this kind of education. What an amazing thing for a graduate to do! Read about it here: http://bit.ly/h11hTy

    • edreidyork · April 20, 2011

      Dave – great observation in terms of needing to understand “how the world and people work”, and that both uni and work can deliver against this. And the stuff that Josie Long is doing looks fantastic – thanks for the link!

  8. Rich Cadden · April 20, 2011

    It take a special kind of person to be able to blend academic knowledge and apply it pragmatically. I have heard employers say that having a degree is important as it shows an openess of mind and an ability to grasp bigger concepts.

    My degree is in engineering, but my business is in self-improvement and development…two radically different fields, but its more a question of how you apply that learning skill. There are many people out there that have the academic qualifications but to lay that down and apply it to themselves is something completely different.

    I now realise that the ability to ask smart questions is one of the best skills that can be learnt.

    • edreidyork · April 20, 2011

      Rich – I think you’ve touched on something similar to Dave, which I agree with – University education is more than simply an academic degree in a single discipline. I also think asking smart questions is a skill, and one that we can all improve on!

  9. Rob Cammish · April 21, 2011

    On leaving school over 30years ago I decided against going down the academic route and joined the Merchant Navy (back in the days when this country was a major player in the shipping stakes), gained recognised qualifications along the way which gave me a good grounding, this was followed by approx 20 years spent in various facets of the manufacturing industry.

    I now run my own business and have a “degree level” qualification in my chosen field, however in my opinion nothing can beat the years of experience I have amassed in various industries which I can draw on to empathise with people and problem solve to find mutually benificial solutions.

    Having a son at university and a daughter heading that way I have often thought “Would things have turned out different if I had gone to Uni”. Hard question to answer with a lot of factors to consider.

    I would therefore come to the conclusion that it is “Horses for Courses” as I know successful business people who have who have gone down both routes.

  10. Dick Jennings · April 27, 2011

    I think it all depends on the university.

    The once-in-a-lifetime opportunity that university can give you is to meet, learn from, relate to, fellow students. At it’s best that’s priceless. At it’s worst it’s devotivating and depressing.

    So I’d say do go to a university where the fellow students will set you a benchmark for life, but run like hell from the rest of them.

    And which can set you a benchmark? Well Oxford certainly did that for me. So, well away from any dreaming spires, has Bishop Burton College for my daughter as a route into agriculture.

    But there are far too many deadbeat courses for deadbeat students. It’s not the £9,000 p.a. I wouldn’t want my kids to go on them at any price.

    • edreidyork · April 28, 2011

      Hi Dick – really like the idea of “benchmark for life”, and agree it should be set nice and high early on

  11. Pingback: Well behaved women seldom make history « EdReidYork's Blog

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