The Value of Education in Entrepreneurship

Do you, as an entrepreneur, need a college degree to succeed? Everyone knows Bill Gates and Steve Jobs and Michael Dell found entrepreneurial success in spite of not having a college degree. Lots of entrepreneurs without a college degree have found success. A 2013 study of entrepreneurs found nearly 40% of them said you can succeed in business without a college degree (i.e., at least a Bachelor’s degree).

You don’t need a college degree to succeed in business, but you’re more likely to succeed if you have a degree. According to Scott Shane, who wrote a book entitled The Illusions of Entrepreneurship and a commentary entitled “The College Dropout Turned Billionaire Entrepreneur,” the evidence shows having a degree reduces business failure rates and increases profits, sales, and employment. He says:

“If you want to become a successful entrepreneur, your odds are much better if you graduate from high school and go on to college. Many studies show that better educated entrepreneurs have greater access to external capital, lower business-failure rates, greater business sales and employment growth, and more profitable ventures.”

“In fact,” he says, “the data show that the average startup founded by a college graduate has 25 percent greater sales than the average startup founded by a high school dropout, and the average startup founded by a person with a graduate degree has 40 percent greater sales than the average startup founded by a college graduate.”

How does college help?

College teaches you how to speak and listen effectively. Business classes teach every facet of running a business, but perhaps most importantly—especially in today’s ultra-competitive marketplace—college teaches you how to be creative.

College teaches you to analyze a problem by breaking it down, and it teaches you to analyze how you’ve handled the problem before. In addition, college teaches you the value of brainstorming … in hopes that one of your seemingly-outrageous solutions will actually work.

No matter what industry you’re in, whether you produce a product or provide a service, you need to innovate. No matter how well your practices and procedures have served you, at some point, they become outdated. If you hold on to them while your competitors are innovating and keeping pace with industry trends, your business becomes inefficient, falls behind, and loses market share.

Today’s marketplace is different from the marketplace of generations past. Drastically different. To remain competitive, ensure your business operates effectively and efficiently by keeping pace with industry trends. In addition, tap into your creativity from time-to-time and find ways to make your business surge ahead of the competition. You don’t need a degree to be creative—everyone is creative—but whether you have one or not, get in the habit of finding new ways to do old things.