PayPal founder (and billionaire) Peter Thiel is offering grants to 20 students under the age of 20, luring them to leave school and become entrepreneurs. He thinks that getting teenagers to start thinking big early will help them become innovators. Rather than take on education debt, Thiel wants these kids to get $100,000 from a mogul and start a business.
In a Bloomberg Businessweek ranking of CEOs of S&P 500 companies, those without college degrees tied with University of California system graduates as running the most businesses. Last month, Stephen Greer asked Does an Entrepreneur Need an MBA? He showed that while an MBA may not provide all the ingredients to become a successful entrepreneur, it does equip entrepreneurs with the skills that can make them more effective. Yet, Mr. Greer was discussing those who have obtained, at least, undergraduate degrees since such are usually required for admissions into most MBA programs.
But what if the entrepreneurs are not even college graduates? What is the chance that a kid that leaves school because of $100,000 will succeed as an entrepreneur? And if he fails, what will Mr. Thiel do for him? For every Mark Zuckerberg, there are countless dropouts who have failed.
Some dropouts become legends and create industries. Is the current model of education relevant to these entrepreneurs? Our doctors and lawyers cannot afford to be dropouts, but many entrepreneurs have excelled by doing just that. If some dropouts excelled without college degrees, why must a kid entrepreneur pass through college and get rewarded with an average debt of $250,000?
Mr. Greer says you can’t “teach someone to really enjoy taking risks.” That does not mean entrepreneurs do not need education; under most circumstances, lack of education hurts. Of college dropouts who become successful at a young age, many do so in technology, an area that rewards such entrepreneurs. Entrepreneurial opportunities in finance, medicine, banking, law and most others areas have structures that allow for much less risks. For budding entrepreneurs who want to work in those areas, staying in school opens more opportunities.
As a college student in Nigeria, many of my classmates left school to start businesses thinking they would become moguls before the rest of us completed college. None succeeded. The ones who completed college and got into entrepreneurship are doing much better. They are the ones whose companies are now entering into joint partnerships with multinational companies. Their confidence and better vision in the market helps them scale and pick opportunities. Those without education cannot play in that level. The educated ones can get travel documents to most Western nations; these governments discriminate on educational status when approving visas. There seems to be no single reason where dropping out of school has helped. Yes, I know, you may not expect future Microsofts and Facebooks from Nigeria, but even in the U.S., I know for sure: thousands of kids have been destroyed by the illusion that leaving school is a recipe for successful entrepreneurism. They have failed to see school as a risk worth taking. Their degree should be their first product, on which they can build many more.
By Ndubuisi Ekekwe, originally published in Harvard Business Review, as Does an Entrepreneur Need a College Degree?