Is the Sheepskin Worth It? Do entrepreneurs need a college degree to be successful?
By Teresa Moravek
Bill Gates never completed a college degree, yet founded Microsoft, the world’s most prominent software company. Steve Jobs, founder of Apple Computer, never obtained a college degree either. And there are many more examples of entrepreneurs who have “made it” without a college degree. The 2002 U.S. Census survey of business owners found that 28 percent of business owners had some college credits, 24 percent had obtained an undergraduate degree and 19 percent held post-graduate degree status. If the majority of entrepreneurs (and some of the world’s most famous) don’t have a degree, is there a solid reason for entrepreneurs to seek a degree or entrepreneurial education? If so, is the right type of entrepreneurial education readily available? Higher Education Programs More than 1,500 colleges and universities now offer some form of entrepreneurial training. Correlating with that trend is the increase in the number of endowed chairs and professorships in entrepreneurship and related fields, which have grown by more than 71 percent from 1999 to 2003. The Kansas City-based Kauffman Foundation is pouring $25 million into the entrepreneur programs at eight colleges and universities over the next five years as part of their Kauffman Campus Initiatives program. Yet, some feel that the resources and respect for entrepreneurial studies fall short of demand. In a recent meeting that included facilitators, administrators and partners of the world-class Kauffman FastTrac programs, Judith Cone, vice president, said that entrepreneurship is not a highly respected discipline within colleges and universities. She attributed this to the lack of lobbying groups promoting entrepreneurship. Apparently, the “true customer” of these colleges and universities, corporate America, really isn’t interested in hiring trained entrepreneurs.
Educational Options So where does an entrepreneur begin in capturing the critical business acumen to launch and grow a financially viable business? There are three core functions of any business—making the beans, selling the beans and counting the beans. If aspiring entrepreneurs are without sufficient understanding or experience in any of these three areas, they have several options. They can: • Learn on the job through trial and error • Hire employees who have the necessary experience • Obtain additional formal training such as a general business degree, an MBA, or even a degree in entrepreneurship
Answer Three Questions To discern whether a degree or additional education are necessary to augment the start of a new venture, there are three questions potential or existing entrepreneurs should ask before investing in college tuition.
1. Does the type and/or life stage of the business afford the luxury of time needed for education? If the business is hyper-growth in nature, such as a technology-based venture, the team may be racing against the clock to get to market. The time to obtain an additional degree just may not be feasible. The competition may forge ahead in the race to be the enviable first player to market. A more manageable approach in this scenario may be to get a business coach or expert to guide and advise with real-time business leadership and operational issues.
2. Can the entrepreneur afford to hire employees or contractors who have the subject matter expertise necessary? If so, it may not be worth the time or money required to go through the rigors to gain a formal education. When the necessary knowledge, skills and experience tied to the functions of the business can be bought, it allows the owner to allocate more time to working “on” the business versus “in” the business. However, even with this approach, entrepreneurial training and planning programs such as the Kauffman Foundation’s FastTrac training can assist the owner in strategic and tactical business planning. This is a critical success step for any business owner, regardless of the roles assumed as the owner.
3. Is the credibility and short-term viability of the business contingent upon the business owner’s type of education or knowledge base? If it’s a consulting business, for example, the target market’s perception may be that the owner must be educated, knowledgeable and up-to-date in the company’s area of consulting specialization. For example, the credibility of a computer science or technical degree may be necessary for the founder of an IT consulting company. If the owner isn’t at the expected educational level, additional education or training may be necessary to gain the confidence of clients.
After answering these three key questions, entrepreneurs should be able to perform a cost/benefit analysis to weigh the importance of pursuing additional education or degrees. Even when they determine that a degree isn’t necessary, business owners should still consider “sharpening the saw” with continuing education and coaching to secure and fine-tune the business acumen needed to run a viable venture. Teresa Moravek facilitates FastTrac, a Kauffman New Ventures program, for Right Management Consultants. She is the owner of Performance Partners Inc., a professional coaching and development company. She may be reached at (913) 451-1100 or
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