A recent post at A VC makes the argument that entrepreneurs do not need degrees.
"Entrepreneurs don't need degrees like lawyers and doctors do. They are credentialed by virtue of their track record. The first startup is hard but if they make that one work, they end up with something much better than a college degree. They have a notch in their belt. They've got a track record of success. Even if the first one is a failure, I'd say that they've got something more than a degree. They've shown they can start something from nothing, build a team, a product, and maybe even a business."
While I agree with the idea that you don't need a degree, research clearly indicates that entrepreneurs are more successful when they have an education. But don't take my word for it. Here are some examples from the research on this topic:
Education of entrepreneurs has a positive influence on:
1. your ability to marshal the necessary resources (tangible and intangible, financial and psychological) to be able to start the business
2. your ability to identify new opportunities as well as learn about what is going on in your market and the technological domain that applies to your business
3. more educated entrepreneurs have more positive expectancies for the growth of their businesses, possibly leading to higher levels of effort and resilience
4. the firms of more highly educated entrepreneurs tend to have higher performance, and better survival rates.
There are some important caveats here. First, education is typically used as a proxy for intelligence. It is much more difficult to measure intelligence, but it is intelligence rather than education level that is expected to produce the benefits listed above.
Second, it is important to acknowledge that education is not the same as getting a degree. So many famous entrepreneurs (Richard Branson, Steve Jobs, Bill Gates) got the major part of their educations from their experience and the opportunities they created. Their formal educations, or lack thereof, are not what helped them succeed so much as their intellect coupled with their environments.
However, for all those bloggers and twitterers out there re-blogging and re-tweeting the meme in the form 'education doesn't matter for entrepreneurship' beware! The evidence is against you on this one.
