Richard Branson on Studying Entrepreneurship in College
Editor's Note: Entrepreneur Richard Branson regularly shares his business experience and advice with readers. Ask him a question and your query might be the inspiration for a future column.
Q: I'm 17 and I have to start making decisions about my university education. Some schools offer an entrepreneurship degree, which sounds very appealing. Do you think it's better to study something broader so that I could start my business with some "real" knowledge? -- Axel Meta, Spain
I can't speak to the specifics of your situation, but I always tell everyone to pursue what interests them -- and you already know what you want to do! It's terrific that you have the option of attending a university that offers entrepreneurship training; I hope this includes hands-on experience and the chance to connect with mentors who will continue to provide guidance as you open your first businesses.
I'd also recommend that you look ahead to what's next, after you graduate, so that you can prepare. What support is available for young people who have the drive and skills to become entrepreneurs?
Funding is often the greatest obstacle. When my friends and I launched Student magazine in the late 1960s, I managed to sell some ads, and that paid for the first few issues. But as the magazine caught on and we needed to pay the printers and other expenses, cash became even tighter. That's when my mother stepped in. Months before, she had found a bracelet and turned it over to the police. No one claimed it, and around the time that my friends and I were getting a bit desperate, the police gave the bracelet back to her. She sold it and gave the proceeds, 300 pounds, to our venture. That was all it took to keep us going, and we went on to set up our mail-order record business, record stores and recording studio in the next few years.
Young entrepreneurs can face especially high hurdles when approaching investors or applying for loans: they usually have few assets, no credit history, and rarely any business experience that they can point to. This is a problem that needs solving -- after all, a sign of a healthy economy is a thriving small business and startup sector - and we established entrepreneurs need to show leadership here.
Your question reminded me of an approach that seems promising. Virgin Media Pioneers is an online community that one of our companies, Virgin Media, set up for aspiring entrepreneurs in Britain, and which I help as much as I can. (It has since been sold.) To try to pinpoint what prevented young people from setting up businesses, VMP conducted a survey of young entrepreneurs in 2011, and the responses revealed the usual issues: Young people were still held back by a lack of support, a lack of practical training and a scarcity of funds.
Drawing on these findings and working with a number of youth issues experts and groups, VMP issued a report calling for corporations to find tangible ways to support startups, such as opening up office space and providing mentors for aspiring entrepreneurs. It also suggested that government should reconsider the way it invests in young people.
The argument was simple: Why should a university student be able to borrow around 30,000 pounds to get a degree in business but then struggle to raise 5,000 pounds to launch a startup? VMP suggested that the British government could unlock huge economic benefits by renaming and remodeling its Student Loans Company. The new Youth Investment Company could continue to administer student loans, but also make loans available to young entrepreneurs on the same favorable terms.
This idea resonated with me. I remembered my own struggles after I left school: My parents were supportive, and my friends and I had a lot of fun, but those first years were pretty challenging.
Around the time that report was published, the British government was already looking at various schemes to provide financing to young business people, and I had been doing what I could to urge lawmakers to consider such proposals seriously. In 2012, the government formed a new nonprofit called the Start Up Loans Company, to provide financing to new businesses.
The company has since built up a network of more than 50 delivery partners who are lending money to new businesses all across the country. To date, more than 9,000 businesses have borrowed over 45 million pounds - an impressive feat. (Through Virgin Money, our bank, we took part in a pilot program last year, and we are now launching our own delivery partner, Virgin StartUps, to help provide training and mentorship, as well as money. The website is www.virginstartup.org.)
This idea should have merit beyond Britain -- and we should all be urging lawmakers to implement similar schemes. Funding startups is a huge challenge, and the solution requires the involvement of both the public and private sectors.
Clearing a path to entrepreneurship for our best and brightest benefits everyone and boosts the economy, so if you are an experienced business leader, consider volunteering as a mentor or offering some of your business' resources to young people trying to launch startups.
And if you are a young entrepreneur, what is your biggest challenge? A lack of financing? Difficulty building your business network? A combination of both? Do you think a loan program for young entrepreneurs could work where you live?