Expert Opinions: Is a Business Degree Worth It?
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Can going to school make you an entrepreneur? It’s a burning question for people deciding whether to jump straight into business or spend years -- and a lot of money -- on a degree from one of more than 2,000 U.S. colleges and universities that offer entrepreneurship courses. While there’s no shortage of opinions arguing both sides, there’s no consensus. So we sat down with two researchers to get their take.
Heidi Neck is the Jeffry A. Timmons Professor of Entrepreneurial Studies at Babson College in Wellesley, Mass., and director of the Babson Entrepreneurship Experience Lab. She is co-author of Teaching Entrepreneurship: A Practice-Based Approach.
What do students get from entrepreneurship programs?
Things are changing, and students are finding that what they learn has transferability to organizations of all types and sizes. When you look five or 10 years out, that’s when students have a greater propensity for starting businesses. We have a glamorized view of what entrepreneurship is; in profiles and magazines we’re seeing a small percentage of really successful entrepreneurs who are living the good life now. In the education setting, students realize just how difficult it actually is. I like the realism we can bring to it.
Are students failures if they don’t start a business right after graduation?
We teach entrepreneurship in the context of starting a business, but we have students who graduate and don’t start a business, and I don’t think that’s a failure of the program. They’re coming out with a more integrated mindset around business instead of some functional expertise. Some go into consumer products companies, some go into consulting, some go to Wall Street. Years back, students were afraid to say they were focusing on entrepreneurship. Now corporations are looking for students like that.
How has the view of entrepreneurship education evolved?
Historically, if you look back at the 1980s and ’90s, the focus was on small-business management and the traits of entrepreneurs. Now that researchers are giving up the idea that there are character traits that separate entrepreneurs from others, it has evolved into more of a process view: What is the process of starting a business?
I would say in the last five years there’s been more emphasis on acting in order to learn—getting out there, testing your ideas—not simply making a business plan. I like to say we’re teaching students how to practice entrepreneurship, which circles back to the question of the value of entrepreneurship education. We’re giving students an environment in which to practice different aspects of entrepreneurship where the cost of failure is not as great as it would be outside on their own.
Are there other advantages to studying entrepreneurship?
I think it’s meeting peers, which helps students with networking and with filling out their teams. Students are also looking to the faculty for guidance and access to faculty networks. The institution’s role is not only to connect them inside but to connect them to the appropriate networks outside. And of course there’s the alumni network. Our alumni are always coming back to find out how they can help in the classroom or to find students to bring into their organizations.
So you don’t really believe someone can become an entrepreneur by reading a book?
It all goes back to the practice. As we get more comfortable with doing something, we learn more about it. Doing it may tell a student that they don’t want anything to do with entrepreneurship, or that they would be more comfortable working in a corporation with an innovation arm. They won’t ever get that feeling by reading a book. I’m a huge proponent of doing in order to learn vs. learning in order to do. I think this generation is expecting to be engaged around entrepreneurial education, and if they’re not, there’s very little return on investment. At Babson, it’s a campus-wide thing. We don’t tolerate passive learners very well.
Vivek Wadhwa is a fellow at the Stanford University Rock Center for Corporate Governance, research director for Duke University’s Center for Entrepreneurship and Research Commercialization and vice president of innovation and research at Singularity University. He is the author of The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent and Innovating Women: The Changing Face of Technology.
Is entrepreneurial education worthwhile?
I would have answered this question differently a while ago, but I realized living in Silicon Valley, you can skip school, because this is school. Everyone around you talks and walks and thinks about entrepreneurship. You can join a startup in downtown Palo Alto or San Francisco, and you’ll learn it on the job. If you live anywhere else, you’d better go to school, because you don’t have the people around you; you don’t have the sharing network you have here. It’s really that simple.
What’s the problem with entrepreneurship education?
Most of the schools are still backward. They are still teaching business plans and how to raise venture capital and stuff like that. That’s ’90s stuff. Now it’s about lean startups, iterations, using exponential technology, and it’s about building apps. If you can find the right school that teaches these things, you’re all set. But I would not go to a traditional school, and I would look at the curriculum. If they have “business plan” or “business plan competition” on there anywhere, dump it.
These days, people can learn most of it online. You have access to so many resources. You don’t have to go the traditional route anymore. I would do some education because you need it, but I wouldn’t go overboard and think, If I go to school for three or four years, I’ll come out an entrepreneur. No, you can’t.
Part of being an entrepreneur is having the ability to take risks and having a burning passion in your heart to change the world, and if you’re ready to take the risk, you’re a real entrepreneur. If you want to go to business school and take the traditional route, you’re hedging your bets. I’m not against going to business school, but for most people it doesn’t make sense. It’s not the risky thing to do.
Undergrad is foundational, and my advice is always to do a degree in whatever field you’re excited about. But you do an MBA if you want to join an investment bank, not if you want to launch a lean startup.
Are you saying some people are just born entrepreneurs?
No. Anyone can become an entrepreneur. You’re not born an entrepreneur. You could have advantages depending on where you’re born, but you learn by doing. That’s the best thing. You can learn a lot of things in advance, but there is no experience quite like doing it.
What kinds of people make successful entrepreneurs?
In my research we documented that the average and median age of a tech entrepreneur is 39. There are twice as many entrepreneurs who are older than 50 than younger than 25. Age provides a distinct advantage. The young may be able to build some silly social media apps, but you need experience to achieve success. That’s what I documented, and it hasn’t changed. In Silicon Valley, you meet lots of people in their 40s, 50s and 60s. Facebook is a bunch of “old” people. Google is a bunch of “old” people. It’s an advantage to have already achieved success in life. Learning on the job is the most valuable thing in entrepreneurship.