Why the Myth of the College-Dropout Billionaire Is So Enticing
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Every few months (or weeks, depending on where you look or listen), you’ll hear about some new college dropout who became a billionaire or multi-millionaire after starting a revolutionary business. And for accuracy’s sake, there are lots of real examples here. Some of the most iconic entrepreneurs of our time have been college dropouts, including Bill Gates, Steve Jobs, Mark Zuckerberg and Larry Ellison, all of whom quit school and went on to make it onto world’s-wealthiest lists.
But the concept of the college-dropout billionaire is at best misleading and at worst a fundamental myth of our culture. So why is this myth so enticing and so pervasive?
The Myth of the College-Dropout Billionaire
Let’s start by dissecting why the college-dropout billionaire archetype is problematic. Anecdotal examples like those above lead to a few inaccurate potential assumptions. For example, you might conclude that if you’re going to college and have a great idea for a business, you should drop out to pursue it; after all, you might become wildly successful. You might also conclude that dropping out somehow correlates with a higher success rate; it might signal the capacity to take unconventional risks, and we know intelligent risk taking is a vital skill for entrepreneurs.
In reality, college-dropout billionaires are both rarer and less illustrative than people would like to admit. For example, let’s look at the Forbes 400, or the 400 richest people in the U.S., all of whom are billionaires. Upon examining the 362 billionaires whose education records were available, 44 were college dropouts; in other words, only 12.2 percent of billionaires dropped out of school. Similarly, a 2017 analysis found that only 16 percent of billionaires didn’t have a Bachelor’s degree. In other words, 84 percent of the country’s richest people had a full college education.
Further statistics illustrate additional monetary and career benefits of completing a college education. Compiled research suggests that men with a Bachelor’s degree earn $900,000 more over the course of a lifetime than their high school-graduate counterparts. Women with a Bachelor’s degree earn $630,000 more. It’s still a few orders of magnitude away from taking you to billionaire status, but it’s a hard statistic to ignore.
The Role of Survivorship Bias
When you look at all billionaires, the number of college dropouts is not impressive. We can also examine the career-long performance of the average American college dropout, to look at things from the opposite angle. According to College Atlas, 70 percent of Americans will study at a four-year college at some point, but more than a third of students will eventually drop out, and 30 percent of first-year students drop out in the first year of school. With roughly 20 million enrolled college students at any given time, that amounts to millions of new college dropouts each year. How many of these went on to run a massively successful business?
We’re disproportionately focused on college-dropout successes due to a phenomenon known as survivorship bias, a logical error and cognitive bias that leads people to false conclusions due to invisible or overlooked examples. In this case, we have a few dozen high-profile college dropouts who we hear about all the time juxtaposed against few million low-profile college dropouts who we don’t see or think about.
The Enduring Appeal
While survivorship bias explains our uneven attention distribution, it doesn’t explain why the myth of the college dropout success is so appealing. Why are we endlessly fascinated with the rogues who took an uncommon, unrecommended path and still found success?
In part, it’s because we love to root for underdogs, but we’re also drawn to statistical anomalies, as the status quo is often labeled "boring.” Plus, knowing people who failed early but became successful later gives us confidence that we can work past our own mistakes, no matter how bleak things look. Whatever combination of factors is at play, dropout entrepreneurs are clearly regarded as more compelling than they necessarily ought to be.