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Third Degree

We ask if book smarts or street smarts rule in business.

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This story appears in the June 2005 issue of Entrepreneur. Subscribe »

In the third season of The Apprentice, contestants were divided into two teams, high school vs. college graduates. In a real-life spin, we asked four entrepreneurs with various levels of education, Are street smarts or book smarts more important in business?

Armed with the gifts of gab and persuasion, Steven Arroyo spent time around restaurateur clients as an espresso bean salesman and became convinced he had the street smarts to excel at the restaurant biz himself. He started what is now Cobras & Matadors in Los Angeles 10 years ago. "I knew that my style was as good as anybody's out there," says Arroyo, 36, who never attended college. "When you have a degree, you pay someone tuition to tell you what you can and cannot achieve. No one has ever told me what my capabilities or limitations are." Arroyo now has four restaurants and projects 2005 sales of $7 million. "The street will teach honesty, integrity, humility and how to BS," he says. "Lack of knowledge is sometimes my best weapon."

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