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Do You Want to Be an Entrepreneur?

Recent years have seen a public debate around whether entrepreneurs are better off skipping college. For reasons noted below, we think this is a false debate, and we$$ll explain why. But before we$$re done, we will identify a way in which a higher education can legitimately be seen as limiting one$$s ability to innovate and start anew business.

Let$$s start by acknowledging there are complex links between education and entrepreneurship and by explicitly stating our point of view: The right person can become an entrepreneur without the benefit of a college degree. But having a college degree is no impediment to becoming an entrepreneur And can further provide the benefit of formally studying the Dynamics of business$-$just as we are doing in this class.

One volley in the debate was launched by investor Peter Thiel who, for nearly a decade, has offered $$100,000$ fellowships for a two$-$year program in lieu of attending college. Thiel argues that higher education is out of step with the business environment. Firms created by Thiel Fellows have a market capitalization of over $$8$ billion as of $2019.$

While the very different entrepreneurs in this chapter were chosen for their business success and innovations, and not their education, they$-$Jeff Bezos, Sara Blakely, Reed Hastings, Elon Musk, and Jimmy Wales$-$all have college degrees. Some famous entrepreneurs neglected higher education $($Mark Zuckerberg dropped out of Harvard; Steve Jobs dropped out of Reed College$).$ Entrepreneurs, though, are more likely to be better educated than most business owners. Additionally, many entrepreneurs who had some college experience praise the courses, professors, or friends there with providing tremendous help in starting the firm $($e$.$g$.$ Jeni Bauer from Ohio State, as noted in the chapter$).$

But there is a more likely way in which higher education could be the enemy of entrepreneurship: the impact of large student loans. According to a report, the higher the student loan debt in an area, the lower the net creation of very small businesses, The correlation of those two factors comes with some caveats:

$$ These effects tend to affect only the smallest businesses, which are more likely to take on debt that's secured by the founder's own personal credit.

$$ The authors of the report stop short of claiming that heavy debt burdens hamper an individuals attempt.

$$ An alternate view of the data would be that students with high debt load go directly to higher paying corporate jobs.

$1.$ Thinking about today's business climate, would you say that now is a good time to start a business? Why or why not?

$2.$ Do you see higher education as a benefit or detriment to becoming a successful entrepreneur? Why?

$3.$ Explain how you would apply the strategic management framework to enhance your startup's chances to gain and sustain a competitive advantage.