Would a degree in entrepreneurship really help you get your first business off the ground? Or should you just get started on your own?
Classes—and even entire degrees—in entrepreneurship are popping up all over the country, at schools from Stanford to Harvard. Yet the value of an entrepreneurship degree isn’t quite as clear-cut as, say, an accounting degree. Think of all the different variations on how an entrepreneur can found a business—how much of that do you think is possible to pack into a four-year degree?
Before you take out those student loans, you need to know what you’re paying for. That’s even a bigger issue if you may need a business loan to put your knowledge to use.
Placing a Value on an Entrepreneurship Degree
The value of an accounting degree is clear: you can earn $45,000 a year straight out of college at one of the big accounting firms, and there are plenty of job titles in the field with average incomes of over $70,000 a year. But putting a dollar amount on entrepreneurship isn’t nearly as simple. During the first year of operations, many companies are lucky just to break even, while some startups get multimillion dollar exits. Calculating an average doesn’t tell us anything.
The value has to be a question of whether or not the degree helps a brand-new entrepreneur start her first business—and if it improves her chances of creating a business that either lasts or has a successful exit. Of course, with brand-new degree programs, there are no statistics on success rates of alums. Articles promoting entrepreneurship degrees routinely rely on broad statistics about how many new businesses were established in the U.S. during the last year, not how many of those business owners have entrepreneurship degrees.
But there is one basis of value we can judge on: the impressions the professors teaching those classes have of what they’re offering students. And therein lies something concerning. I heard a professor (who happened to be in charge of teaching entrepreneurship at the university I was then attending) tell a class full of students that they need to go out and actually build a business to get a full education in entrepreneurship.
An entrepreneurship degree is essentially a regular business degree with some warnings tacked on about what has gone wrong in other new businesses. There isn’t an effective way to teach much more than that, because each new business is different. Even individual franchises face different problems than their parent companies. I’ve started several business of my own at this point (including one during college that blew up spectacularly), and I still run into problems I don’t foresee with each new venture. Furthermore, some of the professors teaching these classes haven’t ever started businesses of their own.
But does that mean an entrepreneurship degree is worthless?
Value Beyond the Academic
The major value behind a degree in entrepreneurship is the value of any college degree: you’ve got four years to try out a bunch of different things, access to a huge number of resources and connections to a wide variety of people. If you go to a school with an entrepreneurship program, odds are good that you’ll get chances to network with successful entrepreneurs—the guest speakers brought in for classes, the industry connections of the professors you’re learning from and even the alumni who graduated from your school.
Think about how many businesses have been founded in dorm rooms already. If those student entrepreneurs can do so when many aren’t even taking business classes, think what a dedicated individual willing to make the most of the resources in front of her might accomplish.
Any college degree is worth only what you make of it. An entrepreneurship degree might not have the intrinsic ability to help you found a successful company that much faster than you could figure out on your own. But a university is full of resources that are harder to access without a student ID.
It’s a big financial bet; don’t get me wrong. If you’re confident in your abilities and you’ve got a great idea for a business, it may work out better to just found your first business as many experienced entrepreneurs suggest, rather than racking up student loans that very well may force you to take a job and wait on your dream of entrepreneurship. It’s a tough decision. Yet if you’re clear on what you want to get out of the deal, that will certainly make the decision easier.
Thursday Bram is the editor of 21times.org, a daily newsletter for developers.