The media often glamorizes college dropouts like Bill Gates and Steve Jobs to prove that you do not need a degree to succeed in your entrepreneurial ventures. The point they make is true – you do not need an academic degree to qualify your business or technology skills. In the world of entrepreneurship, nobody cares whether or not you are from the Ivy league. What matters is if you have the acumen to do stuff, and if you are successful.
Does that mean academic degrees are meaningless? Not at all. Not everyone here is a Bill Gates or Steve Jobs. At least, it is difficult to know if you are one unless you have made it in life yourself. There are several reasons why a degree like MBA or MS is important before you pursue your entrepreneurial dreams.
Here are a few:
Provides Fallback Option : Motivational speakers often advise aspiring entrepreneurs to go for the kill and not worry about completing a degree. While this is good motivational stuff, it is not realistic. Despite the success and riches that entrepreneurship can bring, the bottomline is that only 10% of start-ups that launch survive the first two years. So statistically speaking, you are more likely to fail than succeed. A masters’ degree provides you with the fallback option to go back to a regular job while you recover your financial losses and thus gives you the option to get back on it in a few years’ time. In the absence of a degree, you will be forced to continue pursuing your entrepreneur goals even when you are losing. This often has a cascading effect and can bring losses.
Gives You A Network : The great thing about an MBA degree is that your batchmates and alumni are likely to get settled across several industries – Finance majors go to investment banks, Marketing majors go to all sorts of industries while Operations majors get into FMCG companies. This provides you the sought-after network you will need when you launch a new business. Building a cosmetic product that you want stocked at Wal-Mart? You will always have someone who knows someone who is at a senior position at Wal-Mart. Want to research the insurance industry before launching your finance portal – you should always have a few of your peers in the industry. This network is an invaluable asset that MBA graduates gain as a result of pursuing their degree.
Enhances Brand Value For Funding : Every entrepreneurial venture requires funding and people who finance start-ups look for distinct factors that will assure them of success. If you have already launched successful businesses before, funding is easy to come-by because you already have built a reputation for yourself. But for first-timers, angel investors look for associated factors like college degree, your initial traction, etc. A college dropout who has not shown much success yet is a dangerous sign that can go either way; and in such instances, investors always prefer to err on the side of caution.
Provides A Way To Benchmark Yourself : Master degrees also provide you with a benchmark. According to a new report on Barrons’, one of the most popular online GRE preparation services, the gap between the scores of Indian and Chinese students as compared with Western students has steadily grown in the past few years. During the same period, Asian entrepreneurs too have seen a higher level of patronage from angel investors. Your SAT scores, CGPA, college degree and work experience all matter when investors benchmark you against potential alternatives to park their money.
The two years you spend studying may seem like an impediment on your imminent startup success. In many cases, it is indeed the case. But considering the reality of the entrepreneurial world and the number of failures that crop up, it is always a good idea to get a degree when you can rather than go for the kill and potentially lose out when you do not meet with success.