March 14, 2011
A little while ago I participated in a HN discussion on Why to stay in College. My recommendation then was to not only stay in college but actually leverage the experience. My opinion remains the same, but I finally got around to writing it up in a bit more detail.
1. Statistics: A university degree will secure a better future for you, on the odd chance that you aren’t the next Steve Jobs or Bill Gates. I want to focus on entrepreneurs specifically, but all traditional benefits of university education of course apply: higher salary, faster career advancement, social recognition, etc.
2. Free Money: Universities are drenched in free money. Sure, professors and students are constantly (and maybe rightly) complaining about the continuing loss of government support, but they are still in paradise compared to the harsh world of venture financing. Being a student entrepreneur allows you to tap into many grant programs both directly for your venture (e.g. Canadian I2I grants) and indirectly (e.g. research grants for your professor which in turn apply to some of your entrepreneurial activities).
3. Access to Smart People: Universities are crowded with great minds who are socially conditioned to share that knowledge for free. Try to leverage them for your business. The most obvious advantages will be on the technical side, but don’t overlook the seasoned entrepreneurs who might just be hiding in various faculty buildings.
4. Facilities & Equipment: Short of mass production, universities can support most of the activities of a start-up. On the technical side this means specialised equipment that would be insanely expensive anywhere else. Many universities also offer discounted office space and other incubator services. Even if you have to pay for facilities or equipment, it is usually a lot cheaper than conventional buying or renting. For a student entrepreneur these facilities have the added benefit of reducing your “commute” from office to classroom. My entire B.Sc. was only possible because Sunnybrook’s office was located within a few feet of many classrooms.
5. Tech Transfer Offices: Most universities take a cut of your future entrepreneurial gain. That’s not an argument to avoid them. Their cut usually applies only intellectual property related gains and most of the value of a start-up is created post founding. The net result will be a very small cut that is definitely worth it (e.g. in my case my “university share” made up less than 10% of my total exit payout). In any case, I am listing reasons to *stay* at university, so the university cut is already sunk cost. You might then as well leverage the Tech Transfer Office’s capabilities. They generally don’t charge anything past the initial cut and you can get great patent management, business expertise and legal support from them.
6. Credibility: While completing your university degree doesn’t guarantee your abilities, dropping out really doesn’t prove anything at all. While the image of the hacker in flip-flops has been carefully crafted by the media, the reality is that most investors will be happier with a CalTech PhD than a drop-out for their next tech founder.
7. Tax Credits: This one shouldn’t be true, but very much is. Many subsidy programs, such as the Canadian Scientific Research and Engineering Development (SRED) credits, use a distinction between “science” and “product”. You can get the money if you are doing risky science but lose out if you are doing product (or worse: business) work. In theory this should be independent of the person doing the science, but it practise it really isn’t. A SRED claim with a rocket engineering PhD as the “scientist” is much more likely to get approved than the same claim with a college drop-out (especially if the “science” hovers at the boundary line to “product” work as it usually does).
8. Ability to Supervise: Earning your degree can help your venture later. For example, being a professional engineer in Canada allows you to supervise junior engineers. Some of my best employees would never have started without the ability to complete this critical step in their career. Similarly, a PhD allows you to act as an investigator on research grants, supervise graduate students and so forth. None of this cost you anything but will greatly help your venture.
9. Scholarships & Grants: Following from the above, you can get a fair bit of salary support as a university entrepreneur. In addition to all the traditional start-up grants, but you can get academic scholarships, financial assistance grants and so forth. Especially in the early days it really doesn’t matter where the money comes from, just that you have something to eat while you build your venture.
10. Entrepreneurship Test: This might be the ultimate benefit but maybe the hardest to accept. Entrepreneurship is about passion, commitment, smarts and multi-tasking skills. Completing your degree while building a business is harder than doing either one independently – but precisely that “hardness” makes it a great test for your entrepreneurial ambitions. If you cannot reconcile your venture with a degree, then what are you going to do if your venture gets hit with a challenge of similar magnitude (e.g. 20 hours of semi-aligned extra work per week)? On the flip side, if you can overcome this challenge once – through planning, extra work, resource leverage, or any other tool – then you will likely be able to solve it again. And it will need solving in your entrepreneurial career. Over and over again.