What would you do if someone offered you $100,000 to drop out of college?
Of course, such a gift would come with some strings attached. In this case, you’d need a really good idea and the ability to measure risk.
Peter Thiel, a 43-year-old entrepreneur and venture capitalist, is offering $100,000 fellowships to 20 entrepreneurs under the age of 20, on the condition that they drop out of college for two years to create start-ups.
Thiel himself graduated from Stanford with a degree in philosophy, and later earned a J.D. from Stanford Law School. He co-founded PayPal and has made his fortune investing in risky and slightly out-of-the-box ventures (Thiel was the first outside investor in Facebook).
Now he’s looking for the next wave of young entrepreneurial superstars — people whose ideas will revolutionize industries and push technological boundaries.
“Our world needs more breakthrough technologies,” Thiel wrote on the fellowship’s website. “From Facebook to SpaceX to Halcyon Molecular, some of the world’s most transformational technologies were created by people who dropped out of school because they had ideas that couldn’t wait until graduation.”
Thiel’s experiment is an interesting idea, but for most students it is not the best choice.
There are certainly a number of success stories about college dropouts who made it big.
Steve Jobs left Reed College after only one semester to launch Apple. Not only did Paul Allen drop out of Washington State University, but he was able to convince his buddy Bill Gates to drop out of Harvard so they could start Microsoft. Facebook, Dreamworks and Twitter all were founded by guys who dropped out of college.
The moral of the story seems to be that if you have a genius idea, don’t let college get in the way. But the key assumption here is that you have a genius idea and the skills to back it up.
Bill Gates didn’t just drop out of college looking to wing it.
In his book Outliers, Malcolm Gladwell explains how Gates had the incredible opportunity to attend a private school in Seattle that owned its own ASR-33 Teletype computer, a state-of-the-art machine that transformed computer programming from a laborious punch-code process into the efficient real-time process.
As Gladwell points out, this was 1968 and most colleges didn’t even have computer clubs.
“By the time Bill Gates dropped out of Harvard after his sophomore year to try his hand at running his own software company, he’d been programming practically nonstop for seven consecutive years,” Gladwell wrote.
Bill Gates would have been wasting his time by staying in college. He already had a vision and the skills to make that vision work.
For a young entrepreneur itching to start a venture, it comes down to evaluating the opportunity cost.
There is something to be said about not letting your idea sit for too long and risking missing the market or losing your motivation. But there is probably more to be said for acquiring the skills and networks that only come by way of a full college education.
“If anybody’s got an idea, they should do it as quickly as they can,” said William Crookston, a professor of clinical entrepreneurship at USC.
But he points out that this doesn’t require dropping out of school. Successful companies have been launched from the dorm room before.
Most young entrepreneurs would be better off finishing school. They can receive feedback and criticism from experienced professors and can learn beneficial skills like management and analysis. In the end, they will still have their ideas, and they’ll be able to develop stronger products and launch more stable companies.
“Age 28 to 35 is the sweet spot for entrepreneurs,” Crookston said.
At this point in their lives, entrepreneurs will likely have one or two failures under their belts, which is a type of “depth that only comes with years,” he explained.
For the average young entrepreneur, the best bet is to launch a venture while still in school. If it takes off and you are making millions of dollars, drop school and go for it. If it flops, at least you will still have your degree — and your dignity.
Jordan Lee is a sophomore majoring in broadcast journalism and Chinese.