Over the past dozen or so years, I've been involved in about a dozen startups, either informally (as a friend or advisor) or formally as a founder or investor. In my experience, I've found that many startup founders that I know began their companies while they were still students (undergraduate or graduate) or shortly after they graduated. This brought to mind the question of whether or not students made good entrepreneurs. I think so. Here are the reasons.
Disclaimer: Two of the three companies I’ve founded myself were done when I was in “student mode”. One as an undergraduate (computer science) and the other as a graduate (MBA). So, I may have a bit of bias. But, as I always say: “Just because I’m biased, doesn’t necessarily mean I’m wrong.”
Why Students Make Great Entrepreneurs
- Starry-Eyed Optimism: Let’s face it, starting a company takes a fair amount of optimism. You have minimal resources, and the odds are severely stacked against you. To overcome this potentially troubling reality, founders must to some degree exercise suspension of disbelief and demonstrate a degree of optimism to take that initial step. I think this is easier to do when you’re a student. You’re more equipped to be optimistic than if you were a corporate drone trudging through life with Dilbertian bosses and having the life energy slowly drained out of you. Students (in general) are happier people and more capable of the optimism that is required to get started. Clearly, there are exceptions to this. I’m sure there are a few people in corporate land that are not faking satisfaction or happiness, and are generally optimistic people. My hat’s off to them. The world needs people like you to help make big companies functional so the rest of us can use your products and services.
- Trusted Peer Network: One of the great things about being a student is that you have the opportunity to meet and work with a lot of different people. If you do it right, you can get to know some of these people pretty well by working on projects with them and hanging out with them outside of class. This group of people can often make great co-conspirators and collaborators. On the other hand, if you’re stuck in a big corporate world, chances are you’re interacting with a limited set of people with very well defined activities many of whom you may not like anyways. Why is this so? Simple, because in corporate-land you often don’t get to pick who you work with. When you’re a student, to some degree, you get to pick who you “hire” for your social and academic groups. One of the single largest contributors to startup success is the ability for more than one person (however exceptional) to come together and collaborate.
- Higher Risk Tolerance: Let’s face it, when you’re a student your opportunity cost is likely lower than most other points in your career (even if you’ve been in the workforce for a little while and decided to go back and get that MBA). When you’re sitting there in class and an idea comes to you, it doesn’t really cost all that much to give things a try. Besides, who needs all that sleep anyways? Students often find it easier to take the initial entrepreneurial leap because the new startup idea isn’t competing with a regular paycheck. It’s competing with classes and academic work. Many academic programs (even the excellent ones) don’t consume 100% of the available energy of an entrepreneurially minded student. There’s time left over for starting companies.
- Abstract Thinking: In many academic programs (and especially the better ones), students spend a fair amount of time thinking about abstract concepts. This is particularly true in an engineering, computer science or even a business program. Learning about things like microeconomics, data structures or calculus is to learn about abstract ways to think about complicated things. You look for patterns and structures and frameworks to explain the world. As it turns out, this kind of thinking is very useful when it comes to thinking strategically (but objectively) about a startup. Without this, it becomes too easy to focus too much on tactics and execution -- without sufficient thought to the larger problem. Since students are exposed to a fair amount of abstract thinking, it may come a little easier to them to think about strategy, competition and how their offering might (just might) change the world.
- Applied Learning: As a student, you’re quite often “drinking from a fire hose” and bringing all sorts of new information into your brain. Some of which “sticks” and some of which doesn’t. Along the way, a few of these concepts may shake your understanding of the world a bit and every now and then light-bulbs go off as you begin to understand what all the fuss is about. As a student, it’s often very, very tempting to try and apply some of these concepts that are new and exciting and do something with them. One of the easiest ways to do this is to build a startup that somehow implements or expands on the idea.
One of the great things about startups (and particularly software startups) is that it is so easy to get started. Getting started is simply a matter of beginning to think about a problem and solving it. All the legal stuff, company formation and other details, though important, don’t have to get in the way (and are not that hard). One of the biggest barriers to entrepreneurism is that initial leap of faith. And students seem reasonably capable of taking this leap on a frequent basis.
Summary Of My Point: If you’re a student or recent graduate, this is a great time to think about starting a company. Keep your mind open. See if you can find patterns in the problems that you’re seeing and try and find unique and compelling ways to solve problems people care about. It often is really that simple.
A personal quote that I used in a presentation on entrepreneurism at MIT a few years ago:
Starting a company is really, really easy…it’s the surviving and growing it that’s hard.
Dharmesh Shah, 2004