Years ago I came across the idea that in entrepreneurship, education and experience contribute to likelihood of success roughly like you see in the chart here. The underlying assumption is that a lot of education makes up for very little experience, and vice-versa. And this is in the context of startups, investment, and entrepreneurship.
I’ve drawn it here MBA style, with a line on two axes, pretty much the way I first saw it, with a smooth curve from one extreme to the other. It’s almost symmetrical in this drawing, and would be even more so if I had better tools (who wants to devise an equation? I just drew it.) The idea is some sort of a conceptual break-even point between the two factors.
I think it makes sense in a broad view, but my experience — as angel investor lately, as entrepreneur before that, and startup dabbler still — makes me think it should be skewed. This is my opinion, based on (how nice) education and experience. And this relates to how I look at startups as potential investments for the angel group I’m in (WAC) :
- There’s no amount of education that has much likelihood of success with no experience whatsoever. The curve should move slightly up and to the left.
- I believe the sweet spot on the curve is in the middle.
- My own experience with an MBA degree — which I got later than most, already 30+, but also before I started my own business, and was a co-founder of one that went public — was that the MBA gave me a general overview that made entrepreneurship easier.
- However, through several decades of working in this area, I’ve come to think that most MBAs need to temper all those analytical skills with real-world experience before they can really make progress. So an MBA five years out of biz school tends to be way more valuable than one who just graduated. Then again, I have an obvious bias.
- I’ve seen very little evidence that an undergraduate business degree increases likelihood of startup success more than a good undergraduate degree in science, math, engineering, or — yes, I’ll stand by this one — even liberal arts. In fact, I’ve seen a lot of evidence for the latter: that any other degree is a better indicator than a business degree.
However, one big caveat: I’m guilty in the above of one-size-fits-all thinking. The huge bias towards my way of doing things. So take all of this as just one opinion.
Do you agree? What are your thoughts? I posted it here because the discussion intrigues me, not because I think I’m right.