Startup Culture Needs Your Graduate Degree
Classes are back in session for the spring semester for most universities across the country. And roughly 4 million soon-to-be college graduates are faced with a choice: start job hunting now, or go back to graduate school in hopes of better prospects in the future. For someone who aspires to be a doctor or a lawyer, the decision there is pretty straightforward — those professions require graduate degrees. But for those who want to try their luck in a startup, the decision is less obvious. After all, such household names as Microsoft CEO Bill Gates and Facebook CEO Mark Zuckerberg founded their own multi-billion dollar companies without so much as graduating from college.
The temptation to follow in their footsteps can be strong. Who doesn’t want to sidestep more student debt? However, a recent study from the Kauffman Fellows Research Center shows that their stories are the exception — not the rule.
Indeed, the study’s authors found that a majority of startup executives (58%) have an advanced degree. They also report that “70% of U.S. startups have at least one C-level person [CEOs, CFOs, and COOs, etc] with an advanced degree.”
As someone who spent three years as a CFO of a software startup, I’ve a few thoughts on why that might be the case.
When we’re talking about work within the startup world, perhaps the most obvious advantage of an advanced degree (a PhD in particular) is that it bestows instant credibility to you. That provides the foot in the door that any fledgling firm desperately needs. When it came to high-tech startups that I interacted with, founders who had PhDs were trusted by investors and advisors almost immediately. Most investors and even advisors don’t have PhDs, and seem to have a pretty natural admiration for people who do.
When trying to make an appeal to investors, a graduate degree also proves your research abilities, that demonstrate you have the skills necessary for creating a novel product and comprehending prior research in your particular field. Graduate studies are more focused than undergraduate curriculum, and therefore make you a highly specialized expert. The last thing that investors want is to give their money to a team that cannot create something novel or whose work lacks scientific merit. The same goes for advisors. They want to help you build something ground-breaking, and someone with a demonstrated level of expertise in their field is simply a safer bet to achieve that end.
Then, of course, there’s no price on the helpful connections you’ll make in graduate school.
For instance, while I worked in a startup, we frequently hired extremely talented PhD students as interns. We wouldn’t have been able to do that without our connections to the academic departments where we studied. Those students were ideal interns for us—they’ve got research training that undergraduate and masters students frequently lack. Our connections to professors and administrators made it easy for us to have high-caliber talent for a fraction of the cost without sacrificing quality. Had none of us gone to grad school, we wouldn’t have had access to those folks.
You also make friends with people who have high future earning potential. Going to graduate school means earning your degree alongside a pool of highly-skilled individuals, people who will later become top engineers and even investors. This way, you’ll already have an in with folks who know the latest trends of science or could become early-stage investors to your business. In our startup, we engaged our network in both ways.
We know all the success stories of college dropouts, but we simply don’t know about the ones who might have attempted a startup and failed. Success-against-all-odds stories are a lot more exciting than stories of regular people who went to college or grad school and succeeded, simply because there’s something extraordinarily unrealistic about it.
Graduate school certainly requires a lot of effort and money, but the data shows that, by-and-large, they’re necessary in the startup world. Dropout-turned-billionaire stories are glamorous, but rare, and might not be worth betting your career on.