First published in the Financial Times on 3rd June 2014.
People who want to fund and run companies should not feel obliged to study financial subjects
A friend and her 17-year-old daughter asked me for advice recently. The daughter wants to run a business, and isn’t sure if she should bother with university – and if she does, what subject should she study?
At 19 I almost dropped out from Oxford because I was bored with my medical studies, and impatient to become a fully fledged entrepreneur. It would have been a mistake – better to finish something you start. Sure, tycoons such as Sir Richard Branson, Felix Dennis, John Caudwell and Sir Philip Green avoided university altogether: but overall almost 90 per cent of chief executives at FTSE 100 and FTSE 250 companies are graduates.
By contrast, the Federation of Small Businesses carried out a survey in 2006 which discovered that only about a quarter of British small business owners had a degree – and one in eight had no formal qualifications at all.
Of course, it is probably true that corporate executives are more conventional in their career paths than the self-employed. I had imagined that bosses took a varied range of undergraduate degrees. In the same FTSE cohorts there is a pronounced bias towards studying the obvious disciplines: economics, business, law, engineering, accountancy and finance. More than a third took that narrow range of subjects – whereas tiny numbers studied the humanities, such as philosophy or history.
But there appear to be many exceptions to these statistics. For example, Ted Turner, the billionaire founder of CNN, decided to major in classics at Brown University. His father, who ran a regional billboard company, was outraged, and sent the 18-year-old Turner an angry letter, which included the line: “I think you are rapidly becoming a jackass, and the sooner you get out of that filthy atmosphere, the better it will suit me.”
And plenty of prominent business figures took unexpected degrees. Carl Icahn and George Soros both studied philosophy; Hank Paulson took English literature; and Jamie Dimon studied psychology. Even Silicon Valley is not committed to science, technology, engineering and maths graduates exclusively. Vivek Wadhwa, a venture capitalist there, wrote: “I believe humanity majors make the best project managers, the best product managers, and, ultimately, the most visionary technology leaders.”
Plenty of prominent business figures took unexpected degrees.
I believe in the importance of domain knowledge – real subject expertise – but when hiring I focus more on which university someone attended than their particular degree subject, and even less on the class of degree they were awarded. Unsurprisingly, in the world billionaires’ league, alumni from the predictable US Ivy League colleges dominate.
I have written before about finding commercial talent among the former military. Jon Hunt of Foxtons, and William Kendall of both New Covent Garden Soup Company and Green & Black’s are high-achieving ex-army entrepreneurs. As former army officer Sean Farrington, now UK head of Qlik (which built the app www.wheredoceoscomefrom.co.uk) says: “The army showed me . . .that one has to have commitment and zeal – once a plan is made, you have to move forward and execute it, even if doubts creep in.”
A majority of the most successful entrepreneurs with whom I’ve partnered over the decades have not possessed degrees. But interestingly they have all encouraged their children to attend university. Attitudes have changed, and there is a greater expectation than ever that ambitious young people will have studied at a higher education institution.
Most of the more impressive twenty-something entrepreneurs I meet now are graduates. They are perhaps less willing to work their way up from the bottom than previous generations; but they are far better versed in topics such as financing, business plans and IT than I was at their age.
Those who want to found and run companies should not feel obliged to study financial subjects to the exclusion of all other disciplines after leaving school. A broader education cultivates an inquiring outlook: subjects ranging from mathematics to biology can all have relevance to the life and work of a business proprietor and leader. Entrepreneurs must motivate and inspire others to win – so above all they must never be dull.