The New Faces of Entrepreneurship: Part III – Dropping Out

The previous insights in this series discuss older founders and founders who changed careers or came from industry in order to start their companies.  But there’s another group of founders that cuts against the typical image of college students coding in their dorm rooms: dropouts.  Although Mark Zuckerberg (dropped out of Harvard) has made the point that dropouts can certainly succeed, he is often seen as the exception rather than the rule.  But there are many others just like him.  And even though universities all over the country, and even the world, have created entrepreneurship programs, startup competitions, and startup accelerators, many students find that college and business don’t mix, and they end up choosing the real world over school.

We have an example here at seedchange with Dragonfly — which was recently acquired by SunPower — where the founders met in a freshman class at Stanford, spent that summer working on a new solar technology product, and ultimately decided not to return to school — but there are many other notable cases:

Example: David Karp

Karp, the founder of Tumblr, didn’t just drop out of college like Mark Zuckerberg and others — he dropped out of high school.  At age 15.  According to an interview with Charlie Rose, Karp discovered a passion for coding at age 11, and school simply didn’t have the coursework he needed.  Having sold his company to Yahoo! for $1.1 billion at age 26, he serves as a role model to others who find that traditional education simply doesn’t match the skills they need to learn in order to pursue their dreams.

Example: Kevin Rose

Rose, the founder of Digg.com (a social news website), dropped out of the University of Las Vegas during his sophomore year in order to work full-time as a programmer.  He moved to Silicon Valley and began to make connections — leading to an opportunity to host a cable television show about technology news called The Screen Savers.  To prepare for the show, he needed to search for obscure news stories — but the process of finding great stories to share was inefficient and laborious.  Thus: the idea for Digg was born.

Example: Jan Koum

Koum, who sold his company WhatsApp to Facebook for $19 billion, was also a college dropout.  He left after he got a job at Yahoo! while a student, but found he was needed at the office during class time.  According to an interview in Forbes, after leaving Yahoo!, he developed WhatsApp to take advantage of the nascent iPhone App Store, and, from there, his story is now startup legend.

Example: The Thiel Fellowship

Peter Thiel, co-founder of PayPal, believes so strongly that college is unnecessary for the path of an entrepreneur that he started the Thiel Fellowship program, which, since 2011, has given dozens of young people (under age 19) $100,000 and two years of mentoring in order to focus on building a startup — provided that they don’t attend (or drop out of) college, at least until the two years are completed.  According to the program, “Rather than just studying, you’re doing.”

For some, the Thiel Fellowship is merely a sabbatical — according to TechCrunch, nearly half of the fellows they interviewed planned on returning to school — including Eden Full, founder of SunSaluter (a gravity-powered device to help maximize the efficiency of solar panels), who went to Princeton after finishing her Thiel Fellowship.

But for others, dropping out means a better way to learn.  Dale Stephens, another Thiel Fellow, founded UnCollege.org, a startup devoted to helping people “hack” their education, and find ways to gain the skills and have the experiences that they are looking for without organized education.

Counterarguments

There are of course many who argue that Karp and the rest of the examples here are mere outliers, and that the smart thing to do is to go to college — and to graduate.

But the reality is that anyone who finds the kind of success that Karp, Rose, Koum, and others have is an outlier — and whether someone finishes college or not, the odds of becoming a billionaire off of your startup are vanishingly low.  As this entire series should be making clear, there are as many different paths to success as there are success stories, and entrepreneurs have emerged from every direction.

While it’s absolutely true that, on average, college graduates earn more money than dropouts, and are far less likely to be unemployed or default on student loans, there is no guarantee that if the founders highlighted here had finished school, they would have ever reached the same level of success.  At the same time, it’s impossible to justify criticism of those who make a different choice.

Kevin Systrom, co-founder of Instagram, earned a reported $400 million from that company’s sale to Facebook.  He opted to finish college, at Stanford, rather than dropping out.  “Working at a startup to make a lot of money was never a thing,” he is quoted as saying, “and that’s why I decided to just finish up school. That was way more important for me.”

His decision may stand in contrast with some others, like Karp and Rose, but is no less bold.  His path, in the end, was simply a different one.