How Colleges Can Prepare Tomorrow's Entrepreneurs

In this series, professionals predict the ideas and trends that will shape 2016. Read the posts here, then write your own (use #BigIdeas2016 in your piece).

With our constantly evolving climate, how can what is being taught in today’s universities be the same as it was over the past several decades? One bold idea I applaud and believe in is the advancement of new curriculum for today’s entrepreneurs. 

For years, the well-trod path was paved with four years in college followed by three to four more in business school. This route had been codified to the point that an MBA held special status, a degree conferred on our most solid specimens— those most likely to rise in the professional ranks and build shiny new businesses.

What this model didn’t see coming were guys like David Karp. Karp is founder and CEO of Tumblr. A high school dropout, he began working full-time before he was old enough to drive. Suffice to say, there was no college, no MBA that Karp relied on when he built and sold his company to Yahoo for $1.1 billon. Just a brain full of constantly churning ideas and a burning desire to see them come to life.

Karp is a member in good standing of the Successful Drop-Out Club, which includes industry luminaries like Bill Gates, Steve Jobs, Michael Dell, Mark Zuckerberg, and Aaron Levie. The question is, did these guys succeed despite the fact that they didn’t finish college, or because of it?

If colleges take a rearview mirror approach to business, how can they do a good job teaching tomorrow’s entrepreneurs how to be successful?

Peter Thiel, co-founder of PayPal, seems to believe it’s the latter. Thiel started making headlines a few years ago by paying promising entrepreneurs $100,000 each to drop out of college and start a business. Through the Thiel Fellowship, enterprising young people can apply for grants, receiving the resources to launch their own new business. As polarizing as that may sound, the results indicate that he may be onto something: Thiel’s benefactors have created companies with an aggregate value of $1 billion.

Thiel argues a lot of problems exist with the college experience. He believes it can delay the pursuit of good ideas – which in the fast-moving Idea Economy may spell doom for late-to-market offerings. He provides an example of how paying for college also saddles students with nearly $30,000 in personal debt, so once they have diplomas in hand, they eschew launching their new business in favor of a steady job that will help them repay that debt. Perhaps most damning is Thiel’s observation that even the highest-ranked B-schools tend to focus on what’s worked in the past, with little emphasis on the next big thing. “They've done these studies on what people from Harvard Business School have done over the years, and the largest cohort always goes into the wrong thing,” Thiel told BostInno last year. “In '89, they all wanted to work for Mike Milken, one or two years before he went to jail with the junk bonds. They were never interested in tech or startups, except in '99 and 2000, which is just when the dot com bubble was about to blow up.”

This last point begs an important question: If colleges take a rearview mirror approach to business, how can they do a good job teaching tomorrow’s entrepreneurs how to be successful? Is the curriculum they teach too stolid, too dated, too inflexible? Even Thiel doesn’t believe dropping out is right for everyone, but clearly there are improvements to be made.

At least, that’s what a 2014 study commissioned by Bentley University shows. In a survey of more than 3,000 stakeholders including recruiters and managers, Bentley found that 58 percent of respondents would give recent college graduates a “C” or lower on their preparedness for the workplace. What’s missing? Real-world experience while in college (85 percent) and courses shaped by input from actual businesses (78 percent).

Some schools are filling in that blank. At Stanford University, Reid Hoffman (LinkedIn, Facebook) and John Lilly (Dropbox, Tumblr, Instagram) teach grad students how to handle rapidly scaling businesses. And in January, Box CEO Aaron Levie will explore what startups can do to disrupt the established dominance of market leaders. “We want to help students think through the question of what General Motor’s CEO Mary Barra or (Ford CEO Mark) Fields does when Apple builds a car,” Levie recently told Fortune. “Or what Ford and General Motors should be doing when most people won’t own a car thanks to Uber or Lyft.”

It’s the kind of forward-looking education that tomorrow’s entrepreneurs desperately need.

I wish I had the benefit of classes like this. Traditional business and finance courses are fine for teaching the basics, but the ever-changing, disruptive nature of the Idea Economy can’t be properly represented in the static rows and columns of a spreadsheet. With too much of an emphasis on old processes and traditional methodologies, how are they supposed to model and plan today’s digital businesses? The needs of today’s strategists require a range of new skills, and we know those skills are sometimes better learned from entrepreneurs who have been successful in the field.

The recommendations of Bentley University make perfect sense, and the new classes underway at Stanford are very promising. More colleges need to follow this model of blitzscaling. Teaching young people how to problem solve, how to explore new ideas and their potential impact on the business, how to think beyond value accumulation to embrace value creation, and how to model what-if scenarios so businesses can pivot in real-time when change inevitably happens — this will make college a more worthwhile investment for the students destined to start new businesses.

The rules have changed. It’s time to fix the college experience so tomorrow’s entrepreneurs get the value they paid for, and more graduates leave school prepared to launch the next great thing.