Opinions expressed by Entrepreneur contributors are their own.
We’ve all heard the story dozens of times: A brilliant kid drops out of college, turns his or her idea into a business and ends up becoming a multi-billionaire. Bill Gates, for example, dropped out of Harvard after two years to pursue his business idea (Microsoft) with his partner Paul Allen.
Some 20.4 million students are estimated to have attended college in 2017. There are some complicating factors there, including varying dropout rates for different programs, differences among population segments and of course, the possibility of a dropout subsequently returning to school. Still, we can count on there being at least a few million new college dropouts per year.
Data from the National Student Clearinghouse backs up this assumption, estimating that more than 31 million adults have attended some college, without receiving a degree or certificate. Even if we assume that all billionaires are college dropouts (hint: they aren’t), that still results in a 0.005 percent chance of having dropped out, then of financial success after dropping out.
One study reported in The Conversation found that among Forbes billionaires, 44.8 percent went to and completed a program from an elite school. Another 44.3 percent had a college education somewhere else and 10.9 percent either had no college education or there was no data to report. The same study found similar correlation data between other important job categories and high achievement levels.
For example, among 30 millionaires, 33.8 percent went to an elite school, 46.1 percent had a college education and 20.0 percent had no college or there was no data. Among Fortune 500 CEOs, 41.0 percent went to an elite school, 53.0 percent had a college education, and only 5.8 percent had no college education or no data.
Looking at the other side of the equation, college dropouts are unlikely to have a bright future. According to a story in The Atlantic, college dropouts over the age of 25 are 71 percent more likely to be unemployed, and four times more likely to default on their student loans. On average, members of this group earn 32 percent less than their contemporaries with college degrees.
Why college-dropout billionaires seem more common
So if college dropout successes are so rare, why does it seem that they’re so common, and that dropping out of college to pursue entrepreneurship is a genuinely good idea?
Part of the problem is survivorship bias. We hear all the stories of billionaires who started their journeys as college dropouts, but how often do we hear the stories of the millions of unemployed college dropouts? We blind ourselves to this much bigger proportion of the population — unintentionally — because they never accomplished something worth sensationalizing.
As Americans, we also can’t resist an underdog story. We like to believe that it’s possible for anyone, in any circumstance, to be successful, so when we hear about someone who broke the norm and worked hard to succeed on an unconventional path, we can’t help but amplify the message and cheer him or her on.
What we miss about college-dropout entrepreneurs
We’re also doing a disservice to the “full” stories of college-dropout successes. These aren’t random people who dropped out with a decent idea and stumbled into a fortune. For starters, they worked very hard to get to their level of success. Bill Gates, for example, after dropping out to form Microsoft, allegedly worked 16-hour days for five years before finding success (according to this Infographic based on Walter Isaacson’s book The Innovators).
They may also have had more (or better) connections. Take, for example, the Peter Thiel Fellowship, which grants recipients $100,000 and two years out of college to pursue a compelling entrepreneurial idea. This is a good system, and one that mitigates the risks of dropping out with nothing. If you have access to this kind of capital, and to external validation, your college education may not matter as much as it would have to someone with less money, fewer connections and less-developed skills.
The reality is, entrepreneurial dropouts aren’t really as common as we make them out to be. There are occasional stories of young geniuses bucking the norm to bring a revolutionary idea to market (and they truly are inspiring), but these stories are the rare exception to the overwhelming average experience.
Dropping out of college deprives most people of the skills, knowledge and resources they need to build a good life for themselves — regardless of what business ideas they have at the time. Accordingly, it’s a much better idea, almost universally so, to complete your education first, and start your business later.