I was talking with a friend who is in the UW Business School about a discussion in one of his classes about the best time to start a business. Most of the class believed that the best time to start a business was 5-10 years after college. They argued that it would be best to start a company after working a job for a few years, building up savings and learning about how the business world works. Its my feeling that this is the conventional wisdom. I think both the students and conventional wisdom are dead wrong.
College is the best time start a company. In college, you have very few, or no, responsibilities. You most likely are not married and do not have kids. You probably do not have a mortgage or a car payment each month. You are not tied down in a job or a specific city and can live on comparatively small amounts of money. You have freedom and lots of free time and are surrounded by other smart, like minded students. These smart students are the perfect place to find partners. Your only responsibilities are to pay your tuition (which can be tough), go to a few classes and get passing grades (and have fun). If your company fails, you have plenty of time to either start another or get a job.
Universities also provide many resources to student business owners that graduates would have a much harder time accessing. For example, I entered ExchangeHut into the Burrill Business Plan Competition during my sophomore year. This competition was a free way to learn how to write a business plan, present to a panel of judges and make connections in the local startup community. I also met my lawyer during the competition and made connections in the press that I would not other wise have been able to make if I was not a student. Not only are there student papers that love to write about student startups, but traditional media love a story about student entrepreneurs, whereas it can be much harder to get press if you are older. Students also are able to use University Health to cut down the costs of health care and have access to library research materials, free wireless internet and much more.
Additonally, lack of market knowledge can actually help startups. College students may be more likely to try new, innovative ideas that others would dismiss out of hand. They have no history to protect and may be more willing to take risks that others might not.
After graduation, most grads look for a job and start to earn a salary. After a few years of making decent money at a job, they have probably upgraded their lifestyle, making it harder to live on a smaller salary. Many college grads are married or are in serious relationships 5-10 years after graduation. Some have kids and many own houses. It is much harder to quit a decent job and take the big risk of starting your own company when you are used to a paycheck every two weeks. Its even harder if you have a spouse or kids. The time commitment required to be run a successful startup can take a toll on family life. Its also harder to find potential partners, as many people in your network will also be settled in their jobs. You might dismiss ideas because “in your experience, you know companies don’t work like that.”
Some may say that students cannot start companies while they are in college because they have to pay their way thought school. I would argue that many students can do better starting a company than working 15 hours a week as a bartender. Even if they fail, they will have something interesting to talk about during job interviews. Companies are looking for smart people who have skills and starting a businesses teaches you these very skills.
While it may be more comfortable to start a company with a financial cushion under you, I believe that the benefits of starting early outweigh the benefits of waiting. College is the best time to start a company: it provides you with access to smart people, university resources, discounted health care and easier press coverage, all during a period when you have limited responsibility and hours of free time. If you are in college and thinking of starting a business, go for it! What’s the worst that could happen? At least you’ll be avoiding the Business School Way of Life!