They all dropped out of school.
Why? Billionaire Sir Richard hints that schools, at least in Britain, fail to teach future entrepreneurs how to take risks while wasting time "overeducating" them on needless things, according to a confidential US diplomatic cable passed to the Guardian from WikiLeaks (available on the Guardian’s website, but not yet uploaded to WikiLeaks.ch).
Branson's comments seem to have struck a chord with business professors and professionals on both sides of the Atlantic, perhaps indicating a growing sense in the business world that many of today's institutes are not keeping pace with real-world demands. The UK publication Management Today writes that Branson "raises an interesting issue – especially when soaring tuition fees might make some people think twice about heading down the university route."
"There is a growing urgency to teach entrepreneurship and innovation that is directly related to the decline of innovation in the American economy," says Dr. Dennis Ceru, who teaches courses on entrepreneurship and business strategy at Babson College in Wellesley, Mass.
"I think Branson’s on to something," agrees Jeffrey Bernel, a business owner and professor at Notre Dame's Mendoza College of Business. "Education is really important. On the other hand, if it stifles your creativity and ability to innovate and look deeper into opportunities. It's not good for entrepreneurship."
Branson's off-the-record comments came in January 2008, when he and other high-ranking British businessmen accompanied then-Prime Minister Gordon Brown to Beijing and attended a lunch conference with Chinese businessmen entitled "What Makes a Good Entrepreneur?"
Too afraid of failure?
According to the cable (read here), Chinese participants criticized British entrepreneurs as being “overeducated, too conservative, lacking passion for entrepreneurship, and too afraid of failure.”
Branson – who dropped out of school at age 15 but went on to found Virgin Group Limited, a conglomerate of more than 400 companies from Virgin Atlantic airline to Virgin Records music label – agreed with the criticism “that British entrepreneurs are overeducated and that schooling does not prepare one for entering the business world.”
The Chinese also criticized their own system as inadequate to prepare people for entrepreneurship, according to the cable.
Professor Ceru at Babson says education should not come at the expense of action, or what he calls "the paralysis of analysis." He says "entrepreneurs fail forward. They learn from their errors as they refine their efforts."
This willingness to fail needs to be encouraged, says Ceru.
Drop out to succeed
The Guardian points out that Facebook investor Peter Thiel has encouraged young entrepreneurs to leave education altogether by offering two-year $100,000 fellowships to teenagers. "Some of the world's most transformational technologies were created by people who stepped out of school because they had ideas that couldn't wait until graduation," Mr. Thiel has said.
Professor Bernel at Notre Dame agrees that there is a tendency for business school graduates to be overly conservative since they are, after all, gambling with others' money. "To some degree, we teach our students to be risk averse in dealing with somebody else’s money. We don’t teach students innovation, creativity, how to use your intuition. Most business schools avoid it," he says.
But not all business school graduates are meant to be entrepreneurs, Bernel adds: The world needs data crunchers and financial experts to whom the entrepreneurs can turn. It's also important to recognize that people like Branson and Mr. Gates and Mr. Zuckerberg are incredibly talented individuals whose success is not easily replicated.
"They’re special people. They see things," he says. "Very successful entrepreneurs are different from you and me. They can draw connections between disconnected issues into opportunities."