Yes it can, but…
Startup culture is so pervasive today that many people launch their first business before they graduate college. But will the time and effort poured into this endeavor ensure a long-term tech career?
The answer to that question depends on a variety of factors. Many startups are successful while others fail shortly after graduation.
If you’re considering a college startup, but you also want to maximize your chances at having a great career, here are some things you should consider.
500,000 new businesses launched in U.S. every year
According to research, 34% of startup founders are between the ages of 20 and 29, many of them college students. But 25% of startups fail within the first year and half will have failed by their fourth year. That’s a positive outlook for startups that make it past the first year because their odds of failing reduce with every year that follows.
Here’s the really good news: You’re more likely to succeed in a business endeavor if you’ve failed in one. According to a study from the Harvard Business School, entrepreneurs who have failed previously with a business have a 20% chance of succeeding, a two-point advantage over first-time entrepreneurs.
4 advantages to launching a business in college
First of all, you’re surrounded by resources. You have college professors who can give you advice, free databases through your school for research and sourcing, and other free sources of consulting.
Second, there’s very low risk and very high reward for businesses in college. Of course it’s still possible to over-invest and lose money while in the college scene, most college students don’t have a lot to lose. Their investment is low.
Third, when you’re in school, you have more free time. There are fewer commitments competing for their time compared to later in life.
A fourth possible advantage is the close proximity to your target audience. Most businesses that begin in college target fellow college students. You know a lot about these students because you’re one of them yourself!
Starting a business in college, especially one that targets students as potential customers, teaches a lot about understanding your audience and making sales.
Tech startups predominate
Tech companies—including mobile games, internet publishing, and ecommerce—are among the strongest industries in the startup market, according to Founder’s Guide. Their research shows that mobile games are growing at a rate of 173%, internet publishing by 110%, and ecommerce at a rate of 52%.
What’s more, those who invested in a tech startup had a 12.8% greater likelihood of exiting the endeavor favorably, according to Phys.org. This means they’ll lose less money or sell the company for more money. Major tech companies will also purchase and absorb tech companies in which they see potential growth. In 2016, we saw an upsurge of companies like Microsoft, Apple, Intel, Walmart, Unilever, and Salesforce absorbing tech startups into their ranks.
A highly encouraging deal made at this time was the purchase of Dollar Shave Club by Unilever. Dollar Shave Club, one of the first online razor subscription companies, was a new startup just a few years ago that grew consistently until it caught the eye of major companies that could make the founders even more successful (If only because they were threatening the market share of the older, brick-and-mortar companies).
Companies in the tech sector also continue to show interest in new tech startups. According to research from CNN Tech, major corporations plan to adopt hundreds of startups in the coming years.
Some Famous Companies Started by College Kids…
If you’re considering this career path, you can take comfort in knowing that thousands of students have created and maintained successful startups during their college years.
Dell: Michael Dell started his infamous computer company while attending the University of Texas at Austin in 1984. He invested an initial $1,000 into what would become a billion dollar company.
Dropbox: MIT students, Drew Houston and Arash Ferdowsky, created the file sharing service while in school. Though other file sharing tools have emerged, Dropbox set the standard.
Rosie: This innovative tech app allows customers to shop online for groceries online at their favorite grocery stores. They can set up same-day delivery or schedule it ahead of time. This app got its start at Cornell University, and the service is rapidly expanding its geographical reach. It won “Startup of the Year” from the Tompkins County Chamber of Commerce.
Modcloth: Susan Gregg Koger and Eric Koger, now husband and wife, began this intuitive fashion website while they were dating at Carnegie Mellon University. The company began in 2002 as a way to help cover college expenses, but turned into a multi-million-dollar company with 70,000 unique shoppers every day. (Walmart bought the company in March for an undisclosed amount somewhere between $50 million and $70 million.)
Reddit: This famous social and information sharing website was orchestrated by Alexis Ohanian and Steve Huffman while they attended school at the University of Virginia in 2005. It was purchased in 2006 by Condé Nast, who saw the potential of the rapidly growing college startup shortly after it began.
Your Best Case, Worst Case
The best case scenario: You’ll end up launching and growing a hugely successful business that offers something new to customers and makes you rich in the process.
The worst case scenario: Your startup will fail, and you’ll have gained valuable experience that will support your future career. Starting a business in college isn’t for everyone, but if you have a great idea now, don’t wait for graduation to get started.
Anna Johansson is a freelance writer, researcher, and business consultant. A columnist for Entrepreneur.com, HuffingtonPost.com and more, Anna specializes in entrepreneurship, technology, and social media trends. Follow her on Twitter.