Out of the 400 people on the Forbes billionaire list, 63 of them dropped out of university to start their companies, including the likes of Mark Zuckerberg and Bill Gates. While not all dropouts become billionaires, some do launch successful companies.
The Varsity spoke with two U of T dropouts, Mackenzie Ferguson and Pei Li, about their decision to leave school to pursue entrepreneurship. Ferguson is the president and co-founder of cannabis company Verda Innovations and Li is the CEO and co-founder of technology consulting firm CodeMode.
Taking the leap
Li was pursuing an engineering science degree at U of T and decided to drop out after his third year. He said that while he didn’t encounter practical issues with dropping out, his family disapproved of the decision.
On the other hand, Ferguson’s parents were supportive when he dropped out as a third year commerce student.
His decision came to a head after taking a full course load over the summer and working on his company, when he found himself spending lecture time drafting documents and sending emails.
“And I started to realize that this was only the beginning,” said Ferguson. “And now, things would keep scaling and piling on top.”
Li and Ferguson also acknowledged that their financial situations made their decisions possible.
Indeed, previous research has shown that financial capital through funds, and social capital through relationships and networks, are strong determinants of whether someone pursues an entrepreneurial path.
“I don’t think there were any financial difficulties,” said Li. “I didn’t drop out to start a company immediately, so I dropped out to join an existing startup.” In a similar vein, Ferguson noted that he moved in with his parents after dropping out, which meant that he didn’t have many living expenses.
Li and Ferguson approached entrepreneurship differently after leaving U of T. CodeMode’s development and design of web and mobile applications rides on Li’s time at IBM, Wealthsimple, two businesses of his own, and digital nomading East Asia. In contrast, Ferguson continued building out Verda Innovations after leaving school.
Was the decision to leave U of T worth it?
Li and Ferguson don’t regret their decisions to leave U of T, noting that they have the option to return if they want to in the future.
“I talked to U of T, and they said that I can come back anytime six years after I drop out and continue where I was,” said Ferguson. “So really the only risk that I have is being a few years behind [and] I think that’s greatly outweighed by all the experiences.”
Li pointed out that university education isn’t necessarily preparation for the real world. “Just the way that they educate you, I find is not reflective of the real world at all,” said Li. “The problems they give you are very one– dimensional.”
“Another thing is that the things they teach you in school, I think especially U of T, are also very outdated,” Li said. “Their computer programming was relevant like 10 years ago, but the thing is nowadays the technology they use, and the skill set needed is very different from what they try to teach you in the classes.”
However, the liberation of dropping out comes with a catch. Ferguson and Li expressed that they missed the social aspects of U of T and the ability to form relationships with fellow students.
Li also noted that he dealt with loneliness after dropping out of U of T, and if he could go back, he would spend more time joining clubs and meeting people. Ferguson emphasized the importance of forming genuine relationships over networking, and noted that his own connections with peers proved to be crucial for the success of Verda Innovations.
“I know that I would kick myself for my entire life if I tried to juggle both,” said Ferguson on his decision to leave school to focus on Verda Innovations full time. “I know that I would have failed school if I was juggling both.”
So, should you drop out to start a company?
“I’m tired of school, I want to give it a shot,” Li recalls being told by students who were considering dropping out.
He cautions that students should understand the risks and have a back–up plan or job offers in place before leaving school. Li worked at companies like Shopify, IBM, and Wealthsimple before taking the plunge and launching Beatcamp, his first startup, and eventually launching his current company, CodeMode, in 2018.
Li recommends that students at U of T should take advantage of the opportunities at their disposal, like participating in hackathons to build a professional network. In fact, Li founded and built Hack the 6ix, Toronto’s largest summer hackathon, from the ground up while he was a U of T student.
Even with his experience, Li acknowledged that a lot of luck had a role in shaping his career.
“It’s really case-by-case,” said Ferguson. “And that’s where a good board of advisors and mentors comes in, as well as co-founders… and having people that you can go to to ask these questions is really important.”
— With files from Srivindhya Kolluru