College dropouts strike it big in the business world

College dropouts strike it big in the business world

Snapchat co-founder Evan Spiegel (L), Michael Dell, the founder and CEO of Dell (Bottom Right) and Larry Ellison, founder of software giant Oracle (top Right)

By Mykolas Rambus
Wealth-X
Wednesday, Mar 12, 2014

Whilst some ultra high net worth (UHNW) individuals patiently wait decades to amass their fortunes, others strike gold early on, even dropping out of college to pursue their lucrative careers. By 2020, this is predicted to be an ever-increasing trend, especially with individuals making in-roads into social media and software.

Technology is indeed one of the most lucrative industries to be in, with the rapidly-changing platform constantly allowing for new ideas to take centre stage and subsequent vast fortunes to be amassed.

Recent inventions have included apps designed to increase people’s social contact, whilst maintaining users’ privacy. For instance, Snapchat co-founder Evan Spiegel stopped his University of Stanford Physics PhD after two days, to work on the app which allows people to send each other pictures that self-delete after a certain number of seconds.

However, Spiegel was heavily criticised in December for Snapchat’s recent security breach that saw millions of users’ private account information breached and publicised online. Spiegel said of the privacy infringement: “I believe at the time we thought we had done enough. But I think in a business… that is moving so quickly, if you spend your time looking backwards, you’re just going to kill yourself.”

The vulnerability to the hacking of programmes as well as software’s ruthlessly fast-paced environment has previously deceived other notable college dropouts. For instance, Michael Dell, the founder and CEO of Dell, who dropped out of his medicine course at the University of Austin, recently privatised the world’s third-largest personal computer company to avoid scrutiny by Wall Street following a significant slump in Dell’s PC sales.

When asked about the risk which privatisation involved, Dell insisted: “I generally believe that we did not really take on any new risks.” Stating that the company’s capital structure would be “better as a private company than what it was as a public company,” Dell pointed to having spent between US$1.7 billion and US$2 billion a year with share repurchases, dividends and interest as a public company. “We spend quite a bit less as a private company. We are aggressively paying down our debts so our capital structure is preferred. We have flexibility and the interest rate environment is very favourable,” Dell insisted.

Another high-school billionaire struggling to keep up with the fast-paced technological world is Larry Ellison, founder of software giant Oracle. His company has fallen foul of the recent cloud computing industry, which buys access to software that runs on third-party networks as opposed to that of the business in question.

Ellison has also highlighted another problem for successful dropouts: the potential of their work being duplicated. Referring to Google as “absolutely evil” in August, the billionaire accused Google of infringing Oracle-owned Java patents with its Android mobile operating system, insisting: “We just think they took our stuff, and that was wrong.”

Though university dropouts like Dell, Ellison and most recently Spiegel amassed their fortunes at astounding rates, the responsibilities and potential lows when building a software business are ever-present, and can result in much in-fighting in what is a ferociously competitive environment.

It is not all doom and gloom, however. Come what may, their rapidly-accrued fortunes will more than likely last them a lifetime.