35-year-old self-made millionaire: ‘School makes you really stupid’ when starting a business

NerdWallet CEO Tim Chen

Tim Chen, co-founder and CEO of the personal finance website NerdWallet and a self-made millionaire, tells CNBC Make It the best advice he has for someone wanting to start a business is to look beyond what you learned in school.

According to Chen, a Stanford graduate who started his now $500 million company with $800, "school makes you really stupid in terms of creating a successful company."

The reason?

"The problem with it is it defines this narrow set of parameters by which you need to succeed," says Chen, who thinks the education can put too much importance on taking tests as opposed to students' ability to think creatively.

"I think this is fundamentally the reason why so many smart people get brainwashed into being terrible entrepreneurs and problem solvers," Chen adds.

School can be "the most terrible feedback loop in the world," the NerdWallet CEO says, because students may be trained to see success in terms of black and white on an exam instead of viewing failure as a learning opportunity.

"If you treat failure as just, 'Oh, that was interesting? Why didn't it work?' You will get better so quickly," Chen says.

However, if you're starting a business and you view every obstacle or setback like failing a test, Chen says you might think: "'This must mean I'm bad at something or this thing isn't solvable.' And then you just stop trying and you will definitely fail at that point."

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There are famous college dropouts who became self-made billionaires, like Bill Gates and Mark Zuckerberg.

And other successful moguls have questioned whether schools teach you everything you need to be successful in business. Much like Chen, British billionaire and Virgin Group founder Richard Branson has criticized the inflexible guidelines of school exams. "Children are taught to pass exams rather than understand concepts and expand their minds," Branson wrote in a blog post in January.

Billionaire investor Warren Buffett and Apple co-founder Steve Wozniak are also both adamant that there's plenty to learn outside of college.

"The best education you can get is investing in yourself. But this doesn't always mean college or university," Buffett says.

Meanwhile, Tesla and SpaceX billionaire Elon Musk has such misgivings about the U.S. education system that he created his own primary school in Southern California for his five children.

For what it's worth, NerdWallet's Chen still "totally" believes that people should go to school — "You learn a lot of core skills," he says. Even a famous college dropout like Bill Gates has called the high college dropout rates in the U.S. "tragic," noting that the country could see a shortage of skilled workers as a result.

Certainly, despite the allure of stories about self-made millionaires and billionaires who never finished school, college graduates see more job opportunities and earn more than non-graduates on average. In fact, a 2017 study that looked at the backgrounds of more than 11,700 U.S. "leaders" — from Fortune 500 CEOs to members of Congress — found that 94 percent of them attended college.

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