Book Smarts Vs. Street Smarts To succeed in business, which is more valuable?

Q: When it comes to succeeding in business, which is more important: education or experience?

A: Have you seen the TV show "Fear Factor"? If you haven't seen it, you've probably heard about it. "Fear Factor" is the show where they put contestants through all sorts of pseudo death-defying feats, like bungee jumping off a bridge over a pool of crocodiles and driving a car through a wall of fire. (You know, the stuff we did for fun in high school.) The contestant who overcomes his or her personal fear factor wins the cash and prizes at the end (usually at the cost of their dignity, but I digress).

The highlight of "Fear Factor" is the eating competition. That's when contestants are invited to partake of all sorts of culinary fare-yummy stuff like monkey brains, all manner of live bugs and spiders, moose intestines, old fruitcake (the horror!) and my personal favorite, live giant worms. At this point, the competition becomes not so much who can overcome their fear factor, but who has the lowest gag reflex.

Your question makes me feel a little like those contestants, because no matter how I answer, I am opening a can of giant worms that I will undoubtedly be forced to eat later. My highly educated peers will argue that education is much more important than experience, while my highly experienced peers will argue that experience is more important. Either way, it's worms a la carte for me.

Oh well, I've eaten more than my share of crow over the years. How much worse can worms be?

It's important to understand that the success of an entrepreneur is not measured by how much education he or she has or by how many years of experience are under his or her belt. An entrepreneur's success is measured by achievements, not words on a resume.

By definition, an entrepreneur is a risk-taking businessperson; someone who sets up and finances new commercial enterprises to make a profit. Entrepreneurs start businesses. The smart ones then hire MBAs to run them.

Let's start with education. Is a bachelor's degree or better required to succeed in business? Of course not. An MBA from Harvard might give you a leg up in a job interview, but it certainly doesn't guarantee you will succeed in business. Nor does it automatically mean that you will be a better businessperson than someone who didn't finish high school. Knowledge is a good thing-if you know what to do with it.

Perhaps it is the academic environment itself that turns mere mortal nerds into budding entrepreneurs. The late '90s proved that college students with no experience beyond organizing a frat keg party could start businesses that would exceed all expectations. Many would argue that the key to success for most of these ventures was that the founders (or the venture capitalists financing them) were smart enough to know that while they had an abundance of education, they needed experienced managers to really run the show.

Larry Page and Sergey Brin were college students when they started the company that would become Google. They were smart enough to bring in Eric Schmidt to be chairman and CEO when the business took off. Schmidt was the former CEO of Novell and CTO of Sun Microsystems. A Ph.D., Schmidt is a man of education and experience.

Jerry Yang and David Filo were candidates in electrical engineering at Stanford when they started Yahoo! (Yet Another Hierarchical Officious Oracle) in 1994. They brought in Tim Koogle from Motorola to run things shortly thereafter, and now the company is led by Terry Semel, who previously spent 24 years running Warner Bros.

Now on to experience. Is experience a prerequisite of business success? Again, not at all. Many experienced entrepreneurs gained their experience in failed businesses, so experience does not instantly translate to success.

So, when it comes to succeeding in business, which is more important: education or experience? While neither is as helpful as a rich relative, here's the answer that will hopefully help me avoid those worms: Both education and experience can play a large part in business success. The more important question is: Can you succeed in business without one or the other, or even without both? And the answer to that one is yes. Can I get ketchup with those worms?

Many successful businesses were started by first-time entrepreneurs who never went to college. Natural talent, ambition, drive, determination and good old dumb luck have fueled many successful entrepreneurs, myself included. I don't have a degree. (I drove past a college once. It looked hard, so I kept going.) Would a degree have helped make my business trek easier? Perhaps. Then again, I know people with advanced degrees who are flipping burgers at McDonald's. It's good experience, I suppose.

A combination of education and experience (and a variety of other things) is the best recipe for success. As the old saying goes, "There is no better education than that which comes from experience."

In the end, it really doesn't matter how much education, experience, talent, luck or money you have. It's what you do with it that matters.

Tim W. Knox is the founder, president and CEO of four successful technology companies: B2Secure Inc., a Web-based hiring management software company; Digital Graphiti Inc., a software development company; and Sidebar Systems, a company that creates cutting edge convergence software for broadcast media outlets; and Online Profits 4U, an e-business dedicated to helping online entrepreneurs start and prosper from an online, wholesale or drop-ship business.

The opinions expressed in this column are those of the author, not of Entrepreneur.com. All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.