[seanos]

A technical PhD will give you exceptional domain knowledge. With that you might be able to sidestep 99% of the start-up crowd who have programming skills alone and are stuck fighting over the 1% of business opportunities that require no domain knowledge. Take a look at the Steve Blank article that the author links to and read about the businesses mentioned. Those businesses could not have been created by someone starting without domain knowledge no matter how passionate they were…and I would call their founders real entrepreneurs (despite what your book says).

[randomdata]

Businesses exist solely to solve the problems of others. Domain knowledge required to solve and implement a solution to one of those problems is irrelevant – it can be acquired at any point in time, including after the problem has been identified.

That leaves us with the question: Does the domain knowledge accumulated in a PhD program lead one to later find problems that they would have never otherwise been determined to solve?

My hunch says it depends. Some people will find a solution and then go looking for a problem. Others will find a problem, and then go looking for solution. For the former group, a PhD will be quite valuable, but not so much for the latter group – the chances of them even having studied the right domain in advance is slim.

[seanos]

I agree that a PhD is not the only way to get domain knowledge. Working in industry and private research into a problem are other ways (amongst many). No matter how obtained, domain knowledge can be a great advantage for an entrepreneur.

Scott Adams attributes his success as a cartoonist to his rare combination of ability to both draw and write jokes well (http://dilbertblog.typepad.com/the_dilbert_blog/2007/07/care...). For a software entrepreneur, programming is analogous to drawing (as the base skill) and domain knowledge analogous to writing jokes (as the differentiator).

It’s also worth noting that technical PhD research is often based on a real problem; gives exposure to a broad range of hard problems and solutions; and teaches the process by which problems can be solved. Thus it can both help you find and solve problems (particularly those in the same field), whether those problems were the focus of your initial scholarly research or not.