April 20, 2024

Bits: Dropping Out to Start a Tech Company

Peter ThielBloomberg NewsPeter Thiel

Parents, do you hope that your children have the chance to become like Peter Thiel, the PayPal co-founder, Facebook investor and hedge fund manager? If so, Mr. Thiel suggests that you encourage them to drop out of school. In fact, he will help by paying them to do it.

On Wednesday, the Thiel Foundation, funded by Mr. Thiel, announced the first group of Thiel Fellows, 24 people under 20 who have agreed to drop out of school in exchange for a $100,000 grant and mentorship to start a tech company.

More than 400 people applied. The winners include Laura Deming, 17, who is developing anti-aging therapies; Faheem Zaman, 18, who is building mobile payment systems for developing countries; and John Burnham, 18, who is working on extracting minerals from asteroids and comets.

The fellowship addresses two of the country’s most pressing problems, Mr. Thiel says: a bubble in higher education and a dearth of Americans developing breakthrough technologies.

Much of the technological talent these days is going into Web sites and apps. Mr. Thiel says he has no problem with those — Facebook has made him a billionaire. But “there’s a more urgent need for innovation” in other areas, he said, like biomedical technology, nanotechnology, transportation and energy.

Mr. Thiel, a contrarian investor and libertarian known for his controversial views, knows that suggesting education is not always worth it strikes at the core of many Americans’ beliefs. But that is exactly why is he doing it.

“We’re not saying that everybody should drop out of college,” he said. The fellows agree to stop getting a formal education for two years but can always go back to school. The problem, he said, is that “in our society the default assumption is that everybody has to go to college.”

“I believe you have a bubble whenever you have something that’s overvalued and intensely believed,” Mr. Thiel said. “In education, you have this clear price escalation without incredible improvement in the product. At the same time you have this incredible intensity of belief that this is what people have to do. In that way it seems very similar in some ways to the housing bubble and the tech bubble.”

In Silicon Valley, following in the footsteps of Bill Gates, Mark Zuckerberg and Evan Williams by dropping out of school might make sense. But many employers would never look at a resume that does not list a college degree, and of course some professions require advanced degrees. As the Times reporter Catherine Rampell has written, the job market is bad for college graduates right now but even worse for non-graduates.

But Mr. Thiel said the recession had opened parents’ and students’ eyes to the problems with the belief in higher education.

“I think a program like this would have been unthinkable in 2007, but I think you increasingly have people who are graduating from college, not being able to get good jobs, moving back home with their parents,” he said. “I think there’s a surprising openness to the idea that something’s gone badly wrong and needs to be fixed.”

Mr. Burnham, the fellow working on mineral extraction from outer space, agreed with Mr. Thiel, whom he first became aware of via the movie “The Social Network.” He said that college did not fit every student.

“What I really liked about this program is it’s giving a lot of people who maybe wouldn’t get into Harvard an opportunity to participate in something just as selective and just as valuable and just as educational,” Mr. Burnham said. “It’s giving them that opportunity even though their personalities and characters don’t quite fit the academic mold.”

His father, Stephen Burnham, said the decision for his son to skip college, at least for now, was uncontroversial.
“There’s a lot of other stuff that you get in college and I would say that would be useful for John,” he said. “But I would say in four years there’s a big opportunity cost there if you could be out starting your career doing something that could change the world.”

Article source: http://feeds.nytimes.com/click.phdo?i=3dc4fec4ab695684f1a2f5e337da0474

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