
Peter Thiel Gives Whiz Kids $100K To Quit College, Start Businesses - davewiner
http://www.fastcompany.com/1755089/legendary-investor-peter-thiel-names-dream-team-of-whiz-kids
======
szany
There seems to be a common misconception about the purpose of the Thiel
Fellowship. Two things the Fellowship is not claiming to do:

1) Testing the hypothesis that university is bad

2) Testing the hypothesis that university is not worth the cost for the vast
majority of people

What the Fellowship might plausibly be doing:

1) Testing the hypothesis that university is not worth the cost for people
like the Thiel fellows

The actual motivation of the Fellowship, which is all over the press and has
been related to me by Thiel Foundation workers, is that students with great
potential accumulate tons of student loan debt in college and subsequently,
instead of taking on projects that might actually help the world, are
financially pressured into working at hedge funds and the like. The Fellowship
is offered to these students as a two year break to attempt these projects
supported by 100K for living expenses and, crucially, _extensive mentorship_.

Again, the point is not to discredit universities, but to keep talented kids
away from hedge funds (ironic coming from Thiel but there you have it).

Edit: Also note that a failure of the Thiel Fellowship project does not
disprove the education bubble in general, since it only applies to a very
small group of people.

~~~
hugh3
_The actual motivation of the Fellowship, which is all over the press and has
been related to me by Thiel Foundation workers, is that students with great
potential accumulate tons of student loan debt in college and subsequently,
instead of taking on projects that might actually help the world, are
financially pressured into working at hedge funds and the like_

Surely kids as brilliant as these ones sound are getting full scholarships to
college?

If you really want to test the hypothesis: _that university is not worth the
cost for people like the Thiel fellows_ then I reckon you'd need two groups.
One drops out of university and gets $100,000 and extensive mentoring. The
other group stays in university and _still_ gets $100,000 and extensive
mentoring.

~~~
jbellis
> Surely kids as brilliant as these ones sound are getting full scholarships
> to college?

I see it's been a while since you went to college. Let me introduce you to a
concept called "need-based aid:" it's virtually impossible to get a full-
tuition scholarship at a top school based on academic achievement.

See also, market segmentation --
[http://www.joelonsoftware.com/articles/CamelsandRubberDuckie...](http://www.joelonsoftware.com/articles/CamelsandRubberDuckies.html)

------
_delirium
I'd be somewhat more interested in a program like this if it were being run by
someone I believed actually wanted in good faith to improve
education/business, rather than having ulterior political motives. Thiel is
quite open that his main motivation is that he thinks universities promote
politics he dislikes, so he'd like to destroy them for that reason. He _also_
claims that in doing so he'd improve education, but it seems like a secondary
motivation. My guess is that he would be willing to accept education even
getting slightly worse as a tradeoff, if it got rid of the negative influence
(in his view) of universities for libertarian politics.

(See Woz and Salman Khan for examples of education reformers who seem to have
education reform as their actual #1 goal.)

edit: Of course, as full disclosure I'm in academia, so perhaps have my own
ulterior motives. =] But honestly I think Salman Khan's approach is a bigger
threat to the higher-education status quo than Thiel's is, mainly because it's
much more scalable. So from a pure self-interest point of view I ought to
dislike that one more!

~~~
kiba
He's dedicated to the cause of eliminating death and aging. That's good enough
for me.

In order to eliminate aging and death, you must have an educated and ambitious
populace who can mobilize resources to wage war on mortality.

Yes, he's a techno-libertarian, but like all great techno-libertarians he's
interested in killing what kill human beings and crystallizing human
potential. Aubrey de Grey even mention libertarians as one of the group that
is most supportive of his work.

Why libertarianism and anti-aging/anti-death and technology in general goes
together? I have no idea.

~~~
samtp
>eliminating death

This is a pointless exercise that is doomed to failure. Sure, we may be able
to extend a person's life to 200 or 300 years. But will we be able to cure all
future diseases (for the next million years), eliminate accidents, natural
disasters, and sudden body failure? What about when the sun burns out in a few
billion years? Will we be able to successfully colonize another planet while
keeping the same safety precautions for human life?

Death is as much a part of life as birth. It will not be eliminated unless you
eliminate life. To think otherwise is a denial of reality.

~~~
kiba
There will always be people who murders other, doesn't mean we should never
try to lower the possibility of murder.

Same thing with death. We should lower the possibility that you will die
within in the next 5, 25, 100, and thousand of years, or even million.

------
guynamedloren
The statement about Thiel requiring these kids to 'stop out of college' is
slightly disingenuous when many received college degrees before they could
legally drive a car. Nevertheless, as a recent college graduate I think this
is a fantastic idea, and I'm excited to see how everything turns out.

------
edanm
While I somewhat agree with the whole "degrees aren't always a good idea"
meme, this feels like something of a "stunt" by Thiel. Taking people who are
so incredibly smart and giving them money is an interesting concept, but it
sure won't prove much about whether Universities are a good idea for us
"ordinary" people.

~~~
inthewoods
Yes, I agree - smart people like this are likely to succeed in any context. I
suppose you could make the argument that their success will likely be
heightened by the involvement in the program because of the connections
they'll make - but the program doesn't really prove or disprove the idea that
the system works or doesn't work. In my opinion, he'd be better off taking a
group of kids that are perhaps borderline college material and training them.

------
neebz
I am seriously lost in terms of innovation. You may give kids money and
they'll open up their Lemonade bars but how can you expect innovation without
any research? And research without any education?

I can't fathom any kid dropping out and then inventing a satellite? or solve
any medical problem? And if they don't innovate then how can they even think
of ways of bringing it to the consumers (which is the difficult next step) ?

~~~
Tichy
All I know is that I certainly did not invent any satellites or solved any
medical problems while at university. Instead I tried to collect points in an
artificial game system.

~~~
larsberg
You definitely missed an opportunity. My first year, I volunteered without pay
in a research lab just to see what was going on, and then by the second
through fourth years I was contributing to actual research.

Of course, it's not entirely clear that I was more help than hindrance to the
group until midway through my third year, but I certainly learned a lot and
got a lot of mentoring you can't get via youtube and e-books :-)

~~~
Tichy
Working in a research lab would have been my dream (and it's all for free
while you are a student, isn't it). I just didn't have a clue as to how to get
there. I don't blame the system, as I wrote in another post. Although it
wouldn't have hurt to get some directions.

------
languagehacker
None of these really look like compelling business ideas to me. It seems as
thought at best, the idea Thiel has is that if some angel out there can fund
bright young people, they can develop business understanding and enrich their
skills in areas they're interested in to a point where someday they can do
great things. But I just don't see those great things being the ventures that
they're currently incubating.

Sure, it would be excellent if a billionaire swooped down from the sky and
paid me a fortune to learn by doing rather than going to school. But more
often than not these days, young people go to school because student loans are
easy to acquire. Furthermore, the jobs they're likely to start off with
straight out of high school pay about as much as the cost of living portion of
student loans taken over the course of a full year. I agree the university
system is pretty flawed right now. It doesn't do a good job preparing young
people for careers -- particularly in the liberal arts. But I don't think that
plying smart kids with money is an effective way to provide a well-rounded
foundation for any career path. That pretty much says that so long as you
impress someone enough for them to become your patron, you're set for life and
there's no expectation that you succeed. And that's the current problem with
the university system, too -- all kids pandering to professors, and no actual
expectations that what you learn be used in whatever constitutes your career
after college. We shouldn't be setting up young people to think that their
self worth is derived from impressing people in their minuscule niche, but
rather from the satisfaction of their personal accomplishments (as well as the
paycheck at the end of the day).

------
dinkumthinkum
Doesn't seem like that much money to quit college over. You could just go get
a job I guess and make that in a couple years or less, if these are really the
"whiz kids." Also, I'm sure these kids are very smart but some of those ideas
look extremely lofty. Are these kids really at that level in their education
and is 100K really even close to enough money to fund a 1-man research lab?
I'm just a bit skeptical.

~~~
hugh3
It'll be interesting to see what does happen. Some of these kids do seem
rather smart but incredibly naive (hey, reminds me of me at the age of 19) --
what _does_ happen when Asteroid Mining Kid runs up against cold hard reality?

Let me just clag in his whole description: _John Burnham believes that the
search for new resources has driven exploration, expansion, and
innovation—from the discovery of the Americas to the California Gold Rush.
Likewise, he believes the key to colonizing space is to make it possible to
extract valuable minerals from asteroids, comets, and other planetary bodies.
John plans on using his fellowship to develop space industry technologies to
solve the problem of extraterrestrial resource extraction._

Really, what _can_ you do to advance space industry technologies under these
circumstances? You're a teenager. You have a hundred thousand dollars (aka
what Elon Musk spends every four seconds). You know far less about space
technology than 99% of the people who work in the industry. And you're very
smart, but a lot of people in the rocket industry are very smart. What do you
do? Go intern for Elon Musk?

~~~
yid
Actually in that position, interning for Elon Musk sounds like a great idea,
followed by using that $100k to fund living expenses in college and grad
school, with the bonus of having a streamlined academic plan and semi-
guaranteed dream job when you graduate.

~~~
zasz
I have a friend at Stanford who got a $100k fellowship for graduate school,
and is interning at Tesla this summer. He's doing the exact same thing as
you're proposing Asteroid Miner Kid would do, but through the completely
traditional route. Seems like a waste if AMK does the same thing as my
brilliant but more conventional friend.

------
daimyoyo
This feels ageist to me. I'm 30 and I am getting the feeling that even though
I am more than willing to work 100+ hours a week for my idea, my age condemns
me. I'm washed up before I even had the chance to get started. It's important
to remember that not everyone starts their business before they can drink
legally.

~~~
rick888
You don't need funding to get your idea off the ground. If you are 30, you
probably have a better credit score than these guys and can more easily get a
traditional loan.

~~~
daimyoyo
Although I'd love to fund my idea using my credit, the fact is that the sins
I'd committed in college follow me today. I literally can't finance a toaster.
Is that a black mark on my profile? Perhaps. But I don't think I should live
in a permanent state of poverty simply because I blew off a few cards years
ago.

~~~
krschultz
Excuse me from being confrontational, I'm certainly not judging you but I
think you have far more control over your situation than you think.

Have you paid back your debts and used credit responsibily since then? I'd be
really surprised if you had made amends and your credit report was still
hosed.

Now if you are saying you don't think your credit report should reflect unpaid
debts even though they were 'years ago', that is fundamentally unfair to those
that use credit responsibly. Everyone else pays more interest to make up for
those that default. There is really no argument to be made that you shouldn't
have to be squared up on your debts to get more loans.

And no matter how many hours you claim to want to work, if you think not being
able to get credit destines you to poverty you don't understand credit. Credit
doesn't make you any richer, it just time shifts future income to a lump sum
in the present. It is the inverse of savings. In fact it makes you poorer
unless you do something with the money that earns a greater return than the
cost of the loan.

So are you saying you are going to take out a loan with a 100% chance you need
to repay it and start a business with a 50/50 or worse chance of working out?
And if it fails you will default on the loan? Because if you are complaining
about poverty now, wait until you have a loan for a business that failed
miserably, then you will be really screwed. So funding a business on credit a
fundamentally risky thing and if you already have one black mark on your
credit report it is probably not a good avenue for you anyway.

And don't say that not having credit means you can't start your business. The
above paragraph explains why I'm not starting my business on credit. I'm
funding it by saving. I work 40-70 hours a week (certainly not 100, I
physically couldn't do that). I do 40-50 at my salaried job, and about 1-20 on
starting by business outside of work depending on if I work all weekend or
not. Does it suck not having free time? Absolutely. But at the end of the day
my business is funded from my own cashflow, with no debt or interest to
anyone. And no matter how bad your credit history is, you can always save and
bootstrap like that.

Blaming being unable to start a business on people not willing to lend you
their money is just an excuse. At the end of the day your credit score,
whether or not you start a business, this is all under your own control.

(And if HN doesn't mind a plug, I personally learned a lot from Ric Edelman,
he has a free podcast and a personal finance 101 book called the Truth about
Money that I learned quite a bit from, but the fundamental thing he preaches
is simple math. Make more money than you spend)

------
ryanisinallofus
Would the reaction be as mixed here if it was PG doing it? Because YC in
effect does the same thing right?

I enjoyed my college experience and as the first ever college graduate in my
family I wouldn't do anything different. Colleges provide something far more
beneficial than the shot at FU money.

That said, some people are better off dropping out or never going at all. I'm
highly suspect of learning how to be an Entrepreneur in a college setting and
guess something like YC is probably better for that.

I think of YC as almost a trade school for start ups but it still doesn't
replace college. I wonder how many successful start uppers go back to college
later? Any of you? Like Shaq and Troy Polamalu? :)

And I guess that school-like vibe is why YC is better than simply dropping out
and taking 100k. Even if you fail, you still get the YC experience to help you
with your next venture.

~~~
veyron
PG's stance, at least nowadays, is not to take college students unless they
are going to leave anyway. I dont think he would do it in the way that PT is
trying to do it.

My understanding, having been sucked into that trap myself, is that college
debt forces people to go to hedge funds or other lucrative jobs that don't
utilize the full potential of some of the brightest college students. If you
can give students an opportunity to build something, unencumbered by the issue
of money, the outcome would be far better for society.

~~~
hugh3
_college debt forces people to go to hedge funds or other lucrative jobs that
don't utilize the full potential of some of the brightest college students_

Well if that's the only concern, then Thiel could do what rich people have
been doing for years -- donating scholarships to give smart kids a free ride
to college.

~~~
veyron
The scholarship process is also broken. With many of the "merit-based"
scholarships, there is a bias favoring those coming from low income families
(otherwise why would they ask for parents' income information?)

~~~
Apocryphon
But kids from low income families are more likely to suffer from student
loans.

~~~
veyron
This is the middle-class trap. In reality, kids from middle-class families are
squeezed, because they are ineligible for most financial aid / scholarships
and dont have enough money to go to college on their own.

~~~
ryanisinallofus
I was part of that trap. My parents wouldn't or couldn't help me and they made
too much for me to get financial financial aid.

~~~
veyron
Out of curiosity: what are you doing now?

~~~
ryanisinallofus
Designing/dev at a popular restaurant guide and mobile app. School loans paid
off by my wife and I working full time and only living off of my income.

------
thesheenamedina
I'm with Umair haque on this one when he says our educational institutions
need serious reform, first. So how does paying super smart kids to create the
same old paradigm change anything?

------
freshfunk
Very interesting experiment and I'm curious to see what comes out of it but I
motivation for going to college isn't all about making money (which is what
starting a business is all about).

Aside from education, College/University changes people in immeasurable ways.
Usually it's where you meet friends you have for life, find the person you
want to marry, discover your political and philosophical self, explore vastly
different parts of your intellect from incredibly smart/talented people
(anything from quantum physics to 18th century english literature), and, most
importantly, mature.

These are things that you can't put a price on but will stay with you the rest
of your life. Of course, one doesn't necessarily need college to mature but
it's a great environment to do it in. I can't imagine trying to do that in a
corporate environment.

~~~
ignifero
Entrepreneurs tend to underestimate how many brilliant low-payed people work
in universities, and how rewarding it is to work with such people. Plus the
job of a lucky researcher is just as a appealing as an entrepreneur. As long
as you don't get trapped in their respective bubbles, both worlds are
exciting. Statistically though, i bet i could find more happy researchers than
happy entrepreneurs.

------
kiteaton
Tricky, tricky. Because sometimes you need the training that a degree (or even
advanced degree) gives you to come up with certain high tech notions...

~~~
skidooer
Oftentimes preconceived notions about tech will cloud your vision on
implementation. If you are aware of a certain challenge, you will, more often
than not, change your design to simplify the challenge. Someone without the
experience will not be bound by those limitations and can always figure out
how to do it later.

When we look to high profile businessmen, more often then not they do not have
the education behind them. Nothing wrong with getting some training, but I'm
not sure it is beneficial when it comes to business. There is no evidence that
supports it.

~~~
hugh3
There are a few successful businessmen with no or very limited higher
education... but they're quite few. You'll find more CEOs with PhDs than with
high school diplomas.

~~~
skidooer
CEOs are often hired into the position, so there may be some educational bias.
What would be interesting by this discussion is how many of those CEOs were
founders of the company?

------
thedaveoflife
Great minds will go on to do great things no matter if they go to college or
not, but you should start a business because you are passionate about a
product or service, not because a billionaire entrepreneur is bribing you to
do so.

This program could very well be successful, but I would argue the participants
would have gone on to do great things regardless of thiel’s invovlement.

~~~
rowaway1
but now they'll start doing great things earlier, and won't be hampered by
debt after graduation, which also postpones doing great things.

------
cfinke
> And yet another scored 5580 on the SATs (on a total of 5 tests, but still).

So he averaged 1116 on the SATs? Even before the switch from a 1600-point test
to a 2400-point test, there's nothing impressive about that except that he
bothered to take the SATs five times.

> Faheem Zaman has shot the moon on nearly every SAT test he’s ever taken:
> 5580 points across 5 tests.

Clearly I'm missing something...

~~~
Birejji
SAT Subject Tests: 800 pts * 4 = 3200

Actual SAT Test: 2380

Total: 5580

------
jeffool
For the record, I'd love someone to cook up a blog and keep tabs on these
people and their endeavors. Hell, I've got half a mind to do it myself, if
only I knew more about the startup world.

Of course, that said, I'm curious if one of the things they'd suggest is "keep
the media a good distance away until you're ready." I imagine so.

------
andrewcross
Whether Thiel is doing this for ulterior motives or not, do any of you think
that the kids that were chosen really need 4 years of college education to be
incredible? Look at what they have done so far! If anything Thiel is doing
them a favor by letting them flourish with all the resources they need! At
college they'd be wasting their time completing assignments designed for the
lowest common denominator in class. While I'm far from a genius, the
difficulty level of most assignments/projects is very low, in engineering at
least.

Kudos for Thiel to stepping out of the box and best of luck to these kids.
Work like crazy and change the world!

------
felipe
I wonder if he would have accomplished everything he did throughout his career
without that Stanford degree (and the connections that come with it)?

------
HaloZero
Anyone notice that a few of these kids already went and graduated from some
formal education? Hell one of them is dropping out of a Ph.D program.

------
andrewguenther
So if the one kid scored a total of 5580 across 5 SATs, that means he scored
an average of 1116 on each test. Which, assuming this is before the writing
section (I hope), is an abysmal score. Am I missing something? Or is it just
impressive that he sat through that awful test five times?

------
known
Unless there is a cap on market capitalization of Big Companies viz Goolge,
Apple etc why should investors risk their investments in a startup?

------
shareme
Some facts you may not be aware of:

USA public university education costs have risen to 300% to 400% over a 20
year period with most of that costs made up of these trends:

    
    
       -US states cutting education funding
       -us public colleges increasing enrollment of non state
        citizens both US and World to replace funding
       -US fed government increasing loan limits that students
        can borrow under
       -US public universities increasing the use of grad students as the major instructor both first and second year

students see teaching classes. -US public universities increasing funding of
non-university expenditures such as sports which the NHL, NFL, NBA, etc use a
free farm team without paying for it despite not a single program breaking
even.

No matter what Petter Thiel believes are it is somewhat factual that US
college education is somewhat broken as a public institute for the public good
is somewhat broken.

And Thiel is basing his system on certain past models that have worked before.
If you go back to the industrial age we did in the USA have certain
industrialists that would pick out young people to train in business. Thiel is
just re-inventing for the modern era.

~~~
wallflower
Numbers from NYMag article:

"In the past 30 years, private-­college tuition and fees have increased, in
constant 2010 dollars, from $9,500 a year to more than $27,000. Public-college
tuition has increased from $2,100 to $7,600. Fifteen years ago, the average
student debt at graduation was around $12,700; in 2009, it was $24,000. Over
the past quarter-century, the total cost of higher education has grown by 440
percent."

"The cost of college in the past 30 years has gone up tenfold. Health care has
only gone up sixfold, and inflation has only gone up threefold. Not only is it
a scam, but the college presidents know it. That’s why they keep raising
tuition." -James Altucher

<http://nymag.com/news/features/college-education-2011-5/>

------
ignifero
It's hard to believe some of the projects in biotechnology and energy will
only require $100K to be built. These things cost more than a laptop and
pizza. These kids are certainly enthusiastic, but why not spend some more time
learning about things? Why not take the $100K for a sabbatical, and then
proceed to build businesses? Science can be pretty exciting, just as
entrepreneurship is, but they are different things.

Success is a relative term, and i don't have the data, but it seems that the
role of luck is bigger in entrepreneurship than it is in science. It will be
interesting to see how many of them go on with the program, how many go back
to school and how many succeed (although the sample is small).

------
zyfo
_He was a 19-year-old 4th-year neuroscience Ph.D. candidate at Stanford
University_ (Andrew Hsu)

Does that mean he'd get his PhD as a 19 or 20 year old? That sounds like a
record to me. That's crazy, in a good way.

~~~
jbellis
Definitely not a record.

I remember a professor at Princeton who got his first PhD at 17, but he was
bored, so he got his second at 19. One was in physics, the other in
mathematics, but I don't remember the order.

------
dmazin
These kids' parents must hate Thiel. What does this guy know about what's good
for their futures?

~~~
clafoutis
view from this parent: we’re grateful for this opportunity. our son definitely
lacks the “imitation gene” so k-12 public school (and any other options within
our financial means and family scheduling limits) did not adequately
encourage/support his talents and ability. Furthermore,the college admission
process is so formulaic that it failed to spot his potential. This fellowship
is elitist in number, but not in spirit. They judged him on the merit of his
idea and the depth of his abilities, not on his GPA. It was a competition that
was open to all. And though it is not scalable, it offers up the notion that
alternative paths to over-priced academia is possible. It is a small, but
meaningful attempt to break the university monopoly on the futures of our
brightest, most innovative students.

