Peter Thiel’s dropout army
The battle between Gawker and tech titan Peter Thiel has made him look like a spiteful manipulator with a bully wallet. But this characterization is incomplete. The stakes and ambitions of Thiel’s backroom lawsuit-jiggering are fairly trivial compared with many of his endeavors – some stealthy, some gleefully public – to rewire the world to his liking.
For Thiel, business is never just business. His original vision for PayPal, which he helped found in 1998, was to create “a new world currency, free from all government control and dilution – the end of monetary sovereignty.” He considered his prescient investment in Facebook, in 2004, as “a means to create the space for new modes of dissent and new ways to form communities not bounded by historical nation-states.”
How seriously should we take this billionaire libertarian who recently signed on to be one of Donald J. Trump’s delegates? As one of Silicon Valley’s most influential investors and talent-spotters, Thiel says he wants to steer entrepreneurs away from quick-and-profitable apps, toward ambitious, world-changing technology. In the manifesto for his venture capital firm, Founders Fund, he lamented, “We wanted flying cars, instead we got 140 characters.” But is Thiel capable of meaningfully changing the world – or even Silicon Valley?
Consider his beef against academia. He has two degrees from Stanford – a BA and a JD – but in a conversation with me last year, he compared elite universities to the pre-Reformation Catholic Church. “You have this priestly class of professors who aren’t doing a whole lot of work, supported by a system dedicated to convincing people to buy indulgences and amass enormous debt for the dubious salvation that a diploma represents,” he said.
America’s approximately $1.3 trillion in student debt “has gone mostly to pay for lies that people tell about how great their education was,” he added. He argues that the pressures of financing college often draw the best students into less useful careers like investment banking, “holding back innovation and leading to a technology deficit that could have catastrophic economic consequences.”
In 2010, this would-be Martin Luther announced his solution: The Thiel Fellowship, which each year would offer 20 “uniquely talented” teenagers $100,000 to forgo college and pursue “radical innovation that will benefit society.” Today’s future Zuckerbergs shouldn’t be wasting time in lecture halls and football stadiums; they should be building businesses.
The idea is, according to Larry Summers, a former president of Harvard, “the single most misdirected bit of philanthropy in this decade.” Yes, there is a need for reform, Summers told me recently, “but the idea of using philanthropic dollars to bribe people to drop out of college is a very dangerous one.”
Fellows were selected via a competition that culminated in a two-minute pitch to Thiel and a team of judges – a gentler version of “Shark Tank.” The winning dropouts included 17-yearold biology prodigy Laura Deming, who had entered MIT at 14 with the goal of eliminating aging-related disease – a pursuit that has become one of Thiel’s core personal and investment interests. “It’s theoretically possible for humans to live for hundreds of years,” Deming told the judges. “I want to figure out how.”
These fellows were an impressive lot; they drew on their benefactor’s connections to capitalize projects that ranged from cancer immunotherapy to a device for synthesizing genomes to artificial neural networks that can “dream.”
And yet, five years in, “radical innovation” has yet to emerge. Many fellows have been financially successful, raising some $450 million for companies that are valued at $2.45 billion. Some are disrupting the fields of photonics, artificial intelligence and educational technology. But the biggest hits have been the most pedestrian. One fellow, Ritesh Agarwal, raised $225 million to build an online market for budget hotels in India; another, Ben Yu, scored a hit with a topical energy spray.
“Peter Thiel promised flying cars, we got caffeine spray instead,” wrote the technology writer and entrepreneur Vivek Wadhwa.
To have a lasting impact, Thiel must move past the first iteration of Silicon Valley and toward the hardware and science revolutions that will usher in Silicon Valley 2.0. We have enough OK Cupids. We don’t have enough of the desperately needed inventions – nuclear fusion energy or cancer cures – that emerge when credentialed scientists tinker away for years on expensive machines that have nothing to do with Snapchat. Of course, this sort of tinkering most often happens in the academic institutions that Thiel reviles, despite their role in the foundational breakthroughs – such as the internet – that enabled Thiel to build his $2.7 billion fortune.
As his fellowship program matures, each class begins to look a little more like the creator himself; there are fewer ambitious research projects, and more of the kind of tech startups that fed Thiel’s appetite for investing. Such a drift may have been inevitable. But there’s also the fact that hard science is ... well, hard.
“It’s true that civilization won’t get to the next level if we’re just doing thin software solutions,” Thiel acknowledged. “But we need to consider not just whether an idea can change the world, but also whether it’s feasible and has a clear path to market.”
Thiel’s fellow PayPal founder, Elon Musk, has managed to do both, parlaying his dot-com profits into space exploration, solar power and electric cars.
One wonders if Thiel has the motivation to extract his wagon wheels from the profitable ditch he has dug, or if he is content to stand atop the vehicle and rant. Like his presidential candidate, the more he rants, the less clear it is what exactly he stands for. Just as his investments in invasion-of-privacy lawsuits show that his much-trumpeted commitment to free speech may dissolve when he himself feels affronted, his role in the founding of Palantir, a secretive data-mining company employed by nearly every US military and spy agency, suggests he’s not as anti-government as he might like to believe.
Then again, if Thiel’s role is limited to provocateur, that may not be a bad thing. It may be enough that he is forcing conversations – about news media misbehavior, about the costs and benefits of higher education, about the shape of future societies – that we need to have.
“Even if the fellowship has been just a $15 million PR campaign to get parents to think more cogently about their investments in their children’s futures,” said Dale J. Stephens, a Thiel Fellow who founded an experiential learning program called UnCollege, “then I think it’s been wildly successful.”
Of all Thiel’s social-engineering enthusiasms, one I would have most loved to see play out is Seasteading, an initiative to create libertarian utopias on artificial islands in the middle of oceans. In 2008, Thiel and the activist Patri Friedman founded the Seasteading Institute, with the goal of building these communities. Seasteading, Thiel wrote, could “create a new space for freedom” where entrepreneurial leaders, working beyond the reach of governments and their pesky laws, could take society forward.
Recently, Thiel suggested he’d gone cold on Seasteading because of cost and practicality. Unmentioned was the possibility the experiment would have come to an ideologically inconvenient conclusion: that a small island – whether created by nature or man – would be an astonishingly bad place to live without rules.
Perhaps there are some conversations Thiel would rather not push too far.
Tom Clynes is the author of ‘The Boy Who Played With Fusion,’ about Taylor Wilson, a Thiel Fellow.
His teenage entrepreneurs want to rewire the world