Peter Thiel (source: wikimedia.org)
This is going to take some explaining. Peter Thiel, the cofounder of Paypal who has racked up billions in betting big on startups like Facebook and LinkedIn, used to dis college education.
Last year, he created the Thiel Fellowship, which finds 20 star students under 20 and pays them $100,000 each if they agree to drop out of school to work for him. In a piece for the New York Times, he said college is “overvalued.”
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.
Well, this fall San Francisco area students will be able to put up their hands and question the new professor on exactly what he meant by that. Thiel will be teaching Computer Science 183: The Startup at Stanford University this spring.
Class act
If you didn’t know better it would make sense. Thiel has a bachelor’s in Philosophy and a JD from Stanford. Many successful people come back to teach a business course at their alma mater out of pride (or revenge). But in this case, the class itself seems to be a complete repudiation of his earlier advice.
Stanford class registration documents give this class listing: “Inner accounts from the early days of startups including PayPal, Google and Facebook will be used as case studies. The class will be taught by entrepreneurs who have started companies worth over $1B and VCs(venture capitalists) who have invested in startups including Facebook and Spotify.” Speculation among students is that there will be celebrity guest speakers, maybe even Mark Zuckerburg.
It would seem that this would be a great value for students, whether Thiel was teaching it or not. Maybe that’s the real lesson here. The media loves fights and is trying to make this into a reality TV show with Thiel as the obligatory loud-mouth hypocrite. But Thiel is simply making a valid point about how entrepreneurs like Steve Jobs, Michael Dell, and Bill Gates had to drop out in order to break into new markets.
Graduate earnings
The truth is that most drop outs don’t make it big, most start-ups fail, and college education does make a significant difference in lifetime earnings for the majority of us, shown in this recent data from the U.S. Census Bureau.
The real hero of this story is Stanford, which proves itself to be open-minded enough to book a valuable course with someone they fundamentally disagree with on the value on a degree. Everyone, not just entrepreneurs, need to learn how to do that.
Videos:
Thiel on his role in the movie The Social Network and education in California:
News about the fellowship that pays smart kids to drop out: http://video.nytimes.com/video/2011/06/02/business/100000000846061/100k-not-to-go-to-college.html
Sources:
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