This month saw a bright flare in the currently otherwise dim landscape of big tech industry deals, when design software company Adobe announced on September 15 that it would acquire competitor Figma for a whopping $20 billion. It would be the highest price ever paid for a private software company – though also the highest multiple to earnings ever paid, which has generated some skepticism among stock analysts.
This piece is part of CoinDesk's Education Week
But the sale is an unambiguous win for at least two parties: 30-year-old Dylan Field, who founded Figma in 2012, and the Thiel Fellowship, which gave Field $100,000 that year to help build the company. Field was just 19 years old at the time and, according to his application for the Thiel Fellowship (then still mostly known as the “20 Under 20” program), had recently “stopped out” of his education at Brown University.
The tech and business media are largely reporting Field’s story as vindication for the core premise of the Thiel Fellowship: That a college education is not just useless for many people, but an active hindrance. There have been other success stories for the Fellowship, not least of them Vitalik Buterin, who was awarded a Thiel Fellowship in June 2014, shortly after the release of the Ethereum white paper. Buterin, Ethereum’s co-founder, had dropped out of the University of Waterloo the year before to focus on developing the smart-contract network.
Despite such headline-grabbing cases, though, a deeper look at the Thiel Fellowship raises questions about its effectiveness as a model alternative to universities.
“This worked out very well for Peter Thiel,” says reporter Max Chafkin. “For the Thiel fellows, your mileage may vary.”
Chafkin is a staff reporter at Bloomberg, and also the author of “The Contrarian,” a book about Thiel’s life, career and political activism. Chafkin talked to many former Thiel fellows for the book and found that despite the Fellowship’s selection of candidates with elite backgrounds, some still felt set adrift by the program’s lack of structure and support. Chafkin’s book ultimately depicts the Thiel Fellowship as more of a public relations coup by Thiel than a sincere philanthropic effort.
Critics of the Fellowship also cite broader socio-political concerns. By seeming to validate skepticism of education, they say the Fellowship advances Thiel’s libertarian, anti-government ideology, including a longstanding opposition to providing more educational opportunities for women and people of color. The initial class of Thiel fellows that included Dylan Field was made up of 22 men and only 2 women.
Thiel’s avowed skepticism of college feeds into a growing opposition in the U.S. to public education, with potentially worrying implications for American democracy and social mobility. Former Harvard president and Treasury secretary Lawrence Summers, hardly a socialist, has called the Fellowship “a very dangerous idea.”
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It may also, Chafkin and others warn, lead young people weighing their post-high school choices down a primrose path to failure.
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The stories of Figma and Ethereum look like an affirmation of Thiel’s core argument that, at least for some people, higher education is a waste of time. The Fellowship touts itself as the perfect option for “young people who want to build new things instead of sitting in a classroom.” Thiel himself has argued for more than a decade that the current higher education landscape is a “bubble,” with degrees sold for inflated prices on the basis of empty promises.
But looking beyond the headlines, Chafkin formed a much more nuanced impression of the actual results of the Thiel Fellowships. The successes, he concluded, were the exception rather than the rule.
“It’s very similar to the success rate of a venture capital firm,” Chafkin says. “Maybe a little bit lower." The target success rate for venture capital-funded startups is generally one in ten. Though they're not entirely comparable, that would be a far lower success rate than traditional education, with about half of university graduates quickly landing a full-time job.
"You have a few [Thiel Fellows who are] billionaires, and you have some people who have gone on to really successful careers," Chafkin says. "And then you have people who went back to school, who had a bad experience or just decided it wasn’t for them. They kind of look at it as a weird vortex they got sucked into when they were young and misguided.”
A core flaw in the program, according to Chafkin’s reporting for “The Contrarian,” is the nearly complete lack of any supervision or training. The Thiel Fellowship is sometimes compared to early-stage venture accelerator Ycombinator, but Ycombinator is highly structured, including regular check-ins where participants report their progress. The Thiel Fellowship, at least for its first several years, had no such requirements. Access to Thiel himself was limited, and often perfunctory.
“It was, ‘Here’s a house, do your thing’,” Chafkin quotes one fellow saying.
This is particularly striking given the scope of some of the earliest fellows’ ambitions. One wanted to pursue asteroid mining and another aimed to expand the human lifespan by 300 years. Any random civilian, not to mention rocket scientists and biologists, would probably argue those goals would require years of rigorous science training.
It’s little surprise, then, that even the best results of the Thiel Fellowship have been inconsistent with Peter Thiel’s own stated ambitions in another crucial way. At his venture firm Founders Fund, Thiel famously declared that he was interested in “atoms, not bits,” and that Silicon Valley’s focus on software has meant that we “wanted flying cars … [I]nstead, we got 140 characters” (a reference to Twitter).
Yet, despite this declared mindset, the Thiel Fellowship’s biggest successes have all been in software. Thiel wanted asteroid mining … Instead, he got an updated version of Photoshop.
Even the program's single clearest benefit seems to undermine the Fellowship's core premise. According to Chafkin, “All the buzz around the program meant that Thiel Fellows could land at least a meeting with pretty much any investor or tech company.” And more than a few leveraged those meetings to secure venture capital funding for their Fellowship-backed projects.
In other words, as Chafkin writes in “The Contrarian,” the Thiel Fellowship “wasn’t an attack on a credentialing system; it was another credential.”
More damning still, the Fellowship seems parasitic on the very old-guard credentialing systems Thiel professed to oppose: A critical mass of those selected for the program over the years have been plucked from the rolls of elite universities like Stanford, Brown, MIT and Yale.
Chafkin argues that this pre-selection bias helps pump up the reputation of the Thiel Fellowship when participants are successful, but actually undermines the idea that the Fellowship itself is helping improve recipients’ outcomes.
“You have some successes that have less to do with [getting] the Thiel Fellowship, and I would put Vitalik in that category,” Chafkin says. “They wanted to give him money, and he took their money. He hasn’t been a huge part of that community, and it’s not a huge part of his entrepreneurial success story.” Crucially, Buterin conceived Ethereum before being offered the fellowship.
Even pre-selecting for elite credentials and connecting participants to venture capitalists has produced some embarrassing flameouts. In a particularly staggering example, the most recent class of Thiel Fellows, announced in January, included Ryan Park, a South Korean developer. Park was credited with creating Anchor, the decentralized finance protocol that just four months later played a key role in the collapse of the Luna system, wiping out billions of dollars of deposits, much of it from mom-and-pop retail. Luna head Do Kwon is currently an international fugitive.
That kind of spectacular, damaging failure is not new for the Thiel Fellowships. One of the first Thiel Fellows to secure venture capital funding was Andrew Hsu, a Stanford Ph.D dropout and putative CEO of an educational games company called Airy Labs. But Airy Labs collapsed almost immediately, with former employees alleging that it wasn’t Hsu but his parents and siblings who had actually run the company.
As one critic quite reasonably asked, “How can a child with no basic education and no business experience be expected to manage 20 employees and millions of dollars?”
The Airy Labs case was reportedly one reason the Thiel Fellowship soon pivoted to focus on recipients in their early 20s instead of those in their teens. In other words, the anti-college Thiel Fellowship has, for the majority of its existence, focused largely on candidates who had actually attended quite a bit of college.
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Given all of these inconsistencies and failures, you may find yourself asking – why exactly does the Thiel Fellowship exist?
Amazingly, according to Chafkin, it has a lot to do with two people who likely have a dim view of Thiel: writer Aaron Sorkin and director David Fincher.
Thiel announced the Fellowship at a Techcrunch Disrupt conference shortly before the release of 2010’s “The Social Network,” a movie about the rise of Facebook written by Sorkin and directed by Fincher. Thiel’s reputation largely hinges to this day on his early investment in Facebook, but the film depicted him in the worst possible light: as uninteresting.
“In the movie, Thiel is kind of this boring, stuffed-shirt guy who makes it all happen,” says Chafkin. “Thiel especially was looking to kind of rebrand that.” Thiel was also in the midst of serious problems at Clarium, his attempt to pivot from venture capital to running a hedge fund. That partly helps explain how hastily the Thiel Fellowship was conceived – on the flight to the conference where it was announced.
The Fellowship's true goal may have been ruffling the feathers of coastal elites with anti-college rhetoric, rather than helping young people. Thiel’s rebranding strategy continued over the following decade to tap into the same cultural currents that gave us Donald Trump, who Thiel would later support in his run for U.S. president. Instead of trying to clean up his image, Thiel leaned into his more trollish tendencies, making a series of statements and actions seemingly tailored to offend conventional American values such as egalitarianism, free speech, and upward mobility.
Thiel even played this angle up in discussions of the Thiel Fellowship, declaring that “to question education is really dangerous. It is the ultimate taboo.” A taboo-breaking image also provided some cover for Thiel’s failure at Clarium – being a contrarian is certainly a more appealing rationalization of 90% losses than simply being wrong.
“I treat the Thiel Fellowship largely in that context,” says Chafkin, “As a sort of brand-building exercise for Thiel.”
Thiel would continue down that path with a series of campaigns that the right people – that is, coastal elites and media types – regarded as scandalous or absurd. Those included his legal campaign to destroy the gossip website Gawker, the aforementioned support of Trump, and his more recent backing of neoreactionary monarchist Mencius Moldbug, aka Curtis Yarvin.
Those efforts do certainly reflect Thiel’s heartfelt political commitments. Thiel was raised by conservative Christians and has been a conservative of one stripe or another his entire life – Including a youthful enthusiasm for President Richard Nixon’s invective against the social upheavals of the late 1960s and early 1970s.
But Chafkin believes these public stances also help Thiel build a platform that ultimately benefits him as a businessman. Thiel’s greatest successes have come from betting on young entrepreneurs, and he was clearly correct that a sort of paleo-libertarianism was becoming more attractive to that group – particularly to young men.
“Thiel is really good at seeing these political and cultural moments happening and capitalizing on them,” says Chafkin. “Thiel was backing [libertarian] Ron Paul for president in 2012 at the same time as the Fellowships, and I think they were connected. There was this thing happening on the internet with disaffected young people. He was basically attempting to capitalize on that, to insert his ideas into that discourse and use it to grab followers.
“He was saying, here’s an ideology, and if you really follow it all the way you can get rich too.”
As long, that is, as you let Peter Thiel hitch a ride on your coattails.