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Drop Out and Innovate, Urges VC Peter Thiel 239

Posted by timothy from the good-work-if-you-can-get-it dept.
An anonymous reader writes "The San Francisco-based founder of PayPal and co-founder of Facebook is offering two-year fellowships of up to $100,000 (£63,800) to 20 entrepreneurs or teams of entrepreneurs aged under 20 in a worldwide competition that closes this week. With the money, the recipients are expected to drop out of university — Thiel calls it 'stopping out' — and work full time on their ideas. 'Some of the world's most transformational technologies were created by people who stopped out of school because they had ideas that couldn't wait until graduation,' Thiel says. 'This fellowship will encourage the most brilliant and promising young people not to wait on their ideas either.' Thiel says the huge cost of higher education, and the resulting burden of debt, makes students less willing to take risks. 'And we think you're going to have to take a lot of risks to build the next generation of companies.'"
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Drop Out and Innovate, Urges VC Peter Thiel More

Drop Out and Innovate, Urges VC Peter Thiel

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  • I like to see people who no longer needs to demonstrate things to put their money where their mouth is.

  • And when they go to realize those ideas ... (Score:5, Insightful)

    by Dr.Merkwurdigeliebe ( 1055918 ) on Sunday December 19, 2010 @09:22AM (#34606644) Homepage
    they'll understand why university comes in handy.

    • Re: (Score:2)

      by khallow ( 566160 )

      they'll understand why university comes in handy.

      It's too bad that they can never go back to college with that new-found maturity and valuable work experience. They're stuck, forever, unable to return. DOOOOOOOOOMED! Unless of course, they do go back to college and pick up that degree.

      • Re:And when they go to realize those ideas ... (Score:5, Interesting)

        by Dr.Merkwurdigeliebe ( 1055918 ) on Sunday December 19, 2010 @11:03AM (#34607102) Homepage
        Doesn't really happen that often, from what I've seen. More often, mature students returning to school are returning because they realize the value of an education on account of having a hard time without it. Additionally, university gives students something that is hard to come by in the working world: an appreciation of how many diverse perspectives there are in the world. Don't get me wrong - success stories happen. But for every Steve Jobs and Peter Thiel, I bet you there are a hundred or more drop-outs (stop-outs?) with nothing to show for their sacrifice. I think it's irresponsible of him to take the highest achieving students and encourage them to leave university.

        • Re: (Score:2)

          by khallow ( 566160 )

          Doesn't really happen that often, from what I've seen. More often, mature students returning to school are returning because they realize the value of an education on account of having a hard time without it.

          Bingo. I rest my case.

          • Re: (Score:3)

            by malkavian ( 9512 )
            There aren't that many mature students.. What tends to happen is that when you first get to uni, you're used to living on not a lot. You start at Uni, and live frugally, with a pretty good lifestyle.. Then when you graduate, you live "real life" and get all kinds of comforts, house, car, things to do and contractual obligations.. All of which come about by advancing in your roles and getting better jobs backed up by your qualification. When you jump out of Uni (in the UK, we have gap years in many degree

        • Re:And when they go to realize those ideas ... (Score:5, Interesting)

          by houstonbofh ( 602064 ) on Sunday December 19, 2010 @12:09PM (#34607586)

          Doesn't really happen that often, from what I've seen. More often, mature students returning to school are returning because they realize the value of an education on account of having a hard time without it.

          Not a big surprise. The ones doing well don't really have a reason to go back. I dropped out to go into IT over 20 years ago. I did well. I am at a company where the CEO dropped out to start thew company. We have a hard time hiring people, as the degreed people have no skills. so we bring in interns. Generally, we hire from that pool. Often before they graduate. There is more than one path to success. I have found that drive and hard work matter most, degree or not.

        • Re:And when they go to realize those ideas ... (Score:5, Interesting)

          by jomama717 ( 779243 ) <jomama717@gmail.com> on Sunday December 19, 2010 @02:36PM (#34608740) Journal
          I've returned to school to study graduate computer science because I'm disheartened by what I see as over-reliance on quick and dirty frameworks and a departure from the fundamentals on teams that produce commercial software. I'm a lead at my job, but decided I can't really effect change on my team unless I am a master of those fundamentals.

          I've only completed two classes so far, but both of them have really opened my eyes up to possibilities I've never considered. In addition to my original purpose I am discovering that learning these things is making me a *much* better developer. When you understand the history of a particular language feature or algorithm, and you can completely convince yourself that a particular approach is the optimal one it takes a ton of guesswork out of development and leads to better software.

          I don't doubt that a person can learn these things without enrolling in a university, but have a professor and a TA as a resource, and being tested on your knowledge of the concepts I think really enhances the experience. It is infinitely easier to discipline yourself to study a topic when you have a test coming up and a grade on the line. As a bonus, my company has a pretty good education compensation program, so the debt question is moot. I plan on continuing until I get a master's degree.

  • Real good plan (Score:5, Insightful)

    by tp_xyzzy ( 1575867 ) on Sunday December 19, 2010 @09:24AM (#34606654) Homepage

    Here's what happens:
      1) they take the money
      2) they work hard for 3 months
      3) the money runs out
      4) their idea is worthless
      5) they have no education
      6) next 30 years they have no job

    Great plan.

    • Re: (Score:2)

      by DarkOx ( 621550 )

      Or if you are smart and really have a good idea:

      1) they take the money
      2) they work hard for 3 months
      2a) or Succeed and go one to do whatever else you'd like
      3) the money runs out
      4) their idea is worthless
      5) they have no education
      5a) or Go back and finish school, you had some plan to finance it otherwise

      • Re:Real good plan (Score:5, Insightful)

        by mangu ( 126918 ) on Sunday December 19, 2010 @10:13AM (#34606876)

        Most people believe they kinda know if they truly have a solid idea.

        FTFY.

        Remember, "ideas are a dime a dozen" and "invention is 1% inspiration and 99% perspiration".

        If a young person has what he believes is a truly great idea while he is at college, the best thing for him would be to finish college first. Yes, I know, there are many counterexamples to this, but if you also count all those who dropped out of college and failed you will see that the probability of success in this path is abysmally low.

        Besides, it's not as if $100k is that much capital to begin with. If that idea succeeds you will pretty soon need more investors, and if you started with some prize money you will not know how to get more.

        If someone has a great idea *and* he has the entrepreneur mindset he will be able to get someone to invest in this idea. To make a great idea work you need leadership talent, which includes convincing people of the merits of your idea.

        • Re: (Score:2)

          by DarkOx ( 621550 )

          if you started with some prize money you will not know how to get more.

          All VC is basically prize money, you had one of the best ideas they guy looking to do some investment saw so you get to use his money; its just not so clearly framed as a contest is all. I am sure Thiel means to pay attention to the *winners* he probably is either prepared to invest more himself or would assist in locating other investors if any of these projects shows real growth on that first 100K.

        • Re: (Score:3)

          by Kjella ( 173770 )

          Most startups fail both before and after college. More importantly, it's highly unlikely whatever you learn in the last in the last few years of college is what will make or break your startup. In fact, it's far more likely that in those two years you spent finishing college someone else took your idea and took your market than that there is a golden egg just waiting for you pick it up some day. Of course it's much about being at the right place at the right time, but taking the window of opportunity is a c

          • Re: (Score:2)

            by malkavian ( 9512 )
            What about the plan of "4 years in uni, two of which were working on the idea in parallel". Get the idea running, gauge interest, and set the groundwork. If it takes over to the point that you don't have time for Uni, then by all means.. Run with it.. Dropping out of Uni to take the whole gamble with no idea is a huge risk. One of the reasons startups fail is lack of funds.. If you were serious, chances are you're broke at the end of it.. Good luck paying for your fees and living expenses at the end (t

        • Re: (Score:3)

          by Stiletto ( 12066 )

          Remember, "ideas are a dime a dozen" and "invention is 1% inspiration and 99% perspiration".

          This little catch-phrase is such bullshit.

          It places undue importance on implementation. Sure, BAD ideas are a dime a dozen, but good ideas, well thought-out ideas, ideas that are feasible and implementable, and can be executed in time, are NOT a dime a dozen. Those ideas are worth 1000x their implementation.

          As one of those "implementors" who would love to one day be the idea guy, I can tell you that implementation is

    • Re: (Score:2)

      by khallow ( 566160 )

      1) they take the money
      2) they work hard for 3 months
      3) the money runs out
      4) their idea is worthless
      5) they go back to school
      6) when they get a job after graduation, they'll have this considerable experience to help open the door

      Dropping out of college is not like virginity. You're not spoiled forever and unable to go back. I think the real problem here is that Thiel is challenging a key axiom of the education mythos. Namely, that you need a certain slip of paper before you can possibly earn money or have a meaningful life.

    • 3 months out of school isn't bad at all and if they have any money from the ordeal then what's the problem? Also having now been part of the whole start-up process it will should be easier to keep at it and then why go back to school when you can keep working for start-ups?

    • Here's what happens: 1) they take the money
      2) they work hard for 3 months
      3) the money runs out
      4) their idea is worthless
      5) they have no education
      6) next 30 years they have no job

      Great plan.

      Then they sue the people who encouraged them to drop out. The up-front cash is hardly adequate compensation for the reduction in lifetime earnings for a university drop-out. Could be a moneymaker if you crash and burn badly enough...

    • Re: (Score:2)

      by migla ( 1099771 )

      Here's what happens:
      1) they take the money
      2) they work hard for 3 months
      3) the money runs out
      4) their idea is worthless
      5) they have no education
      6) next 30 years they have no job

      Great plan.

      Sure it's a gamble, but can't they just go back to school after 3 months if the idea isn't great? (honest question, maybe that would be too expensive in the US or something (over here education is free).)

  • If the almighty buck is the only thing... (Score:5, Insightful)

    by blind biker ( 1066130 ) on Sunday December 19, 2010 @09:24AM (#34606656) Journal

    If the almighty buck is the only thing that motivates all humans, then I can see how executives think. In that case, a deep education is unnecessary. You can get rich with an idea and lots of elbow grease. But not everything is achievable this way. Some things need learning. Like finding the structure of the DNA, develop self-assembled structures, optimize carbon nanotube growth, develop drugs that can cross the BBB, design multicore CPUs, discover the inner workings of mitochondria etc. I expect to be flamed for the following statement: some of the stuff that needs lots of education is also more valuable than Facebook... or money.

  • Sure, why not? However, Thiel better be right about selecting people correctly for the program. Otherwise, you've "stopped out" for a couple of years, got a failed .com startup to your credit, and might have trouble getting back into or adjusting to university.

  • Irresponsible (Score:5, Insightful)

    by derGoldstein ( 1494129 ) on Sunday December 19, 2010 @09:28AM (#34606670) Homepage
    Even if this is true for many talented developers, it's still irresponsible. Actually "urging" kids to stop their collage/university education mid-way is a zeitgeist decision, it only *may* be the right move *now*, but who's saying the tech sector isn't facing another blow 6 months from now (whatever the reason, like a larger economical problem or a large shift in priorities for the major tech companies). They've already put in the money and time into getting a formal education, and he's urging them to gamble it away? Selfish.

    For the record, I word in programming, embedded, and some EE, and I don't have a degree. But then, I didn't *start* one either -- I didn't invest time or money getting half-way there and then drop out mid-way.

    • Re: (Score:2)

      by khallow ( 566160 )

      Even if this is true for many talented developers, it's still irresponsible.

      This isn't about responsibility since the targets of the grants would have almost no obligations. It's about taking risks at a time when you can easily take risks. These people can easily return to school and finish up.

      For the record, I word in programming, embedded, and some EE, and I don't have a degree. But then, I didn't *start* one either -- I didn't invest time or money getting half-way there and then drop out mid-way.

      $100,000 is a good reason to temporarily change your mind and try something else.

      • $100,000 is a good reason to temporarily change your mind and try something else.

        $100,000 won't even pay for a bachelor's degree at some universities. It's hardly enough to justify dropping out of college. Also, Gates and Zuckerberg would have both benefitted from taking some ethics classes. Higher education has more benefits than making one monetarily valuable.

        • Ethics are a hindrance in a dog eat dog world where you can make more money stabbing other people in the back (before they stab you) and paying off your politicians and regulators (before your competitors pay more).

        • Re: (Score:2)

          by khallow ( 566160 )

          $100,000 won't even pay for a bachelor's degree at some universities. It's hardly enough to justify dropping out of college.

          I guess those people wouldn't make good entrepreneurs then. I don't have a problem with that.

          Also, Gates and Zuckerberg would have both benefitted from taking some ethics classes. Higher education has more benefits than making one monetarily valuable.

          Sure they would. Ethics only helps you avoid ethical problems that you wish to avoid.

      • I'm referring to the message he's sending out into the *world*. Some of the applicants will be turned down and then think "you know, I can probably pull this off on my own". Other won't apply at all and just consider his opinion to validate their own, and drop-out for a very high-risk attempt. It's irresponsible not for the people who get picked, but for the ones who don't.

        • Re: (Score:2)

          by vlm ( 69642 )

          Other won't apply at all and just consider his opinion to validate their own, and drop-out for a very high-risk attempt.

          Am I correct in thinking you based your opinion on the (proven inaccurate) theory that paying decades of salary for a degree is not a financially high-risk attempt?

          If you are in school for a field where you'll probably end up unemployed due to ageism at 30, after training your replacement in China/India, the greatest financial risk is probably not with the "drop out of school" plan. Don't throw good money after bad.

          • But they're already *in* the system. They've already invested the time and money. He's telling the to throw that away after, what? A year? 2 years? That isn't "risk", it's certain loss. If he were looking for high-school graduates before they went to collage, that would be one thing, but he's telling them to throw away something they already have.

            • Re: (Score:2)

              by mini me ( 132455 )

              He's telling the to throw that away after, what? A year? 2 years? That isn't "risk", it's certain loss.

              The past two years of your life and everything you learned during that time does not suddenly disappear the day you decide to do something else. Nothing is thrown away or lost unless you think the piece of paper at the end is the only value gained from school.

        • Re: (Score:2)

          by khallow ( 566160 )

          I'm referring to the message he's sending out into the *world*. Some of the applicants will be turned down and then think "you know, I can probably pull this off on my own". Other won't apply at all and just consider his opinion to validate their own, and drop-out for a very high-risk attempt. It's irresponsible not for the people who get picked, but for the ones who don't.

          Those people would probably drop out anyway. What makes his message incorrect, much less, irresponsible?

      • Most of the people you know will have moved on or up. You get out of the habit of studying.

        I'm not sure it's as easy as you make out to go back.

        • Re: (Score:2)

          by khallow ( 566160 )

          I'm not sure it's as easy as you make out to go back.

          I've done it twice. So I can verify that it isn't that hard.

    • Agreed. And sometimes what makes a good idea -> a great idea is the sweat equity involved in developing it before you have the money to implement it. If money always -> good ideas, then Microsoft would already own the entire interweb. Lord knows they have thrown enough money at it. This plan sounds like a way to make life easier for these aspiring young persons, while innovation is often due to the hard knocks learned along the way.

      It's his money, but I fear more bad will come of it than good.

  • Why under age 20? (Score:4, Funny)

    by Cheerio Boy ( 82178 ) on Sunday December 19, 2010 @09:30AM (#34606676) Homepage Journal
    I mean seriously WTF is up with that? Just because I'm over 20 years of age means I don't have the ability to innovate? I'd rather see money given to people who at least have some life experience and haven't had a chance to ever try out their own ideas, dreams, and inventions!


    Yes grumpy old man is grumpy.


    And while there are a million ideas out there done by people regardless of if they completed school or not encouraging people to not finish going to school just puts barriers in their way for when they DO want to innovate.

    Unless you're one of the individuals that can self-learn easily you're only making it harder on yourself if you leave school.

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Under 20 means you might not have caught on to what companies do to employees (oh sorry it's a entrepreneur on a fellowship) that they have no use for after two years.

      • Under 20 means you might not have caught on to what companies do to employees (oh sorry it's a entrepreneur on a fellowship) that they have no use for after two years.

        Unfortunately all too true.

    • Re:Why under age 20? (Score:5, Interesting)

      by vlm ( 69642 ) on Sunday December 19, 2010 @10:08AM (#34606850)

      I mean seriously WTF is up with that? Just because I'm over 20 years of age means I don't have the ability to innovate?

      The cultural belief is you're supposed to go to university right out of high school for 4 years, and then graduate into a great job with no debt. On a percentage basis, no one actually does this, which is why its called a belief not logic or evidence.

      So, lets say you're 25 and you want to drop out and innovate... wait a sec, you graduated at 22 and have had the job of your dreams and 2.5 kids over the past 3 years, right?

      I think it would be a wee bit short sighted to drop out one semester before you graduate, etc, so it seems pointless to run above 20.

      The other problem is at this moment, culturally there is no such thing as an education that is too expensive, just like before the bubble there was no such thing as a house that was too expensive, or the shares of a .com always go up, or medical services . Since you will literally pay any sum of money, no matter how much, for those products, suspiciously that is exactly what they will charge. So, if the relatively no-name private engineering college two blocks from my workplace charges over $50K per year when counting all costs (I checked) there is little to no point of "funding" people whom are 21 and owe about $150K if you're only giving them $100K.

      • So, lets say you're 25 and you want to drop out and innovate... wait a sec, you graduated at 22 and have had the job of your dreams and 2.5 kids over the past 3 years, right?

        Que? How many people in first-world countries have children at 22-25 now? Most people aren't even married until in their 30s. And if they have any sense, they'll leave it even later.

        No-one wants to be stuck with kids, a mortgage and the utter boredom of 9-5 office work in the prime of their life.

    • Just because I'm over 20 years of age means I don't have the ability to innovate? I'd rather see money given to people who at least have some life experience and haven't had a chance to ever try out their own ideas, dreams, and inventions!

      Totally with you there. Just because one is older, does not mean one doesn't come with new ideas. And, someone who is older usually has had more experience with which to implement those ideas and usually has spent more time thinking deeper about them.

    • If you're under 20 you'll definitely be naive enough to allow them to treat you like shit.

    • open to older people has ideas are nice but some real work to go with the idea some times is better and can lead to makeing the idea better or telling you that it will not work that well.

  • Outliers (Score:5, Insightful)

    by dkleinsc ( 563838 ) on Sunday December 19, 2010 @09:32AM (#34606682) Homepage

    Here's the problem: we remember the success of dropouts like Gates and Zuckerberg, and forget that for each Zuckerberg there are hundreds of dropouts that are desperately seeking jobs at Burger King. And finishing college isn't necessarily a barrier to innovation: Larry and Sergei both finished their undergraduate degrees, and things turned out just fine for them.

    • Also, if you look into the Zucherberg story (not the movie, I mean what actually happened), he got where he did *because* he was at Harvard. If you manage to get something big going in the middle of your education, then you should consider the options. But dropping out because of anecdotal information about some people who've taken that path?

      Oh, and try getting a job at Google without a degree (I know it's easier now, but they used to turn you away immediately if you didn't have one).

    • They're not talking about dropping out (Score:2, Informative)

      by Anonymous Coward

      They talking about taking a break. And considering the spiraling costs of university education - only to graduate with no job prospects (even if you have a marketable degree!) - taking a break to earn money to pay for school is quite a responsibly thing to do compared to racking up student loans.

      These days going to college and graduating isn't as worth as much as when I went to school. Kids today are competing with college grads from all over the World. There are no safe and secure careers anymore and going

    • Here's the problem: we remember the success of dropouts like Gates and Zuckerberg, and forget that for each Zuckerberg there are hundreds of dropouts that are desperately seeking jobs at Burger King. And finishing college isn't necessarily a barrier to innovation: Larry and Sergei both finished their undergraduate degrees, and things turned out just fine for them.

      And for every Larry and Sergei, there are hundreds of graduates who are waiting tables. While trying to pay off a 200K debt.

  • Nothing could possibly go wrong there, right?

  • D'OH! (Score:5, Insightful)

    by Chas ( 5144 ) on Sunday December 19, 2010 @09:45AM (#34606764) Homepage Journal

    So. Lemme get this straight.

    Instead of coming out of college with a...DEGREE and a five-to-six digit debt, you're going to pay these people $100k to come out of college with just the debt?

    The drugs really that good eh?

  • Star golfer and notable college drop-out Tiger Woods is offering two-year fellowships of up to $100,000 (£63,800) to 20 athletes or teams of athletes aged under 20 in a worldwide competition that closes this week. With the money, the recipients are expected to drop out of university — Woods calls it 'stopping out' — and work full time on their sport. 'Some of the world's most exciting sports were created by people who stopped out of school because they had talent that couldn't wait until g

    • Re: (Score:2)

      by jvkjvk ( 102057 )

      You are trying to be facetious, but this is exactly the model modern basketball now operates. The only reason (american) football does not is that steroids are illegal. If they could fatten/muscle up those kids earlier, like feedlot veal, so they had the muscle mass you would see a lot there too.

      In fact, there was something of a stir a while ago because in basketball has started poaching highschool seniors, and it is routine for kids not to finish college if they have star qualities.

      You know, this has been tried before and it still doesn't sound like a very good idea.

      For academic detours i

  • Transformational Technologies... (Score:5, Insightful)

    by betterunixthanunix ( 980855 ) on Sunday December 19, 2010 @09:50AM (#34606786)
    Looking through the examples of drop-outs in the article, I am not really seeing people who invented anything transformational, so much as riding on top of the successful of transformational technologies. Bill Gates and Paul Allen? Mark Zuckerberg? Shawn Fanning is about as close as the list gets, although Napster really rides on top of the Internet's existing peer-to-peer architecture.

    Maybe I am too much of a skeptic or believe too strongly in the value of education, but the way I see things, famous drop-outs were good at capitalizing on the successful research or work of people who stayed in school.

    • Re: (Score:2)

      by Junta ( 36770 )

      When it comes to the obscenely successful, I think generally education doesn't make much of a difference one way or another. Luck is the critical component, and beyond that sufficient capability developed well before college graduation to take advantage of that luck. With a sufficiently large population of dropouts, you will have those few special cases of millionaires, just like you have a few coming out of college. In this case, a drop-out credits the act of dropping out as an impetus of his success, j

    • Re: (Score:2)

      by khallow ( 566160 )

      Looking through the examples of drop-outs in the article, I am not really seeing people who invented anything transformational, so much as riding on top of the successful of transformational technologies. Bill Gates and Paul Allen? Mark Zuckerberg? Shawn Fanning is about as close as the list gets, although Napster really rides on top of the Internet's existing peer-to-peer architecture.

      This is what is called "observer bias". Thiel said "created" not "invented". There is a big difference. A transformational technology doesn't by the act of invention become transformational. You need infrastructure to distribute the technology. You need widespread adoption of the technology.

      For example, there were plenty of rival OSes to Microsoft's product line. Only a few of those can be considered transformational and they can only be considered such because they either influenced an existing OS or ar

    • The geek with 20-20 hindsight. (Score:4)

      by westlake ( 615356 ) on Sunday December 19, 2010 @01:17PM (#34608142)

      I am not really seeing people who invented anything transformational, so much as riding on top of the successful of transformational technologies. Bill Gates and Paul Allen?

      Gates was there at the very beginnings of the microcomputer, with the Altair 8800 in 1975.

      The first generation micros ran Microsoft BASIC. In 1977, Microsoft added FORTRAN to the mix and in 1978, COBOL. In 1979 Microsoft released MBASIC for the 16 bit Intel 8086. In 1980 the Z-80 SoftCard for the Apple II.

      The PC without development tools or software support is a circuit board in the lab. It does not change anything.

      The MS-DOS PC was a viable commercial product before the cloning of the PC-BIOS.

      If you insist on talking about something "transformational," why not consider the mass-market oriented disk based operating system that sold for $40 retail list ?

      The OEM Windows system install?
         

  • He's a VC (Score:4, Insightful)

    by Anonymous Coward on Sunday December 19, 2010 @10:08AM (#34606852)

    He's a VC - he only needs one of his horses to come in to make money. Who cares if all the others crash and burn - he'll still own their ideas anyway...

    • Re:He's a VC (Score:4)

      by Strudelkugel ( 594414 ) on Sunday December 19, 2010 @02:33PM (#34608720)

      He's a VC - he only needs one of his horses to come in to make money. Who cares if all the others crash and burn - he'll still own their ideas anyway...

      Indeed. I have a hard time with Thiel's proposition. I think it would be bad for most of the students who take it. Sure, four of the twenty might be successful, according to VC rule of thumb VC math [launchtime.com], but the other 16 would probably be worse off. Having dealt with VCs over time, I have concluded that they are gatekeepers of money for the most part. They don't really have much better insight into the Next Big Thing than anyone else does. All they do is fish in barrels that float into their doors. Think about what has to have occurred before the start-up company founders walk in the VC's doors:

      • The founders have an idea. (~90% of the population can do this)
      • They put ideas on paper and start to think seriously about creating a business(~40% of the population)
      • The founders quit their jobs or drop out of school, or spend much less time at either (~15% of the population)
      • The enterprise is successful enough to keep the founders going for while, so they go to a VC for money to expand (~1% of the population)

      In other words, by the time founders of a company walk in the doors of a VC firm, the VC is dealing with a select group of people motivated enough to create a functioning company. The population of entrepreneurs the VC sees is distilled to the people who have the best chance of succeeding under any circumstances. What is rather shocking to me about that is that even with the best people walking in the door, VC firms still only manage a 20% success rate. Of course they will claim that they can make an objective evaluation of a potential new product of service, but if that were so they wouldn't have to wait for people to walk in the door. They would come up with the idea themselves and hire people to implement it.

      I think Thiel's proposal is a "heads I win tails you lose" proposition for most of the people who would take his offer. But casinos offer the same deal and they are a lot more fun. When my partners and I went to VCs for money, one told us our idea would never be successful (later our more successful competitors proved them wrong), and one told us that they reservations about our team (They were right, dysfunction ultimately destroyed the company). I asked a third VC who he thought the best CEO in the tech world was at the time. He said "Greg Reyes" [eweek.com]

      If you really want to make the best of what the VC community has to offer, let them come to you. If you and your co-founders really have a good idea and have made it work, they will find you. If they come to you, you will get better terms and probably a better VC partner, since those who knock on your door were smart enough to find you in the first place.

  • I mean my university was a complete waste of space. (Which I half jokingly refer to as Good Ol' FU. And yes, foreign language requirements have proven to be less than worthless for me.) I think I would have been better off dropping out half way through and doing anything else so it might be true for some quitting in the middle would be a good idea.(Since my degree is basically worthless. My joke is that at least toilet paper is good for something unlike my degree.) However I can understand for alot of peopl
  • Given all the ranting about the value of an education, it's worth remembering a couple of things here. First, it's very similar conditions to an internship, which is also paying people to drop out of school for a short period of time. There's nothing keeping these people from reentering college at the end of the second year, even if things work out for them. And it's a pretty good deal. $100k goes far for a startup. And they get a mentor to help them make serious decisions.

    At the end of that second year,

  • The dropouts who are highly successful are very much the exception rather than the rule. Generally the pattern is their good fortune is overwhelmingly obvious before they drop out. Meanwhile, thousands more drop-out thinking they are going to make it rich and end up going no where for the rest of their career. This is not an endorsement of the intrinsic value of the education, but the reality of a *lot* of companies that make a 4 year degree a requirement before they'll even forward your resume to the de

  • If you're going to drop out, at least you want to have some fun before the "drop out" part http://en.wikipedia.org/wiki/Tune_In,_Turn_On,_Drop_Out [wikipedia.org]

  • Good to see he practices what he preaches.

  • "Some of the world's most transformational technologies were created by people who stopped out of school because they had ideas that couldn't wait until graduation"

    Some of the world's best unemployed people, low-end job workers and burgerflippers are people who stopped out of school because they had ideas that couldn't wait until graduation.

    Just because 2 people were lucky enough to pull it off, means NOTHING.

  • I have alt idea pay for a apprentices system for IT work that can give to people experience that is cheaper then a 4 year B.S. and lets them do real work as well letting them try out idea with people who have been in the field for some time.

  • 1. Find lawyer.
    2. Sue Peter Thiel for age discrimination
    3. Profit

  • VCs like Thiel are getting more desperate to find young, talented, ignorant people to control, so they have to "generate leads" by this kind of promotion. Young entrepreneurs who already have business sense won't be fooled by this kind of offer. However, if you are really young, really smart, and really naive, you just might go for it and end up owing Thiel 50% of your idea.

  • The real problem with college education is that it is so expensive. How many people now owe not only tens, but HUNDREDS of thousands of dollars in government college loans? And BTW, those are not tax deductible, you'll have to pay taxes on your income first and pay the debt out in after-tax money.

    The true culprit in this is the gov't giving loans to people who shouldn't be getting them in the first place and gov't regulating the entire market of education and education loans.

    How can 200K USD loan be justi

  • Yes, that's it, Thiel. Spend $100,000 to make sure 20 potential future competitors never get anywhere, and have no degree to fall back on. When their dreams crash, they'll be your coding slaves because no one else will want them. Good strategy.

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