“Believe me, it will be like the gold rush,” Burnham said excitedly of his idea to mine asteroids for valuable materials. “There’s an asteroid called Eros,” he explained to the circle surrounding him. “The gold and platinum there are worth at least a hundred billion dollars. It is like rocket fuel.
“Asteroid mining will not only open up space but will also be profitable,” he continued, as if it was incomprehensible that no one had ever thought of it before. Somehow the eighteen-year-old’s lofty proclamations came off as endearing. It was a trait that made you root for him. Looking at his flashing blue eyes, eager expression, and ever-present smile, and listening to his command of his material, you could imagine yourself reading his name in the headlines one day and thinking, “I knew him back when.”
The billion-dollar company that would “change the world” was the Silicon Valley version of Wall Street’s “number”: the figure that bankers bandied about to describe how much money they planned to make. But here the affectation was noble aspiration. The idea of creating something that took over an industry or influenced the future was something that some of the guests in the room, such as Luke Nosek, who’d helped cofound PayPal, or Sean Parker, who’d founded Napster, had done. For them, it wasn’t a stretch to talk about it in literal terms.
After all, when Thiel declared in 1998, “I’m going to create an online currency,” PayPal, he did. Here announcing you would end aging or mine asteroids gave you entry. The finalists, all intelligent beyond their years and maniacally focused on their projects, also obsessively believed in their ideas in a larger-than-life way. For each, asking about the lunch or dinner would have elicited monosyllabic answers, but asking what company they hoped to found would start a soliloquy. Depending on the listener, the speech turned into either a four-hour debate and possibly a new start-up, or a glance toward the nearest exit.
A few weeks later, Burnham and his parents were on their way to New York. They would be having lunch at Aureole, a cavernous three-star restaurant that mostly served as a throwback to a white-gloved East Coast luxury that had been largely lost since the recession.
Burnham had just found out he’d won a fellowship, and he was thrilled. The lunch was for fellows in the area who had been chosen but hadn’t yet accepted. It was the Thiel Foundation’s campaign to put their parents at ease.
Just before noon on a crisp spring Saturday, tourist patrons at Aureole looked up surprised to see a pack of teenagers flooding into a private room behind the hostess stand. It was an empty, formal space that looked like a place where deals were closed and promotions were celebrated. The Thiel Foundation had arranged for winners and their parents to meet one another over lunch as they decided whether or not to take the offers. Now that their children had been awarded spots in the program, some parents had concerns about their children moving alone to the West Coast, incorporating companies, and finding their own housing.
The Thiel Foundation couldn’t house them but would provide them with weekly social activities, lunches, and lectures, as well as assistance with financial logistics. James O’Neill, head of the Thiel Foundation and a managing director of Clarium Capital, and his team would organize orientation retreats and seminars.
A tall, lanky guy in his early forties, O’Neill had a style that was scholar-geek, featuring wacky bow ties atop two shirts with collars. At night, he often donned a red velvet blazer to dinner parties. That day, he introduced himself and said that he and his then wife lived in Marin County, where they homeschooled their three children.
John Burnham’s parents, Stephen and Krysia Burnham, approved of this idea, and said they taught their son more out of school than he learned in it. After Stephen graduated from Dartmouth and Krysia from Smith College, the two met in New York, where Stephen was a stockbroker and Krysia was an assistant at Elle magazine. They now lived in Newton, Massachusetts, and had flown in that morning for the lunch. They beamed as they introduced themselves to finalist David Merfield’s father. He had just arrived from Singapore.
“John has always acted out in school,” Stephen boasted, adding with a laugh, “He may as well pull up a chair outside the principal’s office.” Stephen found his son’s rebelliousness to be a sign of creativity and further proof that the fellowship suited him. “School just isn’t for John,” his father said. “He’s four years ahead of the other kids.”
The Burnhams explained how they now thought of the Thiel Fellowship as a new kind of status symbol. It said their son could get into Harvard but turned it down for something better—even though he didn’t. That he was a fellow was yet another reason why his opting out of the typical path explained all those years of acting out. Now, sanctioned by a Silicon Valley success story, John was on a new track, one that his parents hoped might be more compelling than college.
The other parents nodded knowingly before Jim O’Neill motioned for everyone to take their seats around the long dining table.
At one end were John Marbach and Sherry Pressler, finalist Jonathan Marbach’s parents, and Praveen and Tanu Tyle, parents of Sujay Tyle, another finalist. Marbach was the closest a fellow would come to looking like a jock. A tall, athletic high school senior with light-brown hair, big, round eyes, and a ski jump nose, he looked like a ladies’ man. More sociable and talkative than the rest, it mattered to him if someone liked him or not. The others acted as if they didn’t care. John Jr. asked questions and listened intently. He made friends easily among the other potential fellows.
“It’s funny,” said Marbach’s mother, Sherry, “but as parents, it’s very strange that this is happening, because we saved all our lives for Jonathan to go to college, and now he’s not.” She paused. “But it seems like just getting in gives you enough status, so it’s like getting the Thiel Fellowship is better than actually going to college.” She said it in a wistful way, as if she hadn’t quite accepted the idea of one of her children getting into college and then deciding against it.
“Yeah, it’s like you’re above Harvard because you don’t have to go,” said her husband. “We always put aside money for this, forever, and here the day comes, and he’s not using it!” he added. They laughed. “Maybe we should just travel!”
After the parents and students around the table introduced themselves, their children waved at one another shyly. O’Neill stood up to make an announcement.
“Peter’s theory is that for the past fifty years, all of us have gotten accustomed to steady economic growth and a constant stream of innovation and productivity, and that innovation rudder has slowed down and so has economic growth,” O’Neill said. “He’s very worried that innovation is lagging and is trying to do everything he can to increase the rate of innovation.”
On the for-profit side, O’Neill explained, Thiel will invest in companies that fulfill this mandate, and, on the nonprofit side, in bright young innovators—hence the birth of the Thiel Fellowship. “He’s had some great experiences in tech investing for young people,” O’Neill added, mentioning William and Michael Andregg, two brothers who’d dropped out of college to start Halcyon Molecular. Although now defunct, their genome scanning company was once valued at close to $100 million. “And he had a kid come to him one time to invest in a social networking company called Facebook,” he said, laughing, “and he invested in that.”
Since many of the finalists worried that once they became fellows, they would want to change their ideas, O’Neill tried to put them at ease by describing how Thiel and his cofounders drastically changed the idea for PayPal before it launched. At first, Thiel wanted PayPal to beam payments through Palm Pilots, with email as a feature. One of his cofounders, Elon Musk, had started the competing X.com, which was a financial services company with email payments as only a feature. The two eventually joined forces to start what is now PayPal by making the secondary feature the main idea.
On a plane ride to San Francisco, when O’Neill, Thiel, and Luke Nosek were talking about the need fo
r innovation, they first thought of having a group of twenty-five-year-olds propose ideas for them to invest in. But then they realized by the time most people are twenty-five, many are burdened by student debt or locked into tracked careers. Plus, they thought that talented people in their midtwenties would already have social access to investors.
“But what the world economy needs is people at the right stage of life able to take a little financial risk to help them get started,” explained O’Neill. “So we devised the fellowship for people under twenty, called ‘Twenty Under Twenty,’ a good, manageable number.” The foundation would be there to help them hire employees and find investors, as well as advise them on their business plans. “This is the time to be very frank,” he said. “We’re already committed to you. We don’t have a stake in this financially, but we do have a stake in making it succeed.” He made a final clarification: “You know you have to stop out, not drop out,” he reassured them. “In two years, you can always go back to school.” He ended with a different option: “Lots of people start companies and leave school and never want to go back, and that’s fine, and others do.”
O’Neill said the goal was for fellows to start companies, nonprofits, or tech projects, but they could find mentors at existing companies. Thiel and the Founders Fund wouldn’t have equity in any of the fellows’ companies, but technically they could be recruited to work at Thiel’s companies. But he encouraged them all to head to Palo Alto, where Thiel and the other founders lived most of the time.
Some of the finalists wanted to enroll in college for just the fall semester, so that they had the option to return if they wanted to later. Finalist Marbach would be attending Wake Forest University to test out his education start-up that would provide students with online classes and virtual teachers with actual teachers and students, though his cofounders would be starting immediately. He wished he would too. Eager to drop out of school at the end of the year, they thought Marbach was noncommittal, and worried that once he did leave, he might not be able to catch up.
Marbach’s family had just flown in from North Carolina, where they had been visiting Wake Forest the day before. After spending $600 per person on airfare alone, his father seemed relieved not to have to pay for more than the semester.
“People spend two hundred thousand dollars on college; then after graduation in May or June, everyone moves back in with their parents,” said John Marbach. “Empty nesters get the birds back in the nest.”
About half of the families were immigrants. The Tyles, originally from India, were dressed formally, she in a conservative dress with muted colors and he in a dark suit. They’d moved to America for its educational opportunities. Tanu enrolled in a master’s program in architecture at Washington University, and Praveen earned a PhD in pharmaceutics. But over the years, she had become disillusioned with both American parenting and education.
“In India, people are street-smart,” she said. “Here they grow up with the positive reinforcement and all this seclusion, so they end up really innocent and naïve.” There is “misuse of education” in India too, she conceded, but there at least, “it’s cheap, so it doesn’t matter. Here it is a risk.”
Tanu felt that American children never get to know what real life is like until their education ends. “Before going to college, it should always be a prerequisite to have life experience,” she said. She found Americans’ tracked educations and careers linear, but lacking purpose and direction. For her, the Thiel Fellowship solved that problem. “Doing things like this requires courage,” she said. “Thiel has been supporting that, and forcing kids to break away from those bonds.”
Tanu said she wished her older son, Sheel, had applied. Instead, he was still enrolled at Stanford, though he worked three days a week meeting with new companies at Bessemer Venture Partners, a Silicon Valley venture capital firm. “I said to him, ‘You should see this excitement and energy!’ ”
Her other son, finalist Sujay, had been doing ethanol research with a professor at the University of Rochester, in upstate New York, since he was eight years old. “Even the professor was giving up, but Sujay persisted and persisted,” said Tanu.
Professors and deans around the country didn’t seem to agree. In 2011 Vivek Wadhwa, a visiting scholar at Duke and Emory Universities, wrote a column for TechCrunch called “Friends Don’t Let Friends Take Education Advice from Peter Thiel,” in which he bashed the fellowship. During a conference panel discussion at the American Society for Engineering Education Engineering Deans Institute, Wadhwa had raised the topic of Peter Thiel’s views on education. As he wrote, “Most of the deans in the audience were aghast. They couldn’t believe that there were debates like this happening in Silicon Valley. I told them that more than a dozen students had approached me over the past few months asking for advice on whether they should drop out; that students took people like Thiel very seriously.” Wadhwa interviewed three of the deans in attendance. One of them, Jim Plummer of Stanford’s School of Engineering, compared Thiel’s idea to that of college athletes taking no academic classes and instead just playing their sport until they are drafted. Duke University Pratt School of Engineering dean Tom Katsouleas said, “The other reason one should not take Peter Thiel’s advice is that the value of education is intrinsic and an end in itself rather than something to be measured by its career financial return.”
Ironically, Thiel himself had undergraduate and graduate degrees from Stanford. He was used to questions about that contradiction. He said that college made sense for some people—such as for him—but for most, it didn’t. He said he wouldn’t have changed anything, but if he’d had a great idea back then, he would have gone for it.
Parents at the luncheon found the deans’ complaints to be cheap shots, considering that their entire identities were tied up in academia. They went back to discussing the Harvard Business School professor who had approved of the fellowship. They said that while she wasn’t entirely in favor of the idea, she was open to accepting someone who had tried the fellowship and then returned to school.
“She is supportive, and that’s the whole point,” said Tanu. Still, John Marbach imagined that his other children would have more tracked paths. John Jr. was one of triplets. His sister Megan was going to Fairfield University for nursing in the fall, while his sister Melanie would be attending Loyola University Maryland. As if paying one college tuition bill wasn’t enough, the Marbachs were faced with three all at the same time.
In the end, only one finalist awarded a fellowship that year turned it down. Tessa Green, an eighteen-year-old high school senior from Westport, Connecticut, had been vacillating between accepting the award and going to MIT, where her parents thought she should go. O’Neill took her to lunch later that week in New York. To help convince Tessa, he invited along Eden Full, a gung-ho finalist who had built a solar-powered “sun saluter” for Kenyan villages as her project. The two girls had roomed together at the Hyatt.
But when Green showed up at Fig & Olive on Fifty-Second Street and Madison Avenue in Manhattan on her way to a pre-frosh weekend at Princeton, where she had also been accepted, she was apprehensive to even begin the discussion. With her wavy brown hair splayed in every direction on top of her head until it reached back into a ponytail, she hoisted her heavy backpack off her shoulder and pushed her glasses up onto her nose. She had just spent the past two weeks arguing with her parents about taking the fellowship versus going to school, and everything they had said had pushed her in a college-bound direction. It did not help that her father, a corporate lawyer, had bombarded her with questions about how she planned to start a company, where she would live, and how she would find funding.
In the past few days, she had found out about her fellowship offer as well as her acceptances to both MIT and Princeton. It seemed like all she wanted to do was get on the train to be in the safe confines of a college campus and back to what she thought she was supposed to be doing.
/> “Would it help if I called your parents and talked to them about the details?” O’Neill asked.
“Yes, but I don’t know what they’ll say,” the teenager said hesitantly. “Maybe they would feel better to know the program will be supervised?” she offered, though it seemed she just wanted him to stop trying to persuade her. She would have to make her decision within the next week, and despite the entire Facebook chat group of finalists trying to convince her to take it, Tessa declined.
Burnham, however, practically had his bags packed. He’d endured a dismal spring semester after breaking his arm over the winter, which prevented him from playing any sports. The wrestling team was pretty much the only part of school he enjoyed. None of his friends was surprised that he’d taken the fellowship. “People were really supportive,” he said. John left high school early, deciding he would take his remaining classes remotely from Palo Alto until graduation.
Meanwhile, farther south along the row of ship terminals at the Port of Miami, house music was blaring from a cruise gate at the end of North Cruise Drive. Out front, an army of young men and women in fluorescent green uniforms was beckoning new arrivals toward the beat of the bass. The sound was coming from Terminal D, where the welcome staff was pointing passengers up an escalator to a veritable techno rave. There in the cavernous embarkation area, a snaking line longer than John F. Kennedy International Airport’s on Christmas Eve inched along so slowly that the rhythm of the music felt even faster, throwing the crowd into desperate anticipation. Dressed in fedoras, nautical striped cotton shirts, and frilly neon sundresses, the young group stood on line at least two hours before they reached the counters up front.
They were not auditioning for a reality show, but attending Summit at Sea, an annual Summit Series conference that had grown from nineteen boys in a ski house to an eight-hundred-person extravaganza in DC to a whole resort and living community in Eden, Utah, attracting speakers like Bill Clinton and Ted Turner. Its current incarnation consisted of a thousand handpicked entrepreneurs and celebrities aboard a Celebrity Century cruise ship about to head to the Bahamas from the Port of Miami. Among them were Zappos CEO Tony Hsieh, hip-hop impresario Russell Simmons, former first daughter Barbara Bush, and actress Kristen Bell. Virgin Group founder Richard Branson was already on the boat and scheduled to give an opening speech that afternoon. Thiel would arrive that night. The event was the brainchild of five hipsters in their midtwenties who were constantly clad in form-fitting T-shirts, thigh-hugging jeans, and nouveau high-tops with the tongues sticking out. They sported unruly hairstyles with varying spikes and curls.
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