May 30, 2011

Peter Thiel Foundation - 20 Under 20

The Peter Thiel Foundation run by Investor Peter Thiel, is doing a good thing for society and their vision inspires me that other billionaires and people and groups of substantial wealth will come to their senses, and do the same. The founder of PayPal, Mr. Thiel made his fortune as a venture capitalist, investing in internet companies that would grow to become giants; An early investment in Facebook serves as the best example I can think of, but now he is investing through a program in his foundation. Mr. Thiel is an investor at heart. He invests in the future of a nation and a vision of opportunity that springs forth ingenuity and invention from bright young minds. Through his non-profit, Those chosen to participate in the program will be funded by grants of $100,000 and will get mentors and access to an extensive network of those of those inside the Technology Industry. Rather than spending 4 to 8 years in school, Mr. Thiel is giving America's young adults opportunities to experience the world in new ways. The Thiel Foundation reported they received 400 applications and had selected 24 individuals to extend invitation the the nonprofit initiative is sponsoring, which asks college students under the age of 20, to drop out of college and join the program. I applaud Mr. Thiel as not only an investor in young peoples futures, but also a visionary when it comes to the power that can be realized by cultivating brilliant minds, and having the belief that they can accomplish anything if given a serious fighting chance and nurturing environment. View the Winners and what they plan to do for the next two years as part of the program.

In many ways, Mr. Thiel and his 20 under 20 Program reminds me of what Adam Smith wrote about in the 1776 Economic Classic, the Wealth of Nations. In it, the father of modern capitalism (Adam Smith) studies universities and in particular, wanted to learn if it really took 6 to 8 years to learn a trade (earn a degree). His research took him to the Ancient World and his reading dove into Egyptian, Greek, and Roman literature. In studying the social model and how universities fit into the system as a whole, he studied the Ancient relationships between Master and Apprentice. What he discovered was that an apprentice would have to work under a "master" for 7 years before becoming Masters themselves. The "Master" Status now allowed that individual to take jobs as professors or business leaders in their communities. As an apprentice, the pay was lousy and debt was often incurred, but after those seven years, they could expect to one day take on apprentices for themselves who they could also pay lousy, while raking in more of the income generated by the work done by the apprentice. Adam Smith wondered how it could possibly take 7 years to learn to become a good professor, or an officer in a business, or in a trade company.

A Look at Earlier Civilizations

What Adam Smith discovered in studying the organizational structure of Society in various cultures from Ancient Rome to Scotland in the 17th century, was that it did not take this long to learn a trade efficiently. He claimed that vigorous round the clock study of a subject of interest. Studying day and night, he proposed that a subject such as management, or being a university professor, could be learned to a high level in 2 to 2 1/2 years. His study next went to why such a long time for something like an apprentice to become a master, or a student to get a Masters Degree or Doctors a PhD. What he discovered in the various cultures he studied, was a strong relationship that existed with local business leaders and the political class. For example, in 17th century Scotland, politicians limited the number of apprentices a master could have at one time in particular trades. This essentially was regulating how many "masters" were going to be on the market. If Masters were limited to 2 apprentices, than they'd have to wait 7 years (after their apprentices served their time) before they could take on any more. The reason Adam Smith concluded, was for the purpose of regulating prices. Keeping prices high, meant the business class could reap the fortunes caused by policies meant to stifle competition. If Adam Smith was right, and round the clock study for 2 to 2 1/2 years was enough time to become proficient in a field, than Mr. Thiel wants to tap into that unserved young minds shining with potential that need to be cultivated. He is betting they can excel in life both by doing what they truly want to do, and what they are truly capable of. The current traditional educational system is important, but is it the best way to tap talented, determined minds?

Facebook, the Social Media Giant claiming over 1/2 billion users world wide, was created by college dropout Mark Zuckerberg. He has become a billionaire before the age of 26 making the choice to drop out of college to start a company. Two other dropouts, Microsoft founders Bill Gates and Paul Allen; both are Billionaires as well! There are many self-taught people now and in history including some very famous ones. Abraham Lincoln, Andrew Jackson, and Harry Truman, all were U.S. Presidents but they also have something else in common, none went to college. They must have learned their trade and studied it well to rise to the top of their careers. I don't think the 2 years the program runs is any coincidence. I correlate the time frame with Adam Smith's assessment described in the paragraph above. The $100,000 funding, mentoring, and access to networks gives these guys a good shot. Good luck to them! They can revolutionize education the way Mr. Thiel is attempting.


BOMM said...

Dropping out and not get a degree as an option is left only for the successful ones. But the failure rate in the business of entrepreneurship is rather too high – and having a degree is the best back up for them.

Stock Trading said...

Thanks for sharing your comment. My concern is the cost of education has sky rocketed. Where I Live, community college has tripled in costs this past year and will leave more people attending, in higher debt. I think college is important for society, but the notion that its the only way to be successful, is the myth Mr. Thiel is trying to dispell. We need graduates in all areas but we also should not limit talent to the classroom is my opinion.