College Debt Limits Innovative Risk-Taking
Peter Thiel is an American entrepreneur, hedge fund manager and venture capitalist. He is Clarium’s President and the Chairman of the firm’s investment committee, which oversees the firm’s research, investment, and trading strategies. Before starting Clarium, Peter served as Chairman and CEO of PayPal, an Internet company he co-founded in December 1998 and was acquired by eBay for $1.5 billion in October 2002.
Prior to founding PayPal, Peter ran Thiel Capital Management , the predecessor to Clarium, which started with $1 million under management in 1996. Peter began his financial career as a derivatives trader at CS Financial Products, after practicing securities law at Sullivan & Cromwell.
In addition to managing Clarium, Peter is active in a variety of philanthropic and educational pursuits; he sits on the Board of Directors of the Pacific Research Institute, the Board of Visitors of Stanford Law School, and is an adviser to the Singularity Institute for Artificial Intelligence. Peter received a BA in Philosophy from Stanford University and a JD from Stanford Law School. He is self-described libertarian and a minority investor in Big Think.
Question: Why do you encourage students with good ideas to take a break from college and pursue their passion?
Peter Thiel: Well the term we use is that people should stop out of school for two years. The program is called "20 Under 20." It’s under www.20under20.org. The one advertisement I will get in here. And it is a two-year fellowship program where we will pay people $100,000 for two years to pursue some particular passion, preferably in a technological area where they can work individually or in a team of up to four people in starting a company or joining some other early stage company. We will encourage people to do this from California because that’s where we think we can help provide them with some mentorship.
But we think that the idea of becoming an entrepreneur is something that is not taught very well in school and is something that people should try to do earlier on. One of the concerns that I’ve had about the educational system is that the enormous amounts of debt it’s putting on people is actually constraining people’s ability to do things that are not as remunerative. And so people are sort of trapped in these sort of professional jobs and are not able to do things that are entrepreneurial or non-profit or just, you know, fun or socially useful and sort of are overly or narrowly constrained. And I think technological innovation requires risk, it requires sacrifice and it may be very hard to do that if you have, you know, this enormous debt burden to try to repay. It’s hard to start a great company if you bought a big house, and it may be hard to start a big company if you are burdened down with enormous amounts of student loans.
And so I think it’s there’s sort of a context that’s specific to our time that we think education needs to be rethought, that education does not just happen in college, but it also happens in developing skills which will enable people to contribute to our society as a whole.
Recorded November 15, 2010
Interviewed by Victoria Brown
Directed / Produced by Jonathan Fowler
Technological innovation requires risk and sacrifice, which may be very hard to do if you have an enormous debt burden to try to repay.