On Sunday, September 26, 2010, Peter Thiel and Luke Nosek, the PayPal cofounder, were on a plane from New York to San Francisco, when they had an idea: paying people to leave college.

Peter and a small team worked out minor details like whether this was legally allowed, and later the next day, he announced the first iteration of the Thiel Fellowship in an interview with TechCrunch. He’d give $100,000 to 20 people up to 20 years old — if they left school and started a company.

The famous contrarian, who’d by this point accurately predicted both the dot com and housing crashes, believed America was under the spell of yet another bubble: higher education. Specifically, the Ivy League. The economics didn’t make sense (“You have to get rid of the future you wanted to pay off all the debt from the fancy school that was supposed to give you that future,” Peter told TechCrunch’s Sarah Lacy). But even deeper than that: the allure surrounding the Ivy League was itself immoral. Society shouldn’t situate people’s “best hope for a better life,” as Sarah put it, “on something that is by definition exclusionary.”

“If Harvard were really the best education, if it makes that much of a difference, why not franchise it so more people can attend? Why not create 100 Harvard affiliates?” Peter said at the time. “It’s something about the scarcity and the status.”

Outrage soon followed. A billionaire bribing kids to forgo their futures? Larry Summers, a former Harvard President (of course), called the Thiel Fellowship “the single most misdirected bit of philanthropy in this decade.”

But today, as with many of Peter’s heretical positions, criticizing the higher ed bubble, wherein students are commonly paying upwards of $90,000/year to learn how to do laundry and read Chaucer, is mainstream. And the Thiel Fellowship is gaining notoriety for producing so-called “unicorns” (billion-dollar companies) at a supposedly higher rate than top accelerators. In a contested chart that went viral earlier this month, the fellowship is even beating out Y Combinator.

Point being: turns out the fellows did not forgo their futures. They designed them to their liking.

I interviewed the early architects of the Thiel Fellowship, Danielle Strachman and Michael Gibson, who’re now cofounders and general partners of the VC firm 1517 Fund, to learn about what makes a Thiel Fellow a Thiel Fellow.

I think it’s partially about preserving, and leaning into, your Weird.

GUMPTIOUS YOUNGS

Initially, Peter hired Michael to help him teach a class at Stanford Law School on philosophy and technology. The two had bonded over their love of the philosopher René Girard, who came up with “mimetic theory,” the idea that human desire is imitative, and that competition causes conformity. Michael’s first day of work happened to be the chaotic birthday of the Thiel Fellowship. Danielle, who was skeptical of traditional education and herself, having started a charter school based on homeschooling philosophy, was hired by the next week.

In 2010, they set about finding young geniuses to protect from higher-ed’s mimetic shenanigans.

In those early days, Peter had a phrase: “We’re looking for Howard Hughes, not Albert Einstein,” Michael said. Just like high IQ is only predictive of success up to a point, GPA and test scores weren’t too predictive of a fellow’s success in the wild, Danielle and Michael discovered. (In fact, winning the Intel Science Award became an instantaneous disqualifier - lol). They wanted some hard-to-pin-down, unnameable trait that maybe denotes high creativity? High agency?

Both?

“We came to hear it — this urgency and excitement and competence in the way they would talk about their field of interests,” Michael said. “And they could scaffold the complexity of what they were talking about. They could go from a simple explanation to me, an outsider and ignoramus, to talking to an industry expert and being eye-to-eye with that person.”

Within the program itself, contrarianism thrived. The fellows loved competition, especially when it intersected with, um, manipulation, like in the game Werewolf, a routine feature of quarterly retreats. And they hated: structured and/or sanctioned wisdom-imparting. Fellows’ startups would have to be a little bit on fire, and that’s when they would come calling for something resembling, you know, help. But even then, Danielle said: they didn’t tend to take notes.

“Any sort of direct instruction was rejected. And we tried having speakers, we tried having workshops and they hated it,” Michael said. “They just really hated it.”

Fellows were mentored by people working in tech, sometimes by fellow Gumptious Youngs who dropped out of college. And so, mentors tended to lean in, even to the point of fighting each other in the elevator about who had the best advice for a given mentee. Plus the fellows hit it off. (Just take it from the fourth Hereticon baby: weirdos enjoy the company of other weirdos.) The first year, there wasn’t a moving requirement — but almost all of the fellows moved to the Bay Area anyway. Knowledge — like “founder-led sales is how you do things,” Danielle said— traveled through osmosis to younger classes, and they did a ton of business together, probably more so than your average incubator community, Danielle said. Because, in addition to a natural chemistry, the class sizes (20ish) are nice and small, especially compared to Y Combinator, which accepts roughly 500 startups each year.

“It's a small group. It's not 5,000 people who are just wearing a t-shirt somewhere. They're people who have a shared experience of doing something difficult and bucking the system,” Danielle said. “That's what I would say is a big difference with Y Combinator — to be a Thiel Fellow, you had to be going up against something, typically. Going up against higher ed, going up against what your family believed, going up against what your friends were doing. That takes an incredible amount of conviction.”

(Also probably helping Thiel Fellows: Peter’s brand.)

11-YEAR-OLD FOUNDERS

Today, Thiel Fellow-founded companies like Figma, Ethereum, Anthropic, and OYO Rooms have created more than $750 billion in value (which Molly O'Shea broke down in a recent interview with Danielle on the podcast Sourcery).

Five years into the fellowship, the writing was on the wall. Clear investment opportunities were shaping up, but since the fellowship offered just one-time grants, Danielle and Michael watched from the sidelines, even as fellows struggled to raise money for their earliest rounds.

“If you told a VC you can never work with a founder you love again, they'd say, ‘What are you talking about?’” Danielle said. “The whole game is working with people who are great for as long as you possibly can.”

In 2015, they left the Thiel Fellowship, electing to start a venture fund to fill the gap for fellows and similar upstarts, and the first person they pitched was Peter, who in classic Peter fashion, per Michael, said: “What do you believe is true that the rest of the world thinks is false?”

“Our answer in that first meeting was ‘We think the Thiel Fellowship is the greatest investment opportunity that no one is taking advantage of’ — because that's how contrarian it was at that time,” he said.

Their first fund, $20 million, returned more than $200 million to investors by 2020, placing the fund in the top 10 percent for that early investment stage. Today, Danielle and Michael are four funds deep, including a $100 million fund they’re still raising. Already, a handful of their companies are at Series A and Series B stages, including Mach Industries (defense) and Rainmaker (weather modification), founded respectively by Ethan Thornton and Augustus Doricko, both of whom Danielle and Michael referred into the Thiel Fellowship.

And now they’re taking the thesis even further.

“A potential investor in 1517 recently asked us, ‘Where do you want to be in 15 years?’ And I said, without missing a beat, ‘I want to be backing 11-year-olds,’” Danielle said.

It almost sounds like a joke, but 1517 is already mentoring people who’re ages 11-14 through various programs, including a teen camp — “because we’re just seeing that the frontiers of knowledge are much more accessible than ever before,” she added.

Between AI, changing sentiment around college and independent study, as well as success stories like Figma’s Dylan Field and Anduril’s Palmer Luckey (two Gumptious Youngs who started their companies around the time they could drive) — Gen Z and Gen Alpha are leaning into entrepreneurship earlier and earlier, Michael and Danielle said. The self-taught are taking on things — energy, fusion, nuclear, etc. — that would've been out of reach just a decade prior.

It might blossom into a tech renaissance.

“Creativity is perishable and it ripens really early,” Michael said. “There are lots of people who talk about how maybe we could unify the country by having mandatory civil service for two years or conscription. And it’s just like, to me, that would be the greatest waste because we need variance — we need people exploring different things. And those years from 18 to 23 are so prime, we’ve just seen it. It’s like people are so creative, and sadly, you don’t stay that creative through your prime. You have a peak and then you tend to tail off.”

You get older. You get married. You get a mortgage. People naturally don’t have the same level of output, he said.

“So we were the first program to basically say, no, look, there is an untapped resource right now,” he added. “It's trapped in this institution or this path. And if we just let them do something different, it's going to unlock a lot. The more we see that as a society, the better.”

DON’T COMPETE

Michael and Danielle seem like the right people to back the unproven, because they don’t take themselves too seriously. Their site at 1517 proudly boasts “No Patagonia Vests,” and promises to help dropouts, renegades, and mad scientists “escape from captivity.” In the interview with me, over Zoom, they appeared together in-person. “This is important,” Danielle said while she physically poked Michael, who wore a car mechanic-looking suit that read: “Garage: parts and services.”

“We’re the pit crew; we’re not the racer,” Michael said.

The idea is something like: “We’re going to change your tires.”

It’s probably not surprising, then, that 1517 tends to attract the self-expressed. People for whom not being themselves is too high a cost to pay, come what may (risks, the ruffling of feathers, etc.). Take Josie Zayner as an example. The 1517 portfolio founder and biohacking pioneer is a mad scientist, in a manner of speaking, but she’s also an “artist and provocateur,” Danielle said. One doesn’t livestream injecting oneself with a homemade Covid vaccine if one is not prepared to pay the price for being oneself.

As much as AI stands to turn us into slop, maybe for those with enough gumption to follow their own compass, the opposite will be true. More and more youngs are already rejecting the traditional paths that whittle us all down into drooling paper-pushers. Per Danielle, the first year of the Thiel Fellowship received about 400 applicants. As of a few years ago, it was 80,000.

Per Michael, drawing on René Girard, the man who (kind of) started it all:

“The basic syllogism is something like the more you compete along single dimensions, the more alike you become. And the more alike you become, the fewer unique thoughts you have. So with college, it's like everyone is competing to get these exclusive seats at Harvard and Yale. What people haven't been paying attention to is the conditioning that puts upon the people in that tournament. It makes them all alike. So you have a lot of people who are becoming more and more alike to get those few seats. And there are superficial differences between them, but it's like looking at the market for water. Can you really tell me the difference between Fiji Water, Smart Water, and Dasani? It's like, okay, the packaging is different. There's all fake differentiation. Really it's the same. I think that's true of Harvard applicants. So what Peter was allowing was like, ‘Hey, you don't have to participate in this tournament. And by not participating, your true individuality and uniqueness will emerge.’

“It’s like that old WarGames quote: ‘The only winning move is not to play.’ So by not competing in this race, you're going to not become like those people,” he said.

—Blake Dodge