Thiel Fellowship: right idea, wrong approach

March 20, 2012 8:36 am 2 comments

Share this Article



I wanted to discuss the Thiel Fellowship and sort of run the idea among our readership to figure out if it was justified or not. Bay Area hedge fund manager Peter Thiel started a Fellowship program in his name about a year ago trying to capitalize not on start ups, but the smart kids who may actually come up with the next billion dollar idea.

Let there be no mistake. Innovation solves problems. Bankers, lawyers and hot shot executives are good for only one thing: managing an existing infrastructure. It is the innovators who turn existing ideas on to their heads and enable breakthroughs. Considering the point above, it makes absolute sense to dole out money to innovators irrespective of anything instead of expecting business school drones to come up with new ideas.

I’m sure Thiel had this very idea in mind when he announced that he was going to give $100,000 scholarships to highly motivated kids for dropping out of college and working on start ups. The Fellowship would run for a period of two years and would include mentor ship from various entrepreneurs, visionaries and investors in Thiel’s network.

Now a little bit about Mr. Thiel. He is a Stanford educated lawyer who co-founded PayPal and took it public making millions in the process. Currently he manages a multi-strategy hedge fund in the Bay Area with around $700 million under management. He is also a managing partner of the $275 million venture capital fund Founders Fund. His master stroke was making a $500,000 angel investment in Facebook for a 10.7% ownership stake in the social network’s infancy. That stake is now well over $1.7 BILLION!! With academic smarts and street cred like that, why should anybody doubt Thiel? For three reasons:

First, the world of start ups is cruel. For every sexy profile you see on TechCrunch, GigaOm and Green & White – there are hundreds, nay, thousands of failures. Even the companies profiled often run out of business. Either the founders lose interest, teams fall apart, funding dries up, Google brings out a similar product etc. – the odds of start up success are unrealistically low.

Second, there are more than 6 billion people on the planet. Companies like Facebook and Google may rake in the dough, but they only impact the population that is literate, has access to the web, a computer, electricity and ideally, cash to spare. What if, instead of targeting the 20% of the population that has access to all of the above; start a scholarship for kids to figure out a way to make life better for the other 80%? For example, if Thiel would offer money to the brightest minds on the planet to figure out a low cost way to light up a village, or bring clean water to an arid area- I think we’d have some fascinating results. The revenues may be low, but I think the sheer amount of customers would be large enough to make a tidy profit.

Third, without a doubt, Peter Thiel is a whiz kid. He started out as a childhood prodigy and went all the way to become a hedge fund manager. There is a possibility, though, that if he hadn’t taken a stop at Stanford for his degrees, he may still be toughing it out at a struggling start up. I think his education gives others the confidence to take a chance on him – be it by making him a CEO of an explosive start up or investing money with him.

Bottom line is – this is a valiant effort by Peter Thiel to find the next big start up. But instead of offering kids to drop out of school to do start ups, maybe he should focus on programs within schools where kids can develop concepts and keep on working on these projects after graduation. In addition, maybe he should really challenge the limits of imagination by asking these kids to solve a social issue while remaining profitable. Simply asking kids to drop out of school to be eligible for this scholarship may just be a little presumptuous.

Particularly, from a Pakistani view point, this is even tougher to do. Pakistan has been blessed the some brilliant minds. But we are also bound by social and cultural norms unheard of in the Western world. We are expected to get an education even if we later go on to start a company. I think if we take the more positive elements from Thiel’s experiment and give it a Pakistani spin by focusing on entrepreneurship labs in universities – we may have an attractive model.


Facebook comments:


  • shahbaz

    What I like about this the focus on getting things done. Kids are not being given trophies, certificates or pats on the back. These kids are being given resources to accomplish something. At the end of the day, either they will have been successful or not! If this was done on a wide scale (which it can’t), many book smart kids would realize that they don’t actually know how to start, and much more importantly, finish a project. Such a system would crack open the difference between future bureaucrats and future wealth creators.

  • myamin

    Completely agree with you Shahbaz. In the US, a college education is meant to do just that – teach you how to finish things. That’s why the US education system is so liberal compared to the British (and it’s former colonies) system. You can pretty much do a major in anything but then be eligible for most jobs because you have shown you can start and complete something in its entirity.

Recent Posts

  • Events General Mobile Apps Container Run a continuation of politically motivated apps

    Container Run a continuation of politically motivated apps

    First we had Angry Imran which brought smiles and some short lived fun for us during the election campaign. Then came Gullu Butt following the incident of Model Town Lahore, which stayed on top of charts (Pakistan play store) for quite some while. Also Gullu Butt made an update with having the famous “Aam Khaiyga” quote form Aamir Liaqat in which a character resembling Aamir Liaqt throws mangoes and the Gullu Butt character tries to catch them. Gullu butt currently has more than 100,000 Installs

    And now during this extremely politically tense situation which had the whole nation on its toes on 14th August we have another app continuing the …

    Read more →
  • Announcements Featured Startup General aims to help student make better decision regarding their future. aims to help student make better decision regarding their future. aims to solve an age old problem for our students, where to go next?

    If you have just completed your primary school which college to pick, if you have completed your college which university to pick. There has always been lack of information or rather consolidated information regarding these questions. The best source till now has always been relatives and friends (mostly of your parents). So some uncle did CA and made a good living you should talk to him and decide, or daughter of my sister completed her medical and is practicing follow that career.

    The fact that online presence of our existing universities are limited and not …

    Read more →
  • General Mobile Apps Eccentria Technologies launches an app which shoots to the top of the charts

    Eccentria Technologies launches an app which shoots to the top of the charts

    Whoa!! this was quick so Eccentia technologies launched an app a few days ago called “Ajj Kia Pakaen” or what to cook today and today it has reached the top of charts for Pakistani Stores on iTunes and google play store.

    “Ajj Kia Pakaen” is the most common question asked at every house hold in the morning. The ladies of the family have a hard time deciding what to cook for the day. The app has a fun interface and is simple to use, you fire it up, and it gives you an option of what to cook for the day, if you like the option you can check the …

    Read more →
  • Coffee Session General Marketing/Adv


    Until a few years back we used to have closed groups and forums, which gathered the like minded people and anyone targeting the online audience would tap into that forum and market his/her services. So PakGamers , PakPassion initially even PakWheels used to be driven by members talking about what they loved, people used to create marketing and sales opportunities from within those discussions (so you could get a good router cheap or a gaming PC etc).
    The advent of facebook changed all that, most of the forum goers moved to the new social media. It also made a very attractive market place for some one who does not …

  • General Getting back

    Getting back

    I  have been out of blogging for a long long long time, a lot of things happening on personal front (including a little startup I have ben doing my self). However during my absence I met a lot of people who had followed GreenWhite at its peak, read the articles regularly.

    I had hope there would be some one else who would come ahead and cover everything going on and around us in the local tech world. There are some guys doing a great job, but for some reason I still could not find one source where I can go and read about everything, so my routine usually is to …

    Read more →
  • General Mobile Apps Software & I.T.

    GeniTeam launches official app for Pakistan Idol

    GeniITeam has successfully launched an official app for PakistanIdol. This is one of the first collaboration between a reality game show and a local app development company. I am sure a lot more would follow. Previously we have seen seenreport becoming the basis of mostly all channels citizen reporting system (Like Geo Dost). This is a healthy sign and with the advent of 3G round the corner it should become a business generator for our local firms.

    App allows you to follow the contestants that you like, promote them, comment on live feedback on an episode. It offers official content from the show since it is developed with partnership with …

    Read more →
  • General 10Pearls and National Geographic Release A Geography Challenge App

    10Pearls and National Geographic Release A Geography Challenge App

    10Pearls, one of the leading Pakistani IT companies, has recently added another feather to its cap. This time, in partnership with National Geographic, 10Pearls has released the new and improved GeoBee Challenge App – an interactive app to challenge and grow the geographic knowledge of the users.

    Each year thousands of schools in the United States participate in the National Geographic Bee using materials prepared by the National Geographic Society. The competition is designed to encourage geography in the classroom, ignite student interest in the world around them, and increase public awareness about geography. Schools with students in grades four through eight are eligible for this entertaining and challenging test of geographic knowledge. Now …

    Read more →
  • General 10Pearls Spins Off Game Plan8

    10Pearls Spins Off Game Plan8

    It’s heartening to see that Pakistani IT companies have now started to diversify themselves into non traditional areas, and are competing with global players in areas such as gaming. We have received information that 10Pearls, one of the leading  mobile and enterprise web development services companies in Pakistan, has spun-off a separate entity focused solely on developing and publishing casual mobile games.  The new entity, Game Plan8, will focus on creating 2D and 3D games for the iOS, Google Android, Kindle, Facebook and other platforms. Details can be seen on the company’s official press release at


    Read more →
  • General Telecom CCP Gives Guidelines Against Telecom Companies’ Deceptive Marketing

    CCP Gives Guidelines Against Telecom Companies’ Deceptive Marketing

    If only were there two things when it comes to the law, firstly the fear of breaking it and by passing the legal authority, and secondly, implementation of the law given full dedication, there would have been less competency and dishonesty in business and society. However, keeping good faith, the Competition Commission of Pakistan (CCP) has put forward “Deceptive Marketing Guidelines” which will maintain the Section 10 of the Competition Act, 2010. In order to enforce this part of the law and stop anti-competitive conduct on part of the telecom companies in advertising, the guidelines have been shared with Pakistan Telecommunication Authority (PTA) and other concerned telecommunication sector members, in …

    Read more →