Is Peter Thiel Misguiding Young Entrepreneurs?
Looking to hire someone without a college degree? One Silicon Valley investor thinks you should.
Venture capitalist Peter Thiel, who has backed some of the Valley’s most successful start-ups, has recently been on a no-college-degree-needed crusade, encouraging companies in the Valley, including those he has backed, to ignore academic credentials when hiring.
Thiel, who holds two degrees from Stanford, announced this week that he has accepted a second set of “Thiel Fellows”: a group of would-be entrepreneurs under 20 whom Thiel will endorse for two years in the form of $100,000. Thiel believes his program addresses a major problem young people face today: debilitating student loans that come with the college degree they need to get a good job.
“Pundits and hand-wringers love to claim that universities are the only path to a successful life,” Thiel said in a press release Wednesday. “In truth, an inquisitive mind, rigorously applied to a deep-rooted problem can change the world as readily as the plushest academic lab.”
The only problem here, according to a recent Forbes article, is that most of the Silicon Valley companies Thiel and his venture firm Founders Fund back list a college degree as a requirement on their job boards. Of the 195 jobs Facebook has listed nearly all require a college degree; some of Path’s posted jobs require a college degree and fluency in a foreign language; Quora even asks that some of its engineers have master’s degrees or doctorates in Computer Science. These requirements seem standard around the Valley, yet Thiel still hopes to change that.
“Review your hiring practices over the next six months, and let’s move toward reducing the demand for student debt and useless credentials by letting extraordinary young adults skip college,” Thiel urged his colleagues in a December speech. “If we replace this requirement with more relevant measures, then colleges can focus their efforts on providing skills and knowledge for actual careers.”
The probability that these young people will go on to create a successful start-up in Silicon Valley is slim. In The New York Times Harvard Business School professor Paul A. Gompers cited his 2009 study, which collected data from 1986 to 2003 showing that one in five first-time entrepreneurs who received venture funding actually succeeded (i.e. went public, filed to go public, were acquired, or went through a merger). Forbes calculated that, according to the study, only four of Thiel’s current group would be able to do the same.
Thiel’s office reports it has received nearly 1,000 applications for the 20 Under 20 program this year from over 40 different countries. With such a low acceptance rate, where do the others go? Hopefully, they go to college.