I’ll probably never meet Peter Thiel, the PayPal billionaire. I’m sure he has all sorts of minders, protecting him from the nuts who want his money for their crazy schemes and the nuts who get their lawyers to send letters beginning, “Dear Mr. Thiel, you met my client once at a party and you stole his ideas, so please send a check for A Lot to…”
But he’s a lot more interesting than most Silicon Valley billionaires for three reasons: he is probably somewhere on the right politically, he’s trying to be both a billionaire and someone active in the world od ideas, and he has a foundation that has interesting and unusual projects.
Thiel’s doing a lot of promotion right now because he’s about to come out with a new book, Zero to One. The genesis behind the book is unusual. In 2012 Thiel was a guest lecturer in Stanford’s computer science department. One of his students, Blake Masters, took notes of the lectures and posted them online, where they got zillions of hits and a favorable notice from David Brooks. Masters and Thiel then collaborated on expanding the notes into a book.
(And if this method of producing books seems too up-to-date for you, recall that many of Aristotle’s denser books are actually his students’ lecture notes.)
Thiel was born in West Germany in 1967, and his parents moved to the U.S. when Thiel was a small child. “In high school,” Parloff writes, “Thiel admired the optimism and anti-Communism of Ronald Reagan, who gave him a sense that ‘there were sort of like all these answers that had finally been figured out and that were right.’”
In 1985, Thiel entered Stanford. Two years later, he started The Stanford Review, a right-wing student newspaper that still exists. He then co-wrote The Diversity Myth, published in 1995 by the Independent Institute. He next went into the business of making money, but he still calls himself a libertarian.
After surviving law school, Thiel then was the co-founder of PayPal, which was sold to eBay in 2002 for $1.5 billion, of which Thiel got $55 million. More money came from an early investment in LinkedIn and most notably for getting an opportunity to own 10 percent of Facebook way back when it was just called “the facebook.” This ensured that Thiel became a billionaire.
Now Thiel is a donor, investor, and author. I only have limited space to discuss his ideas, but Thiel deserves credit for having ideas worth debating. The number of philanthropists who write books, after all, is surprisingly small. Andrew Carnegie was a prolific and forceful author. J. Paul Getty was a surprisingly good writer, although his only subject was himself (the man wrote four autobiographies). Joseph Jacobs created a billion-dollar company in Jacobs Engineering, and then retired to write books and articles. (I recommend The Compassionate Conservative, for which I did research.)
What about today? Like him or not, George Soros is a pretty prolific author. Bill Gates also writes books, but I have no idea who reads them. Heather Higgins is a good writer who is always worth reading. So Thiel joins a very short list of donors who write.
If you want to know more about Thiel’s ideas, blogger Dan Wang has a good summary of them. The Wall Street Journal has also run an excerpt of one of Thiel’s chapters. But his thesis is that one reason there’s so much stagnation and malaise in our times is that capitalism isn’t coming out with new products that make our life better. Yes, the computer industry comes out with new products, but other industries don’t follow suit. It takes as long to fly somewhere, for example, as it did forty years ago—and probably longer once you throw in the security lines.
Thiel says he is a “definite optimist,” who believes “the future will be better than the present if he plans and works to make it better.” He contrasts this with “indefinite optimists” who think tomorrow will be better but who won’t do anything to implement positive change.
The Thiel Foundation must be a private operating foundation, because it has a limited number of projects to support the founder’s vision. It funds anti-aging research, and created and is the primary funder of the Seasteading Institute, which seeks to build independent city-states in the ocean.
But the two programs the Thiel Foundation runs that people can apply for are Breakout Labs and 20 Under 20. Breakout Labs gives money to risky ideas that can’t get funding through normal channels. It’s been criticized for the idea that foundations shouldn’t be funding for-profit companies, but foundations fund program-related investments all the time, don’t they?
The “20 Under 20” is even more controversial, because the theory here is that the Thiel Foundation will give twenty grants a year of $100,000 to people between 18-20 to start their own businesses. This program has caused fits among the great and the good; according to former Harvard president Lawrence Summers, the program is “the single most misdirected philanthropy in this decade.”
Now any man who causes Lawrence Summers to have conniptions should be encouraged. Moreover, the program isn’t encouraging thousands or even hundreds of dropouts, but twenty a year, who might have chances to be productive entrepreneurs instead of getting expensive humanities majors and being socked with massive student loans. As Thiel’s friend and tech guru Marc Andreessen told Parloff, “Wake me up when it’s 20,000 kids.”
So Peter Thiel is a donor who writes provocative books and also supports the free enterprise system by helping people become entrepreneurs. In addition, he gives money to promising young people, in contrast to the large number of foundations who insist that giving heavily credentialed people late in their careers large sums is the right way to give.
Thiel’s activities are positive ones. I look forward to seeing what he and his foundation do next.