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Business

At MIT event, group entices students to ditch school

Peter Thiel offers $100,000 to young achievers to hone their ideas with his organization.

Fred Prouser/Reuters

Peter Thiel offers $100,000 to young achievers to hone their ideas with his organization.

Under the noses of school officials, a group started by PayPal cofounder Peter Thiel used an event last weekend at the Massachusetts Institute of Technology to try to persuade budding entrepreneurs that college is a waste of money and they should drop out and start businesses instead.

A billionaire, the high-profile Thiel has used part of his fortune to target the higher education establishment as a bloated sacred cow; one line of attack is to offer bright young achievers $100,000 to forgo college and work on innovative ideas under the tutelage of his organization in San Francisco.

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The Thiel Fellowship routinely makes scouting expeditions to top schools. Of the 62 fellows who have been selected since 2011, one-third have ties to New England, including students from MIT, Harvard University, Dartmouth College, and a high school dropout from Marlborough. On Saturday, Thiel representatives were in Cambridge at the HackMIT event, a weekend-long crash contest in computer coding that drew 1,000 students from MIT and schools across the country.

“The best way to learn isn’t by sitting in a classroom, but by doing,” Thiel Fellowship cofounder Jonathan Cain told attendees at the start of the event.

In a later interview with the Globe, Cain stressed that dropping out isn’t for everyone but that ambitious students should realize “you don’t necessarily have to go through these traditional gatekeepers to change the world. All you need to do is build it.”

The Thiel Fellowship was also a sponsor of HackMIT, its name featured prominently on the event’s website, as were other corporate sponsors Thiel is associated with, including Facebook Inc. and Palantir Technologies Inc., a data analytics firm financed by the Central Intelligence Agency.

The HackMIT event was organized by an MIT student group, and not the university, and drew so many attendees it was held at the school’s indoor athletic facility.

‘The best way to learn isn’t by sitting in a classroom, but by doing.’

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MIT officials said they did not know that Thiel’s program was involved until contacted by the Globe.

One prominent MIT professor was taken aback at the brazenness of Thiel’s pitch on his campus.

“They are taking advantage of the very institution that they are saying you don’t need,” said Bill Aulet, director of the Martin Trust Center for MIT Entrepreneurship, who has become something of a guru within tech start-up circles.

Aulet also labeled Thiel something of a hypocrite, noting he has philosophy and law degrees from Stanford University. Thiel, Aulet said, “has his education and he’s telling people they don’t need theirs.”

The MIT administration was more guarded in its response. Martin Schmidt, the school’s associate provost, noted simply that students can become successful tech entrepreneurs by staying in school.

“Education and entrepreneurship are not mutually exclusive,” Schmidt said. “MIT-educated entrepreneurs are successful over the long term in part because of a rigorous education rooted in the problems and opportunities of the real world.”

Thiel’s foray to Cambridge comes at a time when there is a lot of excitement around launching Internet start-ups, especially among the young. Just steps from the MIT campus, the warrens of Kendall Square are crowded with would-be executives, barely old enough to drink legally, clicking away into the night on the Next Great Thing. It is also no longer unusual for bright freshmen to arrive at MIT or Harvard already deep into a business plan.

Thiel, meanwhile, is not just another Silicon Valley luminary, but a worshiped entrepreneur with a seeming golden touch. In addition to founding PayPal, he was the first outside investor in Facebook, parlaying a $500,000 investment into $1 billion in stock sales. He’s also politically active, promoting libertarian causes and former presidential candidate Ron Paul, backing conservative antitax campaigns, and donating to gay rights groups and other causes.

Despite his academic pedigree and even teaching a class in start-ups at his alma mater, Thiel has questioned the value of a college degree, warning of an “education bubble” that burdens students and parents with too much debt.

“People should think hard about why they’re going to college,” Thiel said in an interview with “60 Minutes’’ last year. “There are all sorts of vocational careers that pay extremely well today. The average plumber makes as much as the average doctor.”

He especially questions the value of an expensive degree for students who are inclined to pursue tech start-ups anyway, pointing to the founders of Facebook, Apple, and Microsoft — all dropouts.

Yet for his fellowships, awarded annually to 20 students under the age of 20, Thiel nonetheless heavily recruits from the campuses of institutions he skewers. In addition to MIT last weekend, fellowship representatives also visited Harvard and Dartmouth as part of a recent campus tour, using a network of contacts to arrange group meetings with students.

The fellowship gives a select group of students a “no-strings-attached” $100,000 grant to work on business ideas for two years. During that time, they mix with entrepreneurs, investors, and experts to hone their ideas. Since the program named its first group of fellows in 2011, members of the group have launched dozens of start-ups, including one that makes a mobile app to find available parking spaces and another whose app reminds people to take medication.

The student organizers of HackMIT said that the Thiel Fellowship — or its participation in the event — was not antithetical to MIT’s mission of educating future business executives.

“It’s just another option for students,” said Alice Wu, an MIT freshman who helped organize HackMIT. “It doesn’t mean we endorse their message.”

She did acknowledge that the kind of computer whiz who attended HackMIT is also the most obvious candidate for a Thiel fellowship.

Indeed, HackMIT drew more than 50 sponsors who donated money to help defray the costs of the 30-hour coding binge, in exchange for access to ambitious and motivated young minds. Other sponsors include Google and Twitter, as well as venture capital firms looking for budding businesses.

This wasn’t MIT’s first brush with Thiel. Among his inaugural class of fellows in 2011 were MIT students Laura Deming and Jeffrey Lim. And their selection drew a note of congratulation from MIT admissions director Matt McGann.

“And whether or not you return to MIT in two years, I wish you all the best for the future,” McGann said.

Michael B. Farrell can be reached at michael.farrell@
globe.com
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