Valley of the Gods Read online

  “We’ve met with CEOs of every major credit card company,” Burnham announced proudly. He paused. “I know, right?” He took a swig of coffee. “We just have fantastic connections, right?” he asked rhetorically. In a way, he sounded like he was trying to convince himself. Strung out and exhausted from the stresses of adult life, such as rent, budgeting, laundry, and transportation, he was trying to keep it together. “We’re not ragtag,” he insisted.

  But Burnham was struggling once again, especially socially. He wanted some more friends nearby and a lot more excitement. So he went back to Patri Friedman and Danielle Strachman at the Thiel Fellowship and asked how he could be more involved with the other fellows. They were already hard at work selecting the next class of fellows and offered him a chance to help find new candidates. As he advised the mentees, one of them caught his eye. Her name was Noor Siddiqui.

  4

  The Never-Ending School

  By fall 2012, John Burnham was living in Mountain View, spending his time reading novels he would have read if he were in college, such as Ernest Hemingway’s A Farewell to Arms and the ancient epic poem The Aeneid by Virgil. He heard that Peter Thiel was going to begin guest lecturing at Stanford University. Titled “Start-up,” and offered through the computer science department, Thiel’s course was open to pretty much anyone who could find a parking spot on campus or who was flexible enough to sit cross-legged jammed up next to other pairs of crossed legs in the auditorium’s aisles.

  From the first class, the room overflowed with attendees, not all of them students. Only 250 people could fit into the auditorium, so ten minutes before Thiel’s lecture on “Secrets,” which later became the title of a chapter in his 2014 book Zero to One: Notes on Startups, or How to Build the Future, the hallway was full as well. Students—and adults who looked like they had been students decades ago but still dressed like them—covered the walls and the paths leading down to the stage.

  Finally, after all this buildup, Thiel walked across the stage in front of a screen broadcasting his course’s title with cinematic grandeur. The crowd became quiet, and he started talking about how secrets are impossible to find, and how most good companies started because somebody stumbled on a secret. The audience listened attentively, writing down Thiel’s pointers as if the entrepreneur were giving away his own secrets. If they came up with a good enough company idea, maybe he’d fund it, just like investor Peter Gregory, the character unmistakably modeled after him on the hit HBO show Silicon Valley.

  In the front row, in full view of his benefactor, sat Burnham. He was probably one of the few audience members not taking notes. After all, he went only for the “face time,” and the notes were already online. One of Thiel’s pupils, a Stanford law student named Blake Masters, would transcribe and annotate all of his lectures, which would eventually become Zero to One. The book would go up against that Silicon Valley book of books, the bridge from the small silo of the tech company c-suite to mainstream success: Sheryl Sandberg’s bestselling Lean In: Women, Work, and the Will to Lead. She had made it not only to the apex of power in the Bay Area, but also to the apex of power as a woman, a writer, and, in some circles, a philosopher—and perhaps someday a politician, many people thought. Thiel, however, wanted to write a different kind of book, one not nearly as politically correct. His book would rail against all that.

  But back then, this class was just a class, and among his pupils were several Thiel fellows. Ironically, while Thiel’s educational credentials came from Stanford, he taught there, and he funded its students, he was also spearheading a program that questioned everything for which it stood. It was a question often asked in interviews: whether or not he regretted having gone to Stanford and getting a college education and a law degree there. He would always respond that he did not regret it at all, and that for someone like him—with his level of intelligence, and faced with the options he had at the time—he would do the exact same thing. Now, though, the world was different. Perhaps he would make a different choice.

  The fellows in the room had taken that new option, yet here they were back in a college auditorium. And it was Burnham’s event of the week. He went to Stanford parties and tried to find Stanford friends. Later fellows would work out of the Center for Entrepreneurial Studies at Stanford. The university, after all, had started it all and helped make Silicon Valley in large part what it is today. That same spring, Thiel wasn’t the only Silicon Valley luminary on campus. Near his lecture hall on the third floor of the Jen-Hsun Huang Engineering Center—Yahoo CEO Marissa Mayer, LinkedIn cofounder Reid Hoffman, Instagram cofounder Mike Krieger, and Quora cofounder Charlie Cheever would come back to campus to celebrate the twenty-fifth anniversary of their undergraduate major, Symbolic Systems. The academic program had produced nearly fifty entrepreneurs whose companies went on to make billions. Since then, with organizations such as the Stanford Computer Forum, which aligned area tech companies with Stanford research, to the university’s Institute of Design (or d.school) to the forty-plus entrepreneurship courses on offer and the multiple venture capital, private equity, and iPhone-app clubs, Stanford had become a hotbed, if not the engine, of start-up mania.

  A few months after Thiel’s “Secrets” seminar, an actual secret event was being held, without students flooding in. It was the second day of the Symbolic Systems conference, where “Sym-Sys” majors and alumni were honoring the Stanford-specific program that explored cognitive science, artificial intelligence, and human-computer interaction. It was a liberal sciences parallel to the liberal arts: Sym-Sys students took courses in a range of disciplines, including computer science, linguistics, philosophy, and psychology. Over the program’s twenty-five-year history, a significant percentage of its seven hundred alumni had gone on to become tech leading lights, and today, executives from Silicon Valley’s hottest companies—the valuations in this room alone ranged from $1 billion to $200 billion—were paying tribute at the lectern.

  The small audience was low-key, and there were no video cameras or flashes. Cheever and Powerset founder Barney Pell, a Thiel fellow mentor, sat near Hoffman. They watched their fellow majors talk about what they’d gotten out of the program. Apple senior vice president Scott Forstall noted that his Sym-Sys studies “convinced me we could build a simple touch keyboard that would work well.” He closed his speech by saying, “I guess this is a long-winded answer to give credit to Symbolic Systems for the creation of the iPhone and the iPad.”

  Mayer, at the time Google’s vice president of local, maps, and location services before she left to run Yahoo, soon got up and said the only reason she was chosen to work on the company’s user interface was that her boss saw that she had taken psychology, a Sym-Sys requirement. Another class, the infamously difficult Philosophy 160A, she said, “gave me a lot of confidence when we were in crunch time” during Google’s early days.

  Later in the day, Michael Krieger stood at the podium and announced that every job he’d ever had, including founding Instagram, had been because of his Stanford major. It was how he met his eventual cofounder, Kevin Systrom. The two became Mayfield Fellows together, part of a selective work-study program run by Stanford’s Technology Ventures Program. They made contacts in industry and could thus raise key venture capital money. “I think of Symbolic Systems as the ideal entrepreneur’s degree,” he said.

  Krieger’s claim seemed like it was becoming more and more true for both those who had graduated from the school and those who had not. Whether Stanford fueled the tech explosion or the industry made Stanford more prominent was a chicken-or-egg question dating back more than a century. The first major tech company in the area, Federal Telegraph, was founded by a Stanford grad in 1909, making the region a leader in the development of radio vacuum tubes. Then, in 1937, Stanford graduates Bill Hewlett and David Packard started Hewlett-Packard, the success of which spawned dozens of other tech companies in the following years. In the 1950s, the semiconductor inventor
William Shockley moved to the area looking for engineers to work on a new transistor, and members of his staff went on to start Fairchild Semiconductor.

  While most schools transitioned from regional renown to national prestige through an undefeated athletic team, one of Stanford’s great prizes was arguably its computer science department. Started in 1965 by professor emeritus and former provost William Miller, it was the first program at the university to work closely with industry. In 1968 Miller created the Stanford Computer Forum, which allowed companies such as Cisco, Sun Microsystems, and General Electric to get an early look at Stanford student research. “That was the beginning of the strong interactions between the computer science department and industry,” Miller reflected. “It’s become much more intensified since then, particularly in the last fifteen years.”

  With the introduction of the first Web browsers in the early 1990s, the Internet had Silicon Valley booming. And it was two Stanford computer science grad students, Sergey Brin and Larry Page, who developed one of the most successful and significant companies of the Internet era: Google.

  Then came the dot.com bust of 1999, a speculative bubble in which the prices of many new technology companies were largely inflated, and eventually burst. It was in those first years after the crash, when the world thought tech was dead, that the groundwork for start-up mania was laid. New open-source technology made building a website affordable. By the mid-aughts, the average cost of starting an Internet company had dropped from $5 million to $500,000, thanks to a combination of factors. First, larger companies such as Yahoo and Google opened their programming interfaces to others; then the front-end revolution made web pages less static; and, finally, bandwidth expanded rapidly. The founding of the blogging platform WordPress.com alone, in 2003, launched millions of new websites within a matter of years.

  Fueling much of this rapidly improving technology were Stanford engineers. “Stanford is really one of the engines that drives the tech industry,” said Toni Schneider, CEO of Automattic, the company that owns WordPress. “It is this constant injection of new people and new ideas and research.” At the same time, Stanford has allowed a “tech transfer,” letting companies that were created on campus, such as Google, into the marketplace. “It had a pioneering role for universities being open to commercialization of ideas,” said Schneider.

  Some of the area’s most successful start-up accelerators, including Stanford’s own StartX, were founded by students. Y Combinator, the seed-stage funding firm that incubated Dropbox and Airbnb, was venture capitalist Paul Graham’s way to encourage students to start companies, rather than take internships, during school breaks. And angel investor Dave McClure’s venture fund and seed accelerator 500 Startups grew out of an app development class he taught at Stanford.

  Students who started companies at Stanford tended to stay in Silicon Valley, reinforcing the cross-fertilization between campus and community. In a place where the rates of colossal failure and exponential success are so extreme they cancel out each other, the flat line between them represents the slope of the barrier to entry. Former provost Miller says that Stanford stands out because it teaches its students that it’s okay to try and fail. “People are willing to experiment, and that creates this open attitude,” he observed.

  It is that attitude that Tim Westergren said led him to cofound the music recommendation service Pandora Radio, now valued at $3.5 billion. After his Stanford graduation, Westergren took a job as a nanny so he would have time to produce and write music on the side. It was the best decision he ever made, he said, crediting a Stanford class on organizational decision making and leadership for convincing him to stick with what he loved to do. “The objective in these classes,” he reflected, “was a think-for-yourself approach to life.” Westergren also applauded the technical bent that former Stanford president John Hennessy had brought to the community. “Now a generation of entrepreneurs who have gone into semiretirement are looking to come back to Stanford and teach,” he said.

  After Eric Schmidt stepped down as Google’s CEO in 2011, he did just that. And when he met a bright young Israeli student in his venture capital entrepreneurship class, he hired him at the end of the semester. Dror Berman, thirty-three, started running Schmidt’s firm Innovation Endeavors in 2010. “All my classmates became entrepreneurs,” said Berman. So far, he has funded over fifty companies, many of them founded by Stanford friends.

  The university was well aware of the networking opportunity it had become. In 1997 Professor Tom Byers started the Stanford Technology Ventures Program, an entrepreneur center that included resources, seminars, conference programming, and the prestigious Mayfield Fellows Program. Instagram cofounders Krieger and Systrom were among the select few who got in. “It is the Navy SEALs of entrepreneurship,” according to Byers, in the lower level of the engineering school, where the Entrepreneurship Center was based.

  Back at the Symbolic Systems conference, as Krieger finished his presentation, passersby had caught on to the fact that Silicon Valley celebrities were here that day. Soon the room swelled with people eager to hear his advice. All the while, the question looming was whether the billion-dollar sale of his photo-sharing app was a sign of another bubble yet to come, one encompassing Stanford’s very campus. But in a place where entrepreneurship is encouraged and failure is accepted, many students asked instead, what would have been the worst thing that could’ve happened if they’d left school to start a company that flopped? They would have come back and graduated, that’s what.

  There were plenty of professors on campus hoping that would be the case. They didn’t advocate failure per se, but, rather, the need for a college education and the idea that graduation shouldn’t be something to take for granted. During the early years of the Thiel Fellowship, one of Peter’s staunchest detractors was Carnegie Mellon University professor Vivek Wadhwa. With columns in the Washington Post and Bloomberg Businessweek, Wadhwa had a wide mouthpiece in the mainstream media—which he used to bash Thiel frequently. Wadhwa eventually debated him and the writer Charles Murray, coauthor of the controversial 1994 book The Bell Curve: Intelligence and Class Structure in American Life, in Chicago to argue against the idea that “Too Many Kids Are Going to College.”

  Wadhwa, a stout, jolly entrepreneur turned professor had roles at Stanford, Duke, and Singularity Universities, the latter a school full of Thiel fellow mentors that researches artificial intelligence and longevity, among other tech-focused topics. The professor also authored a book called The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent.” The main reason, he argues, is because of our diminishing education standards.

  His Washington Post columns, along with journalist Jacob Weisberg’s pieces in Slate, were some of the harshest voices in the media against Thiel and his 20 Under 20 Fellowship. Cheerful and smiling during the Chicago debate, Wadhwa wanted the audience to like him. “I’ve been researching what’s been happening globally. I’ve been researching the impact of globalization on US competitiveness,” he said, opening his arms toward the crowd. “These people in America are totally, completely out of touch . . . We don’t get it. . . . We’re sitting here in our own bubble disconnected from the rest of the world.” Wadhwa explained that because education in the United States was the best in the world, other countries were trying to replicate it, and students came to America to learn how to be like us. He cited the Chinese and the Indians, who, in his opinion, had in effect learned to beat their teachers by educating themselves in America.

  “I’ve faced stereotypes,” he said. “My people were beggars and snake charmers, then we became low-level engineers, and now we’re hotshot CEOs.” Now, he said, Indians were more motivated than ever to bring everyone up to the same level through American education. “The Indians and Chinese are going to be eating our children’s lunch, guaranteed.”

  Thiel fired back. “The US—there are about forty percent college-ag
ed students in college,” he replied. “In China, the number is twenty percent. In India, the number is ten percent, so it’s a brutally selective system . . . if we want to be more like them, far fewer people should go to college.” Thiel said Wadhwa’s argument was a powerful one for his side.

  Wadhwa, however, just smiled at the crowd and looked away from the table where Thiel sat next to his debate partner, Charles Murray. He opened his arms again to the audience. Then he grinned and said, “I would educate everyone in the world because it uplifts society.”

  Wadhwa continued his public arguments with Thiel for the next few months. He even had a “cage match” with Thiel fellow Dale Stephens at the Long Beach TED Conference. There Stephens argued the benefits of his program UnCollege: a system of teaching oneself that turned into a book and “Hackademic Camp,” in which Stephens organized a week for invited campers to learn and practice why they should be teaching themselves versus going to college.

  • • •

  By summer 2012, Stephens’s UnCollege movement had picked up almost as much notoriety as the Thiel Fellowship. That August, the twenty-year-old college dropout was presiding over two long picnic tables on the back patio of a five-bedroom townhouse in the Haight-Ashbury neighborhood in San Francisco. He had rented the house on Airbnb for his Hackademic Camp, for which he had recruited fifteen aspiring entrepreneurs to attend a week of seminars and workshops on how to drop out of college. They looked like college kids, dressed in jeans, shorts, and T-shirts, carried laptops and were obedient students, but they were there to test what it would be like not to go back to school. Stephens went from huddle to huddle, asking with camp counselor enthusiasm whether they were more convinced to teach themselves going forward. He had arranged panels, speakers, and company visits to inspire his campers.