Schumpeter | Encouraging young entrepreneurs to leave school

$100,000 drop-outs

By M.B. | NEW YORK

"WE'RE excited to be working with them, and we hope they will help young people everywhere realise that you don't need credentials to launch a company that disrupts the status quo," declared the Thiel Foundation on May 25th as it announced its first batch of "20 Under 20" fellows.

The lucky winners were all under 20 when they applied. There are actually 24 fellows, rather than 20, and each will receive $100,000 over two years, along with mentorship from a network of entrepreneurs and innovators selected by the initiative's sponsor, Peter Thiel (pictured above). The only condition set by Mr Thiel, who made his billions first by co-founding PayPal then investing early in Facebook, is that they drop out of college (or high school) to focus full-time on building a business. A few of the new fellows appear to have dropped out—or, as the press release quaintly puts it, "stopped out"—before they were chosen, to launch a start-up or even to climb mountains.

They are an impressive sounding group, ranging from Laura Deming, 17, who "wants to extend the human lifespan for a few more centuries" to Sujay Tyle, "one of the youngest students at Harvard" and "passionate about hacking cellulose to create cheap biofuels."

A libertarian who likes to do high risk, long-term focused philanthropy, Mr Thiel is a fierce critic of the current condition of American education. That includes a higher-education system that he thinks tempts many people who would be better off going straight into business and creating significant wealth.

His encouragement of dropping out has prompted plenty of tut-tutting by people who regard him as irresponsible. Yet his initiative may be less controversial than the headlines suggest. With luck, some of the 24 under 20 will follow in the footsteps of other notable stop-outs such as Bill Gates, Larry Ellison and Mark Zuckerberg. And if they should fail? As Mr Thiel told The Economist recently, "they can always go back to college."

Watch Mr Thiel discuss the 20 Under 20 initiative at a recent Economist conference in this video.

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