Valley of the Gods

by Alexandra Wolfe

  “When it first started, we didn’t know how big the ripple effect would be,” she said. “People took a step back to truly think about the debt.” Strachman thought the higher-education bubble had long been the elephant in the room, but “Peter pointed a very large finger at it.”

  Strachman also talked in Girardian terms. (René Girard, a French philosopher, believed in mimetic theory, the idea that people want what others desire, not what they have.) She called the fellowship a “mimetic mind blow.” When it started, people weren’t talking about dropping out of school. Anyone who did, she thought, would be considered a failure. Now, said Strachman, the higher-education bubble was a normal topic to discuss, and the program helped make that conversation possible.

  “I think it’s different but it’s no longer weird. Those twenty people really made a huge difference in the lives of so many young people, particularly US based, since the cost of school here is so prohibitive.” They showed, she believed, that college wasn’t the only path and that people could learn by doing. “It’s really about the optionality.”

  She considered the first class of fellows (2011) the bravest. They helped form the basis of the program and figured out what the structure could be so that it would define self-directed learning. The whole idea was a blank slate. Strachman said she didn’t want the program to be coercive but more like a community that made decisions together. “It’s not like a function where something goes into it and something comes out of it,” she explained.

  At the same time that the fellows were building companies, they were developing as people. “It wasn’t like a thirty-year-old doing this who’s been independent for a while,” she pointed out. “We had people who were sixteen through nineteen starting, so during that first year, we did quarterly reviews of them. We knew we wanted to check in regularly.” Later, they integrated the fellows into the process of choosing new fellows. They came up with organized events such as skydiving and motorcycle safety course outings. The fellows would do the planning, and the Thiel Foundation would pay the social costs.

  After a while, the number of applicants far exceeded the available spots, so Strachman started the Thiel Summit series, where promising entrepreneurs who were viable for the fellowship could come meet one another. One Indian entrepreneur decided to sell his guitar and iPad to afford the flight to San Francisco. They added more interactive events such as lunches and evening meetings.

  Strachman thought this interaction had become increasingly important. She also noticed that the conversation about human interaction, compatibility, and emotion had increased over the course of the five years of the fellowship—and had become a greater concern throughout Silicon Valley in general. When they were forming companies, people soon realized that their selection of coworkers was even more important than the technology they were developing.

  Danielle thought that the success of Elon Musk’s space company, SpaceX, had a huge impact on young people’s aspirations. “People look up to SpaceX and what is happening and see what you can do. Elon can go from PayPal to hard technology—to space—so it’s amazing having ringleaders doing big and grand things.”

  • • •

  Patri Friedman had also left the foundation. After his split from his wife, he and entrepreneur James Hogan made plans to build a libertarian city in Honduras as a test ground for the Seasteading Institute’s free-floating islands. They thought they had the approval of the government, only to find out that changing the constitution of a city wasn’t all that easy. The two of them abandoned the project and moved back to California. Friedman left the Tortuga commune and moved up to Berkeley, where he met a tall, lithe redhead named Brit Benjamin. He decided to pivot to monogamy, and the two were engaged in 2015. He went back to work as an engineer at Google.

  • • •

  In later classes of fellows, the Thiel Fellowship program expanded to include anyone under twenty-two, rather than twenty, and required taking off only a year from college. To deal with the surge, and increased interest, Thiel hired a new leader named Jack Abraham. At the time, he was a little-known twenty-nine-year-old entrepreneur who had sold his local shopping engine to eBay in 2010 for $75 million.

  Abraham, who looked more like he was nineteen, had short, spiky hair, a round face, and a wide smile. He too had dropped out of college, and the thinking was that he would provide inspiration to the new classes of Thiel fellows.

  Abraham grew up in northern Virginia, the son of an amateur artist mother who died of ovarian cancer when he was sixteen, and a father who was the CEO of a software analytics company valued currently at about $1 billion. He started working for his father at thirteen and then went on to the Wharton School. There he took computer science and business, and ultimately designed his own major. It was a typical path, until his senior year came along. Instead of applying to Wall Street or to a consulting firm, as most other business school grads were doing in 2008 when he graduated, he decided to start his own company.

  It would be a local shopping search engine called Milo, but at the time, Abraham didn’t have a plan, just a desire to do something on his own. “I just remember everyone was talking about Goldman Sachs, Bain Capital, and McKinsey,” he said. “People just thought I was crazy that I wasn’t going to these places.” At the time, if you were interested in engineering, you’d go to Google. “Working at Google was like what working at Facebook or Twitter is today,” he said.

  So one semester before graduating from college, Abraham left for Silicon Valley. It took one trip out there to see that it was where he wanted to be. He rented a motel room in Palo Alto for the first two weeks and then finally found an apartment off University Avenue that would double as an office. “I knew this was the center of technology,” he said, remembering of the time: “We slept there and worked there and ate ramen—the classic story.”

  For the first few months, living in Palo Alto was a lonely existence. He had only one real friend there, his roommate and coworker. “It was pretty isolating,” he recalled. The early Thiel fellows were also without cars or much means, and often found themselves trapped in their house on Santa Rita Street. Years later, when he became director of the program, no doubt his own experience sensitized Abraham to what many Thiel fellows were going through. However, the utter lack of a social life didn’t prevent him from creating technology that enabled a function called eBay Now, which allowed customers to buy products from local stores on their phones. He also created a feed like the ones on Facebook and Twitter enabling eBay sellers to show customers what new products were available.

  After two years there, he started a new company, Atomic Labs, billed as a “foundry” that also builds new companies. “It fits into the zero-to-one thesis,” explained Abraham, referring to Peter Thiel’s book of the same name, which promoted the idea that the best companies should be entirely new ideas rather than copies of existing inventions.

  As director of the Thiel Fellowship, Abraham recently broadened the applicant pool because “great ideas can come at any point in your college career.” He capped it at twenty-two, though, on account of the risk-aversion principle he found in those who had left to go to banks and consulting firms. There just wasn’t enough incentive to be original.

  The following year, 2015, thanks largely to the worldwide success of Thiel’s Zero to One (a quarter million copies sold in the United States and a million in China), nearly 4,500 people applied, a 50 percent increase over the year before. Along with readers of the book, Abraham credited “entrepreneurial fever spreading across all the campuses” with the uptick. Kids were no longer going into investment banking and consulting as much anymore. They were eager to get into the tech world. There was a fear spreading that technology was taking over jobs. And a generation of graduates wanted to get there first—no matter that their quest may have been signaling the bubble’s near burst.

  In the end, the Thiel Fellowship was a microcosm of the millennia
l generation. It said, “If you’re so good, let’s take the best and brightest among you and see if you can prove it”—and maybe the fact that they didn’t start billion-dollar companies didn’t matter.

  Maybe all that mattered was that the struggle of starting anew and being alone was so foreign to this generation that even Silicon Valley shimmer couldn’t overcome it. Thiel’s program was a blank slate. It was a new glimpse into adolescence and young adulthood air-dropped into the context of the most successful sector in the country.

  Where were the Thomas Jeffersons and Alexander Hamiltons who started a country from nothing? Who were these people who actually did start companies? For those who had been anointed, what did the network really do for them? What was success? Were these companies even successful?

  What was definitively a success about the fellowship was its very idea: the idea of breaking away from what an institution enforced and had to be. Since the Thiel program started, the idea of going to college wasn’t as necessary as it used to be. People who dropped out or skipped it all together were often considered more talented, and were perceived to have the potential to be even more of a prodigy. They must have been up to something original, suggested the new consensus.

  It also helped change what a job was supposed to be. Instead of becoming a lawyer or doctor, the greater currency was doing something you wanted to. Just as the idea of romantic love changed marriage from a duty to something you were supposed to be passionate about, Silicon Valley changed work from something that was a routine part of life in order to make money and support a family, to something that was now expected to be exhilarating and fun.

  Today, in certain sectors of society, work is supposed to be like play. It’s partly because Google built an office to look like a big playroom, as did Apple and Facebook. At work, you weren’t supposed to grow into a serious adult but become more childlike, have a better time, be happier, more mindful. The workday had become like recess.

  The Thiel fellows were examples of today’s kids who felt too smart to just go to a bank or a law firm or some other plebeian place where regular graduates went. No, talent went west these days, and if schools couldn’t help with that, what were they there for? Now schools all around the country offered entrepreneurial programs and classes on how to found a start-up. Cities were building tech centers and trying to replicate Stanford as best they could. The Harvard Innovation Lab, I-Lab, looked like a mini Google, nestled next to the university’s ivy-covered business school.

  Along with this migration came an even further push. Not only the superiority of the valley but the superiority of what it made: the machine.

  The fear that technology was outpacing humans was a strange derivative of natural selection and evolution. It was the idea that whatever was better would win, and in this case, it was the microchips. It naturally followed in evolution that the being with the superior capabilities would take over the race beneath it—in this case, humans.

  Was it a denial of the humanities and the emotions, and the feeling one gets after grasping a deep meaning or falling in love or feeling something greater? How could a machine do that? In Silicon Valley, some people started saying that those enmeshed in artificial intelligence were developing a sort of different personality, one that was somewhat lacking in emotion—flatliners, in a way. They were strangely devoid of passion.

  It was a new personality type on top of the networking one—which also was empty of real reactions. Humans, especially the Silicon Valley breed, didn’t naturally network or talk to one another but instead almost programmed themselves to be social. They forced themselves to network and meet one another, much like machines interfacing.

  The only problem was that artificial intelligence’s promises were much like many of the inflated company valuations. The programs didn’t quite work yet. The robots didn’t really have emotion. They raised their eyebrows. They frowned. But they didn’t feel. Or anything close to it. They had no personality.

  Was a backlash coming? Was there no there there? It seemed like these kids were well positioned to find out. As Thiel fellow guinea pigs, they were the discoverers of what the myth held, at least for outsiders.

  While some went back to the lives they knew, often with a greater appreciation of them, the others stayed out there in the new world where the fellowship had succeeded, at least as a thought experiment.

  It made people question the establishment, and while the program may have come at a time that was too early for there to be an existing framework for kids who decided to skip school, what it did do was challenge political correctness and fly in the face of what academic institutions had previously made mandatory.

  Most of the fellows became famous at least briefly, but they also got to be pioneers of a new frontier. Now there was another path, and the destination was far more open-ended than it ever had been before.

  What the program also did was to reveal just what that took to make it in Silicon Valley. It exposed the gold rush to be a bit of a mirage in practice. The underbelly was so much bigger than the brain trust—where all the real profit and all the real genius sat.

  Instead of copying the genius of some of these people—the original PayPal mafia, for example—young people were coming in droves to copy their peculiarities, their weirdness, their odd behavior, in hopes that some of it would rub off, and they’d become billionaires by association or by exercise. Achievement through emulation was far less successful than achievement through invention. Original thinking didn’t derive from living in a group house or swearing off gluten with other founders. But they found out the hard way that being on an all-butter diet didn’t make you a billionaire.

  The young, aspiring entrepreneurs were seduced by the lifestyle, by the oddity of it all. They were the new waiters and waitresses on Sunset Boulevard trying to win Oscars in Hollywood.

  And as more and more arrived, their behavior was beginning to mimic those of the East Coast, but instead of Nantucket reds, they wore sweatshirts. Instead of sailing sunfish, they rode Segways. There was the often not-so-hidden drive to make even more money than the people on the East Coast, who said they wanted to make money much more openly.

  The stated Silicon Valley goal of “changing the world,” a phrase that rang earnestly throughout the valley, had become a cliché. What was the noble cause? many of the kids wondered.

  The people who succeeded there weren’t the lemmings; they were, in some cases, the lucky ones, but most possessed brilliant minds. Peter Thiel was one of these rarities. He somehow attracted those unique people too, but even he couldn’t necessarily create them. While the fellows could well go on to great things, what John Burnham got out of it was an appreciation of all that came before—and all that the Silicon Valley bubble had made him, and so many others, forget.

  Acknowledgments

  Thank you to Ben Loehnen at Simon & Schuster, who made Valley of the Gods exist. He provided more insights and observations than pages in this book.

  Thank you to my agent, Sloan Harris, whose honesty and patience have been unmatched and invaluable. And many thanks to Alexander Gortman for his tireless research.

  Peter Thiel inspired this book. He piqued my curiosity about Silicon Valley and about people who have the courage to think differently and then execute on their ideas. Peter introduced me to people more impressive and fascinating than I thought possible, some of whom I now count as my best friends, such as Nellie L., Stephen C., and Ted and Kathleen Janus. Thank you to Kirsten Bartok, whose generosity allowed me to report this book.

  I’d also like to send a warm and enthusiastic thanks to my editors at the Wall Street Journal, namely Gary Rosen, Lisa Kalis, and Gerry Baker, who not only help run, in my biased opinion, the world’s finest newspaper, but also the happiest, most exciting, and energetic place to work.

  To Frank DiGiacomo, whose writing and perspective I will forever admire. To Richard Story, whose style a
nd wit will always be what I aspire to have. And to the memory of Peter ­Kaplan for those hours in his office, in which every sentence relayed the zeitgeist and every reporter felt like a star.

  Thank you to my friends Mark Colodny and Sara Clemence, who were kind and tolerant enough to read early versions of this book and immeasurably improve the next drafts. To Perri Peltz, whose friendship and example helped me weather waves of setback. And to Drew, who also thinks that “crazy is a compliment.”

  Finally, to my parents, who all of this is for, and all of it is from.

  • • •

  Some of the material in this book has been previously published in a different form in the magazines and newspapers I have been privileged to write for over the past few years. Sections of the prologue were adapted from my story “Mating in Silicon Valley,” edited by Dana Brown, in Vanity Fair’s May 2013 issue. The Prologue and Chapter 4 contain sections from my articles for Departures, “Palo Alto’s New Tech Barons” and “Silicon Valley’s Stanford Connection,” in the magazine’s October 2011 and September 2012 issues, respectively. Thanks to the editors at Marie Claire, for whom I wrote “Valley Girls” in April 2013, and used material adapted in Chapter 3. Sections of Chapter 7 were previously included in Condé Nast Portfolio in “Never Say Die” in the magazine’s December 2007 issue. Material in Chapter 12 was adapted from my columns on Ray Kurzweil and David Gelernter for the Wall Street Journal on May 30, 2014, and November 29, 2013, respectively, and material in Chapter 6 was adapted from my Wall Street Journal column on Laura Arrillaga-Andreessen that ran on September 5, 2013.

  About the Author

  © Mark Seliger

  Alexandra Wolfe is a staff reporter for The Wall Street Journal and writes the weekly column “Weekend Confidential.” After graduating from Duke University, she worked as a staff reporter for the New York Observer, The Wall Street Journal, and then Condé Nast Portfolio. As a freelancer, she wrote regular columns for Bloomberg Businessweek, features for Travel + Leisure and Departures, and has written cover stories for Vanity Fair and Town & Country. The Valley of the Gods is her first book.