Foundation gives $100K to teenage entrepreneurs

May 25, 2011 10:11:30 PM PDT
As college tuition mounts and academic resources dwindle due to budget cuts, a debate is raging whether it makes sense for a student to be saddled with $100,000 or more in debt when they could be learning and be successful on their own. That premise is being put to the test Wednesday as 24 young people -- each under age 20 -- are being given $100,000 apiece to launch a tech venture. The Thiel Foundation, based in San Francisco and funded by entrepreneur Peter Thiel, received more than 400 applications from nearly two dozen countries.

The hope is that these young people will become the next generation of tech visionaries, according to Thiel. Thiel was a co-founder of PayPal and was an early investor in LinkedIn.

Dale Stephens, 19, of San Francisco describes himself as a non-conformist. He is a product of home-schooling. He wants to create a new way to develop and demonstrate talent. James Proud, also 19, grew up in Britain and was a self-taught computer programmer at age 9. He has decided to skip college in order to create a new web-based service called GigLocater, which will steer music fans to live performances. He has moved to Palo Alto where he's temporarily sleeping on the sofa at a friend's apartment until he can find a permanent home.

Both Stephens and Proud have just been given $100,000 apiece from the Thiel Foundation to foster the next generation of tech innovators. They're two of 24 recipients from seven countries.

The money is not for college. They will be mentored instead to develop start-ups.

Stephens is working on sites that will give ambitious young people a way to validate life experience, rather than academics, when dealing with prospective employers. He cites research critical of college learning.

"From over four years of college, 36 percent of college students showed no improvement in critical reading, complex reasoning or analytical thinking," said Stephens. "Basically, learning is not happening at the undergraduate level."

Proud says that instead of attending college, he wants to create a useful service.

"You get to a point where you're deciding, I'm not going to make money from this, maybe ever, and that's completely fine," said Proud. "You just work on building something which you enjoy and you want others to enjoy as well."

While skipping college is a bold idea, could they be missing something?

"I think that you'd miss out a lot on the experience that you get with collaborating with your peers," said Stanford freshman Maddy Kane.

"That's where the students build the foundation of how to become leaders, how to market, how to go into accounting or operations, and they need that," said Foothill College Business Dean Glenn Violett.

This is the first year for the fellowship program.

Entrepreneurship carries with it a certain amount of risk. We'll have to see in time whether the 24 Thiel fellows are smart enough to beat the odds.


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