Washington Monthly - September/October 2012 - (Page 41)

got a certificate from the professor saying so. Then, in December, MIT announced the creation of MITx, a new nonprofit organization, branded by the university, which would also offer so-called “massively open online courses,” or MOOCs, and would also give certificates to those who earned them—a new kind of academic currency. In January, some of the Stanford professors broke off from the university and formed a new for-profit company called Udacity, designed to offer the same MOOCs, sans Stanford. In March, some of the other Stanford professors formed another company, Coursera, to offer courses from Princeton, Stanford, Michigan, and Penn, also online, also for free. In May, a few weeks after I returned from the trip, Harvard got into the game by joining the MIT side and founding a larger initiative called edX. Harvard had displayed virtually no interest in online education up to that point. The edX move smacked of an industry leader finding itself in the unfamiliar position of being left behind. In July, the University of Virginia, fresh off its technology-panic leadership crisis, jumped on the Coursera bandwagon along with Duke, Cal Tech, Johns Hopkins, Rice, the University of Edinburgh, and a half-dozen other well-known universities. A week later, UC–Berkeley joined edX. In less than a year, online higher education has gone from the province of downmarket for-profit colleges to being embraced by the most famous universities in the world. Fear is a powerful motivator, and the source of that fear becomes clearest to me on the evening that Michael and I take a drive to the Presidio, a gorgeous, forested area of San Francisco near the Golden Gate Bridge that was once a military base. We park along the sidewalk and walk a short distance under streetlights, dodging sprinklers that are watering thick, green grass. We’re visiting Founders Fund, a major VC firm led by Peter Thiel. Thiel has been a major figure in the valley for years, having gotten phenomenally rich founding PayPal before making an early investment in Facebook now worth several billion dollars. But he was largely unknown in the rest of America until last summer, when he created the “Thiel fellowship.” The idea was to prove a point, which is that higher education is basically bullshit, and probably a bubble of some kind or another, and that it was ridiculous for the smartest students to waste four years and $250,000 for a bad education when they could be doing something useful, like founding start-ups in the valley and making money instead. The fellowship program pays twenty people under the age of twenty to leave college and spend their time creating their own business, or something else; it’s up to them. It was a genius PR move, and the timing could not have been better, because it started rolling out just as a group of fed-up people decided to occupy Wall Street. The population of anticapitalist and generally leftily outraged people with enough time on their hands to live in tents in a public park day and night turned out to be highly correlated with the population of well-educated recent graduates of expensive colleges and universities who, owing to the recent economic catastrophe caused by various greedy and reckless Wall Street financiers, couldn’t get a job that paid enough money to pay back the kind of loans you need to take out to float a $250,000 tuition bill. They were pissed off and began dominating the public discourse, and so people were primed to hear a famous and interesting valley rich guy say that the whole thing is a corrupt enterprise doomed to collapse in a spectacular, real-estate-market-circa-2008 fashion. The media lapped it up, and soon enough Thiel was featured in long New York and New Yorker profiles. It’s past 8:30 when we get into the Founders Fund offices. The space is beautifully appointed (the massive flows of money in and out of the valley have clearly spawned a lucrative ancillary industry in interior design), and the waiting area features a round table, in the While Minerva’s courses will be conducted primarily online, students will live together in shared housing units in cities around the world. Nelson figures this can be done for less than half of what Ivies charge. middle of which is a model rocket roughly two feet tall. We sit down with Scott Nolan, who works for Thiel, in the boardroom nearby. Nolan explains how Thiel (and, thus, Founders Fund) sees the world. A lot of their vision is in a manifesto (that’s what they call it) on their Web site titled “What Happened to the Future? We Wanted Flying Cars, Instead We Got 140 Characters.” Its point is that human progress has been disappointing in recent decades (no flying cars like we were promised), and venture capital is partly to blame. Investors have chased after clever short-term innovations and looked for quick profit, which is not only bad for the world but bad for most investors—since 1999, according to the manifesto, venture capital has lost money on average. Only the top 20 percent are any good. Thiel thinks that the smart money goes with the best people pursuing transformational ideas. He’s not someone who believes in hedging your bets through broad category investment. He wants to find the next Facebook. Washington Monthly 41

Washington Monthly - September/October 2012

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