Atlassian Corp. agreed last week to acquire video-messaging startup Loom for $975 million, just short of the $1 billion “unicorn” valuation that would have put its co-founder and Thiel fellow Shahed Kahn in illustrious company. Eleven of the 271 recipients of the Thiel Fellowship have founded unicorns so far, an impressive accomplishment that doesn’t even take into account the inspiring innovations of other fellows and the many exciting projects yet to mature.

In 2011, Peter Thiel launched a controversial education program to pay college students $100,000 to drop out. The program was widely criticized with many noting the hypocrisy of Thiel, who holds philosophy and law degrees from Stanford University. Former Treasury Secretary and Harvard University President Larry Summers said of the fellowship: “I think the single most misdirected bit of philanthropy in this decade is Peter Thiel’s special program to bribe people to drop out of college.”

Available evidence supports the opposite conclusion. Thiel fellows have achieved shocking success, enough to merit a reconsideration of our current approach to college. A recent book, Paper Belt on Fire, by one of Thiel’s colleagues, fills in the backstory of the fellowship and refines the argument against traditional higher education.

The most notable Thiel fellow to date is Vitalik Buterin, co-founder of the Ethereum blockchain. As of this writing, Ethereum has a market capitalization of about $200 billion and has spawned an unprecedented ecosystem of decentralized software development. There are nearly 7,000 Ethereum-based projects, including some of the most innovative and promising ideas today.

Austin Russel, a 2013 Thiel fellow, took Luminar Technologies Inc. public in 2020, valuing the company at $8.5 billion, while Paul Gu helped Upstart go public at a $4.8 billion valuation. Both Russell and Gu were early Thiel fellows and co-founders of their respective companies. Dylan Field agreed to sell Figma Inc., the influential design company he co-founded, to Adobe Inc. last year for roughly $20 billion.

Other Thiel Fellowship success stories have not yet gone public. Lucy Guo co-founded Scale AI, an artificial intelligence company, with more than 350 employees and customers including Airbnb Inc., Instacart and Block Inc. It was last valued at more than $7 billion. Robert Habermeier, a 2018 fellow, launched Polkadot, a blockchain-connecting platform that has a market cap of $4.5 billion.

Beyond the dollar signs, there are many other innovative companies being built or supported by Thiel fellows. Laura Deming runs a venture fund focused on aging and longevity. She’s backed maverick scientists focused on creating biological immortality, a favorite cause for Thiel. Chris Olah worked in groundbreaking AI labs, such as Google Brain and OpenAI, and founded the journal Distill, which aims to make artificial intelligence concepts easier to learn. Boyan Slat is chief executive officer of The Ocean Cleanup, a non-profit that has raised tens of millions of dollars to develop technologies to remove plastic from the oceans.

There are more Rhodes scholars every year than Thiel fellows and, depending on the course of study, the scholarships can easily pay well over $100,000 to keep students in school. They also offer access to larger networks of more powerful people than Thiel can arguably offer. There are many other prestigious scholarships and fellowships to identify the highest-potential students. All of them put together can’t match the kind of entrepreneurial success before age 35 of Thiel fellows. In addition, nearly every college today has entrepreneurial institutes, incubators or other programs to support student ventures while the founders continue taking classes. Again, none have achieved anything like the success of the Thiel Fellowship.

Over the years, Thiel has often discussed how his previously “tracked” life from the best schools to the white-shoe law firm and investment banking job at Credit Suisse Group AG was unfulfilling and had little positive impact on society. By giving people like his younger self a little money, some prestige and access to a network, he’s helped create innovative, valuable companies. The results of the Thiel Fellowship demonstrate that colleges likely block or delay the success of the most promising students.

Thiel has argued in several talks that the problem is much bigger than a few dozen precocious teenagers. Rather, he sees the current higher education system as a perverse credentialing machine that forces students away from impactful careers in favor of ones like consulting and banking, which offer the surest path to repaying exorbitant loans.

Of course, the world needs credentialed experts who repay loans as well as innovators and entrepreneurs. Rhodes scholars and other prestigious scholarship winners have reached the highest levels of politics and professions including science, law, medicine and journalism — although the proportion of winners with home-run successes cannot compare to the Thiel fellowship. Their accomplishments tend also to come much later in life and usually represent competitive success within established systems rather than stand-alone disruptive innovation.

The Thiel fellows, therefore, pose a stark challenge to U.S. colleges. Are universities suppressing or delaying the potential of some of their most innovative and energetic students? Are they subtracting money for tuition that could be much better spent in ventures than in classrooms? Why can’t their expensive attempts with incubators and venture labs produce results that match the Thiel Fellowship? Are their middle-age professors spending too much time lecturing teenagers and not enough time listening to them?

Thiel has not proven that college is bad for everyone, nor that post-secondary education in the U.S. is a dismal failure. But he has demonstrated a competing idea that has been vastly more successful, if only for a few students and only for certain types of projects. At the very least, that should make anyone paying college tuition and anyone running a college think hard.

Aaron Brown is a former head of financial market research at AQR Capital Management. He is also an active crypto investor, and has venture capital investments and advisory ties with crypto firms. Richard Dewey is the co-founder and chief executive officer of Proven.

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