Paper Belt on Fire: How Renegade Investors Sparked a Revolt Against the University (Part 1)

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Welcome back to Readers, everyone. Today we're kicking off a brand new series on Paper Belt on Fire: How Renegade Investors Sparked a Revolt Against the University by Michael Gibson. And right up front here, you know, I want to kind of set the stage, right? This is not your typical startup memoir or Silicon Valley Victory Lap, right? This is the story of how a philosophy dropout and a charter school principal, two people with zero conventional finance experience, ended up running one of the most unconventional early-stage venture funds in the country. Right now, I want to, you know, first off, I wanna introduce the author. He's a guest today and I'm very, very excited to have him on. Michael Gibson is the co-founder and general partner of 1517 Fund, an early-stage venture firm built around a pretty radical idea, right, that some of the most talented young builders are not always sitting inside these elite universities, right, these elite credentialing systems. Now, before 1517, you worked with Peter Thiel at the Thiel Foundation, where he helped start and run the Thiel Fellowship, right, which is the very famous program that gave young people $100,000 to skip college and build companies instead. Welcome to the podcast, Michael. It's an absolute pleasure to have you here. I'm really excited to get to recording today.

Okay, cool. Thanks for having me on. That's a great intro.

Absolutely. I mean, just, you know, obviously I gave a kind of a quick warm intro here. I'd love to hear a little bit about, and I'm sure the listeners would too, a little bit more about your journey in depth and about, you know, what this book is all about, why you wrote it, and just a quick intro to yourself in general.

Okay, cool. Yeah, the book, yeah, the book is about my, I guess, personal journey as it interweaves with, yeah, the Thiel Fellowship., and some of the people I worked with like Peter Thiel, um, you know, I, I, yeah, I run a venture fund with, with Danielle Strackmann, my co-founder, and we're pretty unusual in our backgrounds, you know, when compared to other VC funds. Um, and so, yeah, when I was looking out there in the world of books on startups and VC, there weren't a lot of behind-the-scenes accounts. Of how that works. So that intrigued me. There are a lot of negative books about Silicon Valley, a lot of memoirs by people who, you know, took jobs at startups and things didn't work out. They become disillusioned. I think of a book called The Uncanny Valley is one memoir about a young woman working at a startup. And maybe these kinds of accounts have their place because certainly there's a lot of hype in Silicon Valley. But, but I wanted to tell a positive story. About some of the incredible people I worked with who are trying to build the future. So that was one level of it. On the VC side, there are no books on VC. I mean, there are some like, you know, industry-oriented books like The Secrets of Sand Hill Road or memoirs by like really old crusty VCs like Tom Perkins from Kleiner Perkins. You know, that sounds a little harsh, but it's like funny. It's like you read his memoir. It's like, you know, this guy building a sailboat and like having drinks by the pool. So, you know, venture capital has certainly evolved from that time. Uh, so I, so I thought that could be interesting, you know, bringing people behind the scenes on how venture capital works. Um, and then there's just our story. So, you know, I helped found Peter Thiel's fellowship, was there day one, uh, you know, grew that program, helped run it. And it's very unusual, you know, in 2010, that it's crazy how long ago that was now, 'cause it feels so fresh in my eyes if I think back to those memories. But, you know, really interesting program with two strange conditions. It was a $100K grant and you had to be 19 and under to apply and you had to not be in school. You had to essentially drop out or take time off. And that was controversial in 2010, less so now, but it caused a media attention storm. And so, you know, I wanted to share what it was like to run that program and work with the people in it. So all those threads came together and thought I'd write the book. And then there's just like sort of like civilization, civilization scale, you know, storytelling. You know, I think Silicon Valley is a very special place. American ingenuity is just so wild and impressive, and Silicon Valley is the pinnacle of that. I think it's in a very precarious position as it's in a hostile environment in California, in San Francisco, where there's so much political government dysfunction. And so, you know, what this drew me to is like, yeah, everywhere from the civilization to the city to individuals, I'm interested in this question about what is the creative spirit? Where do new ideas come from? Who are the people who have them? Is there something we can do at the level of the nation and at the level of our lives to help nurture this creative spirit? Because, you know, when you look at history, you know, these types of eras are quite rare. When you look at classical Athens or Florence in the Renaissance, you know, Silicon Valley is up there in that level of creativity when it comes to tech and science. But these things don't always last forever. You know, there's a sprouting, there's a bloom, the fruit falls from the tree, and then there's a period of decay. And so I think it's important, there's an imperative that we try to understand this process and thwart it. So all these sort of themes I thought could be told in the story in the book. And so, yeah, that was my thinking behind it.

I love it. I love it. This episode is going to be part 1 to all our listeners, and we're going to be covering chapters 1 through 5. We're starting where the actual story starts, right? A phone call from the CIA, a father Michael barely knew, and then the long detour through philosophy and journalism that eventually put him in a conference room with Peter Thiel. We'll get to Cardwell's Law, the launch of the Thiel Fellowship, how Daniel Strackmann walked in and saved the program from itself, and honestly, what made Thiel Capital one of the strongest hedge funds on Wall Street in general right now. Without further ado, let's dive right in. The book here opens not with, you know, venture capital or universities or any of these major topics, but it starts with a simple phone call from the CIA in 2007, right? About, you know, your application. Now, you weren't applying because you wanted to be a spy. You were applying because, you know, you mentioned that your father, Frederick Whittle Smith, passed away when you were 16 months old, right? And this was 3 days after telling your mom he was an operative and feared for his life. Now at 19, you found out that the man you thought was your dad wasn't your biological father at all. This is like, this is one of the craziest intros, honestly, I've ever seen in a book like this, right? You applied, I mean, this is crazy. Now obviously you applied to the CIA hoping that with enough experience, hopefully you would find out who your father really was. They turned you down. And then through the rest of your book, it's kind of funny here. It almost seems like you're rebuilding this from scratch, right? The CIA process, you're recruiting sources, you're reading patterns, you're identifying talent.

That's exactly right. Great.

And this chapter on how you and Danielle scouted founders is literally called "Intelligence Redefined." So, you know, looking back from 2026, right? Was that rejection, would you say that's one of the most consequential things that's actually happened to you professionally? Do you think it's shaped the way you look at it? Would you say that CIA recruitment process is actually a little bit of how you guys have tried to go about it? And I'm curious, right? Every company, every institution, every school, wants the perfect system to bring in these people, right? You talk about finding curious, creative minds, but obviously you have to find them and filter them from everyone who's just a pretender as well, right? What is the CIA's process, other institutions' processes? What do they miss about the kind of mind that's actually prepped and geared up to start a revolution or start or build something great?

Man, you hit on a lot of important themes there that I was aiming for in that opening chapter. At the highest level, it's that coming back to the idea of what makes individuals creative. Thiel has a theory derived from René Girard about who becomes a scapegoat in mythology. And the scapegoat is often chosen for particular reasons. And one of them is like they're an insider and an outsider. There are many examples throughout mythology of this. One would be something like Oedipus where he's this king, but on the other hand, he's not actually from the place. He's blamed for starting the plague that is destroying the city and eventually scapegoated for that. But it's sort of interesting as like Thiel would use this sort of frame to think about the people he hires, the founders he backs for investments. And so when it came to writing my own story, I had to really drill into, you know, what I think makes me an insider and an outsider. One of them is my family background. I mean, sometimes, you know, the story of someone's parental relationships will tell you a lot about who they are. And, you know, that was a pretty unique story. About me, I guess. You know, it's like pretty unusual to, you know, live a life where, you know, you grow up thinking someone is your dad and then, you know, you find out that person wasn't your dad. And then, you know, you learn about the person who was, you know, I was curious about finding out who my dad was, if there was any truth to the story my mom told. And so, you know, I thought, what the hell? You know, I do want to get out of academia. So working towards a PhD in philosophy. But, you know, I just sort of threw my hat in the ring and went through that process with the CIA. Didn't work out in a job. But, you know, in terms of the storytelling, I love that you connected it. That's what I was trying to do is, you know, it's like what became clear to me, what I learned about the CIA's work is that they're trying to develop a map of the future. And there are different ways they go about doing it. Sometimes it's just pure technology by eavesdropping on communications. That's the NSA mainly, signals intelligence. But then the CIA operates something called human intelligence, which is what we get in the movies where it's like, you know, developing sources, trying to uncover information and operating in foreign lands. And what's more is like to do that, they develop a set of frameworks for thinking about character and the types of motivations people have for doing things.

Yeah.

And I feel like that, yeah, that was the first time in my life where I encountered something like that, thinking about the future and then also coming up with ideas about character and how that might be used to try to make predictions about the future, about what's important, about the sources of, you know, what's going to determine what happens. So yeah, I did want to touch on that in the book because I thought it was so unusual. And then I did want to suggest it's like, yeah, there's something where, you know, VC at its best is working with people to try to build the future, to try to predict trends, to analyze the forces underlying certain things that are happening. And you got to be able to do it much faster than even a lot of these government institutions. And the way we do it, the way Danielle and I come to do it, bears an uncanny resemblance, I find, to the CIA's work, which is we do in-depth character analysis of all the people we work with. We're trying to understand their motivations. We have to find them in subcultures. We're sort of like talent archaeologists working to unearth people from unlikely places. We have to develop an intellectual cartography of all the different sort of trends that are bubbling up in different unknown places. And to me, you know, this did bear a strong resemblance to that work I learned about that the CIA does and maybe some of their methods. So, you know, I had my personal story. I thought it made, you know, it's like, okay, why am I doing what I'm doing? I thought I'd try to put it through that lens. And then it was also, yeah, the first sort of key into, hey, here are the methods and tools that they use. Now, it's kind of, you know, and then, then in walks Peter Thiel, who is like this, this individual who very much is thinking about these tectonic plate movements at the civilization level, and then how that scaffolds down to, or telescopes down to individual actions and what people are doing with their lives. And he had a grand theory about the world that I certainly didn't consider, which was that we haven't seen much progress in science and technology outside of computers from late '60s, maybe early '70s to the present. That would be like stagnation and energy stagnation and healthcare stagnation and education. And so, Thiel represented for me someone who was at the pinnacle of that ability to synthesize what's happening in the world 6 moves ahead with an assessment of what, what some team is doing on that field in the current moment. So the first chapter, yeah, very much trying to pull people into that story.

Yeah, 100%. I think it's really interesting how you guys talk about, you know, this whole credentialing system, right? Obviously a big reason why you guys started what you did, why, you know, essentially the thesis behind even everything you write this book about, right, was that the current credentialing systems, the current universities it just is not optimal, right? It's not what's gonna lead a revolution. It's not what's going to, you know, change the world in the way that maybe you see, right? But before you got to Tech Review, right, early on in your career, you also spent your 20s in philosophy, right? Oxford for grad school, the conferences, the seminars, and you describe academic philosophy in chapter 2 here using almost exactly the same language that you later then apply to the entire credentialing system, right? Obviously. You say creatively exhausted, these careers made by pleasing your betters, pedantic fine-tuning by imperceptible degrees, right? You call it Alcatraz. Uh, it's like a museum prison built on a beautiful island. Obviously sounds kind of crazy to hear, but it, it works, right? Like it makes a lot of sense. And I think that diagnosis of the humanities sounds a lot like everything you'd later say about academia, finance, and just credentials as a whole.

Right.

I'm curious.

Well, I, I, yeah, I think it relates to that stagnation story. Yeah, which is, you know, the key, key thing here is that, you know, that, that fine-tuning of the 10th decimal place on already existing views is like another way of saying we're not making progress with bold new theories or interesting discoveries. And, and so, yeah, it's like I had been to the inner temple, I had been to Alcatraz. And so the question is, what can we do to break out of that? You know, the academic system relies on a set of statistics about people in order to sort of rank them, you know, their GPA, their test scores, maybe the level of their education. Did they get a master's degree or PhD? What level are they at? What is the rank of the school they went to? All of this is supposed to tell you something about the person. But I, you know, I came to see and I wanted to express in the book is that I think these modes of thinking are outdated, sometimes even useless, or worse, negative in helping us predict anything about whether or not someone can build the future or new products or make new scientific discoveries. In fact, I, yeah, I think they're harmful in many respects. And yeah, just digging into it in that, in that, my own experience is like, I was interested in philosophy because I, I wanted to pursue wisdom. I wanted to understand as much as possible some of the deepest challenging questions we face as humans, you know, the meaning of life, the nature of consciousness, um, you know, the, the structure of morality and ethics. It's like, you know, what are their foundations? It's like, these are big questions and I find that, you know, most philosophers just like, you know, they'll add like a, yeah, a nuance to some, you know, niche view that no one will challenge just so they can try to get published in the third-rate journal. It's like, this is, this is like such a betrayal of, of the mission of Socrates and Plato.

Yeah, yeah, fair enough. I mean, it's kind of cool because we, we talk about how obviously these credentialing systems are almost outdated at this point, right? Obviously maybe they held, you know, some value when they were created. And not to say that they don't hold value anymore. Obviously there's tons of people that still subscribe to that, me included, right? I'm in university right now. Um, but you know, this also introduces us to Cardwell's Law, right? The British historian Donald Cardwell, his argument, right, that no nation stays creative for more than a historically short period, right? Meaning things become outdated, stuff like that. It's also the spine of Peter Thiel's stagnation thesis, right? The wages flat since 1971, bubble frequency rising. You know, flying cars, 140 characters, all of that, right?

Yeah.

Now, obviously, the stagnation thesis was pretty contrarian when you and Peter were arguing in 2010 and still pretty contrarian even when this book came out in 2022. But by 2026, it's almost mainstream, right? I mean, the whole progress studies world kind of runs on it, right?

I know it's wild how much has bloomed.

Yeah. I mean, I'm curious though, right? Does the AI boom of the last few years— do you think that it may actually be the first real exception in 50 years? Do you think it breaks Cardwell's Law, or do you think that it confirms it, given that, you know, it is almost all clustered in roughly the same Bay Area that you spend all of Chapter 14 pronouncing, essentially?

Yeah, right. Well, Cardwell's Law, I think, is interesting to investigate as, you know, this metaphor of a law. It's like, okay, there are these historical examples in the past of the birth, the rise, the peak, and the fall of creative societies. Joel Moïcher actually just won the Nobel Prize last year for his work on this question. And that's who I first saw reference Cardwell's Law, because as an economist, he was interested in that question about growth and innovation. Like, why do these countries rise and fall. And so we— they're very much like, this is a problem we have to solve. In the last 10 years as well, it's like a meme developed of— maybe you've seen this— where it's like, you know, bad times create good men, good men create good times, good times create bad men. And now we're in this loop. So, you know, we've got this good times problem. Where we need to figure out how to sustain that because the good times seem to create bad men. And so this question of can we stop Cardwell's law? You know, that's— is it an iron law of physics? No, this is just the nature of political economy. And we have to investigate what are the gears that cause this to happen. And I think it is, you know, things we look at like this institutional decay in universities, what people are choosing to do with their lives, why they want to, you know, run this race and be measured in this way, meaning like, hey, get the credential, get the degrees. Like, what does that say about some of the bigger things? Like, okay, the nature of these institutions and what their purpose is. So yeah, Cardwell's Law very much an important thing to investigate and try to reverse, to prevent from happening. Yeah.

Gotcha. Gotcha. I want to shift gears a little bit here, and I want to talk about kind of your first meeting with Peter Thiel, where obviously your career in VC and just even any exposure to this type of space started, right? Now, you describe the actual initial interview that you had with Peter as kind of this remarkable scene, right? Late August 2010, Pruthviraj Chavda offices, you in a corduroy blazer too long in the sleeves, right? Peter's wearing shorts and he kind of looks at your resume and says, you've been to a lot of schools. And like you mentioned a little bit earlier on this episode, you said, I've been to the innermost room of the temple and I can tell you it's empty. Now I love the line. I just want to say that straight out. I thought that was awesome. But I kind of want to push on something right here. Obviously you'd been to Oxford, right? You were at Temple. Your blog had already been circulating around Peter's office and Max Levchin himself introduced you guys, right? Obviously, by the standards of this book, you were kind of a credentialed outsider. I'm curious, do you think the 2010 Michael Gibson would make the cut at a fund like 1517 or even the Thiel Fellowship or something like that today?

Well, certainly wouldn't make the Thiel Fellowship because I had an undergrad degree. You know, I think— oh, you mentioned AI too in that last question. Has that changed things? So it's like, just to go back to that real quick, is I think that we're in a race between technology and politics, where politics, whether it's like concerns about data centers, introducing new laws to shut them down, may very well quash the AI revolution before it fully takes off. But what I do see in the promise of the AI revolution is just this open new territory on what's possible. So while it is true in education, in learning, so while it's true that in the past I did these things, that's only because I lived in the past. It's like someone who uses a landline telephone, you know, versus cell phones today. It's like, okay, you used a landline. Okay, I did. Yeah, because that's all we had. What excites me about the future, and if I could do it over again, is like we know the best form of education. You know, it's broadly one-on-one tutoring over whatever subjects, you know, your curiosity draws you to, probably intermixed with some socialization, maybe some like seminar-style Socratic, you know, sessions around great books and so on. It's like, that can be done at a much faster clip now. I'm meeting people who are frontier seekers. They just get out there so fast because AI is the tool that's letting them get there. Uh, so, you know, I, it's like, I think I would choose a different path if I was 18 again. Um, I don't think I would take that path, but nevertheless, you know, sure, I can concede that in the past I, I did make it through some prestigious, uh, admissions committees, I guess. And so maybe that authenticated me as a certain type of person. Um, it certainly introduced me to some ideas and different people. But yeah, I think if I had it over to do again, I would choose differently.

Yeah, fair enough. You know, but on this journey, right, you take the job, right? And literally on your first day here, September 27th, 2010, I believe, right? Jim O'Neill drags you out of the office to launch the Thiel Fellowship at TechCrunch Disrupt, right? Now, this name, Anti-Rhodes Scholarship, gets workshopped in the car on the way to Fox Business, which I thought was awesome. By the time Peter sits down with Sarah Lacy, right, it's 20 under 20. And, you know, it seems like the backlash is immediate, right? Jacob Weinberg calls it appalling, and Larry Summers later calls it the single most directed philanthropy of the decade. Now, obviously, this reaction is intense. It's immediate. I'm curious, right, with 15 years of hindsight, how did you know how strongly people reacted? How did that teach you something about what you guys were actually challenging that maybe you didn't fully understand going in.

The emotional reaction reveals a lot about the type of issue it is. I think, you know, it's like you could just be wrong about something and people don't freak out. They're just like, oh, you're wrong, you're an idiot.

Yeah.

But the fact that sometimes you touch a nerve in a way where it's not only that you're wrong, it's also the case that you're sacrilegious because you're violating some sacred principle. And I think in 2010, that was true of higher ed. It still is there, not in tech, but you see it out in the world. I just saw a podcast Ezra Klein from the New York Times did with a historian where they're talking about the importance of liberal arts for educating a, you know, the citizenry in a democracy. And so it's that kind of language where it's like, oh, only good citizens can, come about through studying liberal arts. It's like, there's that sort of holier-than-thou attitude, you know, all this piety about it that I think leads to that reaction, that type of reaction. Like, because if you meet someone who's like, wait, what is second, you know, what are you talking about? They, that the emotional reaction is quite big. So it's like the number, the frequency, intensity of these things has declined somewhat, but there's still pockets of resistance from 2010. But just to consider how long ago this was, it's like we launched the Thiel Fellowship in 2010, mainly because the movie The Social Network was set to come out that week. It was like, so Peter, I think the script had been leaked to the movie, and it was clear he was going to be portrayed negatively in one quick scene, Zuckerberg obviously in a lot more. And so I think there was this thought to change the conversation by announcing something pretty wild. What I think is fascinating, and I didn't put in the book, I should in the second edition, is that Zuckerberg launched his own initiative to try to draw away the negative attention from, from the movie. You know, he donated millions to, I think it was $100 million to public schools in New Jersey, Newark, New Jersey. And so it's like you compare Zuckerberg's $100 million donation to failing public schools compared to Peter's $2 million donation to a bunch of dropouts. Pretty wild comparison. But nevertheless, they both were trying to change the PR around that movie. We launched the fellowship on a Monday. The movie came out that Friday. I think in the event, the movie— it's kind of like the movie Wall Street from the '80s. People— that was supposed to be this critical takedown of the greed of stockbrokers and whatever, fund managers, I don't know. But, but like when people saw the movie, sure, they saw the criminal acts and, you know, bad behavior. But there was also something glamorous and charismatic about, you know, the, the Gordon Gekko character played by Michael Douglas. I think the same is true of The Social Network, even though Zuckerberg is portrayed as like this snotty, bratty, um, you know, geek. Nevertheless, I think there was like a compelling, glamorous, uh, aspect to the story because it's like it did take you behind the scenes into the creation of one of the great companies of the last two decades. So, uh, maybe, maybe the movie anyway had the opposite effect than the intended one. Um, so, you know, maybe that— maybe Peter and Mark's, uh, fears were misplaced and trying to distract the PR. But that's what started the fellowship.

Yeah.

And we were off on that first day.

It's kind of crazy, obviously, like dropping out now and kind of pursuing some of these things, these creative goals is like, it's pretty, it's almost overappreciated. Like people try to do it so much. People, it's honestly just another LinkedIn badge at this point, right? Obviously you have your genuine founders, who are doing this properly, but there's equally as many people who are just trying to put founder on their LinkedIn bio, or people who are just trying to say, hey, yeah, you know, I'm going to Silicon Valley for the summer, or whatnot, right? Now, I'm kind of curious here, on stage with Sarah Lacy, right? Peter has this great moment where she says, you know, Sarah Lacy says, you mean dropping out of school? You know, and almost in this dramatic way, and he corrects her saying stopping out of school, right? And obviously, you know, you know that stopping out is a trading term meaning kind Cutting a loose position or losing position. And that single word kind of reframes the whole pitch, right? Obviously 15 years on, this whole thing was built on, you know, kind of trying to find, break down this ancient credentialing system and create something that could help people build the future, like you said, right? And, but now we look on, right? And the word Thiel Fellow is itself a high status credential, right? Founders put it on their decks. It opens doors at every VC in the Valley. The critics said, you know, that you guys would damage the kids. But instead, the program has produced a new pedigree. And I'm curious, right, obviously this is all about, you know, these ancient, um, kind of credentialing systems and setting the paper belt on fire and all, right? Has the Fellowship created exactly the kind of badge it was supposed to abolish, right?

Um, yeah, geez, it's certainly in a sense in which right? People become imitative of others. And so if they see some guy, you know, in our ancestors' world, if you notice someone fishing by the river and they just happen to sing a song before they fished and they caught a lot of fish, you know, you might find yourself also trying to sing songs before you fish. But the clear thing though is like, what's underneath it? Like maybe there are techniques that guy has to be a better fisherman. And so I think the same is true here is like, ultimately, it could be the case that it becomes this mimetic competition trap where people are just playing founder or trying to appear like they're creative founders, when in fact they're not. I think to get around that, it's like I'm not running the fellowship, but I think you really have to focus on like, hey, what new original valuable things does this person want to create? And that, that's what matters. If they go about doing that, then more power to them. We need more people who can do this. It's very hard to create new and valuable things. The problem with the wanna-wantrepreneur, the fake, is that they want the success without the substance. And I think you know, when it comes to awarding the fellowship, people should, you know, the people running the program is like, yeah, you want to, you want to make sure this is being used towards uncovering some new truth, new discovery, new product. And, you know, let the cards fall where they may when it comes to whether or not it looks good on the resume, because what looks good on the resume is having created something new and valuable, not that you won some award. So I think the fellowship would become like Harvard if it was the case that like, you know, the people actually, there wasn't a lot of substance to it. They were riding on the coattails of the past. And so it looks good on the resume, but like, in fact, people aren't actually doing new things. So that, you know, focus on the problem. Are people solving problems? Were they doing other things? I think that's the way to get around this issue. It's hard, but I think that's the way to do it.

I appreciate you answering that question. I was a little nervous about that one, but I was, uh, I was just really curious even reading the book, right? Obviously just something that kind of comes up.

Well, yeah, you know, it's a fair thought. Um, you know, you see how many, it's like the number of YC founders out there in the world and the, and, you know, it does. Oh, I, I guess you just can't help. It's like, I, there's a stat or I guess I wouldn't call it that because I don't know how rigorous it is, but someone told me like the, the. The best predictor of whether someone will become a billionaire in the future now is if they win the Thiel Fellowship. So, it's like, what does that say? It's saying there's a probability that someone has a chance of becoming— a good chance of being someone super successful. I think that's the halo that people are trying to take advantage of when they get something and they put it on their resume because they want to try to communicate that potential to other investors or employees or whoever. And so I think there's always going to be a trade-off there on, you know, okay, you know, other people with this team jacket had some success earlier in the past. What does that say about you if you put it on? You know, how good of a signal is that at making that prediction? We'll have to see. For those of us, you know, on the sidelines, doing the talent scouting and support, it's up to us to try to determine like, okay, is it still a good predictor? Is it still a good aspect of someone's story that helps us understand if they have a lot of potential?

Yeah, I mean, I want to switch gears here for a second, you know, and I want to talk a little bit about Chapter 4, right? This is where Danielle Strackmann comes in. Obviously, this is your co-founder, and she comes in from another very different background here as well, right? The way you introduced this, she's wearing the Sarah Lacy interview from a Mountain View commune called Monroe House, right? She's 29, she's burned out from running this Innovations Academy. She's broke from $800 a month rent. But before she ever joined the fellowship, right, she spent years fighting the San Diego public school system just to open her charter school, right? You describe it like it was a Burger King needing permission from McDonald's, right? That was constant resistance. A few years later, right, you and Danielle ran into kind of a similar reaction from the academic establishment around the fellowship, right? Similar dynamic, uh, you know, incumbents treating the new entrant as a threat, right? How did Danielle's earlier experience kind of fighting that fight shape the way that maybe the two of you handled it the second time around?

Yeah, so Danielle is a, uh, you know, in a way, a philosopher of education. Who's tried to put into practice some of her ideas that in the, in the 2000s, that at the time represented a charter school in San Diego. She started with a friend, which, you know, still operates to this day, Innovations Academy. And they tried to, you know, they were, they were limited by, you know, state requirements, state standards on what they could do in order to be, in order to qualify as a charter school. They had the apply with all these standards. So it limited the sort of experimentation she could do. But nevertheless, it's like she was bringing ideas from people like Montessori, you know, this sort of project curiosity-led learning that she really wanted to experiment on with her school. And then when she came into working on the fellowship, she really got to put forth in full fashion. And obviously it takes a lot of execution and operational talent to run a school. But for Danielle, it was also, you know, it's like she just has an uncanny ability to see people before they see themselves. She is highly sensitive to unusual human potential. And I think she sees it because it's like working with, you know, she was part of the homeschooling environment too. And so I think working with unusual young children, primed her and gave her the learning she needed in order to detect this sort of stuff early. You know, she's very good at carrying the emotional load for people, for understanding them on that emotional level. And so I wanted the show and telling her story, you know, yes, some of this background knowledge that she had, but also how in what we do, it's like we're not— there's not redundancy in our skills. There's a lot of like complement. We complement each other in really interesting ways, both on the fellowship and at 1517, where if she's bringing this educational background, working with younger people, outliers, unusual weirdos or like crack teenagers, and I'm coming at it from this like civilizational scale pattern history understanding, it's like that fuses and into what we do. So I wanted to tell her story. So, you know, I think Danielle has a thick skin as well, and that certainly you had to, to start a school against, you know, the, you know, it's like against some of the deeper established interests in San Diego and the public school system. And so I think, you know, she's definitely been able to weathered the criticism more than me over the years. And because I think she, she experienced it in different ways back then. Yeah. And now here we are, it's like, um, um, you know, she's still— it's like if someone sends us a nasty note, she's still, she's still like, oh, what, don't worry about that.

Yeah, it's awesome. I think the big idea she brought from her teaching career was Maria Montessori's kind of principle of this non-coercion, right? Meeting young people where they are. You know, you talk a lot about this, starting with what their yearnings are, what their interests are, not kind of forcing this curriculum, most of which may just not mean anything to them in the long run, right? And it became the spine of how the fellowship was designed, right? Each fellow gets their own program, one-on-one tutorials, no template. And I assume that's a similar philosophy to how you guys started your own fund, right? Now obviously, that's a beautiful principle for an elementary school, for people kind of going through this program. But the fellowship itself was funding teenagers to build companies, right? Like, like you mentioned, these guys are building the future. Milestones, capital deployment, board meetings, obviously eventually venture rounds, right? How does this principle of non-coercion actually hold up when the people that you're, you know, quote unquote leaving alone are, you know, running real companies, building the future, answering to investors, doing these things in the real world?

Yeah, when we started the fellowship, it wasn't just startups. We did take some people who were running nonprofits or starting nonprofits, people pursuing research ideas. What we found was that they made a lot of progress. They certainly could get going, but like sustaining those things over time became quite difficult. On the research side, it's tough to get published in journals or invited to conferences when you have no, you know, institutional affiliation. Or, you know, legibility as it were in that world. So we saw that, okay, that outside path is not quite ready yet. When it came to startups, if you can build a business and you're making revenues the lifeblood, you don't need— yeah, it's like you don't need a degree to make revenue, right? So people just kept going. When it comes to coercion, you know, it's like people In order to build a company, it's like such a monumental task. It is so hard to build a startup. You have to want to do it for reasons besides, you know, fame and fortune. It's got to be a deep mission. And so, you know, that's the non-coercion piece is that the only reason to work on something is because you can't work on anything else. And this is your life's mission because there are going to be so many obstacles, so many ups and downs. So it's like, to me, that's the non-coercion piece is like, okay, well, you know, it's like you're doing this because this is the most meaningful thing you can do right now in your life. Now, what you build around that is really important. You know, how you hire people, the way you treat them. But, you know, in our society, this is all, you know, very voluntary in the sense of people consenting, you know, adults consenting to mutual acts of capitalism. Is non-coercive.

Yeah. You know, kind of on this last question to wrap up here, I'd love to hear, you know, just one last thing about you, right? Chapter 5 here takes us inside the Deal Capital trading desk, right? And you describe this place as almost more of like the reading room of a renegade history faculty than hedge fund pit, right? There's, you know, Josh's art prank, the Captain Gaskin story, the unusual hires, right? And then And then there's you, right? The showing up with kind of a no finance background, books piling up on your workspace, and eventually picking up this nickname of the philosopher. And I want to ask about that, that nickname almost, right? What did the humanities training actually do for you in that environment? Now, obviously, I know like you're all about, hey, look, you know, you dropped out, right? There's a reason you dropped out. But I'm asking, you know, whether that's a certain love for philosophy, a love for learning,, you know, the realities of the world, how people think, um, but, and not necessarily as a credential, but as a real working tool, right? What did this ancient Greek philosophy, your interests, uh, which eventually ended up becoming this nickname, what did that let you see that the people around you couldn't?

The old philosopher. Um, well, I think, well, you have one subject in philosophy, you know, there's ethics, there's the, the mind. But, you know, one area is epistemology, which is this question about how we know what we know. And so maybe philosophers by disposition are good at thinking about, you know, questioning, you know, how is it that, you know, we— or why we believe what we believe, what constitutes, you know, different degrees of knowledge. And so a willingness to really try these unconventional ideas out and try to interpret things in maybe unconventional ways. I think it could be that there's a, with the study of philosophy comes a, yeah, a sort of understanding of how we form our knowledge. What are our sources and what it all means. But that said, it's like there could be a confounding variable here, which is like, Maybe you're just by nature a person who likes to do that. And so naturally, you're drawn to the subject of philosophy, which is a formalization of those intuitions or those reflexes. So, you know, it could be the case that the types of people who want to wrestle with questions that can't be answered are also the types of people who, who are good at trying to figure out what's going to happen in the future, because that too is a question that can't be answered. But maybe we can set up some constraints and parameters and what answers might look like. So, yeah, there is that selection effect confounding variable, which I think could be powerful. The only reason I say that is because, like, there are— the American Philosophical Association, all the professors of philosophy, I think there are like, I don't know, 5,000, 6,000 members of that organization. I would, I would say many of them are not good at thinking about the future or taking risks or, you know, thinking about, uh, the nature of, of, of character required to, to build new things, or, you know, all the things we're talking about here. Um, you know, it's like there are so many risk-averse conventional people in that group. Uh, so what does it say about the study of philosophy? I, I, you know, maybe it's not as good a, um, you know, uh, it doesn't have as medicinal a quality as we would like. Um, uh, so So, yeah, you know, that's a little bit of my own skepticism on it. But sure, I think for me personally, I think it has helped me think through that, those epistemological questions. Also thinking through, you know, the ethics of what we should do and what matters. I think those are all things that come up in the nature of what I do till this day. In the Thiel Capital office, and at the time when I was hired, it was called Clarium and became Thiel Macro. And Peter has a family office, but the office is like— when Peter hired me, I thought I was an unusual hire because I had no background. But it turns out I show up on that trading floor, and it's like, okay, I'm like another one of the misfit toys on this island. 'cause it's like other people, you know, there are some other people who studied philosophy, but there were also, yeah, nuclear engineers, statisticians, English lit people, but there was no one who had an MBA. An MBA was a negative signal because it meant you were too mainstream, too conventional. And so that created a very lively work environment. There's no chain of command in Peter's office. There's no hierarchy. You know, it's like you can always get a meeting with Peter if you work with him. And what's more is like eventually he wants you to come in and pitch him some idea about leaving his office. It's like incredible how much value has been created off that trading desk that has nothing to do with trading financial assets. It's like, you know, Palantir, the company started on the trading floor of Clarium and that value created dwarfs anything made or lost in the trading of currencies or bonds or whatever. So, Peter stands out to me as an innovator. Now, obviously, he's like the number one talent spotter magnet in the world, or at least over the last, call it 15, 20 years. But it's also in his management style and the way he runs things. He's just like so different from other funds or even corporations where it's like, geez, I can't think of another place that would operate like that. Yeah.

I love it. I love it. This has been an absolute pleasure, Michael. Thanks so much for hopping on today. I feel like these 5 chapters were a perfect, perfect part 1. They did the real groundwork. We've got obviously the personal stakes starting off with the stagnation thesis, this active public provocation against the entire credentialing system, right? Talked about the partner who walked in from a commune and made the whole program work. And then lastly, right, the strangest trading desk on all of Wall Street. But again, Michael, thank you so much for joining us today. It's been an absolute pleasure. That was awesome. Longer than originally thought. That's all good.

That was a great discussion. Yeah. And look forward to part 2. That'll be great.

Absolutely.

Absolutely.

And to everyone listening, you know, whether you went to college or you didn't, The questions, you know, Michael's raising apply to all of us, right? Are we measuring talent correctly? Are we, you know, validating certain systems that may not be as important as we think? Are we giving young people the freedom to actually build, or are we sorting them into these safer and safer boxes, right? You know, next episode we'll get into a bit more of the deep end, right? How Gibson and Strachman actually identified exceptional young people before they'd accomplished anything. The story of Vitalik Buterin and Ethereum. And the wild ride of launching 1517 Fund. Thanks everyone again for tuning in to Readers. I'll see you in part 2. And until then, keep on learning, keep on changing, and keep on growing. We'll see you next time.