PayPal Founder and Facebook Backer Peter Thiel on The Next Big Thing, and Why He Thinks College Isn't Worth It

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"The future is limitless," said Peter Thiel, the billionaire PayPal co-founder, hedge fund manager and venture capitalist. If you were Thiel, you'd probably think so too.

The 43-year-old Thiel has become Silicon Valley's version of the man behind the curtain in "The Wizard of Oz" by creating or funding some of the most successful enterprises to come out of the technology world.

"I think technology is the key to a better future," he said.

After attending Stanford Law School and becoming a derivatives trader, Thiel co-founded PayPal when he was 31 years old. Now he's known as the Don of the PayPal mafia -- a group of braniac executives who ran the company and have since gone on to give birth to digital pillars like YouTube and Yelp.

"That was the very basic idea -- take dollars and email and try to combine them," he said of PayPal.

That combination turned into a billion-dollar empire. EBay bought PayPal in 2002 for $1.5 billion, putting around $55 million in Thiel's pocket, which he used to invest in promising media start-ups, most famously Facebook. His $500,000 investment in the social-networking giant is now worth about $2 billion.

Being Facebook's first Silicon Valley investor earned Thiel the full Hollywood treatment -- complete with a portrayal in the Academy-award winning film about the company, "The Social Network." Thiel said he spent time studying all of the social networking businesses for a few years before sitting down with Mark Zuckerberg and his team.

"I basically told them I would invest after meeting with them for an hour or so," Thiel said.

Going on gut instinct is what has made the Thiel formula for entrepreneurship such a success, but it also doesn't hurt to be a genius. Thiel was a math phenomenon as a child and became a chess champion at age 18 -- in the top 2 percent of rated players in the world.

His competitiveness has carried over into what he calls breakthrough philanthropy, although some have described it as bankrolling eccentric ideas Thiel thinks can save the world.

"Technology is fundamentally about going from zero to 1," he said. "If you do something new, it will always look a little bit strange."

Thiel has donated millions of dollars to promote research into extending human life expectancy by reversing the aging process.

"I enjoy my life," he said. "I certainly would like to live longer."

Thiel also funds The Seasteading Institute, which is devoted to creating self-governing communities -- essentially floating cities that will be used to test new ideas for government -- in the middle of the ocean. To Thiel, the concept is harnessing a largely untapped resource.

"Seventy percent of the planet is covered with water, and there's so much we can be doing with oceans, and it was one of the frontiers that people have more or less abandoned," Thiel said.

"It's pretty far in the future, but closer than, say, building cities on the moon."

The latest venture Thiel has invested in turns the notion of higher education on its head. The "Twenty under Twenty" fellowship provides $100,000 scholarships to college students who drop out of school to start their own businesses.

"Learning is good, credentialing and debt is very bad," Thiel said. "College gives people learning and also takes away future opportunities by loading the next generation down with debt."

"We ended up picking 24 people to try to get them to work on very specific projects that would push the frontiers of science and tech in areas ranging from biomedicine to computers to robotics," he said.

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