Michael Gibson on The End of Academia and What's Next

Michael Gibson joins to discuss his book Paper Belt on Fire, which chronicles his work with Peter Thiel's fellowship program investing in young talent.

He explains how old institutions like academia are declining yet retain lingering prestige, and the development of new ecosystems and hierarchies based on competence. Michael argues creativity comes from outside stale hierarchies, citing the conflict between legitimate prestige and disruptive greatness.

They debate how far we are from the decentralized network state, and if COVID accelerated institutional failure. Malcolm notes elite alternative communities forming, while Simone asks if the paper belt’s dysfunction will deter its acolytes. Overall Michael concludes we need more inspirational stories of success outside institutions.

Simone Collins: . [00:00:00] I'm super excited for this. Hello and welcome to another episode of Basecamp where today we have a very special guest and someone who's writing I really enjoy but also whose work I probably enjoy even more, Michael Gibson.

Simone Collins: You probably, if you've heard of Michael, I've heard of him because of his book, Paper Belt on Fire. However, he's in other circles, much more well known for being the co founder of 1517, a very unique type of venture capital fund that doesn't just focus on sort of already proven older entrepreneurs, but rather really young people.

Simone Collins: They are investing in, in people like pre college. It's amazing. We're going to talk about all these things. But in this conversation, we are really hoping to dive into his book, which I read as soon as an audio book was available paper belt on fire which really aligns with a lot of the stuff that we're saying.

Simone Collins: is much more eloquently written than the way we would write it. It's, it's sort of a mixture of philosophy prognostication, but also like personal history and history of the 1517 fund, which is absolutely fascinating. So we're [00:01:00] really excited to talk with you about it.

Would you like to know more?

Michael Gibson: Okay. Yeah. Thanks for having me on.

Michael Gibson: And You know, thanks for the kind words as well, both about, you know, whatever, my writing style, but also about what we're doing. Yeah, the book I, I maybe How would I boil it down? I said something like because why would I have memoir? In philosophy and then, you know, behind the scenes account, venture capital and backing young people, I think, I think it comes down to strange people do strange things and when the times get tough, the weird GoPro and I wanted to take people behind the scenes and add some color and story to, you know, some of these characters I've worked with over the years.

Michael Gibson: One, the one thing I guess part of my bio okay, why tell this story is the, we have Danielle Strachman, my co founder of 1517, we helped Peter Thiel start his fellowship program in 2010, and that was a program where [00:02:00] 100, 000 was given to 20 individuals a year. The two conditions were one, you had to be 19 and under to apply.

Michael Gibson: And two, you couldn't be enrolled in university. So you had to drop out or take time off or maybe you never went. And across five years of co running that program, we saw incredible things come out of it. We, you know, most notable examples are helping Vitalik Buterin launch Ethereum Dylan Fields created a company called Figma that was acquired by Adobe for 20 billion last year.

Michael Gibson: Austin Russell. Founded a company called Luminor Technologies. They make a LIDAR system for cars. They went public in 2020. So the, the Teal Fellowship had a lot of great successes and there's a independent, this guy is probably the best venture capital analyst in terms of being an outsider at CB Insights.

Michael Gibson: And he put up a tweet in fact, last week, where he did a deep dive on the success of the Teal Fellowship. And he, he. [00:03:00] Posted the hit rate, like how many of these people, if there's 20 people in every class, you know, what's the rate at which people create, you know, unicorn billion dollar businesses. And, and, you know, his conclusions were like, wow, this hit rate is something like 7%, which in the world of venture capital is, is quite astonishing.

Michael Gibson: So, you know, there's this program out there that, that the world hasn't really heard about mainly because Peter Thiel is, is persona non grata. The media hates him, the publishing world hates him, and so no one wanted to hear this story. And since I was there and part of it, I, that was the story I wanted to tell.

Michael Gibson: So there's

Malcolm Collins: two things I wanted to discuss really quickly tied to what you just said. The second one we'll talk about next, which is, is how the media like tried to keep your book from being promoted. I think as much as it otherwise would have been given. You know how big the things you guys are doing actually are.

Malcolm Collins: But the first thing I wanted to talk about, which is really interesting is within Silicon Valley. So sometimes some of our listeners, they say they watch us to sort of understand what I guess, like elite society [00:04:00] thinking or whatever. With the fall of universities as good judges of people's competence the highest status symbol a young person can achieve.

Malcolm Collins: And I'd say that this is pretty universally agreed upon among the VC sort of class in Silicon Valley. Is getting into the Peter Thiel fellowship. It is a much bigger deal than, you know, having a Harvard degree or something like that among the young. And it's interesting because we've seen this repeatedly in terms of like new status symbols among youth where the highest form of status symbol comes from programs where somebody is giving the youth money like the new one is like the, the Atlas Fellowship's the Teal Fellowship, then it's probably the, the Atlas Fellowship. And it's because in, in a world where, and it's actually kind of crazy to think about it, that historically you would. We, we judge status on people would pay for that status, but now obviously status should be better judged on who's going to give you money.

Malcolm Collins: Yeah, seriously.

Michael Gibson: [00:05:00] That's a, that's a really good point. I

Malcolm Collins: wonder if you had any thoughts on the fall of the current academic system and whether or not you think it still has utility.

Michael Gibson: I think hierarchies are, are best in a stable environment. Where they are hierarchies of competence. They have not degraded into corruption or incompetence.

Michael Gibson: And, and, and if it, let's say a hierarchy exists to solve a problem if, if, if it is still solving that problem and you can judge people based on merit accurately, then it can be stable over time. And, and, and, and with that comes visibility, intelligibility in the way people. Talk about their lives and careers.

Michael Gibson: And it, it just makes sense out there. And I think college fit that for a long time, but people didn't notice that it became corrupted and that it wasn't solving the, you know, the problem that used to solve and then maybe it's incompetent to, but nevertheless, like this lingering hierarchy that still has status, status and prestige is [00:06:00] there.

Michael Gibson: So people are entering it. Whereas in a chaotic environment, which is the environment of innovation. dynamism, creativity. These hierarchies sh