Stanford Has a Secret Course That Teaches 12 People How to Extract Value From Others
The course isn't in the catalog, admits only 12 students a year, and is taught by a Silicon Valley CEO about extracting value from people. The author says students lying isn't an accident — it's what the machine has long rewarded.
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You can take hundreds of thousands of dollars before you have a company
Pre-idea funding was the newest layer of the game when Theo arrived on campus: give an 18-year-old who just got there hundreds of thousands, even millions, of dollars, sign a one-page SAFE check, agree that "if you start a company later, come back to us" — otherwise the money never has to be repaid. For a VC it's pocket change; they don't really believe in these hyped-up teenagers, and they don't need you personally to succeed — one overnight sensation is enough. Meanwhile students are encouraged to make enormous promises and then discover again and again that no one follows up: lie, and there are no consequences.
— Theo BakerThe secret course teaches extracting value
Stanford has a course that isn't in the catalog, called How to Rule the World, taught by a Silicon Valley CEO who styles himself a professor, admitting only 12 students a year — merely knowing it exists is a status symbol. Its central assignment is extracting value from people, with a strong whiff of the ends justifying the means. One woman Theo interviewed said the course taught her how to lie to VCs to raise money — she later raised millions, dropped out of Stanford, despite having already been caught cheating in a computer science class; months later she put out a glossy launch video for a technology that didn't exist, and Silicon Valley cheered her on anyway, she moved into a mansion, and was invited back to Stanford to speak.
— Theo BakerEthics isn't a premise; getting caught is what counts
During ethics week in the intro computer science course, the professor discussed a software defect that killed four people on a radiation therapy machine, and the TA asked who in the room cared about ethics — Theo was the only one who raised his hand. Weeks later a classmate told him he was taking a business ethics course, and "we're all just there to figure out how they got caught." He didn't sense these people needed to pretend to care; when Sam Bankman-Fried was under house arrest in the house on the Stanford campus where he grew up, students made pilgrimages, threw parties themed around him, and said they wanted to replicate his success minus the final fall. A colleague's summary of the money that mysteriously vanished at Tree Hacks: it's all just a little bit of fraud.
— Theo BakerThe real reason the president fell wasn't the data
Board members who ousted Marc Tessier-Lavigne later told Theo that one of the heaviest reasons they gave was his posture — a highly aggressive public stance when challenged, deny, deny, deny, plus the threatening letters sent by the lawyer he hired, Steve Neal, which embarrassed the university. Theo found no evidence he personally falsified data: the problem was in the lab he oversaw, where subordinates fabricated data in papers he co-authored, including the 2009 paper claiming to have found the cause of Alzheimer's, while internal company results before publication showed its core finding was "at best unreliable." He was asked to retract and refused, dragging it out for a decade. What drove him out was image management, not the data.
— Theo BakerFour days after being ousted, the mansion closed
Four days after the board unanimously removed him, Tessier-Lavigne closed on a 7,600-square-foot mansion in "America's most expensive zip code," valued at over $10 million; eight months later he announced he had raised $1 billion for a new company doing AI biotech. Of the two VCs that led the round, an investor at one messaged Theo two months later to rib him, followed by a winking emoji; an investor at the other offered him money to start a company. Theo says it's the most Silicon Valley thing you can imagine: everything can be monetized, even taking down a university president turns into an invitation.
— Theo BakerDuck syndrome: paddling furiously under the surface
Duck syndrome is a word Stanford coined itself: students glide elegantly across the surface like ducks, seeming to do everything effortlessly, while underneath their legs paddle furiously just to stay afloat. Katie Meyer was its best illustration — women's soccer captain, led the team to an NCAA title, headed to law school, didn't drink, didn't smoke, didn't speed. Months before graduation, late on a Friday night, after every student support office had closed, she received a letter: because six months earlier she had spilled coffee on a football player (she said it was an accident, he said it was deliberate), her degree was suspended. That night she took her own life. Afterwards 12 schools paid tribute to her; Stanford was not among them; the women's soccer team she had just captained held a mental health night and didn't mention her name.
— Theo BakerA legendary professor's fraud case, and the school says it never heard of it
Stan Cohen was the first geneticist to transplant a gene from one living organism into another; his 1970s recombinant DNA technique gave rise to the model of universities making money from patents; in its last valid year, that patent contributed 62% of all Stanford patent revenue. In his freshman year, Theo found that Cohen had been found by a court to have committed fraud: he promised investors a drug target that might cure Huntington's disease, and said the drug was already approved to treat another disease, without telling them it had been permanently banned by the FDA in 1976 because it was lethal. He was ultimately ordered to pay $29 million and paid it. Theo asked the university, and the university replied it had never heard of the case and had no involvement at all — even though Stanford owned the relevant intellectual property and had been subpoenaed by the court.
— Theo BakerRaising money is easier than getting an internship, and that itself is a signal
The saying circulating in Stanford's inner circles is that raising money for a startup is easier than landing an internship — Theo says that's absurd, it shouldn't be that way, but that's the status quo. He describes the moment as a game of AI musical chairs: everyone is waiting to see who's still standing when the music stops and who's left holding the bag. He isn't worried about cash-flow-positive companies like Meta and Google; he's worried about the companies clinging to the AI narrative that have no technology of their own, no revenue, and no ability to generate revenue — they can't hold on, and they will collapse. But he also cautions that Silicon Valley hasn't held power for long, that it's a very immature power system that hasn't grown guardrails, transparency or accountability, and that one collapse doesn't necessarily mean a reckoning.
— Theo BakerIn their own words · checked verbatim
there's a secret class at stanford university taught by a silicon valley ceo for 12 students a year called how to rule the world you know i'm not sure i would find that reasonable it's a little on the nose right and yet it totally exists
Theo Baker13:22
He says, you know, we've lost the conscience for what we invest into. We're just following the money.
Theo Baker18:31
I remember a few weeks after that class, talking to this guy who told me he was taking a business ethics class. And he said, completely without irony. Yeah, we're all there to figure out how they get caught.
Theo Baker26:46
She said, it's all just a little bit of fraud. That's how she put it. Just a little bit of fraud.
Theo Baker28:46
He says, hey, Theo, when you aren't too busy knocking university presidents off their purchase into the hands of VCs willing to fund them for a B, you should come join, winky face.
Theo Baker39:01
12 different schools honored Katie Meyer. 12 different schools. Stanford was not one of them.
Theo Baker45:44
it's easier to raise money for a startup than it is to get an internship, right? Which is bananas. I mean, that is crazy, right? That is absurd. And it shouldn't be like that.
Theo Baker55:04
Figures
| How to Rule the World annual admissions | 12 people | 13:22 |
| Combined market cap of companies with offices on the Stanford campus | over $6 trillion | 9:20 |
| Noise limit on the Stanford campus after 22:00 | 55 decibels (normal conversation is about 70 decibels) | 24:42 |
| Stanford Board of Trustees composition | 33 people, none of them an academic, nonprofit leader, journalist or humanities scholar | 49:56 |
| Recombinant DNA patent's share of Stanford patent revenue | 62% in its last valid year | 52:01 |
| Damages Stan Cohen was ordered to pay for fraud | $29 million | 53:01 |
| Property Marc Tessier-Lavigne bought after being ousted | 7,600 square feet, valued at over $10 million | 39:01 |
| What it costs Meta to recruit a single AI researcher | roughly the amount Bezos paid for the entire Washington Post | 57:10 |
Glossary
- pre-idea funding
- Money investors give before a company exists or an idea exists.
- SAFE check
- A one-page agreement; the money isn't repaid, and converts into an investment if a company is later formed.
- Tree Hacks
- A weekend student project competition at Stanford, seen by investors as a high-signal zone.
- duck syndrome
- A word Stanford coined: gliding elegantly on the surface while paddling furiously underneath.
- wantrepreneur
- In the source, people who start companies only because others are doing it, without real ability.
How to listen
Founders and engineers doing early-stage investing, hiring new grads, or watching the AI bubble and Silicon Valley's talent pipeline.
0:00–1:01 and 20:33–22:38 are show promos and ad breaks; skip them.