Tim Draper, Venture Capitalist
Today, my guest is Tim Draper, the founding partner of leading venture capital firms Draper Associates, Draper Fisher Jurvetson (now DFJ) and also the school, Draper University. Tim is a third generation venture capitalist and founded Draper Associates in 1985, which when joined by John Fisher and Steve Jurvetson became the venture capital firm Draper Fisher Jurvetson (DFJ).
In 2012, Tim founded Draper University to teach entrepreneurship through hands-on training, an innovative curriculum and thought leadership.
He has been listed as #46 of the most outstanding Harvard alumni, #7 on the Forbes Midas List, #1 Most Networked Venture Capitalist by Always On, and #98 on the 2014 Worth Magazine 100 Most Powerful People in Finance. Tim holds an EE degree from Stanford and an MBA from Harvard Business School.
In this candid conversation, Tim shared the real stories behind his family's deep roots in venture capital, his invention of viral marketing, and his unique approach to training future entrepreneurs.
1. Growing Up in the Apricot Groves. Tim revealed that his grandfather was the very first venture capitalist in Silicon Valley and his father was a pioneer in the field. Growing up watching the area transform from simple apricot groves into a booming tech hub taught him that there is always a better way to do things, a mindset that eventually inspired him to spread venture capital globally through the Draper Venture Network.
2. The Power of Embracing Failure. Discussing his investment strategy, Tim noted that his biggest advantage over other exceptionally smart VCs is his absolute willingness to make mistakes and fail. Because he actively expects about 60% of his investments to lose money, he is not paralyzed by the fear of failure; instead, he focuses purely on how profoundly a startup could transform society and healthcare if the idea actually succeeds.
3. The Tupperware-Inspired Birth of Viral Marketing. Tim shared the incredible story of inventing "viral marketing" out of sheer necessity when funding Hotmail. Lacking a massive advertising budget, he drew inspiration from a Harvard Business School case on Tupperware and convinced the founders to put a clickable promotional link at the bottom of every single outgoing email. Though the engineering team flat-out rejected his pitch to start the message with "P.S. I love you," the embedded link strategy skyrocketed them to 11 million users in 18 months, and they ultimately chose to give the viral concept away to the world rather than patent it.
4. Building a School for Heroes. Beyond his full-time venture capital work, Tim transformed an old hotel into Draper University, an unconventional "school for heroes" and entrepreneurs. Instead of history, the curriculum teaches future-focused subjects like predictive analytics and Bitcoin, and subjects students to extreme team-based survival training with Navy SEALs. He is currently compiling his school's credo and these unique lessons into a hybrid textbook and manifesto for aspiring founders.
