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Tim Draper On Silicon Valley And Entrepreneurship

We check in on Silicon Valley and the way ahead with heavyweight venture capitalist and tech visionary Tim Draper.

Draper University students at Google HQ (Draper University).

Draper University students at Google HQ (Draper University).

It’s been a rough decade for venture capital.  In the 1990s, venture capitalists – “VCs” – were masters of the universe, racking up huge returns fueling and riding the Internet boom.  Since then, not so good.  In fact, overall, not good at all for the venture investors who come in early looking for a huge payout with the next Google or Facebook.

Silicon Valley has been the heartland of high-profile venture capital.  And venture capitalist Tim Draper has been at the heart of that high-flying world.  He’s with us.

This hour, On Point:  American venture capital and innovation, with Silicon Valley heavyweight Tim Draper.

- Tom Ashbrook


Tim Draper

Tim Draper

Timothy Draper, founder of the global venture capital firm Draper Fisher Jurvetson. Founder of Draper University of Heroes, a boarding school for young entrepreneurs. (@timdraper)

From Tom’s Reading List

San Francisco Chronicle: Tim Draper’s boarding school for entrepreneurial heroes in San Mateo – “Venture capitalist Tim Draper is turning the landmark Benjamin Franklin hotel in downtown San Mateo — which had sat mostly vacant since United Airlines stopped housing flight crews there around 2002 — into a short-term boarding school for wannabe entrepreneurs. Draper, co-founder of the prominent Menlo Park VC firm Draper Fisher Jurvetson, says he got ideas for his Draper University of Heroes from Andover (the prep school he attended before Stanford and Harvard Business School), Harry Potter’s Hogwarts, Singularity University at Moffett Field and, most importantly, his own life.”

CNNMoney: The quiet successes that drive Silicon Valley – “Yes, Silicon Valley has its share of high profile ‘tech celebrities,’ and wealth and attention can be generated in Silicon Valley perhaps faster than anywhere other than New York (wealth) or LA (attention). But every day, great entrepreneurs are building amazing companies you don’t hear about.”

Wired: The Screams of Crushed Startups Echo Across Silicon Valley – “A reckoning is sweeping through Silicon Valley, and the cries of pain have grown too loud to ignore. Many startups fattened by plum valuations and hefty bankrolls in their infancy are finding nowhere to turn when the money runs out, according to various Silicon Valley venture capital firms. These startups have no choice but to swallow their pride and reverse their sunny financial projections.”


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  • John Cedar

    Hey, I think I just saw a black guy and another guy over the age of 40 in that Google pic

    Oh no wait…its just a middle eastern guy that balds young.
    Gotta love the guys that support librul policy and live a hypocritical life.

    • MadMarkTheCodeWarrior

      Ironic that you should try to make racism a liberal problem. Funny, if I remember the RNC convention in 2012 set the standard for racial purity which was in stark contrast to the ‘librul’ DNC’s convention.

      I’ve worked with black engineers all of my life: they’ve always been a very small minority. I’ve always thought it more of a supply issue in the markets that ive worked in: north, south, east and west… and on that point we can debate for years which manifestations of racism are at work producing Casper milk-toast engineering classes year after year over the past century, be it in isolation of neighborhoods, STEM curriculum in those neighborhoods, educational funding to those neighborhoods, bias in college selection processes among other factors.

      • John Cedar

        It is telling that a photograph of Google employees showing a lack of age, gender and racial diversity, implies racism to you wile you ignore the other discriminatory implications.

        And your excuse for the lack of diversity in the engineering field is simply the excuse that every other “assumed guilty until proven innocent” employee or political party should be allowed. But the librul policy I was referring to was the one that does not allow that excuse. No where did I say or imply that racism was a liberal’s problem.

        • J__o__h__n

          The caption identifies them as students not Google employees.

          • John Cedar

            Well that’s the end of that.

            Good thing quotas and affirmative action are never espoused by liberals to apply to students.

          • J__o__h__n

            They are students of the non-liberal who was whining about socialist with cushy jobs who were holding back entrepreneurial heroes.

  • ToyYoda

    Places around the world are trying to copy the entrepreneurial spirit of Silicon Valley. For instance, NYC and Cornell announced plans for an innovation campus in or near Manhattan. And other cities like London have announced similar things.

    Since technology is a driving engine for jobs, it would is vitally important that cities succeed in this venture. I’m wondering to what degree can Silicon Valley’s success be copied?

    • TomK_in_Boston

      Been to Kendall lately?

      If you can do it, starting a tech co or working in a startup is a way to escape the toxic corporate environment. It’s been a brilliant solution for my wife. Unfortunately, it won’t keep the great mass of Americans from sinking into 3′rd world poverty as class warfare rages on..

  • geraldfnord

    Not everyone is suited to being an entrepreneur, not even every bright and energetic person, and (almost by definition) only a few will be among the most successful of those who are so made or can re-make themselves.

    What would Mr Draper suggest for the non- (and lesser) Galts among us who will always constitute the vast majority of us, and for whom the system must work at least decently enough that we won’t decide to kick it over?

    Alternately: what does Mr Draper do to shape the attitudes of his young charges such that they don’t think themselves better than the rest of us, as opposed to being people better _at_ certain things we reward, a very different notion? Any in-group can acquire toxic beliefs about those outside it, and those at the top of our mental, notional, primate band all the more so, and it’s no fun to live in a society whose top have no sympathy with the rest of us.

    • geraldfnord

      My apologies for not being terser—maybe Mr Ashbrook could have, in that case, got Mr Draper to understand what I meant and actually deal with the question.

  • MadMarkTheCodeWarrior

    One TLA for you: ROI… Massively valued corporations are now fueled by the work of a handfull of engineers in the US. It appears that the majority of the other jobs created internally by this work is overseas in manufacturing. There may be local jobs created in sales but these tend to be lowend jobs which is par for the course in the ‘new’ economy. There are tools and methodologies on the horizon in the practice of engineering that is driving the level of efficiency even higher.
    This is very efficient at designing and producing cool stuff, but highly inefficient at generating necessary stuff: living wages to supply food and shelter to people. I’ve been a part of laying the foundation of this dystopic paradigm.

    So where is the beef? What good is a high-tech economy if 90% of people end up working 80 hours a week to stay alive so they can work 80 hours a week with only the hope of winning a lottery?

  • ToyYoda

    I’d love to be an entrepreneur, but the problem is, a extremely few of my ideas have been turned into successful ideas by others. I’m not disappointed by that, but my problem is I don’t have any great ideas to start my own company.

  • ChevSm

    His use of the term “heroes” is really annoying.

    Soldiers are heroes… firefighters are heroes… cops are heroes… some rich kids that attend “entrepreneur camp” are not what I call heroes.

    • Rick Evans

      Did you just prove quantum entanglement by reading my mind? I was just thinking along the same lines.

      There is nothing particularly annoying about someone who uses his imagination to pursue wealth. Would he call mathematicians who invented market derivatives “heroes”? Geesh.

    • geraldfnord

      I will go further: not all soldiers are heroes. My father, a soldier, insisted on this point—one of the differences being that an army that depends on all its soldiers’ being heroes, like a government or economic system that could only work if women and men were angels, will very most likely fail.

      And with time I’ve also understood that in the case of a start-up that though figuratively (that is, ‘not literally’) ‘heroic’ measures might occasionally be necessary, an enterprise that depends on such has probably been poorly-planned or -executed.

  • Yar

    I have my own concept of 1000 points of light. It comes from a distributed power system. On farm energy production can save rural communities. This concept is much better than growing corn for alcohol to fuel transportation. Producing energy on the farm keeps plant nutrients where they are needed.

  • MadMarkTheCodeWarrior

    Please stop calling people who do not risk their lives ‘Heroes’.
    You are degrading the meaning for those selfless souls who have actually save someone else’s life by putting their own at risk.
    Come up with a better word like visionary or agent of change…

    The risks that entrepeneurs take are akin to gambling and there are formulaic evaluations that statistically expect a certain ROI.

  • Jim

    I am the original “hero” for making the building blocks of today’s software market.

    Please give me an applause… yes, yes… why how tender… :)

  • viacarrozza

    “A Drone delivering you a pizza when it detects your blood glucose levels getting low?” Are you kidding me? What about global warming? Greenhouse gases should be the primary technological concern (for entrepreneurs) or all other innovations will be pointless. The big question for venture capitalists should be: ‘how do we build a brilliant economy around green technology?’

    • J__o__h__n

      No, the problem is Americans aren’t eating enough pizza. These drone heroes will solve that!

  • Dee

    I would be interested in his perspective of patents in relation to software and how patents can affect development, costs, and deters investment.

    • Rick Evans

      Funny you mention software patents. Some of the most frenetic activity by Mr. Draper’s “heroic” tech entrepreneurs Apple, Microsoft, Google consists of buying up portfolios of patents, many of which are trivial or were sloppily vetted for prior art. Then when some true innovator/entrepreneur creates an enterprise these patent trolls pounce seeking undeserved royalties. How “heroic”.

      • Dee

        Hm. Yes, though I don’t understand the “heroic” part. There are of course the standing arguement that all patents are built on the ideas of someone else, and the possibility of some one person exploiting said patent at the exclusion of all others not being fair (for whatever fair is worth). I believe I got part of his perspective; government too big, life is too stable, no one takes risks.
        Unfortunately, as you point out, the nature of the innovative beast is to evolve and then take on the role of oppressor to newcomers to protect market share.
        One additional point, and this probably goes to the question “what about those of us that aren’t innovative”, the answer then becomes, are you industrious? The alternative to exploiting the patent is working smarter for yourself or for others. Or, what I heard was, if you really think you are worth more, work more. 40hr work week, “cushy” job= stagnation. And, then we know how this conversation goes back to an earlier era, labor laws, unions, and steel mills. By the time he was done we were at the same place we always are.

        • disqus_ykznXtqnuv

          And that same place is:

          The rich get richer

          Wanna do something about it ?
          Get rich…

          • Dee

            Hm… or change the way you measure your success and more to the point why you work? An adage works here is businesses that aren’t about making money aren’t in business. If you have a commodity, a patent, or some thing perishable for sale you want to maximize what you get for that thing. So, if you just want money that is your model. However, if you want your life to be more than your paycheck then you work somewhere or for some thing where the message is about effectiveness and not efficiency (unfortunately not something governments and colleges are making head way with right now). The second thing you could then do is make those things around you effective. An example of people who want to be more, who are going out on a limb (not being satiated by money) are the MBA students from Harvard who are touring around the country in two cars making a difference in a novel way. Other lessons from life you can forget and then remember in this conversation, what he actually said was: Learn to always be hungry, never accept comfortable, challenge yourself to do something different.

  • MadMarkTheCodeWarrior

    TIm, you don’t get it. Heroism is about risking your life!!! WIth no thought of self.

  • pwparsons

    See YouTube–Walking the Labyrinth of Corporate-Owned Common Core: Why/How Corporations are bricking out “The Education System” to “manufacture” and Ensure a mindless citizenry of CONSUMERS. Ah! The all devouring maw of “Free” Enterprise CAPITALISM! Edison, BTW, was a FRAUD, who ripped off Tesla…NOT “A HERO”, but sufficient for Draper’s purposes…

  • DeJay79

    wow, well its clear this guy is a money guy and not an Idea man because his “off the cuff” ideas are really really stupid.

    “we should be taking the next big leap like flying cars and going into space and stuff” ?!?

    oh really those sure are new and fresh ideas…

    • J__o__h__n

      And apparently cancer needs a cure. Who knew?

      At least he hasn’t said incentivize or think outside the box yet (unless I missed it when I went to the bathroom – the urinal drone didn’t fly so I had to walk).

      • DeJay79

        i know its cliche but


  • Thomas DeMeo

    The problem with innovation in the 21st century isn’t the actual innovation. It’s the networked, interdependent nature of modern societies. After you innovate, you need to fight through a tangle of entrenched networks/regulations that try to hold onto what they have.

    We have plenty of innovative thinkers. We need 21st century business and political structures to intelligently work through legacy structures

    • disqus_ykznXtqnuv

      Don’t forget, even if you do ‘innovate’, and you’re

      successful, there’s a phalanx of copy catters out there
      to undercut you. You’d need deep pockets to get into, and through the patent system, and even more to hire
      lawyers to protect yourself. There’s a whole industry in
      Asia making brand name knock-offs that are surprisingly


  • ToyYoda

    Where is the avenue for those whose big visions won’t lead to any tangible profit for venture capitalist? What if someone’s big vision is to reforest the Sahara or Gobi desert? What if someone’s big idea it to have an open database of pharma-active compounds and cheap chemistry machines so that drug research can be released to the masses?

  • http://www.CayerComputing.com/ Melissa A. Cayer

    What do you think about the U.K. monarchy?

    • http://www.CayerComputing.com/ Melissa A. Cayer

      They do not seem to be innovative and entrepreneurial yet the institution still survives after so much time. The institution must invest their assets in some way.

  • mso9999

    Give credit to the government where its due. VC did not invent the internet or map the human genome. For long range vision and breakthroughs, you need to think beyond a ROI in 2-5 years. What role does VC play in truly risky transformative innovation that might benefit society 20 50 or 100 years from now?

    Matt in Cambridge MA

  • DeJay79

    Wait.. American should Envy the Chinese system of capitalism yet you don’t like socialism. and the top 1% are not the ones getting rich in America today??? What planet are you on?

    “once some people get rich then other will get rich and then you’ll have a rich society” well that’s just about the dumbest thing I have heard in awhile. And this guy is hear to help shape our future? yikes

    • disqus_ykznXtqnuv

      Over here it was called ‘trickle down’…

  • JoshuaKramer

    It is easy to call all Americans weanies when you started off rich (father and grandfather as VCs) and never had to worry about not having a safety net to fall back onto

    • J__o__h__n

      It isn’t a safety net, it is cushy job.

  • CindyC Barnard

    I appreciate what your guest Tim Draper is saying about inspiring the generations to be innovators, and so much to say there, whether they’re working for themselves or others.

    But having “socialism” as your guest calls it, or what the rest of us know as a safety net for economic downturns (that will happen, especially if everyone is taking risks!) will not deter the process of inspiring, educating, all of our children. It just means the safety net will be less utilized overall with better educated, trained people.

    Want to be an innovator, figure out how to inspire those in our public schools.

  • docmac1000

    I think it’s interesting that he keeps talking about Americans being chickens not taking risks but he’s targeted kids from 18 to 28 which is an age range that has less to loose because they just started.

  • Davesix6

    Mr. Draper is making excellent points concerning the need for a positive attitude in life.
    Progressive Socialism does not work and the more we move in that direction the more we will lose.
    Free Enterprise and less government intrusion and we will succeed, as individuals and as a nation!

    • disqus_ykznXtqnuv

      You’re right. Energy startups should be allowed to spew
      toxic byproducts into the groundwater without regulation
      because it increases the country’s ‘wealth’.
      Fortunately, those business entities will be long defunct
      by the time anyone has to deal with the mess.

      • Davesix6

        Wow, with comments like that disqus_ it’s no wonder this nation is in trouble.

  • Jeff

    So who do I talk to about promoting my app I’ve already created? It’s a great idea, an app that automatically changes all your volume settings based on the time of day and day of the week…but I can’t get any exposure! It’s called Volumizer Pro (the regular Volumizer gives you access to all your Volume settings) and it’s on Google Play store; can anyone help me out here?

  • pjchooch

    Socialism is bad for innovation? What a foolish thing to say. First of all, the government doing something does not make it “socialism.” To think it does exposes a complete lack of understanding of what socialism is.

    All of the big innovations of the last century he wants us to emulate were performed by the US Government (NASA, Military/DARPA, etc).

    Space travel: government. Internet: DARPA. Aircraft development: military funding. The list is long.

    Government is great for supplying a huge amount of funding and expertise in areas were there is limited/no initial profit and a high probability of failure. Government-funded research has been instrumental in the base-technologies that drive modern life.

    Think highways… no way would they ever have been built by private industry, but they enable travel/shipping, vehicle manufactures, etc.

    A uber-capitalist may not like it to admit it, but it is true. In the end, most of the businesses he makes his money from base their innovations on these base technologies that came out of government projects.

    • Jeff

      You know I think most people don’t really have a problem with the infrastructure and even some military spending. But you need to take a hard, cold look at the numbers…60% of all federal spending goes into social programs and another 20% goes into defense…that leaves 20% of the federal budget available for all other government functions…including infrastructure, the state department, IRS, FBI, Dept of Energy, Dept of Education, Dept of Agriculture, etc. My point is that we need to shift priorities towards infrastructure and away from so much military and social program spending.

  • Arthur Stockton

    What a self important, silver spoon, faux friend to his fellow man. He suggested that the Chinese model is great. There is great wealth in China, but parts of China are third world. How great is that! Where did most of the technological innovation come from in the 20th century??? NASA and the moon project. What have 21 century “innovators” done for us? make us able to catch up with old friends, watch 6 second videos and trade recipes, watch TV on demand, and give us a opinion feedback loop to all the stupid crap that we already believe, so that we are more and more divided and less and less acurately informed?

  • WorriedfortheCountry

    Uh oh, Mr. Draper used the “S” word and that really set Tom off.

    Tom has an allergic reaction to any mention of the word ‘socialism’.

  • disqus_ykznXtqnuv

    I don’t really want to criticize the guy, but for his school,
    he cherry picks out of foreign elites and Stanford. He said 50% of his kids were foreign nationals and 20% went to Stanford. That leaves 30% for ‘regular’ kids (?)… But they have to have a ‘spark’.

    In my opinion the average person is going to have a
    very tough time creating and running a business,
    especially a ‘cutting edge’ business.

  • disqus_ykznXtqnuv

    The success of Apple, the most profitable corporation
    in America (or close to it) who uses cheap Asian labor,
    does not go unnoticed on Wall Street/Ivy league business

  • disqus_ykznXtqnuv

    It was interesting to hear the knee jerk ‘socialism’ crack
    out of him when Mr. Ashbrook mentioned stagnant
    wages over the last couple of decades.

    I’m pretty sure Mr. Draper’s cash flow hasn’t stagnated.

  • Davesix6

    I believe he was referring to China’s moving toward a Free Enterprise economy and the resulting wealth created and subsequent quality of life rise that has resulted from it.
    Free Enterprise, even limited as it is in China, has totally transformed that nation, and will continue to do so as long as they keep to the same path in the future.
    And more importantly personal freedom for the Chinese people will continue to increase.

  • CaCoast

    Looks to me like this guy’s VC gig is toast due to crowd sourcing and other innovative/disruptive funding sources. His “university” reminds me of that infomercial guy who flipped houses and now wants folks to pay him to teach them how to flip houses. I worked for tech companies in SV for 25 years, and this “university” looks like a great revenue generator for Draper, but not so much for his students.

  • Swashbucklr

    I found Draper to be an entertaining, “big picture”, self-important, but well-intentioned guy, but that image was totally derailed by his comments about socialism.
    Sorry, try again.

  • Michele

    To Jeff in OK: You might want to do some more research on your car idea. Detroit is developing a hydrogen car with solar panels on it…60 Minutes (Leslie Stahl) did a piece on it 2010-2011. Good Luck with your idea!

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