Tim Draper: Silicon Valley billionaire’s lifestyle, reaction to his book, splitting California

- In 2014, we decided to raise capital for LinguaTrip and decided that we wanted to raise money from the best. So we spend our last money on a flight to London and you know what we do? We just go to DFJ, a fund started by Tim Draper, knock on their door and say, hey, we started this amazing company. And they say, you need to go on a date, guys, no, we can't talk to you right now and we're leaving. In 2015, we managed to get investment, 500 startups, we moved to Silicon Valley and I met this radio host. And she says, you know, tomorrow I'll have Tim Draper as a guest on my radio show, just call us and ask him for an investment and I'll let you in.

So I called the radio show, talked to Tim, asked him to become a mentor and he said, Why would you agree to become a mentor to someone you heard for the first time on the radio? So yeah, he said no and I was like, okay, but I tried. Year 2019, Tim Draper's team comes to me and asks if I want to create a video with Tim Draper at Draper University, and I say of course. So we're here in San Mateo to talk to a

billionaire

, an investor, an entrepreneur, a person who changes the world in many ways, Tim Draper, let's do this. (upbeat music) Tim Draper is an American investor.

One of the first to invest in Skype, Hotmail, Fido and Tesla. His grandfather started California's venture capital industry. Tim has several businesses, including his VC Fund and Draper University in San Mateo. In 2013, Tim began an effort to divide California into six separate states, costing him nearly $5 million, but the plan failed. He also runs a television show, Meet the Drapers. Fun fact: he owns an island. Tim's daughter had a TV show, The Valley Girl, which inspired this channel. When I Googled your name, do you know what Google said? Television actor. - No way, that's funny. - Yes. - Wow.

And I am a television actor, but a very small television actor. Alright? - Yes, well, that's what they say. - That's hilarious. Yeah, well, you know, it was, my sister created something on Nickelodeon called The Naked Brothers Band and I was the school principal on the show and her kids, my nephews, were the stars of the show and my daughter, Jessie. , the other

valley

girl, was also one of the main protagonists. But I came in as a kind of cameo to do crazy things as the school principal. And that was before I was the principal of a real school. - What is one word that would describe you these days? - A word? - Yes. - Wow, a lot of words come to mind.

They are kind of fun, excitable. I think transformative is probably the one that helped propel the internet when it was starting out. Now I'm pushing, I'm helping push Bitcoin and the decentralized world forward. And in fact I think it's an even bigger mission. And in fact, even before that, I was driving entrepreneurship and venture capital around the world and that was my mission. So yeah, I guess transformer or yeah, a transformer like becoming a car. - We should tell Google to replace the TV actor with a transformer. - Yes. And then you have so many businesses going.

You have Draper VC, you have Draper Associates, you have Draper University, you have your Lupita Island, which is also a business, The Prairie Club. - Oh, you've done your job. Yes, we also have the Draper Venture Network, a network of venture funds from around the world. They cover around 48 cities around the world. So my mission there was to make sure that we could fund companies wherever they were. -And of those businesses, which one generates the most profits? - Oh, the venture capital business by far. Ah, from afar. - And can you name some of the most successful outings you have had? - Oh, of course.

Skype, Hotmail, Tesla, SpaceX, Twitch, Robinhood, Corda. I think we have 35 unicorns and eight what we call rhinos, fat unicorns. - Who are you most proud of, which company? - You know, that's interesting because I would say I'm probably the proudest of Hotmail because it spreads communications all over the world for free. And I came up with the idea of ​​viral marketing. And my original idea was to say, P.S., I love you, get your free email on Hotmail. And the founders thought I was crazy. I kept hitting. And finally they said, okay, we'll do it, but no P.S.

I love you. And I think we would have had a much more peaceful and loving world if every email sent through Hotmail or even any of these other email systems said: P.S. I love you in the end, but it's okay. We still have a very good communicative world because it opened the floodgates of communication. And I think Skype did the same thing, but it did it for video and audio. So I'm happy to have been able to contribute a little to spreading communications around the world. We are more global because of that. And all of these things that have happened since then are actually other forms of viral marketing.

Face

book

, anything that looks like a magnet or a spread of something around the world, really has a kind of viral marketing built into it. So, yeah, happy to have achieved that. It's a bit strange moment. And I had this idea and I wouldn't let it go. And they looked at me like, oh God, of all the investors I had in the world, why did we end up with this guy? You know, we could have had all these other investors, but this is the one who said yes? But in the end I think they thought it was a good idea. - And of all your activities, investing is what makes you the happiest person? - Well, that's really interesting.

In general I am happy, I always have been, throughout my life. In fact, people say on your birthday, oh, you know, whatever. And I say, no, every year is better. And that is really the case. Each year has been better than the last. So I'm really happy all the time. I think the things that make me happy are the variety of life. The fact that I can be a venture capitalist and I can go to survival training with students, I can meet with you, I can travel around the world, I have a network of venture partners around the world.

It's all great. Someone asked me before about my bucket list and how that helps me. Well, the way it does it is it leads me astray because most people in their work are on a path and they can't quite get off that path. But if they leave the track, they will come back better at their job. That's why I always encourage people to make a bucket list so they can get off the path, come back, and be better at what they do. - Where is your attention then? Do you have anything you're really focused on these days? - Well, I am very excited about the transformation of the world.

I consider the old world as tribal. We used to create these geographic borders. That way we could protect me from you, that you were Russian, right? Well, all these strange borders were created between the United States and Russia. Turns out if you know people, they're all wonderful on both sides of that thing. But governments are still trying to keep us tribal because they can justify their state departments and defense departments or whatever by saying, hey, we're tribal. With Bitcoin, suddenly the world is global. It is decentralized. It is so global that governments can't really control Bitcoin.

And that means all of these other services will potentially be global. And so, even governments will be able to compete globally for all of us. And that ends up being such a big change. And now governments have to start thinking like businesses and have to say, well, what does my customer want, instead of what do I want? And I think what we're seeing now is the complete opposite of that in governance, because they're reacting to the realization that somehow they're not as necessary. In some ways, sure, you still need the local government and the police and all that, but in some ways it's like, hey, I can get my health insurance in Canada, I could get my educational training in Russia, and I could get my workers' compensation from a country that has never been invented and that could be 11 miles from the coast or in space.

I think governance will be one of the biggest industries in the world in the future and people will have to start adapting to this new world. And Bitcoin, the blockchain, and a smart contract can provide a lot of governance. Because what is governance? It's a security blanket. It is an insurance policy. Well, with a smart contract in Bitcoin, you can create an insurance policy that doesn't require all those people to keep an eye on things. You can use AI to detect fraud. I mean, this is the beginning of something that will really change everything. And I think, you know, the world is saying, how long is this going to last?

Oh, of course when he's dead. But no, I think it will be between five and ten years. And we are going to see a huge change. And some of the countries will be completely left behind because they will cling to their tribalism and other countries will rush forward because they will say things like when Japan said, Bitcoin is a national currency or Malta says, oh, Bitcoin is actually our only currency. - And you're actually doing something locally, right? Are you still pursuing this idea of ​​dividing California? - Yes, it is consistent with my thinking because California is one of those monopolies.

It's so beautiful here and it's beautiful all over the state, that the government can do whatever they want and we have to put up with it and they provide the worst service at the highest cost. California is number one in taxes and number 49 in education, number 50 as a place to do business, infrastructure is far behind. It's a disaster, but people still live here because, well, the weather is nice. - Silicon Valley, yes. - And it is beautiful. Well, if you divide it into three or six parts, then all of those different states are going to have to compete with each other for this land and they're going to have to be accountable to their citizens, just like companies are accountable to their customers.

And those companies have to compete with other companies for their customers. I think governments need to do the same and that is starting to happen. And California is one of those places where they can get away with being a monopoly if we don't break it up. It is also the largest state. Why not? - So, do you think you're going to be successful with it? -No, because the people in power in California are this union boss Núñez, he basically made the firms that I created discounted in the first place. That was for six California. During three California elections, they twisted the arms of all six California Supreme Court justices and removed him from the ballot the day before it was printed.

So I went and got twice as many signatures as I needed so they couldn't do that to me again. Instead, they simply took it off the ballot. They said this would be disturbing. I said, of course I did. That's the whole point. - Yes. And do you see yourself leaving California like your friends or do you think it's the best for you? - I know, I'm watching a group of friends leave and it's very sad. Many big companies are leaving and it is sad. I have a lot of my infrastructure here. I have school. I think as we build ecosystems in other places, I'll be less tied to the state, but I feel like I live in the state, why don't I see if I can continue to improve it?

But it turns out that both of those attempts were repressed. So maybe there is another way and maybe there is a way that the union boss is satisfied and feels like okay, we can do this and it will be good for California, not just for their, you know, the taxi. he forces all his government employees to pay him. (laughs) - So, for you, is this the best place to live on earth? - In fact, I like almost all the places I've been. Yeah, although I was in Moscow in the middle of winter, and as soon as I walked out, I felt all the heat leave my head and I thought, oh my God, that's why they wear these big hats.

It just disappeared. It was as if all the energy in my life had been absorbed. So I don't think I would want to be there in January. I think that would be the only place I would probably have problems with, but I wouldn't mind being in St. Petersburg. - That's where I'm from. - And I wouldn't mind being, wow, everywhere, just having been to the Baltic, and those are such beautiful places in the summer. That's why I think there are so many beautiful places and wonderful places to be around the world. And I think I'd probably be very happy living in all of them.

I would have to go back to an ocean at some point, because I'm an ocean swimmer and I feel like I have to get out. Every once in a while, I feel this urge to go swimming in the ocean. - I have a couple of questions about your daily life,

billionaire

Tim Draper. Do you drive yourself? - I drive myself, yes, or use Uber sometimes. - Oh great, what car do you have? - I have a Tesla, of course. - Of course. - You don't support a company and then don't drive its car. - Yes, I saw your... - And it's a fabulous car.

I drive the s and it is fabulous. - Nice. And when you fly somewhere, do you take private jets or? - No, actually I am dedicated to business. You don't get rich by being extravagant, you get rich by being stingy. - That's great. Remember that. Do you have security? - No. - I only ask this because you, and like the people around you for many people around the world, are like superstars and want to know everything. - No, it would be ridiculous. You know, the really funny thing is that I have people protecting me all the time anyway.

Another interesting thing is that we had, when I first bought the Draper HotelUniversity across the street and this building, we had these robberies. And then all we did was set up a bunch of cameras and we even caught the one guy we had a robbery with, I mean we got him on camera. I think cameras are really valuable. That's why I think we are all much safer than many years ago. And I think that people who surround themselves with a lot of security, I think they live in the old world. I mean, I live with cameras around me, so hey, yeah, go ahead and take your best photo, but you'll be in front of the camera. - I actually wanted, like the people who protect you throughout your life, Karen has been with you for 30 years, that's incredible, 75 interviews to select her.

Can you give any advice for hiring people? - That's right, you read my

book

. - I did, of course. - Yes, good for you. - It's a great book. - Then hire people, yes. Hire very slowly, choose very carefully, and then if they don't work out, get rid of them very quickly. - Yes, in fact I really enjoyed your book. But I also read Amazon reviews and some people say that this guy can't really teach us entrepreneurship because he came into this world of entrepreneurship with the support of his family and with an incredible education. What would you say... - Don't you think that's positive? (laughs) I'm not really sure what's wrong here.

Well, I think it's great that you read the book. You know, I've been lucky because I grew up in Silicon Valley and we started out where, you know, at one point I didn't really have any money and we were just trying to make ends meet. But then I got to see how his influence as a venture capitalist and my grandfather's inspiration as a venture capitalist helped grow this incredible economy we have here. And then when he was 14, he had a big hit. And that was the beginning, that was where I was able to go to high school and then go to Stanford and Harvard Business School.

So I received an incredible education. But I didn't grow up with a lot of money until I was 14. And then we had a lot. - And you can hang out with amazing people. - That was the other thing that was great. My dad had some very influential friends and I got to meet them. And so I ended up meeting the heads of state of many different countries and also some of the best businessmen in the world, some of the great businessmen. That made me feel very comfortable with all those people. - And you hang out with them every day, like incredible entrepreneurs.

Who is, in your opinion, the most impactful entrepreneur currently in Silicon Valley? - It depends on what you call impact. I mean, I would say the impact of all that communication around the world and all that information around the world probably still has the biggest impact. But I would say that someone who would encourage more people to take bigger risks would probably be Elon, because he's done a couple of extraordinary things that people pretty much all over the world thought were impossible. One is to launch rockets without NASA and the other is to create a new car company in the United States.

That was something no one had done for 50 years. And those were important advances, but still, the guys who started Hotmail and the guys who started Skype have had a big impact on all of us. And I think yes, now that I think about it, if you asked me this in three or four years, I would say Satoshi Nakamoto, because he created Bitcoin and Bitcoin will have an impact on all the biggest industries in the world. world. And that, fantastic, I mean, and he remained anonymous, which means that he won't be forced to fall into the schadenfreude that all these other guys are being defeated by.

I mean, I don't quite understand it. Maybe there's a little bit of envy in everyone, but why would we be trying to take down Jeff Bezos and Mark Zuckerberg and all these people who are the most extraordinary people and have done the most for us? I mean, our planet is so much better because of these people. Our lives are much better thanks to these people. We should celebrate them every day of our lives. Steve Jobs should be celebrated every day of our lives. And when we die. - Yes, maybe people are afraid that one person exerts too much control. - Yes, and that's a healthy thing.

I mean, there's something healthy about that. If that's the problem, if it's just defeating this incredible leader, I think it's unhealthy. I feel like, look, they built a business on people communicating, showing photos, entertaining, you know, all that stuff. It's been a fantastic business. It's a big business. They have done great things. If they are using your data to make money, or if they are advertising to you, you can always leave the platform. And I don't, that part is really bothering me. - Yes, it's free, it gives you free popularity and stuff, and you complain about the algorithm change.

Yes, I know what you're talking about. And of the investors you interact with, who is the smartest today? - My children. - Your children? - My children, from afar. -My son at Boost, Boost VC is an accelerator, but a venture fund, and he is doing it to, he says, make science fiction a reality. And he was the first accelerator to chase Bitcoin, the first accelerator to chase virtual reality, chase oceans and anything that's science fiction. My daughter actually started The Valley Girl Show, which you modeled this after, and then she's a female-only VC based in Los Angeles.

My other son worked with me for four years and decided that when we were going to raise our next fund, he said, no, I'm leaving dad, I'm going to do my own. He is an incredible investor. He brought me Robinhood. I think all of them, and my other daughter is an entrepreneur, so I can't say she's a great investor, but maybe she is. - Great, yes. I know where you are back to back. I have a couple of last questions: Get to know the Drapers Show. Is it only for YouTube? - This is what's on the Sony network and the Times network and they both have a large Indian diaspora, which is great for us.

Good entrepreneurs come out of India and it's been fantastic. We are looking for more distribution. We will distribute it right after they do it on YouTube and Draper TV and our reasoning is that we want to make sure we complete the crowdfunding. And it looks like many of these entrepreneurs have raised the full $1 million in the crowdfund. - Amazing. - This program is working and is a success in India. - Impressive, yes, congratulations on that. - It's really a fun thing and we have a lot of followers and people, I mean, the nice thing about it is that it's kind of a nice shark tank, but it also allows viewers to come and invest in the companies.

And we do it very easily. It is very easy for a viewer to say $100 to this company. And it's been great for all of us. We really enjoy it and I get to meet up with my dad and my daughter and anyone else in the family who decides they want to be on the show. - Yes, that's great. And I read your wish list, the Japanese language, so my company is a technology platform that allows people to travel and learn languages. So we give you two weeks free in Japan, when you decide to go, tell me. - Oh, fantastic, oh great.

Yes, my Japanese is not as good as it should be. - This is immersive. So you stay with local people, go to a local language school and do that. - Actually? And is this part of something you've set up? - This is our company, yes. That's why we are in Silicon Valley, because we received investments from here, we moved from Russia and settled here to grow the business. - And he settled here. But how does this relate to Japanese? - Allows people to travel around the world and learn languages. And Japanese is one of the languages ​​you can learn. - Oh, fantastic.

Oh, that would be very helpful. - And in fact, we work as agents with educational institutions, so we could do a Draper University as well as an institution. - Oh interesting. - I don't know if you've ever worked with educational agents, but this is a great source of traffic. - We are seeing how, I mean, because now the model works. We've figured out how to make the model work. I have a long time. - But today it is mainly about direct marketing? - Word of mouth mainly. And some governments are bringing in their best and brightest and sending them out. - Great, that's great. - Fantastic.

Great, oh, I better fist bump because I don't want to give you anything... - Yeah. - Definitely not. - Thank you very much, Jim, thank you. Yes, your book is amazing. - Yes is funny. - Did you write everything? - Yes, every word. And these people came to me and said they wanted to be my ghostwriter and I thought about it and I thought, well, then it won't be the same. They don't have the same sense of humor. They weren't there. So they'll try to sugarcoat it instead of, you know, trying to make it into a better story instead of making it real.

And when you read it, you get my whole personality, right? You are not sorry? - All stories. Oh my god, that was my favorite part, all the stories about Silicon Valley. - Oh, wasn't that fun? Yes, and do you know when I wrote it? I have to travel everywhere because I have venture funds all over the world. So I would get on the plane, take this out, and write all about it. And then I did my editing on the computer. - Yes, I also wrote my book. It is a bestseller in Russia. - Fantastic. Oh, do you want to translate mine?

We do not have a translation into Russian. - I can give you the best editor. - That would be great. - Because I have the best editor. - Yes that would be great. The security question, what made you think of that? - Just, you know, as a billionaire, because people like... - But I don't want that. And the other thing is I wouldn't do anything because I can't even get to all that. I know I can't reach that. So it would be like, okay, sure, but you need like 15 people who have to touch it before you can get to it. - Today I will make a post on my Instagram about it with a photo of us. - Okay, perfect.

Great, do we have a photo? Let's take a photo. - Yes, let's take a photo. (laughing) - I like that one. Let's just do a few. - A normal one is fine, fine. - Yes cool. - Great good. - Thank you so much. It was so exciting. - All the best with the baby. - Thank you so much. -Is he a boy? - A woman. - Yes, great, fantastic. Oh, you're going to love it. - Thank you. - Girls are easier at the beginning and more difficult in the middle. - OK thanks. Thank you. He is so sweet.