As a managing director of venture capital powerhouse Draper Fisher Jurvetson, Tim Draper helped launch Hotmail, Skype, and more than 500 other technology firms over the past 25 years. His firm manages over six billion dollars of investor assets, and his own personal fortune has measured in the range of a billion dollars.*
But Draper is equally proud of painting lobsters, starring in a Nickelodeon show, and developing his private island in Africa that is “much cooler than Richard Branson’s.” With these pastimes, Tim doesn’t seem to be your typical venture capitalist, but after sitting down to talk with him, I discovered that he may fit the profile even better than he fits in his infamous bunny suit.
From Submarines to Viral Marketing
“Entrepreneurship is about passion and persistence,” Tim tells me as he leans back in a leather chair in a conference room in DFJ’s offices on the iconic Sand Hill Road in Palo Alto. “It’s about drive and determination, having an idea in your head that you just can’t let go of.” The wall behind him is covered with framed IPO notices of a couple dozen companies, with financial details in fine print. It’s the room of an accountant or actuary.
But Tim looks like anything but an uptight number cruncher. He’s got a big goofy grin on his face, framed by an unruly mop of black hair under which his eyebrows leap like a pair of exploding caterpillars, his suit offset by a rumpled red tie covered in cartoon kids. He resembles a friendly but eccentric schoolmaster, which happens to be the role he played on the Nickelodeon show his sister produced, The Naked Brothers Band, featuring his nephews as young music idols.
He’s played the role of educator in real life as well, creating the charitable Bizworld Foundation to teach business to kids in grammar school and junior high. It began when his eight-year-old daughter asked Draper to explain what he did for a living. In response, Tim came to school and turned her classroom into a business incubator for friendship bracelets. He led the kids in practical workshops in manufacturing, marketing, and financing their accessories. “And it turns out some of those kids who had been labeled ADD were absolute stars in the Bizworld environment.” Tim paused, philosophical for a moment. “Interesting…”
Perhaps success as a venture capitalist depends on a healthy dose of ADD. “I wanted to be an entrepreneur myself, but just had too many ideas,” says Tim of the time he was graduating with his MBA from Harvard. As he was developing a business plan for digital music, he also began studying the potential for holographic videos. At the same time he wanted to launch private stock markets, he became entranced with the concept of mass producing personal submarines, an idea he thankfully abandoned because he “didn’t want to disturb all those sea creatures.”
What he did decide on was that, like his father and his grandfather before him, he would become a venture capitalist, enabling him to curate a dozen or ten dozen different concepts at the same time. He would be able to indulge his passion for technology (learned as an electronic engineering major at Stanford), with the persistence of new ideas created by himself and those around him. The most famous of these ideas was his concept of “viral marketing” which helped turn Hotmail from an obscure free email service to a worldwide phenomenon as the customers did his marketing for him by forwarding the program to their friends.
Since then Tim has launched a virtual viral market of venture capital through the DFJ Global Network, with offices in thirty cities around the world, providing him a nearly endless source of new ideas to challenge the status quo. He says he doesn’t directly manage the companies he’s helped fund, but rather serves the roll of a ringmaster, connecting the manufacturers to suppliers, financiers to founders, and the market to a worldwide big top circus of new ideas, be it the China-focused search engine of Baidu, or the Estonian-Israeli partnership that created Skype.