Venture Unplugged: Tim Draper Part 2

In Part 2 of this interview: Tim Draper and Mayra Ceja discuss Startup superheroes, Elizabeth Holmes, and spirituality. Tim Draper is the world’s most famous venture capitalist with investments in Tesla, Twitter, Hotmail, Twitch, Skype, Box, Carta, Coinbase and Robinhood. He is listed as one of the top 100 most powerful people in finance by Worth Magazine, #7 on the Forbes Midas List, and #48 most influential Harvard Alum.

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Mayra Ceja
Hi, I'm Mayra Ceja you're listening to Venture Unplugged.

From deep tech crypto to direct consumer brands and products, each week we dive in deep into the lives and challenges of today's most successful founders and investors.

This episode is part two of the Tim Draper interview where we discuss startup superheroes, Elizabeth Holmes, and we learned about Tim's spiritual side. As always, Tim is full of amazing anecdotes and advice you don't want to miss.

But before we kick off this podcast, first a word from our sponsors. This episode is sponsored by eToro, Qtum and Lukkaa.

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Which superhero would you be of the Marvel comics?

Tim Draper
Oh, I've always loved Spider-Man, but what would I be? At this point I think I'm Dr. X. I think I am the encourager and guide and teacher of superheroes. And I think that that's the one I'd probably align with the most. I mean there were times where I felt I was Superman, times I felt I was Batman, times I thought I was Spider-Man. I don't think I've ever thought I was Wonder Woman, but-

Mayra Ceja
There's still time.

Tim Draper
And sometimes I am the Incredible Hulk and that's kind of fun to come out and be the Incredible Hulk on occasion. But no, today-

Mayra Ceja
I can see that. Probably not today.

Tim Draper
Today I think I'm more Professor X and he's an X Man and he guides and encourages and drives these superheroes and that's what I do.

Mayra Ceja
Let's talk about something a little bit more serious. We talked about superheroes and all superheroes are humans and inevitably they will make a mistake. One person that you admire-

Tim Draper
Yeah, that's great about Marvel and DC comics is that they all have that human element. They're out there doing great things and then they have the human elements.

Mayra Ceja
You're still Kent.

Tim Draper
Yeah and it's not just that, but actually if you go through those, the villains are kind of cool too, because they're innovators. They create new interesting things. Now they're using them for bad purposes in the comic book, but that creates an us against them thing and that's what people love about comic books. But I think superheroes have a human element.

Mayra Ceja
So superheroes, you mentioned, have a human and it can be used for good or bad. One of the people that you've publicly supported is Elizabeth Holmes. She failed in a very public way. Have you talked to her since and what advice have you given her?

Tim Draper
Since? I mean I do periodically, I've talked to her. Yeah, we were the first investor in Theranos. She came to me full of energy and she said, I'm dropping out of Stanford and I'm going to change healthcare as we know it. And that was a mission that I got behind and I got behind her. She's brilliant. She's a brilliant scientist and really created something extraordinary. And what's happened is that, my thinking is she took her lawyer's advice and just clammed up and I think that was bad advice. I think she should've always been talking to the press, talking to the people, being open, saying here's what we're doing and whatever. And instead she took the lawyer's advice and clammed up. I'm really sorry because that company really had the potential to be extraordinary and there will be many others and there are already 15 companies that have come to me with the same idea roughly. Two drops of blood and lots of different tests. Since Elizabeth has been sunk, there've been 15 companies that have come to me and they've had that idea and I keep thinking God, this could have been Elizabeth.

Mayra Ceja
What's interesting is what you mentioned here is the idea of owning up to your mistakes and being quite open and engaging with the audience rather than retreating, which is, I think, instinctually natural for most people. When you fail, you just want to hide-

Tim Draper
You want to hide and that's the problem. I think entrepreneurs and for her, she kept saying, well it'll come out in the data. Everything will come out in the day. She's a scientist. And when you're under stress, different people respond different ways. A salesmen sells harder. Scientist retreats, becomes more cerebral. And that's what happened to her and that did not play well in the press and once the press went after a hundred times in a row, the government had to go in there and do something about it. When the government comes in, they always seem to find something and she kept staying quiet. And I don't think that's right. I think it's always good to be open, tell everybody everything, tell the press, hey this is what's happening.

God, I mean that product is so good for all those people. All these parents thought this was the best thing that had ever happened. It's interesting. I mean the tests were different. It's always a little fuzzy when you take a blood test because that's not 100%, it's never really perfect. Tests were a little different, but she had the benefit of being able to test them every quarter or something and that could have been quite good because you'd be able to see the trend lines. My blood glucose levels seem to be rising or my vitamin D levels seem to be falling over time and we don't get that.

Mayra Ceja
There's so much that the blood can tell. That's actually a fascinating topic.

Tim Draper
Oh yeah. I think there are a lot of ways to succeed and to fail as an entrepreneur and people of all different walks of life have created extraordinary companies and extraordinary failures and they all take different paths and we get to back them.

Mayra Ceja
What would you say her super qualities would be?

Tim Draper
She's an amazing scientist. She's really extraordinary and a brilliant, creative visionary

Mayra Ceja
In dealing with people, right? It's great that you've been surrounded by all these amazing people, but has anybody ever disappointed you or when was the last time somebody disappointed you and why?

Tim Draper
Yeah. I mean, I never want to mention the name, but one of my students had great potential and I thought they could be a big hit and they were going to make a big impact on a big continent and they were dishonest or they misused the capital and it was very disappointing. But I do believe that even though that was the one outlier that I've had, I mean maybe I've had one or two other outliers in my career where they really didn't live up to my expectations, it turns out that if you have high expectations of people, they live up to your expectations. And if you trust people, they live up to your trust. And that is almost a universal. Reagan used to say trust, but verify.

I think you can generally trust people as long as you're showing them your trust and they are showing you how they can live up to your trust. I mean, gosh, I'm in the business of handing money over to people. It's all a trust game and hoping that what they're going to do with that money is fulfill their mission, their life's ambition, their hopes, their dreams, their longterm livelihood. And they generally do everything they can to make it a success. And I have seen these companies look like they were going to succeed and then they failed and I've looked at those entrepreneurs and I've thought, it didn't work out but you really gave it your all, so thank you. This was really great. Thank you. I think more venture capitalists should look at it that way.

Like these people, they're putting their all into it. They're trying as hard as they can. If the thing works, great, if it doesn't work, that's still great.

Mayra Ceja
And I think you and I share this eternal optimism about people but I absolutely agree that if you set expectations, people will absolutely rise to those occasions and you have an outlier here and there and you certainly learned how to maybe spot them a little bit earlier on. But I think that's definitely a great way to walk through life and an exciting way. And I think you're always pleasantly surprised, right? You've had a phenomenal life.

Tim Draper
I have and I've been able to stay in this phenomenal business because every once in awhile I hit something that other people didn't see. You know, Robinhood, Hotmail, Skype, nobody wanted to talk to. Tesla. They all went to 20 or 30 venture capital's before they found me.

Mayra Ceja
Wow.

Tim Draper
Yeah. I mean, every once in awhile I see it and that has made it so I could continue to be in this great business.

Mayra Ceja
With all of this tremendous success, what has been one of the biggest challenges you have faced in your life either personally or in business?

Tim Draper
Well, actually it's interesting because I even think that those challenges are still ahead of me. I mean, we've had a lot of challenges. We've had founders going AWOL or dying or leaving the business or trying to attack the business or whatever. We've had lots of strange things. We had one founder who wanted to date the other founder and that founder didn't want to date that founder and that kind of ended that company. And then we've had founders that figured it out, caught some amazing wave and rode it, and made it a great success. It's been fun.

Mayra Ceja
Every day it keeps you excited. I love that.

We've talked a lot on various different topics on the show. Before we jump into rapid fire questions I'd like to end on a happy note. When was your last moment of extreme happiness?

Tim Draper
This whole thing's been happy. My moment of extreme happiness is usually around my family. They get me going. They make me happy. Yeah. We have a wonderful family both up and down the food chain. The family is so exciting and so much fun. It's great. They make me happy.

Mayra Ceja
I love that.

Tim Draper
And occasionally my friends made me happy. And Survival, when I go with the students on Survival, that is a happy moment. That can be really extraordinary where you feel you've accomplished something that you've never thought you could do, that kind of thing.

Mayra Ceja
That's great.

All right, should we jump into some rapid fire questions?

Tim Draper
Okay.

Mayra Ceja
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What was the last good book that you read?

Tim Draper
Here it is, How to be the Startup Hero by Tim Draper.

Mayra Ceja
I love that.

Tim Draper
My dad also wrote a fantastic book called the Startup Game, which is about a lot of his stories and it's great fun. And then, let's see, what am I reading now? Generally I read a lot of science fiction and I'm a big fan of Asmiov and Frank Herbert. And then I speed read nonfiction and get me to the point here, unless there's a really good storyteller like Zero to One.

Mayra Ceja
Absolutely.

Tim Draper
He did a really good job of storytelling and so I was in it the whole way.

Mayra Ceja
What is your best life hack?

Tim Draper
I think it's the cold shower in the morning.

Mayra Ceja
Cold shower?

Tim Draper
Yeah. I start with the hot shower and then I go and my showers are quick, but I hit it with cold water and I think that really helps. And if you start getting tired in the afternoon, splash your face with cold water. I think that is possibly the best life hack.

Mayra Ceja
Like Tony Robins. That's incredible.

Tim Draper
Oh, does he do that?

Mayra Ceja
Yes.

Tim Draper
Well he also jumps on a trampoline before he gets on stage and I realize that's not a bad idea to hop around before you're presenting. I should've hopped around before your interview.

Mayra Ceja
I feel like you have plenty of energy today.

Tim Draper
Exercise is a big deal for me. I try to do everything something every day, but if I miss two days of exercise, that can be really bad news. I've got to have exercise at least generally every day, but maybe every other day.

Mayra Ceja
That's great.

And do you believe in God?

Tim Draper
I believe that we're all interconnected and that we're not only connected with people here on the earth and we're all connected to all of them. Every religion and every people and the plants and the animals. We're all interconnected and I think we're also connected to people who have died and plants who have died and animals who have died because I do know that my mom died and we have had real connection since she's died in lots of different ways. Giant rainbow that showed up at right after she died, a phone call I got right after she died, really a lot of interesting things.

I know there is something else. I think there's more beyond our life and I know that we are all interconnected and we should act that way. We're all a part of one big world and that world is interconnected with one big universe and it's all energy sources and uses. I've grown this sense of spirit over the last 20, 25 years of my life and weirdly, I have a really good sense of what happens after you die.

Mayra Ceja
I love that.

What is the last thing that made you want to quit?

Tim Draper
I did six Californias. I tried to create six Californias instead of one so that the governments would have to be accountable to all of us. They'd have to compete for us. If they didn't perform, we could go a different one and California's so beautiful that they can operate it as a monopoly and we're still, we get the worst service at the highest cost because it's monopoly and they don't have to really improve their performance. I mean education's almost the worst. I think we're 49th now. We have the worst infrastructure. We used to be best place to do business now we're worst. I did six Californias and they discounted my signatures because the people in government don't really want this to happen. They discounted my signatures and made it that I didn't have enough signatures.

Then I did three California, I doubled the number of signatures I needed and then they couldn't discount the signatures, but somehow they twisted the arms of the Supreme Court in California and they pulled it off the ballot the day before it was supposed to go on the ballot. You never got to vote on three Californias but we made it. We got all the signatures, we got the Secretary of State's office, everything was okay to go and they yanked it off the ballot. You got to vote on proposition eight and ten but not proposition nine.

And that was where I said the insiders still control this government. They've been doing such a horrible job. And it doesn't matter who the politician is, they still control it. The bureaucrats still control it. I never even got served. All I heard was we are pulling this off the ballot because we think it'll be disruptive. That was it.

Mayra Ceja
Wow.

Tim Draper
And that was just disgusting in my mind. We're a democracy. We should be able to vote on stuff like that. And that's where I had that sense of now what? What do I do?

Mayra Ceja
It takes a lot to make you say that.

Tim Draper
I tried it twice and the third time may be a charm, but I don't know what the third time will look like. I mean I'm a creative guy, I still don't know where I can come up with a way to make it so California becomes better governed.

Mayra Ceja
Do you ever think about running for politics?

Tim Draper
Yeah, except no.

Mayra Ceja
What is the best piece of advice you've ever received.

Tim Draper
My dad got advice from his father and he passed it onto me and then I passed it on my kid. And the idea is it doesn't matter who's selling and who's buying. It's the personal connection that matters. Never feel badly about which side of that you're on, whether you're buying or selling, just look at every interaction as a personal connection.

Mayra Ceja
Do you mediate?

Tim Draper
Yeah. I meditated a lot when I was about 20 and now I actually don't have to meditate that much, but when things get really crazy, then I will. I'll take a little time out and meditate, but I can actually get it done fairly quickly. Sometimes I need a full 20 minutes, but sometimes I can just picture myself in another place doing something different and then my heart rate goes down and everything's good.

Mayra Ceja
Do you believe you're lucky?

Tim Draper
Oh absolutely. And in parts you make your own luck but in parts we have something we called Draper luck and we get it. It's like there's one seat left on the airplane, we get that.

Mayra Ceja
I love that.

Tim Draper
There's something great about Draper luck and we have it. I'm lucky.

Mayra Ceja
I'm definitely on the same wavelength as you on that.

What founders do you admire?

Tim Draper
Oh my gosh. So many. The ones that we've backed. Some of the ones we've backed have been just extraordinary. Robin Li from China, Niklas Zennstrom from Skype, Elon. Elon's amazing because he says we're going to Mars and everybody's saying, gosh, is he crazy? What's he thinking? Except for a few people who are the best engineers in the world and they're saying here's how we can get to Mars. Here's how we can breathe on Mars. Here's how you can eat on Mars. And they all come to him and so he gets the best engineers in the world because he's got a mission that's so cool and he's willing to stand out there alone and do that. I guess he's the one.

Steve Jobs, though, was just, I mean we all bowed down to Steve Job. He's put so much into this.

Mayra Ceja
Absolutely.

Tim Draper
I mean it's amazing. It's amazing what I can do now with this.

Mayra Ceja
What is one belief that you believe that most people don't?

Tim Draper
I believe that anything can happen. I think that anything is possible and I don't think most people think that.

Mayra Ceja
What is the biggest misconception that people have about you?

Tim Draper
I don't know if it's a misconception, they may be right. A lot of people think I'm crazy. What's he doing? Why is he trying to break up California? Why is he starting a school? Why is he backing these startups? Why does he raise money? All of those questions, they are questions that people generally, when they see these articles written, they say, what? He doesn't fit in a box. I still write write poetry, I write songs, I paint, I do all these fun things because hey, they're great, they're fun, they might make an impact somehow and I'm willing to take chances and I think that that is where people are a little more comfortable in their box and they look at me and they say, I'm not that comfortable with all those things he's trying to do.

Mayra Ceja
What is one word that you would use to describe high school Tim?

Tim Draper
I was hard working in high school. I was hardworking and I studied hard and I worked hard on the football field and in all the sports I played and I participated in all sorts of things. I tried running for student government, I was in the plays. I was hardworking and participater. I was in it. I don't know if I had that much talent to start with, but I worked at everything and I think that helps.

Mayra Ceja
What is your superpower?

Tim Draper
My superpower today is helping other people find their superpowers.

Mayra Ceja
What do you want to be remembered for?

Tim Draper
It's still to come, but I actually think that I can have a hand in having the geographic borders become less and less relevant and we become one big happy world where governance is mostly virtual and those governments are all providing services to you and me. And we can pick and choose which government does which service for us. I think that that world is coming and I want to accelerate humanity's advancement to that world and I think we will have huge progress as a world if that happens sooner because right now a whole bunch of the world's population is subverted by dictators or government officials who think that they know better than the individual, what the individual can do or should do. I think freeing up all those individuals to do whatever their mission in life is, is going to move society forward at an accelerating rate.

Mayra Ceja
And one last question. What do you want your children to remember you for?

Tim Draper
That I am a good dad.

Mayra Ceja
Thanks so much for listening to that episode.

Lukka is bridging the gap between the business and blockchain world by providing the leading institutional grade back end middle office accounting software and data services to the crypto ecosystem. For more information, please go to Lukka.tech. That's L-U-K-K-A dot tech.

New episodes go live every Tuesday and Thursday at 7:00 AM Eastern time. If you want to continue the conversation, you can find me on Twitter @MayraCeja007 and I'll see you next time.