🦸 “Superhero Money” — Interview with Tim Draper: The Godfather of VC

0:28Let's get started. the Facebook. Before Steve Jobs even thought about putting on a turtleneck, Tim Draper was riding unicorns. You mean feeding unicorns with capital. Correct, Jack? Yeah, because Tim established the Silicon Valley venture capital that we all know right now. And today, Tim's startup portfolio is today's all-stars on the stock market. And tonight, he's going to tell us how he picks them. Because he was right about Tesla. He was right about SpaceX. He was right about Twitter. He was right about Skype. He was right about Ring. He was right about DocuSign. He was right about Coinbase.

0:59He He was right about Twitch. When the Robinhood investors, when the Robinhood founders got rejected 25 times facing 25 no's, Tim Draper was the very first man to say yes. Tim Draper bought Bitcoin at$4. Not 400, not 4 ,000, not 40 ,000. $4, the slice. That's the price of a slice. That's the price of a slice. But Tim is not just getting rich. He invests specifically in companies with a vision to change the world. He actually once proposed splitting California into six separate states. We'll ask him about that. He also founded a startup university whose mascot is actually Batman. And he turned his family into a reality TV show about investing.

1:42But most impressive to us, Tim, he's actually got the wildest wardrobe in all the Silicon Valley. Oh, if he's not wearing a Looney Tunes themed tie tonight, then the stocks are going to drop tomorrow. That's a sell signal. Besties. And on top of it all, this man is a Yeti. He is in the audience right now. So besties, please welcome the Superman of seed funding, the Iron Man of equity, the Wolverine of, whoa, that is a big price. Our guest tonight for the live show is the one investor you need to know, Tim Draper.

2:16And this interview with Tim is the best one yet.

2:20Tim Draper: Thank you so much for coming.

2:26Tim Draper: Good to see you. Indeed. Oh, we missed the deadline. My recording device is having issues. Our contractor pretended to be sick. I know he's watching the World Cup matches, Jack. Or how about this? Elon just tweeted something at 3 a.m. that completely changes the takeaway on our second story. We got to re-record the show. Besties, when workplace chaos hits you, you need the right hire. And this is a job for Sponsored Jobs. Indeed, Sponsored Jobs gets you quality candidates when you need them most. We produce a daily episode of this show, 250 episodes a year. Sometimes we need help. We need it fast.

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3:32Monarch. Yeah, it is. You know my first money lesson? It was where to put our lemonade stand. I was wondering, it was on the Upper East Side. Do we do it on Lexington Avenue or Park Avenue? Wait a second. New York City has lemonade stands on the sidewalk? They didn't. We were pioneers, Jack. Lexington Avenue is more commercial. Park is more residential. So what did we learn, Jack? Families are willing to pay more for lemonade. So you set it up on Park. Yeah, we did it on Park. Besties, no one gives you financial lessons in life. You end up figuring most of it out as you grow up. But we love Monarch because it's like a financial advisor in your pocket.

4:00Because every minute, it's tracking your savings, spending, investments, and more. For instance, Monarch's goal tracking feature shows if you're on track for that summer trip to Santa Fe. And it tells you what percent of your income is going somewhere that's a surprise. I open Monarch all the time because it takes the mental load off tracking my finances. And whether you're single, you're in a family, or you're dinking it up, Monarch's the way. Our personal fave, the AI Weekly Recap. A once-per-week gut check on what you did with your money. Hey, Nick, you've spent 96 bucks at kids' lemonade stands since July.

4:25Because we pioneered it for him, Jack. Resties, write your own story with Monarch. Use code T-Boy at Monarch.com to get your first year of Monarch Core half off at just 50 bucks. It's 50 % off your first year at Monarch.com with code T-Boy. My wife and I bought tickets to this. Well, actually, she got them for me for Father's Day. And we were getting ready to go. I mean, we're ready to go. And then you gave me the call. I went, I'm already going to be there. And I just, a shout out to my wife. She, she got all except for one of your trivia questions. Did she really? Yeah, she is your biggest Jetty fan.

5:10Oh my God. We have to get another bell made. She would have won the bell, but she didn't want to. I'm going to break the T's and C's. I'm going to entitle her to two hugs. Two hugs. and she can ring the bell on the way out oh by the way i'm a huge fan too you guys you entertain and educate and i feel like anybody i mean you're creating a whole group of mbas here they come out of this they i mean you listen to you you all know you listen to this and you go whoa i'm way smarter than i used to be that is the highest compliment thank you so much for saying that. Thank you. Oh, it's fantastic. We're really honored you're here tonight.

5:49And, you know, we're so impressed by the way that you get attention and continue to do so in novel and creative and on brand and bright ways to use the word that Nick and I like. And we've learned from you from all the ways you do that. The one we want to highlight, though, it's one accolade we forgot to mention. It's your Guinness record because Tim Draper took 52 startup pitches during a cold plunge for 52 minutes at like 37 degrees so hey by the way that was the best introduction i've ever had and probably the best i'll ever have that was so fun we love yeah that was really you know i i've got this weird thing i actually can sit in a cold pool in effect indefinitely it was it was 40 degrees and we had um and i had all my draper university uh heroes come through and i said okay each of you has to stay in here for three minutes but i had them come in three at a time and they came and they they did their thing and then he left and i was just in the pool 40 degrees 52 52 minutes, 52 pitches.

7:00Of course, I've got to say afterwards, I had to go into the car. I was in a bathing suit. I had to go into the car, turn on the heater, and just sit there for about a half an hour. Because I couldn't move my hands. I had a business meeting up here, and I had to get my suit on, my Bitcoin tie. I had to get all this stuff going. And I couldn't unzip or zip. I couldn't button things. Anyway, it was crazy. But it was worth it. We'll check it on the ROI of those companies soon. Oh, one other thing I was thinking, when you guys talked about the Gap doing the boy band, the J-Y - J-Y-T, just your tag.

7:45I thought about it, and I thought, that reminds me of when i met with uh the best pr guy in the world um uh richard edelman and i said well god you're the best pr guy in the world what advice do you have just generally what advice do you have and he said be your own media company oh and that was actually one of the inspirations for meet the drapers yeah your show by the way i tried a podcast i tried a bunch of stuff yeah i don't know how you guys do it it was brutal no one came you know my mom while she was alive my mom um she uh she listened well so you started your own reality show guys that reality show meet the drapers season nine's finale was watched by 1.8 million people yeah those are huge numbers huge incredible well your father is one of the icons of venture capital one of the i gotta i gotta tell you was he died two weeks ago oh he is he he really was extraordinary and we were just lucky to have him as long as we did he died at 98 but anyway hey bill draper let's hear it for bill he was extraordinary man okay anyway go ahead tell me more about we also want to hear it for your mom too, because your mom had a, had arguably a bigger influence on you from a business perspective than your dad who was in venture capital.

9:17Yeah. How did your mom and your dad influence the career that you embarked on? Well, dad, it was really great because dad, um, told me, and this is kind of interesting advice. He said, it doesn't matter who's buying and who's selling. It just the personal connection. That's all that matters. And I have sort of taken that to heart and i always feel like yeah i gotta make that personal connection and it made me made it easier for me to sell buying's always you know tell me what you got um but selling selling is like hey you know but the key was to get to know the people first and then kind of figure it out from there and then mom mom was i mean she'd probably look at me and go god your tie's not on straight um who egged you on to do those early childhood businesses selling the apples selling the oysters selling door to door i can tell you the apple story what's the apple story this is different from the apple computer story okay i was about seven or eight years old and i i uh my mom said by the way she did encourage me that's she did she encouraged me to go pick those apples and sell them at the end of the street or at the end of the driveway driveway was a quarter mile long but you know so i'd lug these things in and i'd pick a whole bunch of apples and i'd go and i'd sell them down at the end of the store and i'd get to know the people and it was great fun and it pretty much took me like i don't know three weeks four weeks forever for a seven-year-old yeah and And every once in a while I'd have a friend who'd kind of come by and wonder, what are you doing?

11:04And hang out, whatever. So one day one of the neighbors, mothers, comes up to me and says, well, you've been doing this for a while, right? And I said, yeah. She said, well, how much have you made? And I went, eight dollars. And she looks at me, she goes, she goes, let me see it. She takes the money. And then she said, who helped? and i said well you know a couple guys came by once in a while and it was like she and there were a few friends around yeah she gave one dollar to one guy one dollar another guy one dollar another guy one dollar another guy gave me one dollar and then took the rest for herself i said i said whatever this was i don't ever want to see it again and i realized what it was it was socialism I hope your mother had a talking with that mother.

12:01Well, Tim, when you grew up and when you walked in the room, you're meeting with all these legendary founders. But, you know, Jack and I have noticed in the hospitality industry, people make up their minds about a hotel in the first five seconds of walking in the lobby. As a venture capitalist, you must make up your mind pretty quickly or do you take your time? What is the first impression that you look for in someone you want to write a big check for? So I've trained myself not to go on that first impression. At first, that is exactly what I did. I'd see the person right off the bat and I'd say, well, yes or no, or this is ridiculous or whatever.

12:41And then I realized that, you know, we all have these sort of internal biases. And let's face it, most of the great entrepreneurs have come from other countries. So I realize that other countries have different cultures, different morals, different value systems. And so I get to meet all these really interesting people. I guess I just get to the point where I say, OK, let's let's hear it. Let's give them a chance. Let's see what what's in it. And the thing that. Actually, OK, I often ask this one question. sometimes it's obvious before I ask it, but it's like, and I'm going to ask you guys, why are you doing this?

13:25And I ask it in that way. So that, because you guys both kind of went, well, you know why we're doing it is perfect. We're educating and entertaining and making all this. This is so much fun. Okay. So would be entrepreneurs, the ones who they'll say, I wanted to be an entrepreneur or I thought or Joe thought this was a good idea or, you know, I thought maybe I'd make money or the clever ones. I thought I'd make you money. But the true entrepreneur leans in and says, because Robin Hood got in the way of everything I was trying to do and i wanted to go do it myself or that customer i was talking to they wanted this thing i told my boss i told my boss's boss they all said no and i know that they want that that customer i can provide that product to that customer those are the entrepreneurs it's like it bursts out of their chest yeah it's so important and uh and so that's what i look for yeah but i that's in the people in the market i look for something i mean it's kind of weird but i look for controversial what do you mean yeah well because i look for the things where other people really wouldn't want to go and the reason is i think well you know if it's down the middle there can be 5 000 companies trying to do the same thing but if it's a little around the edges then it's like, hey, this might work.

15:01And if it works, is it going to be that awesome? You know, I'm always looking, is the world going to be that much better for this company being successful? And I always have to anticipate that the company will be even more successful than the entrepreneur thinks it's going to be. Because there's, you know, no way Elon thought that, you know, Tesla and SpaceX were going to be trillion dollar businesses is when he got them started. What did he tell you in the room? Can you give us any specific examples where you said, why are you doing this? And somebody maybe, a founder we know. Elon was a different experience.

15:39With Tesla, we actually backed Martin Eberhard, who was the first guy. And then we ran into some financial problems and Elon came in and said, I'll do this and I'll run it. And we're going, what?

15:51Tim Draper: This is awesome. The PayPal guy, right? What's that? The PayPal guy? is that what elon was at the time yeah and and so he he did and everything was great and then my partner steve jervison was spending all his nights and weekends launching rockets and i was going okay jervison you know i mean it's totally brilliant and i'm thinking god focus and and i said okay you're spending all your nights and weekends launching rockets naturally find us the best rocket company and he looked at me with like great hope in his eyes really and i said yeah and so he goes out and two weeks later he comes back he goes the best rocket company is elon's and i said isn't he supposed to be running tesla anyway when we talked to elon it came out of his chest It was so clear.

16:47This is all he wanted to do. He wanted to make sure we were multi-planetary. He said, you know, space has been dominated by governments. They clearly aren't doing anything with it. This needs to go in and we got to do something really important here. And I mean, I went ahead with it, but what I didn't realize was how incredible he was going to be. He got a $400 million loan from the government. And then he bought the NuMe plant for five cents on the dollar. That was a Tesla move, right? That was the Tesla move. And then in SpaceX, he cut a deal with NASA. And at one point, I think he had to borrow from Tesla to keep SpaceX in business.

17:35After we, or as we were investing, rock the Falcon one I think of it as the Falcon one two and three but it was the Falcon one three times Falcon one blew up on the launch pad Falcon two Falcon one two blew up on the launch pad and Falcon one three blew up on the launch pad and and we kind of felt like it's gonna work out you know it's gonna be okay despite it was a little like when I I invested in cruise automation. It was a self-driving car.

18:12Tim Draper: Yeah. And the guy, he takes me for a ride. And I'm thinking, well, that's great, you know, and everything's working fine. Yeah. We're driving along. All of a sudden, you know, we're driving along and the car is doing it itself. Yeah. And all of a sudden, for no reason, the car takes a left-hand turn into oncoming traffic. And I'm in the passenger seat. right there i thought i'm gonna back this and you said yes you want to back weird as you're about to get because i was about to get crushed i said i'm gonna back this because i thought well this is just a software problem so there is this and also if you back these things that seem controversial at the time and they become enormously successful it's like there's an awakening an awakening to the world.

19:06And so if you find an entrepreneur who really wants to awaken the world, that's a magical thing. It's funny, because on the entrepreneur side, Jack and I are always like, we can't let perfection be the enemy of good enough, and we need to launch something. It's why we partially launched part of a show before. Why don't you just get it out there for feedback? But you're saying on the investing side. I love that you're trying new things. I mean, of all, I try things all the time, and the ones at work are the ones we all talk about. So, you know, you're a very intellectually generous man, and I appreciate that.

19:39And everyone wants to know. Oh, I thought you were going to say intellectually challenged. And I was going to agree in either case. Now, a quick word from our sponsor. Nutrafol. You know, Nick, anytime I read about hair thinning, shedding, hair issues at all, I'm looking for wood and I'm knocking on it. And why is that, Jack? Because the males in my family have growing foreheads. It's giving Peyton Manning. So far, you are avoiding it, but what's the status right now, Jack? I don't want to just cross my fingers. So I actually started using Nutrafol men six months ago. Okay, get this. We did a hair and makeup for an interview last week, and no joke, the hairstylist said to Jack, you have great coverage.

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21:55So if your revenues are at least in the seven figures, go to netsuite.com slash tboy. Get your free guide at netsuite.com slash tboy. Netsuite.com slash tboy. Netsuite.com slash tboy. So keeping tabs here, you want to find a founder who shows you his passion by answering that challenging question. You want a founder who is in a business that's controversial, as you say, because if it was easy, everyone would do it, right? What other, you know, what are the other patterns that make for a great investment from your career? I tend to poke in a lot of places that, and it may actually upset the entrepreneur.

22:38I don't mind getting them upset. They're usually smaller than I am. And then I often ask a question, and some of my team is out here, um that's out of left field all right just to see how they react do you actually like I like if they're like a group that's been properly trained by Y Combinator or whatever they've gotten this training um they have a set thing and they can't go off that track so I take them off their track I see and then it's like oh you know they're lost either they're lost or it's like they're they really now are into it yeah and so it's not bad to ask a question it doesn't make any sense i want to point out this works in dating too from what i understand right this is a good first date strategy potentially worth worth giving it a shot i don't know honey did i try that on you what about with something where there isn't a founder like bitcoin like we said you you were Bitcoin before anyone we have ever met.

23:46What was it about something where you couldn't interview the founder, but you could bet on the technology? What did you see there? Well, so one thing is that I'm very lucky because it's such a wonderful job because people come to me all the time. In fact, a couple of them came to me out there who are pitching their business. And so I start getting a window. Anyway, there was this guy from Korea who I was meeting with and he said, said, hey, we got this, oh, it was 2004. And he said, you know, we got this game that everybody's playing in Korea. It's called Lineage. And I said, yeah. And he said, no, everybody's playing it 100 % of the time.

24:27And I said, really? And he said, yeah, it's like I have my life and then I have my virtual life. And I said, well, okay, great. And he said, so much so that I actually pay a guy to be my avatar when I have to go off to work wow and then he said I bought my son a sword for my before his birthday and I went wait why are those connected and he said it was a virtual sword it was pixels on the screen cost me 40 bucks and I said oh and all of a sudden it was money for for virtual goods and then it was virtual money for real goods and then I started to put things together so I'd been looking for digital money I was thinking that it would be like you'd Farmville dollars for Zork diamonds or something I thought there'd be that and I thought that's how uh virtual currency would happen and then this genius Satoshi Nakamoto comes up with this idea that software can be your trusted third party.

25:32And it made it just magical. And I did, I was betting on an entrepreneur at the time. I bet on something called CoinLab and I invested in CoinLab. And I said, I said, and while I'm doing it, why don't I buy some of this stuff? Yeah. This Bitcoin stuff. And then it was the Wild West. I was supposed to get it at four bucks per Bitcoin. Here's what happened. They said, we're going to mine it for you. So then he goes and he orders these chips from another company. The chip manufacturer front ran him and mined all the Bitcoin before while the price was going like this. Wow. And then I got some. I eventually got some.

26:24And then he stored it at Mt. Gox. and it was the biggest exchange. So of course that's the safe place to go, right? Yeah. So then Mt. Gox kind of stole all that money and then it was gone. And I thought, oh, that's the end of it. But Bitcoin only dropped about 15 % on that news that Mt. Gox had stolen$400 million. And I thought, wait, 15 %? People really need this. And that's when I did all the research. and I saw that it was banking. First I thought, people must need it for guns and drugs. And then I thought, wait a second, what else is going on? And the unbanked, you know, three billion people at the time were now a part of the world economy.

27:13And they could do deals, they could do everything with Bitcoin. And they were starting to do that. And then people working overseas who couldn't, who didn't have good currency, could get Bitcoin. So big companies were starting to pay people in Bitcoin. And then, of course, people working in the US were using it for remittance and doing it super cheaply. This pattern recognition, though, it began, you and I were like in middle school. This is before Facebook or YouTube, I think, exists. It was before Bitcoin, his first story. Yeah. So you read the white paper. You kind of did bet in a founder. I mean, not just of the company, but you read Satoshi's paper.

27:51So I guess you did bet in the founder. So you were early, early believer that Bitcoin would change the world. It would empower the unbanked with the software, the transparency, the, you know, borderless currency. Um, you were right. It's worth$86 ,000 today. Are you still bullish on the technology or is it kind of like properly valued? Okay, the way I'm going to describe this is in a story. Okay. My dad, thanks dad, handed me, I was about nine years old, and he hands me a million dollar bill. And I went, a million dollars? Whoa, what can I do with it? And he goes, nothing. And I said, what do you mean nothing?

28:34He said, that's a million Confederate dollars. Wow. and i said and he said the confederates lost the war nobody really wanted the currency it inflated they printed more and more and more it became worth less and less and less and eventually it was completely worthless everybody wanted union dollars and nobody would do exchanges in confederate dollars i'm looking at this world saying government spending doesn't stop we are overspending and no one can like I don't know structurally Congress can't stop it right and so it just continues to go we are having inflation and so there are two things that can happen one is inflation goes crazy and we have everybody loses faith in the dollar and it collapses and you better have Bitcoin.

29:33And the other one is that the Fed raises the interest rates way up. And then things like what happened to Silicon Valley Bank happened and we get bank failure after bank failure. And people are saying, I got to have some Bitcoin. So I feel like it's a parallel universe right now that will eventually be a big part of our world economy. So is the bear case for Bitcoin that the U.S. Congress gets its act together and reigns in debt? Yeah, that would be a bear case. So, you know, it's crazy. We just had this. So good luck with that.

30:13So we just had this clarity bill not passed the Senate. Yeah. And yet the price of Bitcoin rose. But it wasn't just didn't pass the Senate. They didn't pass the idea that they would then talk about whether they would want to vote on the Clarity Act. I mean, there is so much process in Washington. Nothing is ever getting done. And I think people were just relieved to have it over with. And I think and also we got the having coming up. Havening used to be the having. Havening was sort of more mysterious. Now it's the having. um we have the having coming up and so people are kind of going hey there's going to be an event one half of the supply so there's going to be the same amount of demand so the price will go up i mean at least that's what i learned in economics well speaking of the financial system and you know jack and i have a great relationship with vlad and beiju the guys who co-founded robin hood and it's incredible what they've done to change the financial system we were curious though they face 25 no's when they were first pitching yeah you were the first one to say yes to robin hood what was it in that meeting what would what did they say that convinced you so first my son billy draper of path ventures brought that to me and the two of us sat there in that meeting and And we were a little concerned that the two of them, Vlad and Baiju, were going to pay themselves a lot.

31:48And they didn't really have, and we knew how hard it was to get a broker-dealer license. Yeah. And so I said, well, look, you know, I'll put up some money as long as you guys don't pay yourselves until you have a broker-dealer license. So they couldn't have a salary until they got. Baiju tells that story. he is it's like he's still mad about it but um but it was really it for us it was that that was the issue the the market issue was nothing i was thinking oh my god i can trade stocks on my phone this is the coolest thing ever but they hadn't even built it and do it for free that was no they were pitching a um trading system on the uh it wasn't going to be an app it was just going to be mobile app.

32:38Tim Draper: Yeah. Yeah. And so that's what they were working on. Anyway, what an amazing company. And they're still going. Still going. And Vlad just keeps going. And Baiju's doing this entirely. Cowboy. He's going to do servers in space. Yeah. Beam energy down. Yeah. And beam energy down. Yeah. All that. You know, you only invest in companies that plan to change the world. That seems to be a pattern of yours. Tesla changed automotive. spacex changed space twitter changed communications robin hood changed finance what's the one industry you think is ready for its world changing moment oh i'm glad you asked that question you guys are so good that was great um so so um here's what i kind of look for i look for industries that are um run by oligopolies now or monopolies and they've been that way for a long time and that the the business is getting a little fat and lazy and the consumer is losing so it's like things were going well and now they're kind of not I mean business is going well they're charging a lot but they're providing bad service so you go through and it turns out it's kind of every industry that starts with the word big yeah so i'm going to be going after every industry that starts with the word big okay big pharma pharma big accounting the big three accounting big pool bulge bracket banks big pool um big government uh-huh big uh did i say big accounting oil big legal big well big oils yeah we already have with akla which you interviewed yeah that was the no that was not the best one yet this this is the best one yet

34:34you are such a great hype man so anyway i look for that and then i look for technologies that are coming along that are going to challenge those industries um one i haven't mentioned which I'm about to is AI is just like magic. It's so amazing. It is the thing, just like the internet was way back when and what Bitcoin was to finance. AI is going to transform some of the biggest industries in the world. And the one that is ripe for the picking, that is a monopoly and nobody thinks about it as big, is education. so we have a huge opportunity in completely transforming education so i'm looking for entrepreneurs who are in the education space okay now of course i went after big pharma recently we because they go for chemo therapies they put chemicals in your body and then they go for and then all of a sudden it's like oh there are these side effects take this chemical oh side effect take this chemical that and they make lots of money doing that and but we're living shorter lives so the key here is that we have new technologies that are bio cures so it's like biological cures stem cells and cloning and uh biochemical engineering and and using ai and and robots to figure out what works on a body similar to what we covered in that nuclear episode how nuclear isotopes can be used to cure cancer yeah something i learned from that didn't you guys say that an atom maybe i read it but an atom like the whole atomic bomb was you know splitting the atom only generated one one thousand of the energy that's in an atom and so we we can go a long way with this.

36:37And that breaks a big one. Think about flying cars, whatever. It's going to be amazing. Tim, you want to ask about AI? I actually wanted to get to his university. Oh, yeah, yeah. But Tim, part of your success is the access you've had to investments that most people don't. You were able to invest in Tesla and SpaceX way before most people. I have two questions about that. First is, what parts of your investing strategy that focus on startups and a very founder-centric analysis. What parts are applicable to the public stock markets where we can all participate as well? So, yeah, I mean, I have all that access, mostly because I would, you know, there were only like 10 venture capitalists in the world when I started, and I went to all of them, and I said, give me your tired, your hungry, your weary.

37:26And then I started to build my own judgment, and that helped. and now you know we we've been entrepreneur friendly and that's been our model we always love the entrepreneur what i would do is i'll just pitch my own business we i would suggest we back companies and a lot of them fail and if they start working and they get to the size of being public companies they are doing something really extraordinary because we make these these investments and a lot of them don't work but but the ones that do become really extraordinary and market sizes are much much bigger than most other public companies so you might just follow our lead and when they are about to go public i mean oclo it's fantastic it's just this that thing probably has many many nuclear stock yeah um and what's great about tim robin hood is going to just keep going space space is the final frontier it's like space it goes anytime you think you oh we should sell spacex go out at night and look at the stars it's like whoa and what's great about tim is he's talking about this publicly all the time which is what's cool you know for audience oh i'm old i need to educate.

39:05Tim, for our audience here, you know, there is, especially in the last week, AI anxiety. There's anxiety about a lot of things, maybe, for our audience. Some of them living right down the street in the marina who may be a product manager at Uber right now. Everyone has that feeling. So we kind of want to turn the tables and have you pitch the audience. And what should Tim pitch the audience on, Jack? Why should we be optimistic about capitalism, technology, and the markets right now. Oh my god, audience. First of all, capitalism is, I mean, they talk about the homeless. Who's going to build those homes?

39:44Capitalists. They aren't going to be built by your politician who's going, I don't know, should we build it? Not. It's going to be built by a capitalist. Capitalism is what gets you your, the hats, I see a lot of hats, your clothes, it's your food it's your lodging it's your it's the services it's uber it's doordash it's awesome it's like all these amazing things i actually had a um day once when melissa was very mad at me my wife and she said um i'm hungry and you're late and and i'm sitting there and i'm going well my car is in the shop and i'm at the office and i don't really know what to do yeah and i hit two buttons uber doordash and i come home and the doordash arrives just as i do and i walk in with dinner and i'm a hero that doesn't happen with socialism so i okay look so socialism has never worked all you need to do we took a trip to cuba they are so lost they have no customer orientation They have no sense of doing service for each other.

40:58It was horrendous. It was horrible. And I'm sure North Korea is that way. I'm sure, I mean, Russia, God, try to get anything done in Russia. It's just a nightmare. Socialism doesn't work. And then they say, oh, what about, you know, those Northern European countries? They're socialists. Now, turns out, I did the analysis, every time they grow, it's a capitalist in charge. And every time they flatline, it's a socialist in charge. And they swing back and forth. So, okay, that's socialism. Now, what else am I selling these guys?

41:38Tim Draper: The markets. Markets. And AI. Okay, markets are really, this is really important. If you get on an airplane or a bus or whatever, turn to the person next to you and ask them what they do. And then what's going to happen is you're going to put a patchwork quilt together in your head of how capitalism really works and how the markets work. Free markets are just magical. They pull us all together. And, you know, some guy does a deal with somebody else. you know some guy from India does a deal with somebody from China you're benefiting and you don't even know it and and we all are benefiting the iPhone this iPhone that you all have this is made up in from geniuses from 80 different countries and they've all added something new to it and they've all done something and it's helped you and you don't even know it so make a deal with someone because when you make a deal with someone you're both you're both better off and and let's say you know people go oh you know that bezos whatever and and i think oh my god i will kiss his feet this guy is so extraordinary he has made the most deals with anybody ever I can push a button, I say I want a toothbrush, and it shows up in four hours at my door.

43:14And that's all because Bezos made so many different deals, and we are all making deals all the time. And every time you make a deal, you're both better off. One of you spends money, the other one provides a service, you're both better off. Everybody benefits. And we are one big global patchwork quilt. And that is the way I see it, and that's the way I will always see it. There's the one socialist he's leaving. He's got a DoorDash order. And, Tim, finally, on AI for our audience, how do you think they should feel about it? Okay. You know, when electricity showed up, it was witchcraft. Nobody wanted to touch it.

43:57When the car arrived, all the saddle manufacturers and buggy whip manufacturers were so mad. They were spreading fear throughout the land. These things are going to crash into each other. You don't want to have anything to do with it. When the computer came, the first computers, they said, we'll never need another mathematician or another accountant. I'm not sure it's worked out that way. There are a lot of accountants out there. and and when the internet came uh you know they were freaking out about the melissa virus named after my wife um that the melissa virus was destroying everybody's computer because of google had some virus in it um nobody was going to put their credit card on that internet thing but what have we done with the internet oh my god we all communicate for free i remember my daughter calling her boyfriend from Africa and we had to pay 80 80 dollars a minute for that call and now it's free the whole thing's free and you can see the boyfriend she could have dumped him earlier um so so uh so all these things add up to AI, the sky is falling, we're going to lose all our jobs, we're going to, you know, the end of the world.

45:24And even some of the guys who program in AI are saying, oh, this is going to take over all humanity. I think they think it's a little bit of hubris. It's like, I can program software to completely eliminate the need for humans. But on the other hand, it's like, no way. We always come up with new things to do based on the tools available to us. AI is the coolest tool. It's so fantastic. I use AI every day in a hundred different ways. We have a data lake that spits out 250 ,000 companies. It spits out five companies a week. And I go, let's look at that one and that one. And then it learns. It gets better.

46:10And then we use AI to evaluate companies even when they're sitting in the room we we kind of go competition to you know xyz core and and then then i have something intelligent to ask them you know hey well what about this company you know tell me why you're better in real time in real time and and then we can even do you know like check out this guy in ai and it's all there ai is basically think about this it's the borg it's basically the use of the six billion people that are connected and then the knowledge base of six billion people and it's learning and it's getting better and better and better and god it's amazing it's really don't tell all my the my friends but it's um it's really good for fantasy football.

47:06Well, Tim, before we wrap, I did want to give you credit for something because, you know, there's a critique or just an observation that venture capital has an unfairness element. You know, you have access to investment opportunities that others don't, but you've done two really great things to, you know, I mentioned earlier, you're intellectually generous. You're also generous with the opportunities you present. Draper University gives people the opportunity to join an accelerator program. And I've watched the videos. They've come from 104 different countries. That's awesome. And the show, Meet the Drapers, you are just telling anybody who's willing to take a risk and come step up onto your platform.

47:49You're giving them the real advice they need. In many cases, you're giving them million-dollar checks to pursue their businesses. So it's really, really cool what you've done at this stage in your career, just being very generous. But I'm not that generous. I don't give them the million dollar investment it's an investment and it's investment in their stock in hopes that that stock becomes you're giving them an opportunity and it started out I was just grabbing anybody I could to get on that show we're just trying to experiment try it out we tried it out with crowdfunding and then the SEC came and knocked on my door and I went whoa So, okay, I don't need crowdfunding.

48:26But now we get about 1 ,000 applications for every four slots we have on the show. So now the quality is super great, and it's a huge deal flow machine for us. So deal flow is kind of an insider term. It's a generosity that pays dividends. But, Tim, to highlight something about you, we said at the beginning of the show that our guiding brand word is brighter. Make our audience smarter and happier. and you're the ultimate optimist. I don't think we've met anyone who's more optimistic than you about everything we just covered. So thank you for putting that out into the world. But before we let you go, we did have a few quick rapid fire questions for you.

49:03Okay, fire away. Okay, first. The question can come fast. The answer may not. I'm a storyteller. This could go on for a while. Best brand you love. Best brand I love. Yeah. It's gone. I mean, that's a tough one because here's what's rolling through my head. The first thing that came to mind was Apple, and that was really awesome because they've really I remember the first Apple computer I bought, I opened it up and everything was perfect and beautiful, and you know, I thought Steve Jobs, this guy's fantastic. It was just a welcome to the Apple community. It felt really good. You felt that brand and you knew what you were getting.

49:47And it was it was very positive. we did say rapid so i think that's the answer we'll go with apple yeah best restaurant in san francisco god i haven't been to a restaurant in san francisco for a long time oh there was a great steak place of course i won't remember the name of it i like the mystery okay who is the best business leader we suspect are going to say elon so someone else because we've heard that answer before steve jobs and finally what four letter stock ticker would you be if you tim draper were a publicly traded company h-e-r-o nice nice so tim we like to end each of our stories but the hero is not me the hero is them well that'll be in the s1 so tim what's the takeaway on starting or funding the next$1 billion business.

50:41Be your own media company. Love your customer. Do everything you can to make them happy and bend over backwards for them. Don't try to overcharge at the beginning. You can always get that later. And then make it so your customer loves you so much that they can't help but spreading the word. So create a viral marketing effect. Tim. the DoorDash is ready thank you for being here thank you for being part of the show and thanks for everything you've done for so many people

51:20Tim Draper: here, all together here we go give it a good game there we go there we go

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