Leadership

Tim Draper: The Riskmaster Who Builds Entrepreneurs and Leaders

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Editor’s note: In this second article in SandHill’s series on outstanding leaders, we focus on a leader who builds leaders — Tim Draper, founder and managing director of the renowned global venture capital firm Draper Fisher Jurvetson. He was #52 on the list of the 100 most influential Harvard Alumni, and #7 on the Forbes Midas List. He was named Always-On #1 top venture capital deal maker for 2008. 

In 2012 he launched Draper University, a school for inspiring thought leaders and entrepreneurial “heroes.” He says the eight-week, 24/7 program “doesn’t teach history; we teach future.” The Draper program teaches students what they need to understand before they can be leaders who can make an impact on the world. 

You talk about Draper University students being “heroes” and you call your campus in San Mateo “Hero City.” What do you mean by “hero?” 

Tim Draper: We are teaching people that the world is to be molded, not just lived in. We encourage them to think change, think differently. To positively impact the world, they need to understand that they are the ones who need to make it happen, so they must learn to think of themselves as heroes and take risks. 

How did you get the idea for Draper University’s unique program? 

Tim Draper: Although I’m a venture capitalist, I’ve focused a lot of my efforts on education. When my daughter went to school and had the same great teachers I had but the classrooms were barren, I realized something was wrong with the education system. My entrepreneurial side said: If something is wrong, go see if there’s a better way. 

In then thinking about what a better school would look like if I were to start one, I realized that in the incredible education that I had at Andover, Stanford and Harvard Business School I I didn’t get to do the things that they taught. A lot of people learn very well from reading or from listening; but others learn by doing. 

I then started BizWorld, which uses a fun game simulation to teach young kids how business works.  It spread to about 100 countries and fifth graders in all U.S. states. 

I brought my two worlds together when the venture capital business was going through a big change. I started thinking about how to create something entirely new that would teach people by doing. 

I noticed you said “people,” rather than “entrepreneurs.” 

Tim Draper: That’s right. When we select the students from those who apply, we don’t look at their grades or scores. We look for people who are willing to stick their neck out a little bit. So we ask questions like “Why were you put on the earth?” or “What would you have a robot do for you?” Or we ask them to do things like draw a picture, sing a song or make a movie. 

We want to know if they have what it takes to be an entrepreneur, but we’re not just looking for entrepreneurs. We’re looking for people who want to be better people and great leaders — some might even turn out to be revolutionaries. We select people who will do whatever it takes to make something happen.  And about half of them are from foreign countries, so we’re spreading the diaspora around the world.

At the school we repeat a pledge at the beginning of each day that says: “I will promote freedom at all costs, I will do everything in my power to build and improve my brand, and I will fail and fail again until I succeed.” 

Taking risks and failing is an acceptable behavior in Silicon Valley but it doesn’t usually fly in a school. 

Tim Draper: In real life, in business and in efforts to improve the world, taking risks and failing counts. I think the grading system in education is a problem. Straight-A students are just good at doing what they’re told to do. But my philosophy, which drives our school, is that an A grade shouldn’t be awarded for not making any mistakes; it should recognize extraordinary behavior. 

The points we give to students at Draper University recognize when someone steps out of the box and comes up with a good idea to change the world. If a student gets up in front of the class and promotes something that somebody shoots down and it’s a real disaster, she still gets points for achievement. If a student just does a good job and doesn’t make any mistakes, he doesn’t get any scores at our school. But if he doesn’t make any mistakes and he does something extraordinary, then he gets a lot of points. 

We’re trying to get them to see that it’s ok to try, whether an idea fails or succeeds. We want them to learn that they were put on the earth for a reason and they need to do something about it. 

Since they are learning by doing, what do you ask them to do? 

Tim Draper: It’s all a game dynamic, and all the students work in teams. And it’s not all insular; some activities include the outside world. Today, for instance, they are out cold calling for one of my startups. Other days they might give speeches to each other or to other people. 

They learn accounting through a game show where each team has to teach all the other teams and do it through a game show simulation. I figured that accounting would be painful to learn, and this is a way they can learn it so well that they can teach it. 

We also have urban and rural survival training. After this training, they understand: “This is my downside, so everything is up from here; and I can make it.” That lesson turns out to be quite valuable. 

And we have them do things that seem probably impossible. For instance, I may tell a team they’re in charge of energy for Nome, Alaska, and they have two hours to brainstorm and then must give a five-minute presentation to the class. It’s amazing what a team can come up with when given a seemingly impossible task. 

In the business world, it’s hard to build an effective team. How are you doing that? 

Tim Draper: It’s not as much building a team as learning to work with a team. This is a boarding school, and we choose the teams based on psychological profiles and all sorts of other things. We make the teams of five or six. In a 10-member team, people can hide; and teams of two don’t think they can accomplish anything. They are stuck with those teams for the duration of the program, and it makes all the difference. People will do so much with their team that they won’t do for themselves. Consequently they learn 10 times as much. 

Other than for foreign students, why is it a boarding school? What are the benefits?   

I went to Andover, which is a boarding school, and learned as much from the other students there as I did from the teachers. Teaching our students to think differently and think of themselves as heroes is a complete transformation that really does need to be a 24/7 effort. They even have classes or activities on Saturdays and Sundays; there is something they have to do every day of the week. 

You had the initial pilot session and have conducted two sessions since then. What have been the top top three outcomes so far? 

Tim Draper: First of all, for every student who was in college and took a period off to come to Draper University and then went back to school, their grades went up. 

Secondly, we have already had quite a few students receive funding and we are currently incubating some of our alumni who are focused on building their companies. I’m sure there will be many more who will be off to the race and build businesses. 

The third thing is, by teaching a wide variety of things and by teaching that life is fun and is full of twists and turns, our school has given our students an enthusiasm for life. They have a whole new perspective on the world. What I want to do with all our students is to give them a real purpose and give them a feeling that there is something they have to do. 

People are surprised at how Draper University is working. A lot of experts and people from other universities have been coming through and saying, “Wow, that really works and you’re really motiving people.” 

So it’s already a big success in just a few months. 

Tim Draper: Well, I’m always fascinated by people’s suggestions. I’m constantly trying to improve the whole program, so I look for others’ thoughts on how to do that. 

What can people in Silicon Valley or others who read this article do if they want to get involved in some way? How can they help? 

Tim Draper: There are lots of ways. We are always looking for mentors and for speakers who are experts in something. No speaker stays more than an hour. If they have an extraordinary story, we’ll take them as a speaker. 

They can also encourage kids with a little bit of spark to apply to be a student. Or they can sponsor a student. The tuition is $9,500, and we do give some scholarships. 

Also people can promote Draper University to their alma mater; students from those schools may want to come for a quarter and be somewhat transformed. 

Has anything that you’ve seen since you started the school caused you to look at startups and entrepreneurs differently as far as whether or not you would fund them? 

Tim Draper: Yes. I always tended to back the people over the business idea. I’m even more that way now because I watch what’s happening to our students. 

An idea at its inception can’t take flight. You can’t just have an idea and then go run a business. By taking their idea and running it through the gauntlet that is Draper University, it creates a much better idea and a much better business. So they’ve been a little more battle tested. 

As a venture capitalist, I still look for big markets that are moving really fast and interesting technologies that are changing the way people do things. But watching our students be transformed into entrepreneurial heroes makes me believe even more than I previously did that the people are a bigger indicator for success than their ideas.   

Startups are hard to do. There are times when everybody that you meet one day or even 10 days straight or even for months at a time tells you that your idea is stupid. Entrepreneurs have to overcome that and need the wherewithal to have their own mind about things. So I’m now looking for people who have this heroic thing about them.  It isn’t necessarily something that is inherent in them. But it can be taught. 

You’re also running Boost VC, a startup incubator. Is that connected to the university program? 

Tim Draper: Boost was founded and is run by my son Adam. Boost is separate from the school but is housed across the street in Hero City. He currently has 17 companies, and it works well as the students get to meet other entrepreneurs who are further along in developing their business. 

No students from the school have been accepted into the incubator yet; but at some point that will happen. So we feel that we’re creating a whole life cycle for our entrepreneurial heroes, and we’re pretty excited about it. 

Timothy C. Draper is founder and a managing director of global venture capital firm Draper Fisher Jurvetson and founder of Draper University.  His suggestion to use viral marketing in Web-based email to geometrically spread an Internet product to its market was instrumental in the successes of Hotmail and YahooMail and has been adopted as a standard marketing technique. Other successes include: Skype, Overture.com, Baidu, Parametric Technology, Hotmail, PLX Technologies, Preview Travel, Digidesign and hundreds of others.  

Kathleen Goolsby is managing editor of SandHill.com.

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