Tim Draper realized venture capital could work anywhere after seeing Hotmail gain 100,000 users in India in three weeks. He opened DFJ offices globally, recognizing that software companies no longer need Silicon Valley's hardware infrastructure and that entrepreneurs with internet access can build from anywhere.
Chapters
I started to think about the globe and what it could do for us and how it would expand when I was actually failing in my venture business. We had a little SBIC and it didn't really— it wasn't really working out very well. There was no public market like today. I was just struggling along trying to figure out what to do and some guy from Alaska said oil is now $5 a barrel. You know what a barrel of oil costs now? It's like $100 or something. It was $5 a barrel and they were starting to panic because all of their economy came from oil and they said we need something else. We need venture capital, entrepreneurship, and it got me thinking that you could actually do this in other places. Anyway, a lot of global opportunities. There is global warming, global finance, global communications, global health. So we started to think, wow, we ought to really think globally and part of it was, getting a little window. When we funded Hotmail, the founder, Sabeer Bhatia, sent an email to his friend in India and within 3 weeks we had 100,000 registered Hotmail users in India and there weren't even 100,000 computers in India at that time. So it was all of a sudden we realized we could do commerce all over the world, we could spread information all over the world. A lot of great things were going to happen around the world, And so at DFJ we made this decision to start setting up offices around the world. And we knew that it used to be the Silicon Valley required— when I was an electrical engineer, the Silicon Valley, you had to start your electronics business in the Silicon Valley because the disk drive manufacturers were here, the processors were here, the memory devices were here. Everything was here, so you had to, if you were starting a business, you had to build it here. All the printers were here, everything was here. But then all of a sudden there were these companies that didn't require any hardware. So we thought, oh my gosh, those could be done anywhere. You can start a business no matter where you are. You've got the same information now on Google and Baidu and whatever as everybody else in the world, so if you are creative enough, You can start a business that spreads all over the world and it doesn't have to be here in the Silicon Valley.
