Episode 07 | Part One: Venture Capitalism, Crypto, and The Future of Entrepreneurship

Gregory Shepard, an entrepreneur who's built and sold 12 businesses, a recipient of 4 private equity awards, TEDx speaker, and Forbes author. This is The Boss Podcast with Gregory Shepard. Joining me today is legendary venture capitalist Tim Draper. Tim has invested in such companies as Tesla, SpaceX, Twitter, Twitch, and Skype. He's even created an immersive entrepreneurship program that helps bright minds grow their network in Silicon Valley. Tim, thanks for joining me today.

Oh, my pleasure.

I just read about this, and I wanted to start by asking you about the Draper Startup House. Tell us what this is all about and how you got started.

Yeah, the Startup House was, um, actually, there's this great guy, Vikram, who came to me and said, I am taking over management of the hostels around the world. They're all ma and pa shops, and I'm taking over the management of them, and it looks like it's working out pretty well, and I've got about 8 of them. And I said, well, that's really interesting because those are 25-year-olds who are kind of wandering around the planet trying to figure out what they're gonna do next. And a lot of them are, a lot of travelers or good travelers are good entrepreneurs later. And I said, well, you know, we've been running this Draper University for a long time and things are going very well. And we've created a bunch of heroes out of the alumni group and we could potentially apply some of our learnings and our curriculum to the people who travel through your hostels. And that was the beginning of the Draper Startup House. And, and—

No kidding.

That is so cool.

You're kidding. Really?

Now we can actually take it a lot further because I'm working with another company that does holograms. And we're thinking that if we get Elon Musk to come speak, at Draper University, we can then have him projected in hologram form into all of our startup houses. And so we're going to be moving in that direction where we can, we can get extraordinary speakers in any, anywhere around the world, and they can be projected anywhere around the world.

And yeah, that is so cool.

That is so cool.

Especially, I love Elon Musk. So I noticed about your— all your investments in Elon Musk-founded companies. And I was like, oh, this guy's my man.

Yeah, we've been very fortunate to work with him. He's got this vision. And he kind of— he's okay to say, hey, we're going to Mars. A lot of people thought he was crazy. And but he ended up attracting the best and the brightest engineers in the world to come work with him to get there. That is a real leadership talent. We're thrilled with him. He's done so much for us, and I'm so happy we backed him as many times as we did.

Yeah, yeah, no kidding, right? I mean, I was a fan of Steve Jobs, but now my new favorite is Elon Musk. It's— I'm on my, what, 4th Tesla?

Those are my 2 favorites too.

Yeah. So let me ask you another question. So I'm really passionate about helping entrepreneurs, and that's, you know, the whole idea of this show. And I love how you're consistently trying to help entrepreneurs. And not long ago, you announced that you're starting a program called the Draper Freedom Fellowships in an effort to support entrepreneurship geared towards deserving causes, right? So you are focused really on giving back. Has this always been on your mind?

I like the concept of paying it forward instead of giving back. I want to leave the world a great place, and so I am always paying it forward. And that's what venture capital does, and that's what entrepreneurship does. It pays it forward. The benefit to society inches forward as you do these extraordinary things and you take these extraordinary risks to move the world into those great directions. That program was very much like a hackathon. The thinking there is that we would take the biggest problems in the world and see if we could get people to first identify them, then find an interesting solution for them, then figure out how to make money doing it, and then create the product that's gonna make the money doing it. That's the model for changing the world.

I actually believe— I call it altruistic capitalism. The idea that you use capitalism to help in an altruistic way. and combine the two for a better outcome.

It works for capitalism. I mean, capitalism works.

I think that the Draper Freedom Fellowships is just awesome. I mean, the whole idea of taking really smart people and then using those smart people to come up with what the problems are and then the best way to solve them and then try to springboard off of that into businesses that are worth investing into. It's just really cool. I probably spent more time looking at your background than I have on any other guest. 'Cause I just got into it and I went down the rabbit hole. I was just reading.

The thing that we're most excited about is something that came from COVID which was, you know, we created Draper University of Heroes. We've had 1,200 students come through there. They've started about 400 companies. Some of them have become extraordinarily successful. One unicorn, couple in the sort of quarter unicorn size. And still coming. And that's 8 years old, that program. Well, COVID came and it shut us down. We can't afford to keep it open if we've gotta put everybody in single rooms. And for survival training, we'd have to give everybody a tent and a sleeping bag. And during COVID we were not able to run our program. So our team put together an extraordinary online program. For entrepreneurs, and it's 2 weeks and it's 2 hours a day. We just threw it together, but using the Draper University philosophies and credo and all that, we brought in 100 students in each of 3 months. They had amazing experiences. We realized that that actually might be the first step toward becoming a great company. You go, you take the 2-week program. The best of that group will get to go to the Hero Training in San Mateo. The best of that group will get funded or be put on Meet the Drapers or whatever. And we kind of take them from the very beginning of the business, bring it to a full launch. And I think that we are onto something and never would've happened if we had Hadn't had this COVID crash.

Yeah, it's really fascinating how fast the world actually has adapted to this, and really it's created a lot of new opportunities.

Yeah, the thing I love is that, you know, somehow through the media and the politicians, we were— we suddenly were going to shut down the entire economy or a big part of it. And so suddenly 31 million Americans were unemployed. And around the world, it's about 10 times that. But many of those people have created their own new jobs based on the new environment. You just have to love that, that ingenuity, that drive, and just pure grit. No doubt in my mind, you know, you look around at all the people of the world and you realize, well, they are the humans that have withstood millions of years of of evolution. And there's no doubt in my mind that when left to their own devices, they are going to succeed. Humans are remarkable and everybody's different and everybody's beautiful. It is such a wonderful world. And I love what individual people can do when push comes to shove.

Yeah. I mean, it's really crazy, especially because the United States in particular is such a Visionary, creative culture. I mean, right, we don't make things like China and Mexico and around the world as much as we do, but we create ideas that need to be made. Our export is our creativity and the open environment that we give to entrepreneurs. I mean, we've had more unicorns than any other country year after year after year after year. And for the most part, started the whole idea up in the Valley. I live in San Diego now, but I grew up in the Bay Area, so I cut my teeth in the Valley, you know, on that, on the corridor there. So I love it. I think it's just awesome.

It's a culture that has been created around people who look at something and say, I can do that better, whatever it is. I can improve the customer experience. If everybody's doing that, then they're always figuring out how to improve the customer experience. Whereas other cultures, other places around our country and outside our country, there's always this hesitancy to go try something new. Trying and failing and trying and failing are a big part of what makes Silicon Valley so great.

I agree with you. And entrepreneurship in general, you know, is the ability to try something, iterate, try something, iterate, iterate, iterate, and then make something better. And then somebody else comes along and says, I have a whole new way of thinking of this. It's, it's, some of it is like the creativity too, right? That like to your point earlier, people look at a problem differently. You look at a problem, you go, you know what? I think I can solve this problem. And you know what else? I think I'm gonna actually go for it. You know, and then the venture capital community and the capital, uh, private equity and angels and everything back 'em, and then you have another unicorn. It's just an amazing thing.

If you really wanna make an impact on the world, you have to figure out First, what's the problem you're solving, then how you're going to solve it, but then how you're going to make money doing it. Because if you make money, you can spread the good word around the world. If you don't make money, you're not doing anybody any service.

Yeah, exactly. Yeah, that's— yeah, that's— I'm very passionate about helping entrepreneurs because I think I look at the world and I look at what's going on, and I think that the future of the world is entrepreneurship, and that means evolution.

That's a great, great thought, which is I think humans are at this point where we are going through an anthropological change. Anthropologically, we were always tribal and we set up these tribes and, and they were ways of protecting our, our people. And, uh, you know, you don't cross this line and I don't cross this line and everybody's good. Now we realize that we want all those tribes interacting. As long as they're interacting, we all benefit. We benefit from having open borders with China. We have— we benefit from having trade with Mexico, trade with Europe, trade with India, wherever. We're all beneficiaries of that. I think the world before COVID was getting very global. Now there's sort of a little weird nationalism that's come back, but I think that's a temporary blip. I think it's like the roar of the dying lion.

I do too.

I totally agree with that.

100%. I totally agree with that. I say that myself. I'm like, it's the last scream.

Yeah, because they realize that these borders don't mean anything or very little. I mean, they mean a lot to Americans because we've built this incredible economy. Over all these years, but we build it on freedoms. We start spreading those freedoms around the world. We want those— we want to work with people from all over. We're, you know, we're all better off if we get our fruit from Chile and our beans from wherever they come from and our watches from Switzerland. And I, you know, we're just better off. Having different groups become good at different things and the consumer benefits. It's good to have competition. You can't have one single source of anything, but that globalism is coming and the tribalism is dying. And I think we're getting the last, that just the very last little out of the lion. Right now.

I agree with you 100%. So what do you think? I mean, so when you think about that, right, when I think about this idea of, okay, look, the world is a small place, we all know it, and anybody in business works with people all over the world constantly. To us, there's no borders, right? I'm on the phone with somebody from Moscow this morning. I'm on the phone with somebody from the United Arab Emirates this afternoon, so on and so forth. And you're just doing business. And so business doesn't have borders. So how do you adjust the attitude of these people who don't understand the evolution, just sort of the traction that's heading a single direction where we're all working together is a good thing rather than thinking of it as a fearful thing?

Yeah, it's funny. I brought this up earlier today, which is, I mean, there are a lot of reasons to read the book Dune by Frank Herbert, but one of the reasons read it is they keep repeating the message, fear is the mind killer. And it really is. You, you watch the news and you get fearful, and then you, you freeze and you don't leave your house, and you wear a mask and you're— everything's scary. You live your life in fear and nothing happens. If you live your life feeling like, hey, we can both win, If we work together. If you have that as your attitude in life, I think you're going to have a much better life and I mean, the more you trust people, the less you fear people and the more you work with people, the wealthier you will become. I mean, you think about it, all the countries where people can trust each other are rich. All the countries where people are Thinking of it as a zero-sum game, they're all poor. Wherever that happens, you just look and say, all you need to do, build trust in your system. Once the trust is in your system, everybody wins.

Yeah. Yeah. If you're not worried about somebody stabbing you in the back, then you're more apt to turn your back. Sure.

And it comes from the top. You have a corrupt leader, you've got a corrupt society, and there's no trust. And they will never build a strong economy. But if there's trust and you have an honest leader, it goes down through the organization, through the company, through the country. Everybody benefits from that.

Yeah, it's definitely— I agree. It's from the top. Like, you worry about who's up there driving the bus because you're on board and wherever they decide to drive it, you're going. You know, you're kind of looking at the driver going, hey, where exactly are we going right now? 'Cause it looks, it doesn't look good, you know? And then you start worrying, right?

That's Reagan. That's trust but verify.

Yeah, yeah, exactly. Let's hit the pause button right there. Coming up in part 2 of my chat with legendary venture capitalist Tim Draper, Tim will tell us why he loves cryptocurrency so much and why now this is the best time to be an entrepreneur.

This is your moment. You're an entrepreneur. The world has just come to a freezing stop. It's, it's a reset. It's a reboot. It's an opportunity to reinvent the world. And now's your time. This is— I don't think I've ever seen a better time to be an entrepreneur.

Thank Thanks for checking out the BOSS Podcast with Gregory Shepard. Get more on Greg's Business Operating Support System, BOSS, at GregoryShepard.com. This has been a production of Forbes Books Radio.