Tim Draper shares how Hotmail became a viral phenomenon through a simple marketing tactic: adding a signature line to every email. He discusses his venture capital career, founding Draper University, and his views on Bitcoin and entrepreneurship.
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He's truly one of the most legendary venture capital investors in Silicon Valley. He's predicted the rise and fall of some of the biggest companies that came out of the Valley. He has started his own university because he has such a huge belief in education. He has become a proponent for breaking the state of California into 6 states, and if that didn't work, into 3 states. He's one of the great thought leaders that I've met in my career, and it's always fun to sit and talk to him for a period of time. We were on a trip to Myanmar last January, and I told Tim I didn't really understand well ICOs and Bitcoin. In an hour and 15 minutes, he gave me a tutorial to the point where I probably could teach a class because he knows it so very, very well and he studied it so well. So he's a student, he's an investor, he's an educator, but I think he's also 3 things more importantly than that, and I've seen all 3 in action. Number one, he's an absolutely devoted and wonderful husband. To his wife Melissa, who is his great partner. He is a terrific partner to her. He's a great dad. He has 4 children, all 4 of whom he called when we were in a hot air balloon over Myanmar. He called all 4 of them and FaceTimed them, said, guess where I am? Dad, why are you waking me up? Where are you, Dad, that you're calling at this hour of the morning? But he made sure he called all 4 of them. And number 3, he's a very good friend. And when I asked him if he would do this today, I almost didn't get the words out of my mouth before he said, I'd love to. And about 10 minutes later, he came back to me and said, I'm already thinking about what I'm going to say. I got some ideas. So he's been thinking about this since January. That might mean it's going to be 3 hours long. We'll see what happens. Our commencement speaker, who has an undergraduate degree from Stanford University in electrical engineering, he has an MBA from the Harvard Business School, and he's a very dear friend, Tim Draper.
Thank you. With no disrespect, I'm going to take this thing off, and it's sort of a bad hair day. You know, when I heard Oprah was going to be at Annenberg, I thought this place was going to be empty, so, you know, there must be really a lot of interest in Bitcoin.
Hey!
I can actually show you how to properly throw these at the end of the thing, but— so first, I would like to thank Dean Ellis for this amazing opportunity.
It's—
thank you, Dean. And the reason he couldn't get the words out of his mouth was because I was thinking, this is an amazing opportunity for me to recruit Potential students at Draper University. But then I want— I also, before I really get started, I want to recognize my wife, Melissa. I think you're over there. Stand up. So, So a couple of days ago, you know, I had lots of good ideas. A couple of days ago, I had Melissa take a look at it and she said, this is horrible. And she went through and she cut out the part where I said, I'm thinking of, you know, I love Dean Ellis so much. I love— my daughter went to USC and she loved it. And I went to Stanford, and they don't seem to be doing these really nice things for me. So I'm thinking of defecting.
Go Trojans!
Go Trojans, yeah, all right. So, and then she took that part out. And then there was another part she took out, and I'm sure that'll come sometime in my talk. Okay, so let's— this is the vetted and filtered version. Okay, here we go. Hey, congratulations graduates! Awesome!
You're out!
Well done! This is so cool! As you leave the gates of USC, I hope you hear the starting gun. This is the beginning. Your training is over. Your life begins now. Your education will continue, but your life begins now. Make it awesome. It's up to you. Make your life awesome. You only have one life. Well, in this current form. There may be others. I love that I get to talk to you, the business majors of this amazing school. I'm humbled, honored, and thanks again, Dean Ellis, for choosing me. It's so cool that you all majored in business. Business is mission critical to all of us. Businesses are— businesses created what you are sitting on, what you are clothed in, delivered what you had for breakfast. Businesses feed you, house you, protect you, care for you, entertain you, inform you, allow you to communicate across the world, transport you, organize you, and educate you. USC is a business. Your household is a business. Your church is a business. The news is a business. And you wonder about that fake news, you know, they're, they're attracting you. Your government is also a business. Wherever cash flows in and cash flows out, There is a business, and you, you were clever enough to major in business. And the greatest businesses are the ones that provide the most value to customers, and as a result become the most profitable. So when you make a profit, be proud knowing that you are doing a good job Providing a needed service. But you all know that. Let me tell you a few stories about my business. I've been a venture capitalist for over 30 years now, funding technology startups of all shapes and sizes, and I've been able to experience firsthand some of the biggest transformations in history. It's given me a window on the future.
Thank you.
I funded Jack Smith and Sabir Bhatia, 2 26-year-olds who wanted to build a web-based email. In the first board meeting, they told me, it's up! And I said, what's up? They said, well, you can now do email for free on the internet. I said, that's great, but how are you going to let the world know about it? They said, we want TV ads and billboards. And radio ads everywhere. And I said, the money we funded you with— I think it was like $150,000— will get you a nanosecond of airtime or a postage stamp on 101, or 405, I guess. I said, can't you just blast it out to all those people on the internet? They said, no, that would be spamming. That was kind of a new word for me. So I said, how about if you just put a note at the bottom of each email that says, P.S., I love you, get your free email at Hotmail. They looked at me and they thought, of all the venture capitalists in the world, why did we get this one? But I kept pushing, you know, I was persistent, and they finally agreed, but they said, but no P.S., I love you. Just get your free email at Hotmail. And to this day, I think we would have had a much more peaceful and loving world if they had kept it. But in any case, get your free email at Hotmail spread Hotmail to 11 million users in 18 months. Sabir sent me one email to his friend in India, and within 3 weeks, we had 100,000 users in India. And at that time, there weren't even 100,000 computers in India. So we called this phenomenon viral marketing, and we sort of used it to spread lots of products throughout the world. I guess it's called growth hacking now.
