Top 5 Takeaways on Innovation and Entrepreneurship from Tim Draper of DFJ
On a gloriously sunny Seattle afternoon, venture capitalist Tim Draper stopped by to impart some words of wisdom. The founder and managing director of Silicon Valley-based Draper Fisher Jurvetson gave the keynote today at the Washington Technology Industry Association’s Fast Pitch Forum & Technology Showcase down at the Bell Harbor conference center. He was hosted by local DFJ venture partner Bill Bryant and WTIA president Ken Myer.
Tim Draper has previously backed such companies as Skype (now part of eBay), Overture (bought by Yahoo), Hotmail (acquired by Microsoft), and Baidu (the Chinese search engine). He serves on the boards of Glam, Tagworld, SocialText, Meebo, Wigix, and several other companies with intriguingly weird names. Besides all that, the Stanford and Harvard alum is also a singer and songwriter. “I recently got to interview Carlos Santana,” Draper said. “I wrote some other words to ‘Smooth’ and sang it while he played it. It was kind of interesting. My singing career does have its moments.” (More on that in a minute.)
Despite what he called “an economic nuke” and subsequent “nuclear winter,” Draper was bullish on the prospects for entrepreneurs, and he gave some inspirational advice. “One thing has not changed—innovation just keeps going. Where there is a problem, there’s innovation,” he said. “Ultimately, it’s the entrepreneurs who solve all these problems. Entrepreneurs are heroes.”
Here are my main takeaways from Draper’s talk:
1. It’s the regulations, stupid. Draper criticized the many rules and regulations that can harm or slow down innovation. As examples, he cited Sarbanes-Oxley and the Investment Company Act of 1940, NASDAQ and NYSE acceptance hurdles and fees, and accounting rules like FAS 157. He also said monopolies block liquidity. “It’s like putting friction on a path, it slows everything down. That means there’s less money for investment in risky things, less money that goes to venture capitalists and entrepreneurs.”
2. It’s the best time ever to start a business. People need jobs, existing companies are reeling, and there are fewer startup competitors and newer technologies, Draper said. “It’s a whole new game,” he added. “You are as young as you feel.” He pointed to a long list of successful companies that were started during recessions or depressions: IBM, Microsoft, Hewlett Packard, Adobe, Coca-Cola, GE, Johnson & Johnson, to name a few.
3. It’s all about starting a revolution. Companies like Amazon and eBay were transformative in that they did away with institutions that most of us thought would be around forever—things like bookstores and trading posts. “What can we start?” Draper asked. “Moore’s Law is starting to accelerate, … Next Page »