Who wants to erase the state from u. S. Maps he is a serious invest here is dabbling in a reality show, a welldressed man who we are about to show in his underwear. Here take mine. Thats tim draper there, taking a break from his day job a few years ago to play a part in his sisters tv show naked brothers banned on fwhik loadian. Whenever anybody says you cant, i always think, well how would you . This too, is tim draper in pants discussing his plan to split california into six separate states. Just one of his many interesting ideas. So many ideas and projects venture beef calls it the draper ecosystem. His latest effort to pass on his knowledge to a new generation of entrepreneurs through an intense and Residential School called Draper University. Tim draper is the son and grandson of venture capitalists, one of the very few oldstyle dynasties you will find in Silicon Valley. His firm is invested in tesla and space x and jaromir, among others joined by andrew tang who runs the school Draper University as well as the Draper Dragon fund and that is the venture fund concentrating on china, im going to presume and Quentin Hardee the new york times. I want to start with you have so many investments out there and so many pots and plates spinning, whats your favorite and i dont mean the one that paid off the most or the one you want to promote that will pay off later. What is the one that you really are so glad that you put some money into . Well my daughters best friend was Elizabeth Holmes and she was she dropped out of stanford and she came to me and she said im dropping out of stanford and i want to i want to change medicine as we know it completely. And i said well youre dropping out of stanford i had known this girl since she was 2 years old. She was now 19. And i got so excited about her and what she was doing, i said okay, i will invest your first million dollars. And now, Elizabeth Holmes is on the forbes list and she she made it before she was 30. And she is the first selfmade woman who made the forbes list. And tell folks how she did that. What she does is she takes two drops of blood from your hand, from your finger and it goes into a microfluidic chamber and that chamber runs 50 different blood tests, so you respect taking quarts of blood out of your body in order to get your blood test. And then those 50 tests go into a database up in the cloud and so that if you go and you get your finger tested again, you get your blood tested again, then the next time you can see that your vitamin d levels have gone down or your glucose level is too high or whatever and you can make that transition and figure out well, whats happening over time to your body. Staying in stanford would have been the worst advice you could have given her . Advice would you have expected you to give. Ask her parents i did say, have you talked to your parents about this about dropping out . At the same time you stayed with that for, what nine years, eight years . How many did that take . As a venture investor, you stay in it there is no liquidity. That is one of the things we are trying to change. We are trying to make it so that all of these private companies are a lot more liquid than they were back ten years ago when we had that big drought. We have a different kind of drought now, but a big drought of liquidity in small businesses. And these entrepreneurs were starving, but they had a lot of money on paper and they were trying to figure out how to get that money well lets spend a minute on that. I think what youre doing there, you have kind of broken off from Draper Fisher jergenson and started your own well it is a little different further out. Draper associates and then i worked with worked alone for about seven years and then i brought in john fisher and then brought in steve jergenson, we ended up with a lot of great partners around the table and then i saw huge changes in finance and i realized that i had an innovators dilemma. I had to decide whether i could change that big boat or i needed to step outside. Thats where im going. You had a venture firm for one world. Third generation. I dont think the world changed much between your grandfather and your father and your early method. Now youve venture capitalists. Now youve started this university youve started this new kind of fund. Whats different in the world that makes you want to take these kind of radical steps . Okay. So, the internet has changed media, Communications Information in a big way. Its flattened them all. Its disintermediated all the leaders in those fields. Were in venture capital. It is very likely that with angel list and funders club and eshares and cap share that second markets that our business is going to be completely changed, too. Right. And i want to get out in front of that and i want to invest in it and drive it and see where it goes. And thats where Draper Associates came, you know, had a revival. The University Part of that a response to that change in the world as well . Yeah there are also incube baiters and accelerators. What we did was we set up Draper University to come before those inc. Cube baiters and accelerators, so all the great prep knewers from all over the world could come to this one place and spend six weeks and get somewhat transformed themselves into true entrepreneurs, they were really out there to change the world. Andrew youre in charge of that transformation. What gives you the qualification qualifications to transform the young were enknewers of the world . Well, you know its very much a startup, so tim and i started the school back in 2012 and its really about, you know our experience working with startups Venture Space for the last 15 years, over 20 founding teams some this is yet another chance to really scale this by helping 40 students at a time. You select these 40 students. They apply to your university and they are paying you as well right . Right. You have a rich ben factor here. Why are you charging tuition in the first place . We are believers in the capital market. So we believe this is a good product and its a product that we think needs the customers need to ben felt from. They need to buy in and we need to measure ourselves, you know, our success based on how the, you know, our customers feel. Okay so spend a minute on the program. How long does it last and what do they get . So its a sevenweek program and we run this four times a year, 40 students per session. Mmhmm. What do they get in that seven weeks . So theres seven modules that reflect the seven stages of startup, starting with the vision vijlism, marketing, speed of strength which is Team Building and Survival Training just to really build that you know emotional so what you get a framework and a context for being a startup. Right. When they graduate they have chops they wouldnt have otherwise. And how is that different than say [ inaudible ]. As starters we are working almost like a people accelerator, we work with people with the Business Plan or without a Business Plan and when they come out, they are better people. They may go on and start a business, but they may not. They may go apply to graduate school, work for a big company. So in fact many of our students are applying to y come notre, 500, boost. Explain to me, where does that come in . Lets say i finish my schooling at stanford. Is that do i do Draper University next do i do graduate school of business next . Do i do why come dater next . Which is my first step not quite figured out what my startup wants to be, but i know i need further education . Obviously, we believe right. Right. But why . On the Admissions Committee . Pick 18 to 28. Yes, of course. And i and theres a specific thing that im looking for. Im looking for a real spark, something that we can ignite and get that person going. Invest in a person . If they are 18 years old, its just like hey, you dont have to have your complete Business Model put together. Right. If youre 28 you probably should. But if you have that great idea at 28, you when you go you there our program, women put you through this blender and by the time it comes out, it wont be the same. What are they paying for this . They pay about 10,000. Okay. And its amazing transformation. And the students love it so much, they go out and they tell all their friends and they tell their friend and they have come from over two Different Countries. We are going to talk more about the 28s and what do you do when youre 29 with tim draper and andy tang when we come back in just a minute. Welcome back to press here. Talking about Draper University or we were before the break. There are two rules that i thought were particularly interesting and both of you can speak on. This number one, the upper end is 28 years old, as a 47yearold man, i would like get some more information about that secondly, that its residential. You must stay in the facility for the length of the seven weeks. Is 28 a random number . No. We all know the young kids have the great ideas . We have been very deliberate. We have done certain things that are really deliberate and for really good reason. First, 18 to 28 is catching them before their first startup. That is a really important time to catch them because we want them to do it right the first time. If they are over 28 and they want to do a startup, we have a executive program and if youre over 28 you dont have six weeks to give up. No you dont. No. If you do we are concerned. An issue. But during that time we feel that its really important to make it totally immersive and so we have all the students there, they live together they come from 42 well we have had them from 42 Different Countries and they learn as much from each other as they do from any of our speakers, any of our program, any of our activities. And being immersed there and spending six weeks, during that time thinking about what your business is gonna be is a really powerful thing. All of these challenges how many students [ overlapping speakers ] 300 students. Have gone through . Right. In fact have the age range of the guide line it really came from our experience as venture investors, invested in hundreds and close to thousands of founders. And in our mind got statistical data that shows really where that sweet spot is. Metric of success of 300 graduates, xnumber of success. What tells you this isnt the right path . What have you seen . There are different metrics we track. One, very sort of quantitative metric we track, how many businesses have started and how much success in fundraising they have had. And . And we have had 150 businesses formed and over 20 million raised. Qualitative point of view i get thank you notes two years later from some of these students who say you changed my life. I learned more in that six weeks than i learned in four years at stanford or name a school. And thats happened to me are you taking [ overlapping speakers ] whats that . Taking an investment a pest of this company as well as part of the deal . No not as part of deal. They come here educated. Well when they come out, if they are one of the top teams, we might put some money behind that. Sure. And not just us but we have a whole panel of venture capitalists that evaluate their twominute presentation. Interrupted your side. First off, we are bashing stanford. Nothing personal to stanford or others. Or others. I like that. Local. Of the 300, what have you seen you know, that makes you say thats our guy, like a new applicant shows up and you say, boy, i want that guy. And has that of course and has that changed over time . You know your initial thoughts about who you might take and now who youre taking has that changed . You know, i dont think its changed too much because we have been in the business for so long, i have been in the Venture Business for, you know 25 28 years. Right. And i have seen what it is that im looking for. I know im looking for somebody who is going after a big market with a unique technology and a big vision and hopefully, a personality that attracts. Sounds like a venture relationship. They come at you with passion. You invest in a person. Yeah. They give you money. When they come we challenge their assumptions the whole time they are there and then, we get them to be very comfortable oneonone and in front of a large audience and on camera and in a number of different situations. And then we put them in really awkward situations so they are really comfortable in their own skin and it makes a big difference and thats why we thats why they are saying we have transformed them. Now, this universitys a startup, too, in a sense, cause your early days, you two founders always agree about what to do next . Push back on each other . I have to say initially, i didnt fully understand the age guideline. I remember we had lots of discussion initially and then i think over time i could really see it make a lot of sense of having that guideline in place. You know i will tell you, we would make a lot more money at the school if we opened that able group up because somebody who is 29 can pay a lot more easily than somebody who is 18. We have had people go up on indy go go and say, hey, i want to go to Draper University and they have raised their entire tuition. 300 people at 10,000 each is 3 million, take away the costs of educating them the building et cetera, you got much better investments than this. I got a feeling this isnt entirely about money. A lot of ideas could you invest in later. This is about education. We are we are in some ways leading the way toward a new type of education. And youre starting to see a few things what are the characteristics . We have done some very interesting things. We have a teambased approach. So we have people coming back to us saying i never would have worked that hard if i hadnt had to do it for my team. Mmhmm. And so its all team based. We dont have any individual activity except for the pitch at the very end of the presentation, the term. And that thats whole new way of looking at education, because education historically has been the individual and maybe cut the other people so i can get the a, and getting an a was all about about good job, you didnt make any mistakes. What we are trying to encourage mistakes, our teams get more points when they try unique things and succeed and they get a few points if they try unique things and fail. Mmhmm. So we are trying to get open their minds to the idea that we have to try things and then its more like the work world. You work in a team when youre in the work world, no matter who you are. Tim i have to interrupt you there, we have to pay a bit. Be back with tim, andy and quentin and me in just a minute. Welcome back to press here. Talking about tim draper and andrew tang about Draper University. I do want to change the subject a bit. Andrew feel free to jump in at any moment though. Tim, thud idea of six different california yas. They would be literally separate legal states like wearing it. Explain it to me. It helps. If lets pretend, if we had six california yas now, it wouldnt have happened that fast, for pretend, lets pretend, this water situation, and i dont want to call it the drought, because droughts are act of god and theres nothing we can do about it wither in a water crisis and thats how i want to frame it what would have happened with six california californians, a state not us would have owned all the water. Whos hetch hetchy . What state . Part in north california and part of it i believe, would have well it runs down use your tie. It runs down and thats true the pipeline does. The point being the water let me tell you about the water. We would be much better off, california went from spending 26 of their budget on infrastructure down to spending 3 on infrastructure in the last four years. So somehow, we have let the highways go we have let the water system go we have electricity. Its all kind of falling apart. Its living back in the 1970s. So if we had six new states those states would be refreshed. We wouldnt have all the the baggage that we have that we are operating under and wed start with something fresh. There are great desal technologies, investment in one called oasis water and great Information Technologies that show where the water is its called water a Company Called water smart, shows where the water is at least you know where it is and you can round it. Silicon valley, the state of Silicon Valley would have had to pay the state of north california for that water though. With that inspired more pipelines and that . I actually think there would be a lot of horse trading at the beginning amongst the states but all of them would be much better off at the end. Youd end up with something that was a venture investor saying this is mispriced and they need to arbitrage this. Looking at as a venture investor saying hey, we have seen startups like skype completely traps form telecommunications or tesla change the entire Auto Industry or email or hot mail changing all of communications. If you could easily see the idea of six new states transforming the way governments work. Hewlettpackard. Doesnt work very well lets pull it in. We had the president of estonia come to Draper University and he spoke and he said, we have started fresh and we have much more virtual state and just by instituting digital signatures, we have saved 2 of our gdp and by doing digital voting, all the young people started to vote. And Digital Identity lowered the crime rate. You cant tell me that a new state cant do some extraordinary things and really improve our lives. And the Education System we have let that go from we were first in education. The best place to do business. Everything was great about california. Now we are 47th in education. And the businesses are thriving bus the immigrants are still coming because we have great weather. That question you want to ask . I got make myself a little bit up comfortable here and say i have seen the coverage of the university and, you know, sometimes it borders on ridicule, right . And i have seen the coverage about your ideas in the states and they are, like rich guy wants to youre clearly youre a guy who will go on tv and stand in his underwear, you dont mind ridicule. Does this get to you sometime, you feel misunderstood the way people no i actually i actually feel a little like i need to show something. And i need people to sort of come to where i go. I have that sort of, like, i want to take people here so that they can see this. Yeah. And its a nice way of doing it. And i dont mind taking some rid couple along the way, if society progresses at a much faster rate. For passing into something. Absolutely. In fact thats all we teach our students teach them to be comfortable in their own skin. In fact if you are a fall leader, doing something innovative sometimes border lines being ridiculed. Need humor, thick skin. The jobs and they put themselves out there and let themselves be attacked from time to time. You know you did say this the rich guy doing whatever. I got rich by doing those things. For you ridicule may be a positive sign. Right. When we find that actually the best investments are when the decibel level in the room rises to the top, not necessarily the ones that everybody goes, yeah, thats good deal. Right. But we this was my idea six californians and i am we are we are doing something, announcing something in a couple of weeks that will that will allow other ideas into the program. Oh come on. Too many people telling me that i cant announce it. Jim draper the time we have but can i get at least a semipromise that someday, you will come on this show and announce something. Say something, dont tease it on my show. Fair enough . Maybe the next time i change my underwear, would that help . Fair enough. Shown you, we started with the underwear, end it with the underwear. Tim drarp. Pull back you can tell he is wearing pants. Andrew tang. [ overlapping speakers ] wearing pants and andrew will take your word for it thank you for being our guest this morning. We are back in just a minute. Thats a our show for this week. My thanks to tim draper and andrew tang from Draper University and the Venture Investing world. Im scott mcgrew. Thank you for making us part of your sunday morning. An trujillo hello, and welcome to comunidad del valle. Im damian trujillo, and today the youth mariachi is playing with mariachi vargas in their upcoming concert here in san jose, plus also the ballet folklorico of logan high school. This is your comunidad del valle. [music] male announcer nbc bay area presents comunidad del valle with damian trujillo. Damian and its time to give. We do begin today with the Community Foundation of Silicon Valley and their program Silicon Valley gives. It happens to fall in sync with Cinco De Mayo its where you all get a chance to dig in and to help your local charity. With me are the folks from the Silicon Valley Community Foundation. With me are Manuel Santamaria and mari Ellen Reynolds. Pronounce your other last name for me. Mari Ellen Reynolds loijens. Damian see, i dont want to mispronounce it. Thank you so much for being here on the show. Now, tell us about the Silicon Valley gives because weve been doing it annually here. Mary ellen, maybe you can talk about that though
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