In Beijing at least, it feels like everyone is an investor. So for many entrepreneurs who are not familiar with the investment side of things, sorting out the good from the bad can be difficult. At this year’s CHINICT event in Beijing, the famous Tim Draper of VC Draper Fisher Jurvetson (DFJ), Skype called in from Paris where he was invited by French President, Nicolas Sarkozy to advise him on internet before he went on to lead the G-8 session (A group of 8 world major economies, strangely China as the 2nd largest economy is not one of them).

VC runs through the Draper Family

So who is Tim Draper and why is he so interesting? His grandfather, William Draper launched the first Silicon Valley venture firm in 1959 and is credited with kick-starting the venture capital industry; his father Bill co-founded Sutter Hill Ventures and later created the first U.S.-India venture capital partnership. His daughter Jesse Draper, has her own show called which looks at entrepreneurship from a very feminine and pink perspective.

Skype, Hotmail, Baidu…enough said

DFJ has made a host of impressive investments. Internationally, Skype (sold to eBay and now Microsoft), Overture (sold to Yahoo), Hotmail (sold to Microsoft) and Admob (sold to Google) are some of the most prominent. Within China, Baidu, Focus Media and PPLive are monstrously valuable investments. It’s amazing to think that, without the investment and support from a VC like DFJ, would these services we use daily ever exist?

Tim knew China would be big

As a pioneering investor into China, Tim said that a long time ago he realized China was where America was at the turn of the industrial revolution, when it was getting rich. “When you see your neighbour buy a nice car, you want a nice car, when they get a fridge you want a fridge and when they get a tv, you want a tv.” Tim saw this trend being inevitable in China, so the first DFJ China fund was established in 1998.

Baidu was probably the best investment decision we ever made

Baidu dominates China’s search engine market with 76% share. It currently trades on NASDAQ for US$138 per share and has a market capitalization of US$48.31bn (as of today).

“I invested in Robin Li because he is steady, consistent and gives great confidence that he can execute well… it’s his charisma. Originally we felt we were paying a high price but it turned out to be a very low price and Baidu was probably the best investment decision we ever made.”

China is doing things that America isn’t even dreaming of

When asked about his views on Chinese innovation, Tim adamantly believed that China has what it takes to compete internationally and sees the country as innovative. “Some of the most innovative companies in the world are in China and they are doing things America isn’t even dreaming of.”

He also strongly feels that success stories such as Baidu, give confidence to entrepreneurs to try new things.

Attack the bad gorillas

When asked about what type of business an entrepreneur should go into, he recommended going after markets where there is an entrenched incumbent who has a monopoly position and customers aren’t happy. For example, Hotmail gave us email when people were unhappy with paying for a relatively slow postal system. Skype gave us free international calls when telecommunication carriers charged exorbitant amounts of money.

He is the Risk Master…Skates on the edge of disaster

At the end of his talk, despite being 5am in the morning in Paris, Tim gave a great rendition of his song about being an entrepreneur. That’s when you know you love this stuff! You can download this song on iTunes and read his blog here.

Risk Master lyrics by Tim Draper:

Invested all his mattress money
Divorced his Prom Queen hometown honey
Scraping up his alimony
Friends think he’s a little funny

Needs a “world class CEO.”
Just another million or so
Get him to some real cash flow
So tears and sweat can IPO

For 15 years he’s been out gunned
Bankers demanding blood refund
Company’s looking Moribund
Even Draper will not fund!

He is the Riskmaster
Lives fast drives faster
Skates on the edge of disaster
He is the Riskmaster

He’s got a mission
Company vision
An artist’s ambition
Gut intuition
Fearless and free employee
No guarantee for the Corporate escapee

Team fights on against the trend
Had to lay off his best friend
Called a “recession” seems like “depression.”
Chapter seven. Is this the end?

But then a salesman shouts, “We got it!”
The company’s gonna show a profit
To think the papers rang, “quixotic”
The sky has opened astronautic.

He is the Riskmaster
Lives fast drives faster
Skates on the edge of disaster
He is the Riskmaster

He is on top, on top of the world
At last they see it. Vision unfurled!
Cashflow landslide!
Now everybody wants a piece of his hide.
Court wants him tried. Press wants him fried.
Anyone this rich must have lied.

He is the Riskmaster
Lives fast drives faster
Skates on the edge of disaster
He is the Riskmaster

To the moon!

Jason Lim

Jason is an Australian born Chinese living in Beijing, specializing in entrepreneurship, start-ups and the investment eco-system in China, especially in the tech and social area.

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