Tim Draper is an American venture capital investor. He is often regarded as one of the most renowned and successful venture capitalists in the world and is one of the most influential people in Silicon Valley, having racked up a net worth of over $1 billion. But what has made him so successful? Draper lists three things that he looks for when deciding on future investment.
1. Finding a competition sweet spot. Draper insists that there is a sweet spot for newcomers to the industry. If there is too much competition, you’re too late to the party. But on the flip side, if there’s no other competition in your field, you should be wondering why.
2. Eliminating Bureaucracy. When looking for startups to invest in, Draper focuses on fields that are slowly becoming “big and lazy and bureaucratic”. Then he looks for startups and entrepreneurs looking to transform them. Draper typically stays away from the three main fields that are resistant to both change and technology: banking, medicine, and government.
3. Leading the 10 percent. Draper points out that like with any ambitious choice, 90 percent of the people will laugh at you, and 10 percent will follow you. As long as you have that 10 percent, you have the groundwork for a business. You don’t need 100 percent of people to be on board. You only need 10 percent.
These are all attributes that Draper looks for when evaluating startups and entrepreneurs. He disagrees with breaking his strategy into a formula: “Once you think you have that formula for a successful investment, the world changes, and you no longer have the formula”, Draper said at the Global Technology Symposium in Menlo Park. There is no straightforward equation to unlocking the ability to consistently making successful investments. There are a lot of factors that go into the economic dynamics of startups and entrepreneurship, but by knowing what to look for, Draper has been able to minimize risk and optimize profit.https://www.inc.com/laura-montini/tim-draper-explains-his-investing-formula.html
It is very impressive that he is confident enough to only need 10% of the people's support to go forward in business/work. To me this seems a little over-confident. It is also evident that there needs to be just the right amount of competition. Too much competition won't lead to success for you but not enough means that there is clearly something missing. It would be interesting to see if this formula has been as successful for others as it has been for him.
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