We met Tim Draper the Founder & Managing Director of Draper Fisher Juvertson who was in Mumbai recently. We spoke to him on various issues right from the current economic slowdown to how he viewed the Indian market, his advice to entrepreneurs and Why was he in India?.. and more..

Tim on Global Economic Slowdown

Entrepreneurs Perspective

Tim started with giving us his viewpoint from the entrepreneurs perspective on the global economic slowdown. He felt that this was a great time for entrepreneurs to truely showcase their entrepreneurial skills and be creative enough to make money in this kind of slowdown. He stated that according to him these were the most exciting times for entrepreneurs and they can learn how to manage their cash in a tight manner. He felt that those entrepreneurs who were quick enough to realise that the situation had changed and got out of the initial shock of cash crunch and went to work with a sense of determination would be the ones that would do well.

Global/VC Perspective

Tim stated that Businesses move in cycles and hence this is another cyclical phase in which the markets are slowing down. He said that he wont be surprised if tomorrow the market picks up again and things start looking better than what we expect them to be. He also pointed out that the role of media in today’s day and age was prime in making these slowdown’s or recession seem bigger than it is as all the media talks about it and everyone reads, sees it and reacts. He also felt that due to this high level media exposure the depressions are deeper and the boom periods are over hyped as well.

Tim’s Viewpoint On India

Tim stated that according to him India is a fantastic place to invest right now. He said that a global recession for India means a growth rate of 5%! He said that everyone in India seems to be an entrepreneur and the fact that you have a indigenuous market of 1 billion people makes it even better for entrepreneurs.

He did caution though that US capital being infused by venture capitalists would be squezzed given the US recession though the Indian companies that continue to do well should have little or no impact.

Tim’s Approach/Advice towards companies during this slowdown

He said that cutting down spend wasn’t the solution for all companies. He said that different companies would need to take different approach. Though conserving cash is important for some companies this might be the right time to engage with customers while their competitors are backing off. He stated that the best startup businesses are the one’s that are organically grown and these times are the best times to boot strap. He felt in most cases its usually best to avoid taking venture capital till you can afford to. He also said that if companies find it hard to convince large clients to spend it would be wiser to go after the bottom marketing dollars i.e. smaller clients or smaller deals which are longterm inorder to build cashflow and profitability in these times.

What does Tim Draper Look for in an Entrepreneur?

Tim’s answer to the above question was..

1) Enthusiasm and Singular Approach - The enthusiasm fact is key as an entrepreneur needs to be upbeat about his business whether or no the market, research or competition is or not. Also singular approach which means he should be completely focussed on singular business opportunity with his entire heart and soul.

2) Dedication - Money shouldn’t matter to the entrepreneur what should matter is the realisation of his vision and what he has set out to achieve. Because there will be times when money isn’t there in the business and only real dedication can get such businesses through tough times.

Why is Tim in India?

According to Tim India is the greatest opportunity of the world right now. It has a billion people domestic market, tons of entrepreneurs, a growing economy, english language speaking audience.

He felt that this was the greatest opportunity to bring Venture Capital and Entrepreneurship together.

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