Ayman Al-Harbi2

Part 2 of our interview with Tim Draper, venture capitalist, who discusses his family history in private equity and his work to educate future business leaders. | April 2019

New Horizons: You are listening to New Horizons, the podcast channel for ICT Insights Magazine. Please join us as we talk to innovators and thought leaders from around the world.

Welcome to Part 2 of our interview with Tim Draper, one of the world’s leading venture capitalists. Click here for Part 1.

So, Tim, what advice would you give talented entrepreneurial individuals working in a large company?

Tim Draper: You know, we have executive trainings at Draper University, and they have been very successful. We do like one-week or two-week programs. I guess what we really do is help people build their confidence. We give them a lot of different speakers and a lot of different exposure to different things, team building exercises, and they come out — even in a week or two — they come out with a better sense of what they’re capable of. And so I would recommend that.

I would also recommend, and I recommend this to every young student who’s just leaving college and going in to start or joining a company, I say “Get to know one to four people every day, and ask them what they do in the business.” If you do that, and you keep going around the business, you’ll be the most valuable employee in your business because you’ll know what everybody is doing, and you’ll have a great understanding of how the whole picture works. So that you won’t make these myopic judgments or suggestions… you’ll make suggestions based on all of these other pieces of information that you have. You’ve met the people in finance, you’ve met the people in marketing, you’ve met the people in R&D, you’ve met the people in G&A… by just going around and making sure that you know what everyone else is doing, you will become the most valuable person at the business. And your creativity will be much better received.

New Horizons: Because you’ve made an introduction and they know who you are now and what you do as well.

Tim Draper: Yeah. Absolutely. It works both ways.

New Horizons: All that internal corporate networking.

Tim Draper: Build your own corporate network. And then you’ll just get a better feel. When you first start in a company and it’s huge —– like Huawei — you don’t know really where you fit. You’re trying to figure it out, you don’t know how they make their money or kind of they sell servers or routers and switches, and you kind of go “I think I know what that is.” Well, figure out what it is. Really understand the products, really understand what are their features, in what cases are they better than Cisco, in what cases are they not better than Cisco… just figure all that stuff out. And the way to do it, or the way that I benefit the most is sitting down and talking to people.

New Horizons: What technologies are getting your attention these days?

Tim Draper: You know, the most exciting thing I think that has happened since the Internet, and it’s probably more exciting and bigger, is Bitcoin and all the associated technologies around Bitcoin. Bitcoin is — I’m more and more convinced every day that it’s a currency that we’re all going to be using from three to 100 years from now. The fact that it’s decentralized and frictionless and open and global. You can use it everywhere.

Imagine being a Syrian refugee that was very wealthy in Syria, but then they got moved out of their country, and nobody is taking Syrian currency. You’re out of luck. You are in bad shape. But if you had Bitcoin, you could just draw it down, and you would be living a decent life somewhere else.

So, there’s something to that — having a global currency. The other thing is, you can use it for micro payments. You know, the guys at Lucas Films send those 15,000 people you see at the end of every Star Wars movie in the credits, they each have to get an envelope every quarter with a check for $3.22, but it costs Lucas Films $7 to send that check. That could all be done through Bitcoin wallets. Shew, and it’s done.

The Blockchain is really exciting because it has the perfect ledger, so it keeps perfect track of your Bitcoins. So, I can imagine a day, when – in fact I tried to do it, but there are too many — nobody knew how to deal with it, so it hadn’t been regulated, it hadn’t been — lawyers didn’t know what to do, the accountants didn’t know what to do. But I wanted to create a Fund that was purely Bitcoin. We’d take it down in Bitcoin, we’d fund our companies in Bitcoin, and then they’d pay their supplier and employees in Bitcoin, because all of the accounting is done already on the Blockchain.

So, if you project out a couple more years, that’s the way these things will work and you won’t need — the accountants will have to figure out other added value things to do for you, because they accounting is going to be done. And then the deal that I would have with my limited partners and the deal I would have with my entrepreneurs would all be built onto a Blockchain with smart contracts. As a result, whenever there was a big winner and we needed to distribute the money, it would automatically go. We wouldn’t have to go through a series of efforts with lawyers and accountants or LPs, they would just get it right into their Bitcoin wallets and the payment would be done.

So, you put that together with artificial intelligence, and you’re affecting not just the commerce and the finance and the banking industries, or accounting and legal… you’re not just affecting them, although those are all trillion-dollar industries, bigger than anything the Internet affected.

With artificial intelligence, which is really just — if you have enough data, and you have a way of doing what they call deep learning, which puts statistics on that data, and then you put an expert system on it which is AI, artificial intelligence, that AI can do a better job than any human on almost every job. People say, “Oh, those taxi drivers are going to lose their jobs” or whatever… We’re all going to lose our jobs. When everybody loses their job, then what? People will have to abstract their ideas. And by the way, that was my son’s idea, Adam, who came up and said “Wait, we’re all going to lose our jobs.” That was the first I ever heard of it. But it’s true. We’re all going to lose our jobs. I could easily see, I’ll probably still have to do the interview, but maybe not. Maybe AI does the interview with the entrepreneur, but the camera will be able to spot things that I might have missed, like I can tell when someone looks a little determined, and I think they’re absolutely going to go make this thing a big success, if I see them squirm in their chair, I think that they might be not telling the whole truth — but the camera is going to be able to spot all that stuff better than I can. And so I actually think that even venture capital, my own job, is going to be abstracted, and I’m going to have to think of a new world to live in while my job is taken by machines. I’m very happy with that. I would much rather have that happen.

Well, anyway, think of this. We have a company called Cloudmatics. It’s a fantastic company, and what the guy has done is he had his AI take the doctorate exam. The doctorate exam is a patient walks into your hospital, he’s got a bruised leg, a lazy eye, and he’s got a headache, and he’s got a big wart on his hand. What do you do? Ok. Well, the average doctor — you have to get a 70 percent to pass the doctorate test. The average doctor gets a 76 percent. The AI of Cloudmatics got an 86 percent, and when combined with a doctor, they got a 91 percent.

So, the diagnosis of a patient is going to be done out there in the cloud. The future might have me as a patient, putting all my data up there — my medical records, my blood test results, my genetic history, but it will add things like my Fitbit results and what I had for breakfast, who I met, where I’ve traveled, all that stuff… and a bunch of data that nobody’s made a connection with like what kind of chair I sat in. I mean, nobody is really thinking of that as diagnostic tools. Well, it could be an interesting diagnostic tool. People might discover that some chair is related to some getting a cold in November. Who knows? There could be weird connections that no one really thought about. And so healthcare is going to change in a huge way and so many deaths happen because of misdiagnosis that this is a lifesaver.

New Horizons: Have you made a lot of investments in AI?

Tim Draper: Oh, yeah. Oh, many. We were really, I guess, the first investors other than maybe Google in an autonomous car, cruise automation. He took me for a ride — and he said, “Oh yeah, watch how this thing works.” It was working fine, and we hit an intersection and the car took a quick sharp turn to the left, right into oncoming traffic. And I thought, and at that point it was very strange, that was when I decided I would make the investment, because I thought it’s just a matter of getting the software improved, and then this is going to work. The weird thing is the mistake is the thing that got me over the top, because I thought, “Whoa. It’s just a matter of improving the software. He’s already got it sort of working. You have to make sure you don’t turn left into oncoming traffic, but other than that, you’re good. And then it will be something else… watch out, don’t hit the dog. All those things. Anyway, that was great. GM bought that for a billion dollars.

We’ve done a couple since. And we did a fun one called Neurala — well, they’re using for a whole bunch of different uses, but what he did was he sort of gave me a really fun toy. And on my Samsung phone, I was able to go around and take a picture of something and say what it was, and then go find another one — I get a picture of a water bottle, a chair, and a human. And then I’d go point the camera at a different kind of water or a can of Pepsi, or something. And it says, “This is 86 percent likely that it’s a water bottle, 4 percent likely that it’s a human, and it all becomes, it was fun! I was thinking, “Oh, my god, everything that I’m pointing at and writing in it’s all learning what these things are.” And then it’s going to have knowledge of different devices.

And then we backed a company called LawTrades and another one called Lawyaw, both which make legal services cheaper, more efficient, and better. And as legal services, as they find that they become repetitive, they can implement artificial intelligence in there so that you don’t have to do the repetitive thing.

New Horizons: I know that your time is very valuable, but I wanted to ask you, make a comment and ask one question. Your family and you yourself have impacted millions of people around world from your investments and the different work that you’ve done. How do you feel about that as a responsibility?

Tim Draper: Oh, I feel great about it. I mean, think of all the people in the world can now communicate with each other for free, whether by text or by video, by voice or by voice and video because of Hotmail and Skype… all that intelligence that’s been spread because of Baidu and all the other search engines that we backed before Google came out. And the idea that a new product can spread much faster than it ever could before because of viral marketing. I think that just gets me more invigorated and I have to get out there and work harder. It’s very interesting. It’s a self-fulfilling thing where if you’ve made an impact like that you realize “Oh my gosh, I feel an honor and a responsibility, and I’ve got to get out there, because now we’ve got another one. I mean, that was for the Internet, and now we have another one, and it’s Bitcoin, and I feel I’ve got another responsibility. The world has got to see this.

New Horizons: Well, Tim, thank you so much for taking your valuable time to talk to us today. We appreciate it. And I hope that maybe some point in the future, we can come back and chat with you again.

Tim Draper: Terrific. Yeah, this was fun.

New Horizons: Thanks again.

Tim Draper: You bet.

New Horizons: Thanks for listening to this episode of New Horizons. Please be sure to click on the link below to read a full transcript of this interview. For more information on Huawei’s products and solutions, please visit e.huawei.com. Be sure to tune in again soon for more great guest interviews and stories. And as always, thanks for listening.

Click here if you missed Part 1 of this interview, where Tim Draper discusses his family history in private equity and work to educate future business leaders.

Biography:

Tim Draper is a top global venture capitalist, having founded Draper Associates, DFJ and the Draper Venture Network, a global network of venture capital funds. The firms’ investments include Coinbase, Robinhood, TwitchTV, Skype, Tesla, Baidu, Focus Media, YeePay, Hotmail, SolarCity, Athenahealth, Box, SpaceX, Cruise Automation, Carta, Planet, PTC, Ledger and many others.

He is a leading spokesperson for Bitcoin, Blockchain, ICOs and cryptocurrencies, having won the Bitcoin US Marshall’s auction in 2014, and led investments in the companies that would issue two of the largest ICO’s: Tezos and Bancor.

He created viral marketing, a marketing method for exponentially spreading an electronic service from customer to customer, instrumental to the successes of Hotmail and Skype and other applications, particularly effective for mail and communications applications. Arguably, social media, crowdsourcing and growth hacking are all outgrowths of Tim’s invention of viral marketing.

He is regularly featured on all major networks as a proponent for entrepreneurship, innovative governance, free markets and Bitcoin, and has received various awards and honors including the World Entrepreneurship Forum’s “Entrepreneur of the World,” and is listed as one of the top 100 most powerful people in finance by Worth Magazine, the top 20 most influential people in Crypto by CryptoWeekly, #1 most networked VC by AlwaysOn, #7 on the Forbes Midas List, and #48 most influential Harvard Alum.

In promoting entrepreneurship, he created Draper University of Heroes, a residential and online school based in San Mateo, Ca to help extraordinary people accomplish their life missions. The school launched entrepreneurs from 76 countries who built 350 companies including NVision (sold for $275 million) and crypto leaders QTUM, Spacecash, DataWallet and Credo. He authored a popular entrepreneur’s text book called, “How to be The Startup Hero” and created a crowdsourced TV series with Sony Network called “Meet The Drapers,” where viewers can invest in participants. ABC Family created another show, “StartupU,” around the activity and students of Draper University. He has more than 100,000 Twitter followers.

He started Innovate Your State, a non-profit dedicated to crowdsource innovation in government, and BizWorld, a non-profit that teaches young children how business and entrepreneurship work.

He served on the California State Board of Education, and led a movement for Local Choice in schools culminating in becoming proponent for a statewide initiative for School Vouchers. He also led an initiative to create competitive governance with Six Californias, followed by Three Californias, which was approved for the ballot, but was rejected by the California Supreme Court before the vote. He received the “Toqueville” Award for freedom from the Independent Institute.

Tim Draper received a Bachelor of Science from Stanford University with a major in electrical engineering and a Master of Business Administration from the Harvard Business School. He has two honorary doctorates from The International University and Trinity College of Dublin. He gave the commencement speech at USC’s Marshall School of Business in 2017.

An interview with Hank Stokbroekx, Vice President, Enterprise Services, Huawei Enterprise Business Group. | October 2018

New Horizons: You’re listening to New Horizons, the podcast channel for Huawei’s ICT Insights Magazine. Join us as we talk to innovators and thought leaders from around the world.

Hi everyone. We’re back with Hank Stokbroekx, Vice President of Enterprise Services for Huawei Enterprise, and today we’re going to be talking about digital disruption and AI. So Hank, can you fill us in on what you’re working on?

Hank Stokbroekx: Glad to be back on the program. Digital disruption is something that is frequently being discussed in the media, also with the experts, of course, within businesses as well — particularly around AI, Artificial Intelligence, and the impact that might or will have on businesses. And obviously Huawei, being a technology company, one of the largest in the world, we’re also very much focused on looking at what AI, can do for businesses, for industries. How will it impact ourselves? How can we use it for our own benefit?

Digital disruption and Artificial Intelligence, machine learning, are all topics that are very much on the minds of executives these days. Businesses, governments, etc., and obviously Huawei is looking to play an active role in that.

New Horizons: How is AI going to affect digital disruption? What part does it play?

Hank Stokbroekx: Well, that’s a very good question. AI, Artificial Intelligence, actually the term is already maybe 50, 60 years old. If you look at what Turing did with his machine, that was already could be considered Artificial Intelligence. So Artificial Intelligence in itself is not really new, but for a long time, the technology just wasn’t capable of applying that theory in a massive scale.

Now, with the reduced cost of storage with the much better compute power that we have, with cloud computing, with big data analysis, with the availability of big data, now suddenly AI becomes much more realistic — and particularly machine learning, which is kind of like a subset of Artificial Intelligence.

Machine learning, in particular, is now much more available to businesses and governments and even people, which wasn’t the case before. So even though AI and ML, machine learning, had been around for a while, the tools just weren’t capable of doing what we wanted it to do, but now with the technology where it is today, that’s actually become much more realistic.

New Horizons: And which industries are you seeing that are being disrupted today by AI?

Hank Stokbroekx: Actually, every industry to be honest, seriously — also our own industry, the IT, I’m in the technical services. Also, services are being disrupted by digital technologies.

Take for instance, voice recognition. These days, when you call a help desk, 95 percent of the time you get a person on the phone. With the improvements being made in voice recognition, natural language processing, the ability of replacing these people with computers is actually very realistic.

Now you could wonder, Is that a good thing? Well that’s another discussion maybe, but the reality is that computer just has certain advantages over a person. A computer is much better at rapidly going through an enormous amount of data and coming up with an answer. So if you have a massive amount of data from previous reports or incidents that customers have reported to you, the computer can very quickly analyze, “Okay, you have this problem?” I can in a split-second search my database, and come up with a right answer, and show that to the customer in a natural language. For a human, that would actually take more time.

Plus, a computer obviously works 24/7, never gets tired, never gets bored, never gets angry. So there are these benefits to using a computer over a person. There are other many examples of where that’s not the case, but this is just one particular example, where a computer can complement what other humans are doing.

New Horizons: Right, there’s two aspects to that. The AI can be an assistant to somebody in their job, or potentially replace a job, but would that be creating potentially new and different types of jobs?

Hank Stokbroekx: Well exactly, I mean for instance if a helpdesk person would be replaced by computer, a helpdesk person could probably move on within the organization to do something more advanced that the computer cannot do. So, it actually would help that person to move up in their career and start doing maybe more interesting things than what they were doing today. So give them new opportunity to do more interesting things.

New Horizons: Right, so they’re not going to lose their attention span when they’re doing a boring, or mundane, or repetitive job.

Hank Stokbroekx: Exactly, yeah and actually I think that’s a key point if you look at AI and ML today is that it’s able to do repetitive work much better. And there is still a lot of repetitive work to be done everywhere in every industry. And AI is just able to do that more efficiently and allow people to do more interesting things rather than this repetitive work.

New Horizons: Right, well your focus is on technical services and in providing support for our customers; so how is AI going to affect that industry?

Hank Stokbroekx: Okay, good question. For instance, AI, ML, relies on big data. You need to have an enormous amount of data, and then the algorithm can detect trends in that data, and start to do predictions. Most of company’s services, IT service companies, these days are still in a reactive mode. You have a problem, you call, we fix it, done.

What would be much better if we would call you, the customer, and say, “Well, Mr. Customer, there’s a 98 percent chance that within the next three weeks you’re going to have this and this problem.” And we can say that because we have analyzed the big data from other customers; and based upon that, if you have an environment that looks like this, then statistically the chances of something happening will be this and this and this. So we can actually call you and actually prevent that problem from occurring, because I can be proactive, just have a schedule that every three months, I’m going to come to your place, do some work in order to proactively prevent problems.

I still don’t know whether that problem is actually going to happen or not, but I’m going to do it anyway. That’s proactive.

Predictive is saying, well, I have pretty good information that something is going to happen, and I’m going to prevent it. That’s predictive, which is much more difficult. You need to have that big data analysis with the trend and the algorithm to actually learn from it, because that big data is so big, if you do it properly, that no human can do the analysis. You need to have the learning algorithm to understand what the trends are, and actually by constantly feeding it more data, it will get more and more accurate over time. So it will actually learn, which is a key part of Artificial Intelligence and machine learning.

Maybe sometimes, it will make a mistake. It should learn, the algorithm, from its mistakes and success as well. That’s the key part of the algorithm, which actually makes it intelligent. That will make a big change in the service industry, in the IT service industry, in no longer sitting by the phone waiting for customers to call with a problem, but actually reaching out to customers and saying, “Well, you know, I am aware, we’re going to do something about this. Otherwise, you will most likely have a problem in the next three weeks.”

New Horizons: Right, right.

Hank Stokbroekx: Which obviously for everybody, it’s much better.

New Horizons: I would think so, and now you’ve written a paper on this subject going a lot more in depth, because I’m sure you could wax poetic about this for several hours.

Hank Stokbroekx: Sure.

New Horizons: Where can people find the article?

Hank Stokbroekx: So the article is published on CIO.com.

New Horizons: Okay.

Hank Stokbroekx: So if you search for “digital disruption in the service industry” or look for my name, you will probably find it pretty easily.

New Horizons: Okay great. Well Hank, thanks again for joining us.

Hank Stokbroekx: You’re welcome.

New Horizons: And looking forward to the next interesting topic that you want to bring to us.

Hank Stokbroekx: Okay, for sure.

New Horizons: Again, we’ve been talking with Hank Stokbroekx, Vice President of Technical Services for Huawei Enterprise. And again, Hank, we’ll have you back again soon.

Hank Stokbroekx: Sounds good, thanks.

New Horizons: Thanks for listening to this episode of New Horizons. If you enjoyed it, please be sure and share it on social media. Once again, thanks for listening.

Biography

Hank Stokbroekx is the VP of Huawei Enterprise Services. Based in Shenzhen, he looks after the service marketing, leveraging his 25 years in the IT industry to build and deliver high-value services for partners and customers.