Tim Draper, the most powerful investor: Capital winter is just an exaggeration

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In today's star-studded Silicon Valley investment circle, Tim Draper has always been a well-known name. From inventing the concept of "viral marketing" in the early days, to founding DFJ Investment Fund and Draper University, to purchasing a large number of Bitcoins... Tim Draper has always been a maverick and has never followed the beaten path.

Recently, at the largest Silicon Valley entrepreneur conference "Founder World 2015" co-founded by F50 and Google, the reporter had an exclusive interview with Tim Draper, and talked with this legendary figure about his exclusive views on the recent hot topics such as the rising global mergers and acquisitions, layoffs in large companies, and the capital winter. "Everyone is talking about the capital winter now, but I think it's a good time now." Tim Draper made a surprising statement.

Global M&A Wave: Breaking the Old and Building the New

Recently, there was the marriage between Ctrip and Qunar in China, Dell's $67 billion acquisition of storage manufacturer EMC abroad, and Western Digital's $19 billion acquisition of flash memory manufacturer SanDisk... Huge mergers and acquisitions around the world are one wave after another.

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In this regard, Draper believes that corporate mergers and acquisitions are a general trend of the market's maturing development. The stock prices of large companies are rising steadily, and they have enough capital to acquire small companies. On the other hand, many large companies' innovation capabilities are not as good as those of some small companies. "When these large companies realize that their products are not attractive enough to their target users, they will start to acquire small companies with excellent product innovation capabilities. After two or three years of mergers and acquisitions, these large companies will naturally be able to produce more market-competitive products."

When asked why the recent M&A deals are so large, Draper said: "The market is becoming more and more competitive, and the appetite of large companies is getting bigger and bigger. I think this phenomenon of huge M&A will continue."

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This round of layoffs: cannot be compared with 2008

In addition to the climax of mergers and acquisitions, the wave of layoffs in domestic and foreign technology companies has also made people panic. BAT has significantly reduced the scale of campus recruitment and social recruitment; Twitter has laid off 336 employees, equivalent to 8% of the total number of employees; Evernote has closed three offices around the world and laid off more than 10% of its employees.

Draper, however, does not see these cases as a general phenomenon in the current tech job market. "The overall job market in Silicon Valley is still in full swing. There are still plenty of other opportunities for these laid-off employees." Draper believes that the current number of layoffs is simply not comparable to the scale of layoffs around 2008 and 2009. "Six or seven years ago, everyone felt that the end of the world was coming."

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Layoffs are a way for companies to streamline and restructure their structures and improve overall work efficiency. From a macro perspective, Draper believes that layoffs also promote the rational allocation of talent resources. "If these employees cannot bring much benefit to the company, joining other companies after being laid off can actually increase the productivity of these new companies, and generally speaking, improve the economic efficiency of the entire industry."

It is reported that many people who lost their jobs in the 2008 economic crisis decided to start their own businesses after rethinking their lives. Many companies founded at that time are still developing quite well. Draper smiled and said, "Perhaps a considerable number of these employees who are laid off today will start their own businesses. Maybe in seven or eight years we will see a large number of successful companies."

In fact, the controversy caused by layoffs is not limited to concerns about the overall employment situation, but also comes from the security of the company's trade secrets. In this regard, Draper believes that in addition to the company's need to improve the information protection mechanism, the more important thing is the moral constraints of the employees themselves. In addition to those legal constraints, employees should also realize that protecting trade secrets is a basic professional ethics, otherwise it will not help their long-term development in the workplace.

Tim Draper: I don’t think there will be a capital winter

"Now people keep asking me 'Is the capital winter coming?' or 'Is the Internet bubble about to burst?'" Draper said with a laugh. "Every time I reply to them, 'If the winter is really coming, or the bubble is really about to burst,' you have no time to ask me these questions. You will just be like ants on a hot pot, thinking about how to solve the business crisis."

Draper said that the closure or layoffs of a few companies due to their own poor business models or operational results cannot represent the overall economy. In fact, one of the evidences that the current economic situation is relatively stable is that the valuations of startups are generally reasonable. The valuations of Chinese startups have recently fallen relatively, and they have returned to normal market levels. "When you notice that people like taxi drivers and cleaners are starting to make frequent daily transactions, that's when we should worry about the economic situation."

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In Draper's view, Founder World is also a reflection of the thriving Silicon Valley economy. "Look at the more than 7,000 people who came to the event today, including investors and entrepreneurs, and more than 200 companies set up booths. Innovative investment and financing matching platforms like F50 are indeed quietly changing the entire ecosystem of the venture capital circle. The exchanges at the scene were very enthusiastic, and the collision of ideas will surely spark innovation."

While everyone is worried about the capital winter, Draper is getting more and more excited: "I am still very excited about the current opportunity. There are opportunities everywhere, and I think the next few years will also be a golden age."