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Tim Draper — the billionaire venture capitalist who built his fortune by making early investments in Twitter, Skype, Tesla and SpaceX (to name a few) — says his first job as an apple picker drove him to capitalism.
“When I was about 8 years old, my first job was picking apples. We had a couple of apple trees in our backyard and it was harvest time, so I picked a bunch of them and I would take them down to the end of the driveway and sell them,” Draper, 61, founding partner at Draper Associates, tells CNBC Make It.
His asking price: 5 cents an apple, which in 1966 was the same price as a U.S. postage stamp.
“I [sold apples] every day for a couple of months, and every once in a while one of my friends would come by in the neighborhood and stay with me for a little bit while I sold them,” Draper remembers.
At the end of the season, he says, he was wrapping up selling his last batch, when his friend’s mother approached him and asked him how much he made.
Draper says he told her $8, which meant he sold 160 apples that season. He says he was ecstatic over the accomplishment.
But his friend’s mother wasn’t. Draper says she took the $8 away from him and asked him who else had been there to help him sell apples. She then divided up the money and gave each kid a dollar who stopped by to help, leaving Draper with a dollar himself.
“It was my first exposure to socialism, and I decided at that point that there had to be a better system for sharing the wealth,” Draper says.
The experience, he says, led him to become a capitalist — just like his dad and grandfather were.
Draper’s grandfather, William Draper Jr., founded the first venture capital firm in Silicon Valley in 1959 called Draper, Gaither & Anderson, while his father William Draper III, founded Draper & Johnson Investment Company in 1962. Draper started his own early-stage venture capital firm in 1985.
While Draper does believe change is desperately needed to combat income inequality not only in the U.S. but globally, he doesn’t believe socialism or free-cash handouts (the idea of giving out a “no strings attached” cash handout to every citizen regardless of employment status) are the solutions.
“It all depends on how it’s done. I think that it is an interesting idea and a good safety net for people,” Draper says, “but I’m always a believer that you have to teach people to fish rather than handing them all the fish. And I would rather see that money go into improving education instead.”
Draper says what the government really needs is a “Steve Jobs type candidate,” meaning someone capable of completely revolutionizing the way something works, to get elected and reshape our government systems like Jobs did with the iPhone.
“The government is still operating like a mainframe computer while the rest of us all have smartphones.”
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