Vinod Khosla, partner at Kleiner, Perkins, Caufield & Byers, was bitten by the entrepreneurship bug early in life when he heard about Intel starting up. He was enamored by the idea of being able to start your own company. Intel served as as a great role model, he says.
Khosla talks about his early career development. He first tried to do a company in India based on milk from soybeans. He travelled to Carnegie Mellon, and then to Stanford University. He describes why persistence and evangelism are important. Although he was not admitted to Stanford at first, saught more real-world experience, and was not admitted again, through persuasion and persistence, he was finally accepted.
Launching a start-up is not a rational act.And Vinod Khosla, a partner in Kleiner, Perkins, Caufield & Byers and former Sun Microsystems CEO, believes that success only comes from those who are foolish enough to think unreasonably.Entrepreneurs need to stretch themselves beyond convention and constraint to reach something extraordinary.
Khosla never intended to be a venture capitalist and still doesn't consider himself as one. He considers himself a venture assistant who has little interest in business other than its necessity for economics and its power to change the world. Khosla loves technology and believes that it drives most of the change that happen in the world.
Things aren't ever as good or as bad as we think. Today (2002) is one of the best environments to be an investor. The last three or four years were not a lot of fun-if Khosla went to someone to build a reasonable business, the response he would get was that another company was willing to give more money for less work. He would have to explain that the role of a VC was to help companies develop a real economic model and to give an honest valuation.
Where most entrepreneurs fail is on the things they don't know, Khosla says. The biggest problem is when you don't know what you don't know!
When things are hot, that's not the area to invest, Khosla cautions. There is a surprise element always present where the biggest opportunities lie. Khosla highlights his interests in biology, genetics, nanotechnology and optical technology.
Khosla states that any big problem is a big opportunity. If there is no problem, there is no solution, and no reason for a company to exist. No one will pay you to solve a a problem that doesn't exist, he explains.
Khosla explains how to think big and act small. He reminds us that part of that process must be done on a belief system. Without a mission or belief system about how to change the world, one will not be successful.
Khosla shares his view on technology-driven entrepreneurship and predicts the growing impact of technology on life, society, and the economy.
In Kleiner Perkins perspective, Khosla argues, the traditional model of giving is broken. Social entrepreneurship and ways to leverage money are very important. Although there is not enough money in the world to solve the world's problems, if you apply and multiply, there are, in fact, solutions to some of these problems. Examples of companies providing these solutions include Gramine Bank and Aprotech.
Khosla states that it is the team that make the company. At Kleiner Perkins, he notes that everyone has learned much from each other. Personalities and approaches are diverse and combined to create great strength.
Khosla talks about how Juniper Systems started, and the role of customer feedback in the product development. There was not one vendor thinking of building an OC48 router for the internet. Juniper perservered and took a risk in the technology, despite the majority of customer feedback.
Khosla believes that entrepreneurship is the driving engine of the economy. Don't give up on your dream, he says, -entrepreneurship is a passion. Follow your passions and interests!
Khosla claims that investors only have two emotions: fear and greed. He has seen the trend of investing, which bounces between cycles of fear and cycles of greed.
It is important to use time to get deep expertise, Khosla notes. You need to go much deeper in understanding technology-a bachelor's degree is not enough and will be irrelevant in another 10 years. If you have a goal of entrepreneurship in mind, you must go deep in an expertise in order to advance your career.
From an entrepreneurs point of view, it is a great time (2002) to assemble a team that isn't distracted by money, and is interested in building a real team, and developing a solid business plan.
Great CEOs are people who put great teams together. Scott Kriens at Juniper is one of the best CEOs Khosla has ever worked with, as well as Bill Campbell. There isn't always one definition of a CEO, Khosla notes, each situation requires a different kind of leader, and each stage of a company has different needs for that leader.
Entrepreneurs are far less successful when they are trying to make money-they are much more successful when they have a mission to change the world. No matter what you do, Khosla says, you have to be foolish to do what an entrepreneur attempts. Whatever your value proposition is, it should have the goal of making the world a better place and you should feel passionately about your contribution. If you don't have this and you run into an obstacle, you get stuck. If you are passionate about your product and your message, you can power through problems more easily.
Khosla feels that an MBA is not the only way to gain experience, it is a way to gain perspective. Real-world experience provides the depth of knowledge you need in a company.