From: Adam Rifkin (adam@KnowNow.com)
Date: Sat Nov 25 2000 - 22:13:29 PST
Wow. I love this man...
Vinod Kholsa was a founding CEO of Sun Microsystems where he pioneered
open systems and RISC. Today, he's known in Silicon Valley as one of the
most influential personalities.
He's now a veteran partner at Kleiner Perkins Caulfield & Byers, and is
considered one of KPCB's key architects, leading its initiatives in the
Communications and e-business infrastructure.
Kleiner Perkins itself is one of the leading VCs in Silicon Valley,
having taken more than 100 companies public, raising over one point two
billion US dollars in capital, and has invested in companies whose total
market value exceeds eighty billion US dollars. Many of these have since
become household names like Compaq, American Online, Sun Microsystems.
Vinod Kholsa's own philosophy has been to stress the importance of
building companies over mere investments. And he has consistently
emphasised the importance of mentoring and nurturing businesses.
Editor's Note: This is an edited transcript of the interview.
In-Conversation: Vinod Khosla, welcome to In-Conversation. You were
the 'sun' in Sun Microsystems. What are you in KPCB?
Vinod Khosla: Well to me it is always been about enjoying what you're
doing, not about being somebody. In fact to be honest, I don't like the
idea or notion of tagged tycoons. You know, it's people working to make
a difference, enjoying themselves in the process. It's no different than
climbing a mountain or training a whale. You just do your thing, enjoy
it. And the notion of power structures or tycoons is a very foreign
notion and one that I fundamentally don't agree with.
I think the thing to realise is that all of us are human beings and very
fallible. You can be successful and look back at the things you did
right. Or you can look back at all the times you've been lucky and you
wouldn't be in the place you're in if things have fallen a different
way. So I think it's a realisation of the fact that luck plays a big
role in where all of us get.
I-C: In your life, how much has luck played a role and how much has your
ability palyed a role?
VK: I would say the following. I know many, many people who are a lot
smarter than me and who work a lot harder than me who haven't had the
same fortune. I would then have to conclude that luck has played a big
role in what I did. Probably bigger than ability.
Having said that, it's really important that luck alone is not
sufficient, ability alone is not sufficient. Probably what I find, the
single most important characteristic, even more than luck and ability is
perseverance. You stick with things you believe in, what you believe in.
Most success, I believe, comes from having some sort of vision of what
you want to do, a belief system, sticking to it, having real passion for
it, driving with it, staying with it even when things are going
wrong. That's to me where most people give up too early, and I think
that's the difference between success and failure often.
I-C: You were successful with Sun Microsystems. Why did you quit?
VK: I don't think I quit. I have sort of taken a very different view of
my life. As far as I knew, I wasn't interested in any of the traditional
matters people are interested in. I wasn't interest in a career, I
wasn't interested in wealth, I wasn't interested in being famous.
My interest was to have fun. I've always claimed work has always been a
hobby. My undergraduate degree was in electrical engineering. The next
thing I got interested in was biomedical engineering. So my masters was
in biomedical engineering. If I was looking for money or career, I'd
have stayed. So it's always what I currently enjoy and have an interest
in. And that changes from time to time and I've been fortunate enough,
lucky enough to be able to indulge in that privilege, being able to
change topic and subject, what I'm working on from time to time.
I-C: What are the new technology trends?
VK: What's great about this new economy is previously power influence
and wealth were all things that were inherited from the old agrarian
economy where land was inherited to industrial economy, where factory
was inherited. This new economy doesn't let you inherit anything. It's
about ideas and ideas cannot be inherited. It's amazing how much a good
idea is worth. Jeff Bezos is an example, or Yang at Yahoo are all
examples of people who have nothing but great idea and the will and
perseverance to make things happen. Jeff is a classic example. Even
today, Wall Street doesn't like his financial strategy. He continues to
ignore Wall Street in many ways, and says, 'This is my vision, and I
believe it. Buy my stock if you believe in my vision but I am not going
to cater to the short-term needs of the marketplace.'
I-C: But will investors buy that?
VK: Well, if they don't, Jeff is happy to take a lower stock price in
the short run because he believes five years from now, he can have a
higher stock price, and a more valuable company than before.
That's the great thing about this economy. If you're right, you get
paid. If Jeff is right, he will get paid more than somebody who succumbs
to the short term analyst wanting to get a profit. If he's wrong, he'll
be hurt. But it is his idea, it's his vision, and if he makes available
contributions, he'll be rewarded. If not, he's happy to say, 'Let my
stock to where it might.' In the short term it may not be the most
popular strategy. What matters to him is what he can build in five
years. I've talked to him often about it. This is exactly his strategy
and I commend him for it, and I commend him for ignoring Wall Street and
stock prices and popular beliefs.
I-C: What is the future of the trends, in the development of new
technologies that are coming out that KPCB might be interest in?
VK: One of the great things about this technology business, what keeps
me harping and on my toes and probably working as hard as I do, is that
you can't forecast. You can't predict and there is no way to legislate
this. That's why small companies and entrepreneurs have an
advantage. You try something, you experiment. You plan to fail most of
the time, you plan to change your strategy, you plan to change your
technology, to experiment. I would say that experimentation is the
single most powerful tool.
What is possible to predict is that the rate of change will in fact
accelerate changing in a faster rate in the future than we've ever seen
before. In fact, I like to tell people that the way to look at 2025 is
not to look forward because it's impossible to predict. But to look
back. In the next 25 years, we will see more change in our society, in
our business, in our economics, in our sociology than we've seen in the
last hundred. So look back to the year 1900. See what the world was
like, without cars, without television, without radio, telephony. Just
Graham Bell's idea at that point, most of the world without electricity
at that point, let alone communications. No aeroplanes and imagine how
different it is today. That's how different 2025, just 25 years from
now, will be from what we see today. And most of that impact will come
I-C: But if technology is going to change so much and the world is going
to change so much, does that make your job as a venture capitalist more
VK: I call it more interesting. It is more of a challenge. So why is
climbing Mt Everest more fun than climbing a 10,000-foot peak? Because
it's harder, it's more challenging and life is about challenge. About
pursuing challenges, meeting them. It's no different than winning in the
Olympics. It's hard, it takes effort and it takes lots of other
things. Challenges are what life's all about, at least for me, but I
think for most human beings, it motivates them.
I-C: It's true that challenge is interesting and attractive but the
bottom line is surely money for a venture capitalist fund. That's what
VK: Absolutely not, absolutely not. I think this is the wrong
notion. You know why do you climb Mt Everest? 'Because it is there' - it
is the famous line. At least for me, and I don't really think of myself
as a venture capitalist or an investor. Money is a side effect of the
difference you can make. I have found that most people who think of
venture capitalism, and it's a very common notion that it's about
investing, do okay. But over the long haul it is not as rewarding as
building something, or making a difference. So I consider myself not in
the investing business, not in the financial world, but in the business
of building durable companies.
Companies that 10 years, 20 years later make the difference. I think Sun
made the difference in the computer world. Some of my latest investments
are making a difference in the telecommunicaitons world. Jeff Bezos at
Amazon or Netscape, they made a huge difference in the Internet
world. There is equally large changes going on in infrastructure,
software for business, these are monumental changes and working with
them are what this is about. And most of what I do is mentor and coach
entrepreneurs who really have the ideas, the bright, the smarts. I
compliment them. I help them. I am a venture assistant, I'm not a
I-C: How has the work of venture capitalists changed? And now that
you're dealing with the Internet world, and you're dealing with a world
beyond the Internet, in what way has your approach of choosing a
VK: I don't think our approach of choosing a proposal has changed. What
has changed in the venture world, and it is rather unfortunate, is that
the venture world was mostly driven by technologists with a
vision. Those who changed computing from mainframe computing to
distributed computing are Steve Jobs with his notion of the personal
computer that was easy to use. Or Larry Andersen's vision of how
databases should take over the world. You know it was about vision for,
and passion for that vision, for this technology. So I used to call them
technological missionaries, mostly.
What unfortunately has happened is because of all the press reports
about the high rates of return and all that, there has been much more of
an influx of people who are interested in the mercenary aspect. I
personally find that distasteful, where it has become more about deals
and money and transactions, and hard companies, as opposed to the notion
of technology mission value-building, making a difference, changing the
way people work.
So this sort of mercenary element has become more important than the
missionary element. And that's a little disappointing for those of us
who have worked in the Valley for a long time. And what most people
don't realise is whenever you get so mercenary about all this, you
cannot build anything of value. If you can't build a sustainable
company, you're not going to have value 5 or 10 years later. So it is a
bit disappointing to see the sort of Wall Street investing mentality,
the Hollywood mentality of deals and transactions and who you know
becoming far more important than what you do, and what difference you
I-C: You think entrepreneurs are made, or are they born? Can they be
mentored to be a good entrepreneur?
VK: Well, entrepreneurial inclinations isn't something that comes
naturally to everybody, so not everybody is an entrepreneur. I think one
of my favourite things about entrepreneurs is that quote I saw one day
when I was actually learning hang gliding, another one of my old
hobbies. And while watching this movie on hang gliding, I saw this great
quote on the dedication of the movie. It was dedicated to those who
"dare to dream the dreams, and are foolish enough to try and make those
dreams come true." That's what entrepreneurship is about. It's not about
money, it's not about investing, it's not about building and trying new
challenges. And the operative word in that quote was: "are foolish
enough to make those try."
No entrepreneur attempts a reasonable thing.
When you start Sun and you say I'm going to replace IBM in the computer
business, it's ridiculous, it's in fact stupid. That's why I say foolish
is the operative word in that quote, and what you have to do is to take
on challenges that otherwise can't be in the normal scope of human
activity achieved and my goal is to coach these people and help these
people through deep ruts.
Entrepreneurship, I claim, is where the highs are highs and lows are
low, and it can get pretty depressing, it can get very hard. The odds
often seem impossible when you're sitting, trying to take on a big
challenge. But an entreprenuer is generally foolish enough to jump in
and say I'll worry about the negatives later. He's an optimist, and my
role is to help complete the picture, and to increase their probability
I-C: Tell us about the Telecommunications Valley. I mean there's the
Silicon Valley that people are aware of. What is the Telecommunications
VK: There are a number of startups in the Bay area, all focused in the
Palo Alto region and people have started to call it Telecom Valley. And
what's really more interesting a key part of this entrepreneurial world
and to spread access to this environment in this economy to everybody is
telecommunications. Telecommunications is the enabling infrastructure. I
think even if it is in India, in Hong Kong, in Singapore, in
Malaysia. If people have access to the knowledge in this world, to the
goings on, to the news, to the technologies, to the discussions about
technologies, they can then take the fate onto their own hands.
I-C: Well that leads me to the question. You mention these countries and
these are precisely the countries which would like to replicate Silicon
Valley in their own nations. What do you think they need to do that? To
be able to achieve that?
VK: First this new world is not about education, its about lifelong
learning. There is a big difference between the 2. It's about being able
to learn on an ongoing basis and to participate and learn directly. With
the right telecommunications infrastructure in these countries, people
within the country who are motivated, willing to put in the time, the
perseverance that I talked about earlier can get on the net. I've seen
people who have English majors in India retrain themselves on Java
programming themselves. That's not possible any other way.
We don't have enough resources in Asia to solve Asia's problems. What we
can do is enable the five percent who can leverage scanty resources and
give them access to the Net so that they can fully participate. And
frankly they will create worlds around them which will start to impact
their cities, their villages, their neighbourhoods in ways that's much
bigger. So if we enable the five percent, they will then generate the
impact and the resources to help the remaining 95 percent. I must say
another topic that is very interesting to me is applying this same kind
of entrepreneurial energy, this multiplication that happens not only to
businesses but to social problems.
The old notion of making a social difference is being NGOs,
non-governmental organistions. I've started to see social entrepreneurs
apply entrepreneurial energy to social problems. There's a great
organisation called Ashoka I've been looking at recently that
specifically address the issue of social entrepreneurship. To make a
difference not by government programmes, or NGO programmes, so this
broad notion of giving, of one way but to apply processes that
multiply and the resources that multiply.
I-C: You created this Java fund and you have affiliates that contribute
to this fund. How does it work?
VK: Java fund was really a mission for a particular technology. Say
there's something valuable here, let's get a consortium of companies and
entrepreneurs all working on something that will make the world a better
place, easier place to work in. It has worked out very well.
I-C: At one time you were saying that you want to work two days and take
five days off. It's been an important thing for you to get enough time
with your family. How much of that are you managing now?
VK: I'm not sure I said I want to work two days. But absolutely, as I
said earlier, to me this is a hobby. My work is a hobby. My principle
job is raising my children and working with them. So that is in fact a
much higher priority for me. I measure how many times I have dinner with
them, how many days I take with them on vacation. That is a far higher
priority than anything I do in business. Far, far higher priority. And
everybody who knows me knows that I treat the world that way and there
is no business emergency that's more important. I enjoy the kids. Life
is really mostly about relationships, its not about wealth, or fame, or
tycoons, or any of these. Those are often notions that often mislead
people into dreams that are very seldom resolved in happiness.
I-C: Do you have a goal and if you do, could you say that in one
sentence, what would that be?
VK: My goal is to make a difference and I only work on things that will
help me make a difference. It could be a difference in business, it
could be a difference in society, it could be a difference in my
children's lives. I consider all those as important and what matters to
me is making a difference, having an impact. Maybe that's too
egotistical a notion, but that's what I enjoy. That's what I work
on. That's what challenges me. That's what gets my adrenaline flowing.
I get very excited about what I work on.
California's been good to me, I hope it don't fall into the sea. Sometimes you've got to save yourself, It ain't like anywhere else. -- Tom Petty, "California"
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