"Bit by the Entrepreneurship Bug", Lecture by Vinod Khosla / KPCB (2002)

Video Lectures

Displaying all 20 video lectures.
Lecture 1
Bit by the Entrepreneurship Bug
Play Video
Bit by the Entrepreneurship Bug

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.
Lecture 2
Career: Learning from Failure Early On
Play Video
Career: Learning from Failure Early On

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.
Lecture 3
Taking Risks
Play Video
Taking Risks

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.




Transcript



How old were you, 27? Yes, 27. And how old was Bill and Andy and Scott? We were all about the same age, all within a year of each other. Yeah, okay. So it's says, "We had big dreams." When I was hang gliding, I remember seeing this motto "Success comes to those that dare to dream dreams and are foolish enough to try and make them come true." You have to try to do something extraordinary because unless you try something extraordinary, you won't ever do anything extraordinary. Did you really say that or is that... Absolutely.

Yeah.

No, no... Do you still believe in that philosophy or... I absolutely still believe in that. All of that by the way is, I don't hang glide anymore... Let's just say you still hang glide. I don't hang glide anymore though I am going to pick it back again this summer or at least pick up sky diving if not, the hang gliding. My wife, I'd make a mistake of taking my wife skydiving and she forbid me from ever going skydiving again. I just like to see the Kliener Perkins partners faces when you tell them that. Well, I have a stronger reason. My daughter just going 12 now, who's just going 12 wanted to learn skydiving and 12 is the minimum age so I promised her I'd take her. My wife can't say no. You always want a good excuse to do what you really want to do but that quote is really important because you really need to stretch, you know, like I said, entrepreneurs don't have the right to do what they get. It's not a right. It's not even reasonable and so trying something extraordinary is really important. And then what's equally important is this level of foolishness that that quote talks about. That's not my word. It was at the end of this movie on hang gliding because if you sort of do the rational thing, you won't doing a start up as 4 or 27 year old trying take on IBM and that. It's just not reasonable. You just have to have that belief in yourself in a level of naivete because, you don't really need to know what you can't do because once you become within the reasonable domain you will be constrained by your belief about what's reasonable. It's really important.

Lecture 4
Build a Company to Change the World
Play Video
Build a Company to Change the World

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.
Lecture 5
Company Building to Change the World
Play Video
Company Building to Change the World

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.
Lecture 6
Role of VC in Valuation
Play Video
Role of VC in Valuation

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.




Transcript



The fact is things aren't ever as good as the number one venture capitalist in the world - there is no such thing, and that things are never as bad. Today to answer your question more directly, it's one of the best environments to be an investor. The last three or four years was not a lot of fun. And it wasn't a lot of fun for the following reasons: If I went to somebody and said, "Here's what you need to do to build a reasonable business." The response I almost always got was, "That other venture capitalists willing to fund me for 10 million dollars." There was a small group called Centroda. They won the MIT 50K competition entrepreneurship competition came to me and I said, "You don't have a plan. You're doing peer-to-peer which is a terrible area from a business model point of view. But I like some of the things you're doing and the way you guys work. So, we'll fund you but we'll fund you with a million dollars which you have to make last a year." And in the process developed, they came back to me and said - but in another VC offered them 10 million dollars. And so I had to sit down with them and explain. I wasn't going to give them 10. I wasn't going to give them a 10-million dollar valuation. I was going to put them to the ringer in developing a real economic model for a year, before he even knew what he got funded and he have to make his choice. And he could go take the 10 million dollars. He agonized over it for a long time. Actually, this is a small group, the team agonized over it and finally decided they'll work with us. Today, I think they'll tell you, if they've taken the 10 million, they wouldn't be in business today. But I've seen 90 percent of the people take the 10 million dollars. It was hard to argue they shouldn't.

Lecture 7
When You Don't Know What You Don't Know
Play Video
When You Don't Know What You Don't Know

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!




Transcript



...time where most entrepreneurs fail is on the things they don't know they don't know. It's not what they don't know. It's what they don't know they don't know.

Lecture 8
Envisioning the Future
Play Video
Envisioning the Future

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.
Lecture 9
Any Big Problem is a Big Opportunity
Play Video
Any Big Problem is a Big Opportunity

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.
Lecture 10
Think Big and Act Small
Play Video
Think Big and Act Small

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.
Lecture 11
Technology as Driver of Change
Play Video
Technology as Driver of Change

Khosla shares his view on technology-driven entrepreneurship and predicts the growing impact of technology on life, society, and the economy.
Lecture 12
Social Entrepreneurship
Play Video
Social Entrepreneurship

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.
Lecture 13
Strength of a Team
Play Video
Strength of a Team

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.
Lecture 14
Juniper Networks: Customer Feedback
Play Video
Juniper Networks: Customer Feedback

Khosla talks about how Juniper Networks 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.
Lecture 15
Entrepreneurship is the Driving Engine of the Economy
Play Video
Entrepreneurship is the Driving Engine of the Economy

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!
Lecture 16
Cycles of Fear and Greed
Play Video
Cycles of Fear and Greed

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.
Lecture 17
Career Development: Go Deep
Play Video
Career Development: Go Deep

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.




Transcript



But it's important especially during this time when time isn't the premium, money is the premium and you don't have money, you have time. To use that time to get as deep expertise as possible. I don't recommend especially if you're going into technology to go start a company with a bachelor's. I think the bar is much higher and you need to go much deeper in understanding technology and understanding markets and businesses. I would suggest that whether it's further education, which I am a big, big believer of. I actually don't think bachelor's is adequate for anything in today's world and will definitely be irrelevant 10 years from now. The deep expertise is important. The same is true in terms of jobs. If you get jobs and look for jobs. If you have a goal of entrepreneurship in mind you want to go deep and understand things more than advance a career.

Lecture 18
Right Time to Build the Team
Play Video
Right Time to Build the Team

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.
Lecture 19
Great CEOs Build Great Teams
Play Video
Great CEOs Build Great Teams

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.
Lecture 20
To Get an MBA, or Not?
Play Video
To Get an MBA, or Not?

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.




Transcript



Yes. So, the answer is - the first thing I'd say, degrees are important but really what's more important is how somebody thinks. If somebody's thinking deeply, it's very clear to me when I meet with them whether they have an MBA or not. An MBA is not the only way to gain experience. In fact, MBA really isn't the way to get gain experience, it's a way to gain perspective. Now after you get an MBA, I'll find you generally have to work a little a bit then gain the depth of knowledge. It's just that after an MBA if you work for three years or four years, you'll gain a lot more over those three years than if you didn't have an MBA. It's almost like preparatory. But there are lots of other ways to gain deep knowledge. You can be an architect for a product. You can be involved deeply in a market. There is no one answer to that.