Komisar explains how the original TiVO concept went through multiple transformations. Originally, the TiVO entrepreneurs wanted to create a stand-alone VCR box that would be sold by large retailers. Over time and with the guidance of Komisar, the entrepreneurs realized it would make better sense to offer TiVo as a service instead of a hardware product with low-margins.

Transcript



You know, maybe you could give the example of TiVo, how that--which was not a Kleiner project, but it came to you in one form. Because--I think we talked about this a lot--an idea starts one place, but where you end up can often be very different. Well, TiVo, when TiVo came to me, it was two guys who had this interesting idea to create a better VCR. It was a very smart VCR box, and they wanted to sell it as a box in retail. And I met with the two entrepreneurs, and I didn't like the idea. I didn't like the notion of trying to build a piece of hardware, selling that on the shelf in the big box stores, Best Buy, Costco, etc. and then trying to build a long-term business just with the stand-alone box. And we ended up working a great deal with each other early on. The good news for these entrepreneurs --this is a real test for entrepreneurs for me--was, when I gave them the bad news that I thought their idea sucked, they came back. That's an important point, by the way. It's very important to be able to tell an entrepreneur exactly what you think is good or bad about their idea and then seeing what their response is. A lot of entrepreneurs are so wedded to their own ideas that they're unable to take constructive feedback. Those generally don't make great investments for us, in the way in which we work with our entrepreneurs. But in TiVo's case, the entrepreneurs came back, and we began to work out the notion of building a services business, a business where the value is really in the network, not in the box. And that's what we've been trying to do now for 8, 9 years. We've got 4 and a half million of those out in the market place. Our business model has been struggling along, but I think is more and more promising as we go forward. But most importantly, the value we've created is not in the weakest part of the plan, which was a piece of hardware that sits on a shelf and gets low margins. It's actually in a network which gets more and more valuable everyday.

1. A Venture Capitalist Innovation Process
2. The TiVo Transformation
3. Innovation Advice from George Lucas
4. A Cautionary Word on the Deferred Life Plan
5. Necessity-Driven Entrepreneurship
6. Lessons Learned from Failures
7. A View On Industry Bubbles and Investment Partners
8. Optimizing Career and Life Opportunities
9. Different Entrepreneurs Excel in Various Company Stages
10. Skills Of Great Entrepreneurs
11. The Supportive Silicon Valley Ecosystem

Randy Komisar answer questions on Entrepreneurship for Stanford University students on March 3, 2007. Randy Komisar, a partner at Kleiner Perkins Caufield & Byers and author of the best-selling book The Monk and the Riddle, talks about how innovation occurs at Kleiner Perkins. Instead of giving projects a thumbs up or thumbs down, the firm uses a set of filters to review and improve these projects. Through this process of iteration, innovation and problem solving occurs between investors and entrepreneurs, he notes.