Vinod Khosla appeared at San Francisco City Hall at an AlwaysOn GoingGreen Event today.
He gave his pronouncements on innovation and his portfolio firms:
- If you're not afraid of failure, it frees you up to succeed.
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Khosla Ventures' portfolio firm KiOR started with a call from The Netherlands during which the caller told him that "everything you're doing in ethanol is wrong." Within two weeks they had a signed term sheet. The firm uses an old oil industry process and claims it can make a synthetic version of petroleum out of wood and farm waste. Khosla Ventures owns approximately 50 percent of the company, which is now worth $2 billion, and Khosla Ventures "has made over a $1 billion in profit" across their biofuel portfolio. Khosla offers that fact to those like Peter Thiel who say that cleantech investing is a disaster.
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Only small companies do impressive things, according to Khosla -- who challenged the audience to name the significant things that come out of large companies (with the exception of Apple). There's nothing new out of GE or Siemens or Bosch -- the only thing new that comes out of big companies is new packaging for toothpaste, said the VC. "Big companies have process instead of vision," adding, "Motorola and Nokia are largely irrelevant."
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Khosla says that he spends more time recruiting for his startup portfolio than on any other function.
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Khosla advises startups to get rid of expert opinion and punditry.
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"Solyndra is clearly bad for the industry. If you're in the solar industry, it's going to be hard to do your next round. [...] In this case, Solyndra's investors were wrong, but I admire them for stepping up."
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According to Khosla, one of the fundamental problems in greentech is environmentalists. Environmentalists identify the problems and provide visibility -- but are abysmal at identifying solutions. He said, "We've placed very few of our bets that rely on the price of carbon. [...] Unless you get to unsubsidized market competitiveness in five to seven years -- forget it."
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"My personal motives are to help the planet but ... I'm a fundamental believer that nonprofits don't do much good."
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Portfolio firm QuantumScape is trying to build the most radical batteries. Khosla said, "We've just invested in steel." Other investments include agriculture, cement and data centers.
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Forget the Malcolm Gladwell '10,000 hour' BS or Crossing the Chasm. It's just more marketing BS, according to the reticent investor.
Mr. Khosla provided a few quotes for the audience:
All progress depends on the unreasonable man. -- George Bernard Shaw
Human progress depends on the socially maladjusted. -- Martin Luther King
So rest easy if you're an unreasonable and/or socially maladjusted entrepreneur.