I find Vinod Khosla fascinating. He founded Sun Microsystems, was a general partner at Kleiner Perkins, and then formed his own fund where he now focuses on cleantech investing. He’s from San Francisco but he talks trash about hybrids, solar, and wind power.
This post over at VentureHacks brought this recent interview with Vinod Khosla to my attention. Vinod is on from 10:40 to 20:40. If you want to hear the LinkedIn founder not answer some questions in a typical CEO-like manner feel free to watch the preceding portion of the video. I wouldn’t bother.
A couple quotes that struck a chord with me from this video:
“If you succeed, it better be material. I say, I don’t mind failing, but if I succeed it better be worth succeeding instead of some incremental thing.”
Also…
“This is really really important and misunderstood about startups. Startups aren’t big or small, they are MADE big or small. So an entrepreneur picking the right partner will more likely end up as a big company than if they pick the wrong partner who wants a 3x return on their money. Any investor who looks at exit strategies, or multiples of investment, or even does an IRR calculation, a rate of return calculation, probably is the wrong partner for you.”
I work for P&G. Everything we do is huge. At the same time most of what we do is very very small. We are absolutely thrilled if we grow a business 10%. We consider 5% growth a very solid performance. We regularly put significant effort into growing a tiny piece of something in one small channel a couple percentage points, do this all a few times over, and then are proud to put together a plan that moves the needle by incremental points (by points I mean one or two).
When we do something new, we do WAY more than “an IRR calculation”. We’ve got teams of people from multiple functions, worksheets with tons of tabs, financial review meetings, and years-long timetables. According to Vinod, this would be guaranteed to smother the idea, result in failure, or at the very best something only “incremental.” And often that is what happens. However, occasionally the team turns out a Swiffer and builds a billion dollar category out of thin air. P&G is full of paradoxes. Big and small.
