Honoree - Vinod Khosla

Vinod Khosla is regarded as the leading venture capitalist in green technology. Prior to his full pursuit of clean energy sources, he earned the #1 spot on Forbe’s Midas List of top tech dealmakers, helping build into mythic proportions the reputation of the venture capital firm Kleiner Perkins Caulfield and Byers. It is said that Vinod Khosla has created 6 jobs a day for every day he’s been in this country since 1976.

Vinod’s story begins in Pune, India where he was born in 1955 to an army officer. His father valued job security and hoped his son would join the army as well. But as Vinod said, “I’ve always been the opposite of job security.”

What Vinod did value from early on was learning, reading anything he could get his hands on. He says it’s almost like a learning addiction. To this day, he says “I can feel my brain getting nervous when I am not learning or figuring out something.”

As a teenager, he would troll the back bazaars of India, renting year-old issues of Electronic Engineering Times magazines for 5 cents a week and read them avidly. One day, he read a book about an immigrant named Andy Grove who helped start a company in the U.S. in 1968, a company called Intel. “What a dream!” Vinod thought. From then on, he began pursuing the dream of starting his own technology company.

He got into the very competitive Indian Institute of Technology in Delhi, graduating at age 20 with a degree in electrical engineering. During college, he was already exhibiting his start-up instincts, convincing IIT to offer its first computer programming class, its first computer club, and its first biomedical engineering class.

After college, he tried but failed at his first venture… a soymilk business to serve the many people of India without refrigerators. Among the barriers he faced--- no source of funding and a bureaucracy where getting a phone line put in was a five-year process.

But Vinod did get funding of a different sort that enabled him to come to the U.S. Carnegie Mellon University offered a scholarship and he got his master’s in biomedical sciences.
His ultimate target, though, was Stanford business school so he could be in the heart of Silicon Valley. But Stanford rejected Vinod’s application, saying he lacked the work experience they like MBA applicants to have.

So Vinod got not one job, but TWO jobs--- developing a new computer program to teach economics at Stanford’s School of Public Affairs and designing a hospital information system in Palo Alto. Vinod then applied again at Stanford business school. Again, he was rejected.
As John Doerr of Kleiner Perkins said, “The best way to get Vinod to do something is to tell him you don’t believe he can do it.”

Vinod pestered Stanford’s admissions office, getting himself on the wait list and calling in weekly. He got to know everyone in the office. Some of them even started advocating for him. Just as he was about to start business school at Carnegie Mellon instead, he heard that about a last-minute opening. A Stanford student had dropped out. Vinod immediately left Pittsburgh and arrived in Palo Alto, but with no place to stay. So Vinod spent his first few weeks in Stanford business school sleeping in the living room of an admissions office staffer.

Graduating in 1980, Vinod applied to 400 companies he picked out of the American Electronics Association directory. He chose small, new companies so he could work in an entrepreneurial environment and learn how to start his own company. But none of the 400 companies he applied at offered a job.

Then by chance, another Stanford student referred Vinod to his father, a venture capitalist looking to do a start-up. Together he and Vinod wrote a business plan and Daisy Systems was born, the first significant computer-aided design software for electrical engineers.

Less than two years later, Vinod co-founded a little company called Sun Microsystems that would change the hi-tech industry with its groundbreaking workstation technology. It was there that Vinod pioneered open systems and commercial RISC processors. Sun, which stands for Stanford University Network, got its funding from two key men in Vinod’s life, Bob Sackman of US Venture Partners and John Doerr of Kleiner Perkins.

With two big successes by the age of 30, Vinod thought of retiring to pursue his interest in architecture and furniture design. But in 1986, John Doerr convinced him to join Kleiner Perkins.
It started as a part-time job but he soon became general partner and Forbes was calling him a “superstar VC.” But to this day, Vinod does not call himself a “venture capitalist.” He refers to himself, instead, as a venture “assistant” or coach. At Kleiner Perkins, Vinod often put less than $1 million into a venture, believing that it’s the ideas and assembling the right team that matter more than the money.

In fact, he says, “I don’t ask for a business plan or a marketing study. I never created a company based on its rate of return. I just say--- let’s invent the future.”

Vinod was among the first to recognize that internet technology and fiber optics would unleash an explosion of productivity by making communications fast, cheap and easy to install. His half dozen best deals turned $50 million of his firm’s investments into $15 billion.

In 2000, Fortune named him the most successful VC of all time. Vinod had some spectacular failures as well. But he lives by this credo “I’ll try and fail, but not fail to try.”

He moves on from his successes and failures alike. “I never look back. I don’t read history or keep clippings or look over past awards. What matters is what I do next.”

In 2004, he left Kleiner Perkins as general partner and started “Khosla Ventures” to pursue what he calls “crazy science experiments,” ideas too imprudent for the prudent investor.

Another reason Vinod went on his own was to spend more time with his family. Realizing his four children, Nina, Anu, Vani and Neal, would start going to college soon, he was already driving them to school daily…

...and taking his wife Neeru and children out of town on weekends.

To this day, he turns down business dinners and breakfast meetings, (we were VERY lucky to get him to come tonight)… he does not network, socialize, play golf or belong to clubs and avoids business travel if he can.

He usually eats dinner with the family, 25 times a month, to be exact. And he keeps track because as he says, “Anything important is worth measuring.”

In fact, Vinod kept a jar of jellybeans in his office, removing one jellybean every Monday to remind himself how many weeks were left before his oldest child, Anu, would leave for college.

Vinod considers family the most important thing in life. “I call my family my principal job and work my principal hobby. Family is priority one.”

For his “hobby,” Vinod turned his focus to green technology back in 2001 when it was considered more of a fringe pursuit. According to Forbes, Vinod has the deepest green portfolio of any individual.

He has personally invested in some 45 companies pursuing solutions ranging from ethanol made from wood chips to solar thermal plants to cement that absorbs rather than spews carbon dioxide as it’s being produced.

But Vinod says being “green” in itself is not enough. “I am not an ideal environmentalist, but a pragmentalist.”

His pragmatic viewpoint is this-- “Anything that requires people to change their habits or spend a lot more money has a low probability of success even in the face of an impending crisis.

It’s been proven over and over again people don’t inconvenience themselves.”

In other words, waiting for more households to spend thousands to install solar panels or buy Priuses will not solve the problem in time.

Investing millions of his own to come up with ways to stem our environmental ruin might be considered philanthropic enough. But Vinod is also passionate about education and poverty
Vinod and Neeru donated half a million dollars this year to the Wikimedia Foundation to promote the free sharing of multilingual content. Wikimedia operates Wikipedia, the fourth most visited website in the world.

Vinod is also a big supporter of Donors Choose where American public school teachers seek small grants for school projects through a website where visitors can donate online.
He’s also a founder of The Indus Entrepreneurs (or TIE) and has gifted $5 million to his alma mater IIT in Delhi for a school on information technology.

But his eyes really light up when he talks about the microfinance organizations he and Neeru have supported in India and Africa since 2004. He calls microfinance one of the most important economic phenomena in the world in the last 50 years.

One fund, SKS, helps impoverished women in India become self-sufficient with $1 a day loans for purchases, such as a buffalo, some fishing nets, a sewing machine or a refrigerator to sell cold drinks. These women can’t sign their names or read documents. They have no wallets or credit cards, but they can make cell phone-based payments and they are repaying their loans at a rate of 95%!
Here you can see one woman’s success--- behind the hut her family used to live in, is their new home, bought with the $3000 she made through microfinance assistance.

SKS alone puts 160,000 new families a month on the road toward self-reliance in India.

Comparing his roles as a philanthropist, venture “assistant,” a husband and father, Vinod says “It’s all about relationships, about caring and wanting to make a difference.”

So whether it has to do with world poverty or our environmental perils, Vinod has a sunny outlook. He is convinced we don’t have a crisis of resources. We have a crisis of technology… and technology is what expands the art of the possible.

In that way, the title of a paper Vinod has written best sums up who he is and his message to the world. That title is “The Convenient Truth from a Technology Optimist.”

It is my honor to present to you, this year’s Asian Pacific Fund honoree, Vinod Khosla.