Vinod Khosla talks about his passions, investments and the Indian start-up ecosystem.
His net worth is estimated to be around $1.5 billion. He is a venture capitalist, but his areas of interest are far from those of his peers.
American businessman of Indian origin Vinod Khosla was the co-founder of Sun Microsystems, the company that created the Java programming language.
At the age of 59, Khosla says he works 80 hours a week. His colleagues say he neither sleeps much nor eats a lot.
In a fireside chat jointly organised by Khosla Labs and IT industry body Nasscom, Khosla spoke to entrepreneurs about technology being his religion, the need to focus on the bottom 3 billion people in the world, and how he believes that the Indian e-commerce industry is far from a bubble.
Edited excerpts:
The new government at the Centre and its technology thrust
As far as fundamentals are concerned, independent of government, India has a lot of potential. There is potential not only in terms of consumers but the country has a lot of well-educated talent, which is India’s hidden strength. Almost anything that can be done can be done in India now.
Philanthropist or venture capitalist?
This philanthropy thing is overrated! In some sense, as you do well you can choose to work on things you want to. I now have the luxury of working on the things that are exciting to me, which include things that make a difference or have a big impact. I like those things.
I like new technologies and breakthrough science. I like hot problems. I often fail because I take on hot problems.
His technology obsession
I love technology. I can invest in a technology just because I feel the technology is cool. I can afford to do that, but that’s not recommended for most people.
Technology is my only religion. It’s the only thing I subscribe to as a belief system in life. I don’t believe in religion.
I think there’s only one truth and that science and technology lead us towards that. I feel that moral values should be derived from technology. But that’s a personal belief and nobody else needs to have it.
Passion for health care
I believe that 15 years from now, every villager will have better healthcare than I can get today at the Stanford Medical Center, which is one of the best research centres in the world.
That’s because technology will play a significant role. Doctors can make mistakes, but machine learning systems will make more accurate decisions.
Investing decision
You should work on the things that are exciting for you. I see too many people in the investment world chase what is successful.
If Amazon is successful, you will have a lot of people trying to chase e-commerce. That’s ok, if their goal is to make money.
I find not enough people are doing start-ups for the bottom 3 billion people on the planet. Frankly, to me it is much more fun to do that and make a difference than there is to buy a Ferrari.
Valuation bubble in e-commerce in India
You can easily define a bubble in retrospect, but when you are in the middle, you don’t actually know what a bubble is.
When Google went public at $98 a share, everybody thought the valuation was too high and there was a bubble.
Now at 10 times or more increase in price, it doesn’t seem like a bubble. What I find happens is that every time there is a great company, others try to copy it and they get credit for the valuation the leader might get.
The leader usually ends up with good valuation and others get overvalued in the interim and that causes what people call a bubble.
Also, there is a big difference between a financial valuation bubble and the reality. When you look at internet traffic, which was called the internet bubble, there is no bubble because the traffic did not drop; in fact it kept going up.
So my question is: What is the reality? Is it some stock price that some financial guy chose, or what normal people do with the internet, which is use it? I actually think that stock prices should generally be ignored.
The reality of life is how people are using technology and that’s why I don’t think we are in a bubble. We are very early in terms of actual usage and I don’t think usage will decline.
On not having invested in an e-commerce company himself
I am very clear that I don’t want to do something that I am not good at. So I invest in things I personally understand. There have been times when I thought I do things well, but I screwed up very often.
