Willingness to fail gives me the Ability to Succeed
Date: Thursday , December 01, 2011
There is a whole new set of startups mushrooming in the nook and corner of the Silicon Valley with the dream of finding an alternate source of energy, and make the world a greener and cleaner place to live in. And fuelling these dreams is none other than Vinod Khosla, the man behind the $1.3 billion plus venture firm, Khosla Ventures. A visionary and a legend in the Valley, Khosla is perhaps better known for his successful run as the co-founder of Sun Microsystems, as the general partner for Kleiner Perkins Caufield & Byers where he was one of the most recognized venture capitalists, with several successful early stage investments under his belt.
But achieving this success was no cake walk. Be it his first entrepreneurial stint, starting a soy milk company, at the age of 20 or his failed investments in companies like Asera, Dynabook, BroadBand Office, Excit@Home, Kholsa has had his fair share of failures. Perhaps this is the reason he doesn’t mind failing, because for him if he succeeds, it would better be worth succeeding. For him it is the "consequence of success," that matters and this explains why he does not object to investing in some startups with a 90 percent probability of failure.
Taking risks and adapting to failure, as he often says, forms the DNA of an entrepreneur. Having been a part of the entrepreneurial community for so long, he has many pearls of wisdom to share, especially about the entrepreneurial spirit.
Entrepreneurship, according to him, is predominantly a game for the young. The fire burns best among young entrepreneurs and it is because they have not been conditioned to the traditional ways of doing things. This allows them to take risks. “When you work long enough, you get to know everything the way things are supposed to be, and you forget that new things can be invented,” he says. “The biggest danger in doing things is listening to experts. You first have to reject all conventional wisdom,” he adds. Today at 56, he may be on the wrong side this age equation, but prefers to see this as a challenge. In his recent talk at Nasscom Product Conclave at Bangalore, he spoke about what it takes to be an entrepreneur. Following is a brief excerpt.
Why do you want to be an entrepreneur? We all have several reasons and motivation to go down this path. Financial gains, freedom of not working for someone else, fame, passion to do or create something new, or the interest to work with friend, all these can be motivating factors. These are all valid reasons and are acceptable. What is unacceptable is, not knowing why. Never venture into entrepreneurship if you are not sure about what you are trying to accomplish by it.
If you have an idea that you believe in, then jump into it like it is your religion. Do not let anyone tell you that it cannot be achieved. In my experience large shifts always tend to happen. An article in New York Times said 650 million people in India have access to cell phone and only 350 million have access to toilets. This shows the enormous shift that has happened in the Indian mobile space, and no expert could have predicted this. In 1990 no one could imagine emails; in 1995 many major companies told me they would never be interested in internet technology. Now, can we imagine a world without internet and emails? These are all examples of large shifts that have happened in the not so distant past. It is because of shifts like these that I believe we can reinvent the country. You should not be cynical, you should be optimistic and should dare to imagine the future that you want, and then there is a very good chance that you can create it. When I look around I do not see problems, I see opportunities. Every major problem can be a major opportunity. The key is the willingness to take risk.
When you take risk, sometimes you fail, but that should not be the end. Failure is the essence of change. My willingness to fail is what gave me the ability to succeed. I take risk and if I fail I lose only 1X my money, but if I succeed I can make many times my money. My motto is that, I do not mind failing, but when I succeed it better be worth succeeding, it better worth changing something. Be passionate and do not give up when you fail. Your product or company should be like your religion, you will not abandon your religion when you come into a crisis, and this should be the case with your company as well. If you think that large shifts or changes are not possible, that is because you are thinking reasonably, you will have to be unreasonable and it can be done. All progress depends on the unreasonable man. Experts will always tell you something cannot be done, but you have to understand their predictions have been wrong many a times. Believe in yourself and go forward.
The world has changed a lot in the last decade and we are in a very new and exciting era now. There are many magnificent markets if you start thinking out of the box. A few areas that make me really excited are, reduction in data overload, big data analysis, tools that cater to emotions of people, education, TV 2.0, SocialNEXT, NFC, democratization of publishing, utility, health, and marketplace. I call these the cool dozen. These fields have a lot of potential and we will definitely see a lot of startups establishing there. The opportunity in reducing the amount of data is enormous and many breathtaking technologies are going to come in this area. Similarly, big data analysis is also a need of the day, is going to be even bigger in the near future. Emotion, as an area has a lot of scope, there will be a lot of feel good products coming in this space. Education sector is on the verge of a catastrophic change and I believe in future education can happen without teachers. In the U.S. a very large percent of people who watch TV will have a second screen on their lap — it can be their laptop or phone or tablet, and this presents a large opportunity for startups. Facebook is just the beginning, there is a whole set of next generation of social applications coming and it will be far bigger than what Facebook is today. Interest graphs helps in understanding what a person is interested in and lets companies give him option accordingly. Products and startups that can let this happen will be received very well. NFC, regardless of skepticisms, is going to grow exponentially. The nature of health industry will change dramatically with more gadgets and apps coming to the field. Indian health industry is going to be valued between $100 billion to $300 billion in the very near future. I believe, soon health diagnosis will be done by computers and the result will be delivered to the patients’ cell phone. Similar changes will come in retail space also. The opportunity all these sectors offer is going to be enormous and startups better be prepared to exploit them.
In all the glitz and glamour of entrepreneurship, never forget your core team. These people represent your company. Finding people who are similar to you is rarely difficult, but what is really needed is a diverse set of people. It is about engineering the gene pool of your company to perfection. You need people who think differently, who view the world differently, who read different materials, who are in an entire different wavelength of thought than you are. When I started my company I was like a glorified recruiter, I spend about 40 percent of my CEO time recruiting. But that is a very important part of building your company. You need to personally pick the right people and remember, your company will only be as good as its core team.
Look for people who critique you. Examine failure modes. Collect all the ways you might fail, and build contingency plans. But then again, a lot of the success of a new venture is out of the hands of the entrepreneur. There are probably three or four things you can control out of ten that matter for the success of your company. Competitors control another three or four. The rest is just luck.