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Vinod Khosla
Friday, November 21, 2008

Vinod Khosla is considered one of the most influential personalities in Silicon Valley. Most call him a visionary, pointing to his ability to see what most others miss in the complex world of technology. As a partner at the venture firm of Kleiner Perkins Caufield and Byers, Khosla is also in the business of fashioning companies and technologies. If that were all he was doing, Khosla’s work would be daunting enough. But the highly energetic Khosla, 44, does more. Like 20-somethings, he even starts companies when nobody has seemed keen to exploit certain business opportunities.
He is known to be a driven individual, and ambitious too. When just 15, the young Khosla, growing up in Delhi, aspired to start a company in Silicon Valley, he told Amar Bhide, the Harvard Business School professor who conducted a case study on Sun Microsystems, the company Khosla founded in 1982.

Khosla came to the United States after completing his B. Tech. degree at the Indian Institute of Technology, Delhi. But before coming, he attempted to start a company in India, and confessed being frustrated by the experience. In the US, he completed a M.S. degree in biomedical sciences at Carnegie Mellon and came to Stanford University to do an M.B.A. After the management degree, getting a high-paying executive’s job at a large American corporation would have been the career path for most immigrants, but Khosla chose a different one for himself.

When he graduated from Stanford in 1979, Khosla laid down several conditions a company must meet before he would even apply. “I would only work with companies started after 1976...”Khosla said. “I would only work with companies that had less than a hundred employees.” He sent out 400 applications, but did not receive any job offers.

Vowing to become a millionaire before turning 30, Khosla turned to entrepreneurship and found a business idea and partners at a Stanford business club. Daisy Systems, a computer-aided engineering and design company, failed quickly because the economics of the market went against it.

Undaunted, Khosla scouted for opportunities to develop an inexpensive multipurpose workstation, again finding one right inside the campus -- at the Stanford University Network. He met up with Andreas Bechtolsheim, who had designed a workstation that he was licensing to companies for $10,000. The persuasive Khosla wanted Bechtolsheim to stop licensing the workstation, and instead start a company to manufacture them. He won over the German immigrant, saying, “I want the goose that laid the golden egg, and I don’t want the golden egg.”

Then 27, Khosla also roped in Scott McNealy, a buddy at Stanford business school, and Bill Joy, also of Stanford, to start Sun Microsystems. The company changed the face of computing and at a market cap of over $150 billion, it is the largest corporation founded by an Indian. Khosla though did not play a part in building the company to its present size because he was eased out of his position as CEO in 1986 because he had become an unpopular manager, and easily ruffled the feathers of employees.

Years later, Khosla told The Industry Standard that he counts the founding of Sun and the philosophy of “open” systems introduced by it as his biggest achievements. Soon after the Sun debacle, Khosla joined Kleiner Perkins, the firm that funded Sun, as a general partner.

Last year was probably his best in 15 years as a venture capitalist. He seemed to be in the middle of everything that happened in the red-hot sector of optical networking.

He started off Cerent, one of the hottest startups, later acquired by Cisco for a whopping $6.9 billion; he was with Pradeep Sindhu in the making of Juniper Networks; and he headed the development of Siara Systems, which was bought by Redback Networks for more than $4 billion.

Khosla lives in Woodside, CA with his wife and four daughters. He is one of three billionaires of Indian origin in Forbes magazine’s list of America’s richest 400 people.

Bala Murali Krishna

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