Vinod Khosla discusses the relationship between education and entrepreneurship, learning from failure, and the changing culture of Silicon Valley.
Moderator:
Vinod Khosla has been here this afternoon, he came here to learn more. It’s a great experience talking to him. But I also noticed he does not eat, doesn’t take breakfast. He doesn’t take lunch. No breakfast, no lunch. No tea, no coffee. No green tea as well. He just takes one meal a day and that’s dinner. This is how he’s been living since he was 30 years old. For almost like 50 years, not even 50 years, maybe 40 years. That is how Vinod has been living his life. One meal a day. He also doesn’t like to use a car. He likes to walk. He told me that he walks like 100 km, is it every week?
Vinod Khosla:
Every month.
Moderator:
Can you tell us something, what your crazy experiences were at IIT?
Vinod Khosla:
Well IIT Delhi was just a beautiful experience for me, very formative because I was 16 when I joined here. And as I mentioned earlier, academically, this model of system simulation of the bot system in a systems-controlled class. It was in the other building there, has stuck with me. And what I learned at IIT Delhi was to think a certain way. I always say in your head whenever you train in one area, you build models of how you think of the world.
When you get a very diverse education, because we did electrical engineering systems. We even did material science, which was the only engineering school where you actually had to make castings and pole steel. I don’t know if that’s still done today. Most people I run into haven’t done the castings on their own for steel or machine them afterwards. It built lots of different models in my head. I think that has really served me my whole life.
I encourage everybody, especially the students here, to not just be electrical engineering or just be mechanical engineering. Be cross-disciplinary because you’ll build different models and every time you learn something. You learn it with a different model. When you connect those models, you can re-learn any area. I talked a lot about medicine. But 5 years ago, I knew nothing about medicine. I just completely learned it from scratch by studying the area. So those of you who are interested, I should mention this, first my email address is up there. You can email me.
But this whole part is a 50-page paper I wrote on medium.com, called Reinventing Societal Infrastructure with Technology, which has a lot more details. I published it a year ago, a year and a half ago, but I’ve been developing it for 3 or 4 years. And for those of you interested in my views on medicine, and I hinted at my views, I wrote a 100-page paper called 20% doctor-included. And I defined not only where medicine is today, but why and how it can become much cheaper and much higher-quality over 25-30 years. So it’s a 100-page well-referenced document that I encourage all of you to read.
But all of this came from my learning at IIT on how to learn new areas. So more than any other subject, I learned how to learn.
Moderator:
One of the things, many students are confused, that many ask is what is the relationship between education and entrepreneurship. Students are so restless these days that there’s not companies second year on whatever idea they think is important. It’s becoming difficult to even push them out of the system. They get so excited about what they are doing. Do you think a real technical degree is really required for entrepreneurship today or what do you see as the role of higher degrees or the PhD?
Vinod Khosla:
So it depends on the area. You know, if you are starting an e-commerce site, it doesn’t take a lot of things. You can learn programming on your own in 2 years. If you are trying to innovate in biomedicine or invent new material, a PhD is very important. So depending upon the area, most of the areas I mentioned, really need serious technical education, so I don’t encourage people to drop out. The simple things – and there’s room for them, too, can be done without deep technical education or just an undergraduate degree or half a bachelor’s. I think most serious technologies that will change the world will need much more education.
Moderator:
More specifically, what do you see for MBA degrees for example? What’s the role of an MBA today in some of these startup areas?
Vinod Khosla:
Yeah, so my view is the following. If you want to be a big company, join a boring company, like Cisco or IBM or GE or somebody like that, an MBA is useful for a career. If you have passion for an area, which is what most entrepreneurs have. They get passionate about an area, two years doing an MBA is not as useful as two years trying to build a company. So a company is much more education than an MBA. For entrepreneurs for innovative efforts, for – I call it imagine the possible and then just try to make it happen whether you know how to do it or not. I’ve always done that. It’s always worked for me. It doesn’t work for everybody. So the luck like I said has a huge part to play. At least 80% of my life is about luck.
Moderator:
You have a very famous quote – you have all the right things and get lucky.
Vinod Khosla:
Yes.
Moderator:
It’s almost like leaving things to God.
Vinod Khosla:
No, it’s not. Look, you have to do all the right things. You can’t not try things and hope to get lucky because that’s failing to try. If you try and you try and keep trying, then maybe you give luck a chance to help you. More mathematically, it’s probable anyway. If you are doing all the right things, you are giving yourself a higher probability of success and then if you are a good entrepreneur and you try and survive longer and longer because survival is very important in entrepreneurship because many entrepreneurs fail. You are giving luck a longer time to give you a chance or probability to work in your favor. I like to think in probability, but most people understand luck better than probability. But I like to think mathematically you are giving yourself more external things to come together, find an opportunity as you are iterating and trying to find a niche to get started in and then grow from there.
Every time you build a problem, a solution, you get an opportunity to do the next big thing. This is where the exponential nature of these come interesting. The beginnings start off look like they are going very slow and uninteresting, at some point the exponential learning takes over. This is exactly why big companies can’t innovate because they don’t count on this process. They say what can we fairly certainly produce with this project.
Moderator:
Before you started Sun Microsystems and became famous, I think your first company was actually Data Dump and both of them had similar investors, similar teams but one failed and one ….
Vinod Khosla:
Let me ask how many people have heard of this? One or two hands. I always make this following point. People remember Sun Microsystems and Data Dump was started about two months apart and were the same two co-founders, myself and Scott McNealy. But nobody remembers the failure. People only remember the success. So as long as failure doesn’t kill you, failure doesn’t hurt. We learned a lot. Look, we were naïve. For both of us, it was our first jobs. We didn’t know any better. But we learned. And trying things gives you a chance to succeed. One succeeded, one failed. It wasn’t us. It was some things we discovered in one area, but not in the other. So I would say people remember your successes, but not your failures. But failures is where you learn the most.
Moderator:
One of the things that we’re all concerned about - which is something that many people ask - technologies as long as they are improving our productivity we’re quite happy with them. But now many of these technologies are replacing people. It’s all about losing jobs. As a country like India, 1.3 billion people where we need to provide jobs, how do you see how India should plan for the onslaught of these technologies?
Vinod Khosla:
There’s the short-term. So take the next 10 years. There’s the mid-term, say 15 years to 30 years and then there’s beyond 30 to 50 and beyond. There’s 3 different answers.
First I’d say in the next 10-15 years, economic growth will more than make up in job creation. I think there’s lots of vectors of economic growth in job creation that even though these technologies will improve productivity, they won’t affect the overall job growth very much.
In the mid-term, the 15-30 year timeframe – let me start with the long-term and then I’ll come to the mid-term. In the long-term, most of the jobs that exist today, whether that’s in India, in China, in the west, are not very good jobs. If you are to work as a farm laborer in agriculture, it’s not a very good job. If you are to work in an assembly line, it’s a terrible job. If you have to work as a retail clerk, it’s not very stimulating. So most of the jobs that exist today are not very interesting. If AI can do all the jobs, then you have the following situation. Why do you need to work? Okay. I personally believe 50 years from now, the need to work in jobs people don’t want to work in, but work at them to make money will go away. They will essentially be done for free. There will be enough GDP growth to support society without people needing jobs. That’s the long-term view.
This current economic obsession is valuable for the next 30 years of creating jobs, but not in the long-term. The best of colleges in the AI – in colleges, that doesn’t mean people won’t be in colleges, but they will do it because they want to do that job because they are interesting. There will be a lot more research jobs. It's investigation. There will be a lot more jobs in art and music and creativity. People will do what they want to do and their basic needs, the minimum standard of living whether that’s healthcare or education or housing will be taken care of because it will be cheap enough because of all these technologies. That’s a very utopian vision long-term.
I think in the middle, we will have a very difficult transition because the capitalist system is geared for economic efficiency. It’s meant to increase productivity of goods and services. But if that becomes very cheap, efficiency is no longer the goal. And in fact, we are seeing some of the negative effects of the economic system.
All of this controversy around personal data and advertising, getting people to buy things they don’t need through data science, getting people to work a certain way by influencing them. This is all capitalism, hacking people’s brains to get them to do things that they really don’t do without that external influence. This is the very difficult period of transition from the current society in the mid-term to the long-term society. I think capitalism will have to change very, very dramatically because the most important thing won’t be to produce more goods and services, it will be make people happier.
Moderator:
I think just one last question before they open it up to the students and audience. You have been seeing this startup culture for at least two or more decades now, In Silicon Valley maybe to some extent in India too. What do you think is changing in terms of, whether its cultures or attitudes or stereotypes, what changes have you seen in the last 3 decades now?
Vinod Khosla:
The changes have been very, very clear. You know, when I started my first start-up in 1980, if you said you are going to do a start-up, your parents will say, hey you can get a job at GE and you want to do a start-up and take all this risk? For what? If you talk to your friends they said you are crazy. When I graduated from Stanford business school, everybody thought it was a bad idea to do a start-up when you can get a job at McKinsey.
The culture has become much more permissive in encouraging entrepreneurship. Many more areas are now open to innovation. So previously, there were a few areas or skills where you can do start-ups. Now no matter where your skills are, you can do a start-up. So areas have expanded where you can innovate and be an entrepreneur. Society support has expanded. There were no programs to encourage entrepreneurship. Now it’s culturally accepted. Back then, if you talked to a senior manager at IBM and said come join our start-up, they never considered it. Today, every senior manager in every large company wants to join a start-up. So everything about the culture has become more permissive, more areas. It’s a beautiful time to be an entrepreneur. And a lot more to work on on the planet as hopefully I convinced you today.
Moderator:
Technology always comes with a weakness. India, which has 60% population which is undernourished, how do you think will it be financially viable for startups to get this technology to the large percent of the population?
Vinod Khosla:
I didn’t follow your whole question, but let me try – I think I got the gist of it. About 20 years ago, I had this argument. Every governed body, every ministry, telecom industry, were all thinking that mobile phones were too expensive. They were only for the luxury items and land lines was the big effort. Despite all their plans, once you got on the cost reduction cycle, it became accessible to everybody.
Now entertainment is doing the same, becoming much, much cheaper. I think the same will happen in education, the same will happen in healthcare. It takes an entrepreneur. It never starts low-cost, it starts somewhere else and then moves towards this target, depending upon the personal passions of the entrepreneurs who are driving the agenda. So I do believe accessibility of all these technologies, one, very important and only technology can achieve.
I’m very hopeful that that will happen in almost all areas. To cut housing costs, we have to do things very differently. We can’t produce 10 times the amount of cement used in India and 10 times the amount of water for food and not destroy the country. So all those will come from entrepreneurs, driving one of these exponential curves up the accessibility ladder.
Moderator:
An entrepreneur has to listen to different advice and from the right person. How do you go by the decision making process for taking advice?
Vinod Khosla:
One of the hardest things an entrepreneur does is to understand whose advice to take on what topic. That’s very hard. If you ask – if you want to hire a marketing person, or you are trying to get marketing advice, if you hire somebody from GE who has done marketing, they are going to give you the wrong advice because they are used to marketing in an environment that’s fairly constant. In a start-up, everything is changing all the time. The advice has to be different. Thank you all very much.