Our Green Mayor was in fine form at SD Forum’sVisionary Awards on June 25th. He made a convincing pitch about why innovators and visionaries should locate in San Jose. In this photo, he’s pointing out his Economic Development teamto the high profile crowd gathered in Atherton; but I think the subliminal message is: WE NEED YOU!
Chuck’s team is working hard to encourage innnovation in San Jose, yet San Jose didn’t make the top ten Green Cities in the U.S. this year, as ranked by Mother Nature Network. Why not? Are these other cities, like Portland (#1) and San Francisco (#2) really doing more, or are they just talking louder about their green achievements? Perhaps San Jose needs an ‘artist in residence at its recycling facilities’ like Mayor Newsom has in San Francisco?
In this Fresh Green Minute highlight, the mayor outlines why a little clean tech startup from, say Kansas, should relocate to San Jose.
I caught up with Vinod Khoslaat SD Forum’sVisionary Awards. In this exclusive interview, Vinod, a pioneer in clean tech investment, describes how in 2000, he started “looking for something new, something difficult and something large to invest in.” He found his first clean tech investment in Bloom Energy and has since gone on to invest and nurture dozens of clean tech businesses including Ausra, AltaRock and Stion
KR Sridharof Bloom Energyintroduced Vinod by saying: “We all need to root for his success, because his success is this planet’s success.”
And Vinod’s recipe for success? The freedom to fail. “The Silicon Valley ecosystem allows me to fail…you get more shots at goal.” Vinod Khosla
This is a transcript of my interview with influential venture capitalist Vinod Khosla. The interview was recorded at the SD ForumVisionary Awards on June 25, 2009. To listen to the interview or read the summary post, click here
Alison van Diggelen: I’m with Vinod Khosla, one of the Visionary Award winners for 2009. Vinod, firstly I want to congratulate you. How does it feel?
Vinod Khosla: Thanks! Embarrassing…(laughter)
Alison: So this is not your cup of tea, to be the center of attention?
Vinod: Not really
Alison: So first of all, I want to ask you about your lead in clean tech. You were one of the first venture capitalists to see the opportunity in clean tech. Can you talk about where that motivation came from?
Vinod: Well, in 2000, I started looking for something new, something different and something large, and something amenable to technology disruption, and clean tech was one of those areas that popped up right away. So, right after I gave a talk about the optical bubble in 2000, when the stock market was still high, I said I should be doing something other than telecom, and that’s when I started looking and this is what popped up.
Alison: What was the first company that popped up, or was it just the sector in general?
Vinod: Well, in 2001 at Kleiner, we invested in Bloom Energy, and KR (Sridhar),who’s going to be introducing me tonight, was one of the first clean tech investments I pursued.
Alison: Is that looking good to you?
Vinod: Well, the company is very well funded, doing extremely well, and has been able to get great valuations in the market place, so I guess that’s a precursor to success. (laughter).
Alison: And where does this motivation come from? I mean, are you concerned about global warming first and foremost, are you concerned about the planet, or is it: here’s a great economic opportunity?
Vinod: Well, I am definitely concerned about global warming, and I am definitely concerned about how five billion people enjoy the lifestyle that 500 million people do today, out of the six and a half billion people we have and the nine billion we’re going to have. So it’s clearly that. But that itself creates an economic opportunity, so that concern about a crisis happening there creates the opportunity and then we muddle through and hope we can find the right answer.
Alison: And you’ve helped a lot of entrepreneurs along the way. I understand you’re very involved in the companies you invest in. Can you talk about how you’ve helped them?
Vinod: Well, as our website says, we’re not in the venture capital business, we’re in the venture assistance business. That’s all I do, that’s what our website says, and frankly, that’s what I enjoy. I enjoy sort of being a coach and mentor to young entrepreneurs, and that to me is the most rewarding thing you can do. The fact that it’s a way to make money is almost incidental at this stage.
Alison: On your website, it also says that you had a dream to bring soy milk to India. What is your dream today?
Vinod: Well the dream clearly is to replace the four major emitters of carbon dioxide: oil, coal, steel and cement with much more carbon efficient technologies, and I think that’s the kind of new invention and innovation that we need to help the planet and create a whole new economic ecosystem. That’s the dream.
Alison: You were an early backer of biodiesel and it’s had some bad press because of deforestation etc.
Vinod: Actually, we never did invest in biodiesel. That is a misconception. We never did invest in any biodiesel company.
Alison: But you were a strong advocate of it I understand…no?
Vinod: No. I was always an advocate of cellulosic fuels, but people have used my name as if I’m supporting biodiesel, like you mentioned. I’m generally against all food based fuels.
Alison: I see, good to clarify that. And you are an investor in Ausra? Tell me about that investment and how that’s looking for the future.
Vinod: Well, it’s looking…You know, Ausra is pioneering a new kind of solar thermal technology for large power plants or additions to existing power plants and I like the fact that they can do a small add-on; a $10 Million add-on to an existing power plant, so you can reduce the amount of coal you burn or the amount of natural gas you burn. So that’s very neat about that technology and you can also build a 200 Megawatt power plant with the same technology, so I like that characteristic.
It’s early in the solar thermal race, but we’ll see how things go. We are optimistic.
Alison: And some people have already been talking about a clean energy bubble. Do you see that? Is that how you’d typify the market with this huge downturn in venture capital funding in the first quarter of this year.
Vinod: Well I was concerned about a clean energy bubble last year and though this economic downturn that’s happened is not good, it has helped slow down the bubble or pop it and I think we’ll hopefully have more reasonable development going forward.
Alison: So you feel the bubble has popped?
Vinod: Well, I wouldn’t say it was a bubble but it was in danger of becoming a bubble and I think that danger is lower, is reduced, is dissipated somewhat. But look, anytime greed starts to play these things pop up again, so it’s something we have to warn against.
I think it was in 2003 I warned against the nanotechnology bubble and that helped. I almost got sued for it.
Alison: Did you really?
Vinod: For saying nanotechnology was not right for public offerings and there was a couple of companies ready to go public. I think we have to avoid those bubbles because they’re not productive for anybody.
Alison: Yes. And what are your warnings today?
Vinod: Warnings about what?
Alison: About potential future bubbles?
Vinod: Well every rush turns into a bubble. It’s something we have to just…it happened with the railroads in the 1830s, it’s happened with almost every new technology and we just have to be cautious.
Alison: Right. And are you optimistic with the Obama administration in power now and their backing on clean energy?
Vinod: Yeah. I’m generally quite optimistic. I’m very optimistic that both we’ll find the technologies as well as the fact that we’ll have a huge impact.
Alison: Thank you very much Vinod.
This interview was recorded on June 25, 2009 at the SDForum Visionary Awards. To read the summary post or listen to the interview, click here
The only things missing were the red carpet and the paparazzi at last Wednesday’s SDForum’s Visionary Awards ceremony. It had all the trappings of the Oscars: glitz and glamor, champagne and cocktail dresses. OK, there were more business suits than bustierres, I admit. But I think the brain power at this Silicon Valley event was probably ten to the Nth power of its LA counterpart.I kept expecting an announcer to say: “Reed Hastings is appearing with fabulous thoughts today, combining high IQ with the always elegant ideas for movie delivery.”
Held at the private home of Heidi Roizen and David Mohler in Atherton, the party kicked off with a VIP only event inside the Italian villa. Backed by a suit of armor, and looked upon by a giant Bison head and stag’s head, SDForum’s CEO Susan Lucas-Conwell (sporting one of her signature French silk scarves) made the introductions, as everyone crowded into the wood beamed hall. Susan teased the crowd about revealing how the five visionaries are actually chosen, but the selection process remains a well guarded secret. Ann Winblad is giving nothing away.
I chatted to Cromwell Schubarth, editor of the Silicon Valley Business Journal who reports that contrary to the fate of many newspapers, like the Merc, his paper is thriving. Exploiting a niche and doing it well is key, he tells me. Next up: The Green Mayor: Chuck Reed, who was unususally enthusiastic. “The best days are ahead of us!” he exclaimed. Perhaps the optimism of all those successful techies and entrepreneurs rubbed off on him. Or maybe it was his delight in driving his wonderful Prius to the event. He told me he gets a cool green 44 MPG. That would make anyone a wee bit jovial, the way gas prices are surging!
Talking joviality, the exuberant Heidi Roizen gave me some of the skinny on her startup: SkinnySongs (an interview for Women’s Radio seems inevitable). She was determined to get the visionaries to sign her “virtual” bookshelves, a masterful tromp l’oie in her living room, already adorned with Sergey Brin, author of “Googled” among other big techy names. A smart move by Heidi: no doubt adding many $’s to the value of her home, even in this down market.
I was cheered to hear a visionary like Forest Baskett (former CTO of Silicon Graphics and Partner at VPs NEA) pushing the case for wind power and electric cas. Moving from 20c a mile (gas) to 2c a mile (electric) sounds pretty compelling to me.
Diane Greene, pioneer of mainstream virtualization and CEO & co-founder of VMWare was the most modest of the bunch. She simply credits her ‘visionary powers’ to being an optimist. According to her intro, she established a company culture that is employee-focused and about being “nice people”. Mendel Rosenblum summed it up by saying “she showed you can build a multi-billion dollar software company and not be a jerk.” Amen to that.
I look forward to exploring both her company culture and her great passion for sailing (she tells me she sails a trimoran) when I interview her for Women’s Radio later this summer.
Founder of Netflix, Reed Hastings had some interesting wisdom to share about growing a startup: success is all about e
mployee freedom he says: encourage creativity, take risk, do things different…
And finally: Steven Levy, senior writer for Wired Magazine and author of “Hackers” was entertaining: he described all the poses Bill Gates goes through in the space of a two hour interview – from rocking madly, almost horizontal, to fetal position. Steven is proud of the fact he antagonized the richest man in the world so much that he threw a pencil at him! Only a geek would boast that claim to fame.
Heidi warned me the party goes on till the wee hours…sadly I couldn’t stay around to see if techies really can party like the Oscar party crowd. But with Heidi at the helm, I don’t doubt they’d give it a good try.
Fadell learned to say “no” more than “yes” while working at Apple and he found creative ways to “disappear” when Jobs was in “one of his moods.”
But in 10 years of working with Steve Jobs, the Apple cofounder often revealed his softer side. For example, when Fadell became a father for the first time, Jobs took him for a walk and advised him not to over-schedule his child.
“Make sure they’re bored sometimes,” said Jobs.
What did he mean?
Fadell explains: Kids need the time to find themselves…be creative, and solve problems.
Although critics say he micromanages his teams, Fadell sees himself as a mentor (see more below).
On Google Glass
Glass is definitely a side project for Fadell…he checks in with his Glass design team sporadically. He’s still CEO of Nest and that remains his primary focus, since, as he underlines, “it’s actually shipping product.” He’s laser focused on making sure it’s being done right (see Leadership below).
On Tech Security
Fadell reckons people today are obsessed with tech security and that in reality “nothing is secure…people in the security business are stirring up the shit.”
On Moving Meditation
Fadell starts his work day at 5:30 am and does what he calls a “moving meditation,” be that running, or yoga (one hour, three times a week). That gives him time to problem solve and prepare for his “roller coaster” day of “back-to-back” meetings.
I challenged him to demonstrate one of his favorite poses: the Vriksasana, or tree pose and as you can see…he likes a good challenge.
For non-yogis out there, it’s a great pose for increasing balance, focus, and memory. It also strengthens your feet, ankles and knees.
The main event at the salon was an excellent fireside chat between Fadell and Kevin Surace, SVForum board member and serial entrepreneur. I’ll post a link to the video here, when it’s available.
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Here are some of the highlights of that conversation and my observations:
On Leadership
Make sure your projects don’t take over 18 months to ship, otherwise “it’s impossible to keep your team together,” says Fadell.
Although Fadell has lost several key members of Nest recently, he insists that his young team “need mentored to grow into the next leaders in Silicon Valley.” He says that those who walk out the door are examples of “the Tinder generation.”
Like Steve Jobs, Fadell has a reputation for being an intense leader, a micromanager or even a bully.
As Ben Austen so eloquently describes in Wired, “Steve Jobs has become a Rorschach test, a screen onto which entrepreneurs and executives can project a justification of their own lives: choices they would have made anyway, difficult traits they already possess.”
Perhaps Fadell needs to do a little more yoga and a little less yelling?
Larry Page vs Steve Jobs
Fadell characterizes his new Google boss, Larry Page as “an incredible scientist” who respects products and likes deep research to push the limits of technology. By contrast, he found Steve Jobs more focused on marketing, “more business, less science” and says he often took, or even “stole ownership of ideas.”
On Failure
Fadell says before joining Apple, he’d had 10 years of failure, at General Magic and other enterprises. In 1998 he was a DJ in his spare time, and founded a hardware startup for music collections. He made about 80 pitches to VCs without success. It was the intense fear of failure that helped him stay strong in negotiations with Steve Jobs. He agreed to work on what would become the iPod, only after Jobs assured him, “if you can build it, we’ll put every marketing dollar into this.” And of course, the rest is history.
Should tech companies build cars?
Fadell gives this question a resounding “YES!” He describes a recent meeting with some members of the board at Ford, “I could see fear in their eyes,” he says.
He views cars – especially self-driving cars – as “lots of computer with a little bit of car,” and says that car companies “need to do a 180 and compete with computers on wheels.”
Vinod: Well, as our website says, we’re not in the venture capital business, we’re in the venture assistance business. That’s all I do, that’s what our website says, and frankly, that’s what I enjoy. I enjoy sort of being a coach and mentor to young entrepreneurs, and that to me is the most rewarding thing you can do. The fact that it’s a way to make money is almost incidental at this stage.
On Working with Steve Jobs
On Moving Meditation
