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Khosla Investing in the Future

Khosla Investing in the Future



For a higher quality version, visit: http://decklaration.com/khosla ...

For a higher quality version, visit: http://decklaration.com/khosla

Have been interested in the question: "Sustainability - How can we all live well and live within the means of one planet?" In my research, I came across Vinod Khosla. He is answering this question through venture capitalism. He has "venture assisted" a set of companies ranging from scalable clean energy to advanced agriculture to clean metals. He has created a nice presentation to evangelize about sustainability. I thought I'd take his 60+ page presentation and put my "magic touch" on it. After spending more than a few hours, here is what I came up with:



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  • Source: Nassim Nicholas Taleb, author of “The Black Swan”
  • http://bucks.blogs.nytimes.com/2010/09/20/market-forecasts-are-just-guesses/
  • the folly of predictions: tetlock studyhundreds of experts.80,000+ “expert” forecasts & 20+ yearsresults: experts are poorer forecasters than dart‐ throwing monkeysSource: http://www.newyorker.com/archive/2005/12/05/051205crbo_books1
  • Source: American Heritage Magazine ‐ http://www.americanheritage.com/articles/magazine/it/2007/3/2007_3_8.shtml
  • Source: American Heritage Magazine ‐ http://www.americanheritage.com/articles/magazine/it/2007/3/2007_3_8.shtml
  • India’s phone to toilet ratio
  • Source: http://www.newyorker.com/archive/2005/12/05/051205crbo_books1why?Source: http://www.newyorker.com/archive/2005/12/05/051205crbo_books1“…. experts were much tougher in assessing the validity of information that undercut their theory than they were in crediting information that supported it.”‐ Tetlock
  • India’s phone to toilet ratio
  • India’s phone to toilet ratio
  • Undetermined planning
  • the vision to imagine the possible to embrace and nurture the improbablebut with the discrimination to eliminate the impossible, and to prioritize the best improbables

Khosla Investing in the Future Khosla Investing in the Future Presentation Transcript

  • Investingin the FutureVinod Khosla khosla ventures 0
  • 5 Billion people want to livelike 500 Million do today 1
  • We needincremental and disruptivesolutions. 2
  • We needincremental and disruptivesolutions.Big Companies doincremental well. 3
  • We needincremental and disruptivesolutions.Disruptive challengesdemand disruptive solutions. 4
  • We needincremental and disruptivesolutions.Disruptionis what VCs do well 5
  • “All progressdepends upon theunreasonable man”GEORGE BERNARD SHAW 6
  • Disruption by Increments
  • Disruption by IncrementsEvolutionarypathways torevolution
  • Disruption by Increments Adjacent PossiblesEvolutionary Groupspathways to Clustersrevolution Autocatalysis
  • “ Cynics never do the impossible, achieve the improbable, take on the inadvisable. Hope is only path to extraordinary success. C ORY BO O KER ( Tw e e t b y N J Ma yo r )
  • Our willingness to fail gives us theability and opportunity to succeed. 11
  • Our willingness to fail gives us theability and opportunity to succeed. It is not because things are difficult“ that we do not dare, it is because we do not dare that they are difficult. Seneca 12
  • Our willingness to fail gives us theability and opportunity to succeed.“Only those who dare fail greatly can achieve greatly. R o b e rt F. Ke n n e d y 13
  • Black Swan EventsRarityExtreme impactRetrospective Predictability
  • Success vs. Impact 100% Most large company innovation 75% Most Venture InvestmentsProbability of Technology 50% Succeeding Accidental Venture 25% Black Swan 25% 50% 75% 100% Chance of Disruptive Impact
  • 10,000IntelligentShots
  • 10,000IntelligentShots 10 Googles or more!
  • It‟s ok to failas long as it isworth succeeding 18
  • Nothing that defiesthe law ofeconomic gravitycan scale
  • Nothing that defies the law of economic gravity can scaleEconomics matter 20
  • DisruptivePortfolio 21
  • A million year crude production cyclereduced to minutes and marketcompetitive 22
  • Engine that delivers 50%+vehicle efficiency atlower cost 23
  • What if coal based electricity could be75% cleaner and we used 75% less ofit? Clean coal without ever taking itout of the ground 24
  • Turning problem carbondioxide into a feedstockfor building materials 25
  • No compromise 80% more efficientpay for itself lighting 26
  • New thermodynamic cycles and thermoelectrics Silicium Energy 27
  • 5x cheaper grid scale energy storageusing only air 28
  • Inexpensive high-density energystorage 29
  • Renewable fuels:Food--‐grade sugarsfrom any biomass 30
  • Advanced Agriculture –cut fertilizer &pesticide use and increase yields 31
  • New Metals:Reinvent materials science &approach theoretical perfection atlarge scale 32
  • Winners take(almost) all 33
  • Theillusion ofknowing
  • Theillusion ofknowing VS
  • Theillusion ofknowing VS Knowing that we don‟t know
  • Ignore theexperts. 38
  • “Heavier‐than‐air flying machines are impossible LORD KELVIN President, Royal Society, 1895
  • “ There is no reason for any individuals to have a computer in their home K e n O ls e n / Pr e s i d e nt a n d F o u n d e r o f D E C , 1 9 7 7
  • McKinsey: US Mobile Subscribers 1980 forecast for 2000 Forecast
  • McKinsey: US Mobile Subscribers 1980 forecast for 2000 Forecast Actual
  • Yesterday‟s technology,tomorrow‟s forecast
  • Could McKinsey or an analyst havepredicted? Phone C o m p u te r In te r net S o c i a l M e d ia G e n e ti c C l i m a te C h a n g e (Facebook, Twitter) En g i n e e ri n g Be r l i n Wa ll C h i n a ‟s R i s e Ar a b Sp r i n g 45
  • Chasing false precision Input the measurableForecastingFlaws Ignore the immeasurable Obscure assumptions
  • Experts are poorer forecastersthan dart‐ throwing monkeysTe tl o c k Stu d y
  • Tetlock study showed:No relation between experience andaccuracy.(Based on thousands of forecasts made byhundreds of experts) 48
  • Ecosystem, culture and mindsets…. 49
  • “Any sufficiently complexpossible reaction „auto - make many if not every mixture of elements will catalyzed‟ by some other element in the mixture ST U ART KAU F F MAN 50
  • Increase odds of auto-catalysis Attitude Clusters Density 51
  • Engineer yourcompany‟s genes 52
  • PLAN
  • Culture ofexperimentation
  • Try frugally and fail fast
  • More “tail risk” is a good thing! 56
  • Failedtactics…. VS Failed strategies
  • Insurance, option value and risk reduction 58
  • Not for the faint of heart 59
  • Venture assist to succeed 60
  • “The best way to predict the future is to invent it Al a n Ka y 61
  • T h a n k Yo uvk@khoslaventures.com
  • Developed and Designed bySalahuddin Khawajasalahk@gmail.com More at Decklaration.comABOUT THE AUTHORSalah has 14 years of experience, primarily in theFinancial Services Industry. Before joining JP Morgan hespent 11 years at Deloitte & Touche helping Fortune 500clients with various types of Strategic Initiatives.He is currently is based in Hong Kong with responsibilityfor delivering the next generation platform for SecuritiesProcessing.Areas of Expertise: Strategy Development, BusinessTransformation, System Integration, Program & ProjectManagement, Mobile Strategy, Data Analytics, ExecutivePresentationsSample Clients: Bank of America, Citi , MasterCard 63