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               Cluste...
“ Cynics never do the impossible, achieve the improbable, take on the inadvisable. Hope is only path to extraordinary succ...
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 ...
Our willingness to fail gives us theability and opportunity to succeed.“Only those who dare fail greatly can  achieve grea...
Black Swan EventsRarityExtreme impactRetrospective Predictability
Success vs. Impact                 100%                        Most large                        company                  ...
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 ...
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                   ...
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 ...
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...
Chasing false precision               Input the measurableForecastingFlaws         Ignore the immeasurable               O...
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 expert...
Ecosystem, culture and mindsets….                                    49
“Any sufficiently complexpossible reaction „auto - make many if not every                          mixture of elements wil...
Increase odds of auto-catalysis             Attitude             Clusters             Density                             ...
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 ...
Khosla Investing in the Future
Khosla Investing in the Future
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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

    1. 1. Investingin the FutureVinod Khosla khosla ventures 0
    2. 2. 5 Billion people want to livelike 500 Million do today 1
    3. 3. We needincremental and disruptivesolutions. 2
    4. 4. We needincremental and disruptivesolutions.Big Companies doincremental well. 3
    5. 5. We needincremental and disruptivesolutions.Disruptive challengesdemand disruptive solutions. 4
    6. 6. We needincremental and disruptivesolutions.Disruptionis what VCs do well 5
    7. 7. “All progressdepends upon theunreasonable man”GEORGE BERNARD SHAW 6
    8. 8. Disruption by Increments
    9. 9. Disruption by IncrementsEvolutionarypathways torevolution
    10. 10. Disruption by Increments Adjacent PossiblesEvolutionary Groupspathways to Clustersrevolution Autocatalysis
    11. 11. “ 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 )
    12. 12. Our willingness to fail gives us theability and opportunity to succeed. 11
    13. 13. 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
    14. 14. 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
    15. 15. Black Swan EventsRarityExtreme impactRetrospective Predictability
    16. 16. 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
    17. 17. 10,000IntelligentShots
    18. 18. 10,000IntelligentShots 10 Googles or more!
    19. 19. It‟s ok to failas long as it isworth succeeding 18
    20. 20. Nothing that defiesthe law ofeconomic gravitycan scale
    21. 21. Nothing that defies the law of economic gravity can scaleEconomics matter 20
    22. 22. DisruptivePortfolio 21
    23. 23. A million year crude production cyclereduced to minutes and marketcompetitive 22
    24. 24. Engine that delivers 50%+vehicle efficiency atlower cost 23
    25. 25. What if coal based electricity could be75% cleaner and we used 75% less ofit? Clean coal without ever taking itout of the ground 24
    26. 26. Turning problem carbondioxide into a feedstockfor building materials 25
    27. 27. No compromise 80% more efficientpay for itself lighting 26
    28. 28. New thermodynamic cycles and thermoelectrics Silicium Energy 27
    29. 29. 5x cheaper grid scale energy storageusing only air 28
    30. 30. Inexpensive high-density energystorage 29
    31. 31. Renewable fuels:Food--‐grade sugarsfrom any biomass 30
    32. 32. Advanced Agriculture –cut fertilizer &pesticide use and increase yields 31
    33. 33. New Metals:Reinvent materials science &approach theoretical perfection atlarge scale 32
    34. 34. Winners take(almost) all 33
    35. 35. Theillusion ofknowing
    36. 36. Theillusion ofknowing VS
    37. 37. Theillusion ofknowing VS Knowing that we don‟t know
    38. 38. Ignore theexperts. 38
    39. 39. “Heavier‐than‐air flying machines are impossible LORD KELVIN President, Royal Society, 1895
    40. 40. “ 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
    41. 41. McKinsey: US Mobile Subscribers 1980 forecast for 2000 Forecast
    42. 42. McKinsey: US Mobile Subscribers 1980 forecast for 2000 Forecast Actual
    43. 43. Yesterday‟s technology,tomorrow‟s forecast
    44. 44. 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
    45. 45. Chasing false precision Input the measurableForecastingFlaws Ignore the immeasurable Obscure assumptions
    46. 46. Experts are poorer forecastersthan dart‐ throwing monkeysTe tl o c k Stu d y
    47. 47. Tetlock study showed:No relation between experience andaccuracy.(Based on thousands of forecasts made byhundreds of experts) 48
    48. 48. Ecosystem, culture and mindsets…. 49
    49. 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
    50. 50. Increase odds of auto-catalysis Attitude Clusters Density 51
    51. 51. Engineer yourcompany‟s genes 52
    52. 52. PLAN
    53. 53. Culture ofexperimentation
    54. 54. Try frugally and fail fast
    55. 55. More “tail risk” is a good thing! 56
    56. 56. Failedtactics…. VS Failed strategies
    57. 57. Insurance, option value and risk reduction 58
    58. 58. Not for the faint of heart 59
    59. 59. Venture assist to succeed 60
    60. 60. “The best way to predict the future is to invent it Al a n Ka y 61
    61. 61. T h a n k Yo uvk@khoslaventures.com
    62. 62. 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

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