BANGALORE, India--Vinod Khosla, co-founder of Sun Microsystems and a renowned venture capitalist in the Silicon Valley, is no Simon Cowell, the talent show judge known for his blunt criticisms hovering on sheer insults and reducing several participants to tears.
Watching the former general partner of the venture capital firm Kleiner Perkins Caufield & Byers, and the current founder of his own firm, Khosla Ventures, in action while he was interviewing start-ups in a private session at the recently held Nasscom Product Conclave held here in Bangalore was an interesting show indeed. Never rude, always polite even while conveying the fact that some ideas wouldn’t work unless the business model was changed.
Sitting throughout a two-hour session (each startup was given 10 minute to present their business plans) and observing him interact with a few selected startups, was an eye-opener for a journalist who has been covering the technology beat for almost a decade. You hear of startups stories and you write about VCs but seeing the VC interact with startups (which they do always behind closed doors) and asking razor sharp questions was a riveting experience.
And it was more so for these young CEOs and founders of startups, too. Forget about the fact that he may not invest in any of these startups at all, just the fact that he was actually giving them quality time and telling what the pitfalls would be in their business was enough to make them feel on top of the world.
When I managed to get a ringside view of that "invitation only" session, which certainly didn’t include journalists, I was on the lookout for a startup story. I was curious to see who the start-ups were and what they were going to present to the veteran VC of the Silicon Valley.
But the startup story was nothing compared to the story that was unfolding before me, layer by layer, question by question—all from Khosla’s side.
The questions he asked without delving into anything except his memory was a fascinating study by itself. Seeing him in action, it's no surprise that he attained the status of a legend in the VC industry globally. (Interestingly, sources close to him said that he had not heard of these startups earlier and that none of the presentations were sent to him prior to the interaction).
There were about 10 startups that were handpicked by a jury to present their business plans to him. They formed an interesting mosaic—from mobility space to clean tech to education and software architecture and even experiential travel.
And Khosla never faltered in punching the right button with the key question—whether it was for the mobile app or a biogas startup.
Invariably his leading question would be "Do users know you are there?"
The startups may have complex technology and many man hours invested into the back end of their websites, but that's not what Kholsa wanted to hear about. The key issue for him was visibility—the user/consumer should know that the startup exists.
The next question was how much traffic their website generates. For instance, there was a startup called Mobstac, which allows website owners (publishers) to create mobile friendly sites and monetize them. He compared the site to Storify and a similar service from Google, Rumor. "There are similar sites and different models, but what you have to do is make sure your model works for the user/consumer," he said.
Not only VCs customers are going ask these questions. Need prove good validation and results before presenting power point. Today money is limited and VC are concern about failures. 1990 we have enough money in the system. Today many VC companies are not doing well. Technology is changing also. Avoid software only product unless it is related to 4G or advanced networking products. It is easy to copy Internet software products, however if you hardware and software then that project will be funded. He knows all these very well. Need to do market research and think how others will react or copy the idea quickly. It is a complex issue. Test test test then you can be confident that it will be funded. No need for business plan. Need to keep it simple working model.
I think some of the Indians who had made the US their home, are trying to give something more to their original homeland and it is just not funding that I am talking about. There is a movement afoot where VCs like Khosla and M.R. Rangaswami who co-founded Sandhill Group LLC as well as entrepreneur/technology pioneers like Naveen Jain, founder of Moon Express, Intelius and Infospace - are all getting together to give what the Indian entrepreneurs desperately need - that capability to market their products and look at a bigger market. The presentation from Naveeen was really impressive and it was not about his company but about how a person who was from a not-so-wealthy background could dream so big and achieve his dreams. Since I find so many readers liking these type of articles, am going to do a piece about that talk of Jain that struck me as one of the best that I have heard in my entire journalistic career spanning two decades. It was a talk with no notes and it came from his heart and I am sure it would inspire many entrepreneurs - -Indian and others.
You are most welcome. It was such an eye-opener for me too - because they usually don't allow journalists or any outsiders to watch these kind of sessions (either at a conclave or a private appointment)
Yes, he was definitely more interested in the person/founder and had this uncanny knack of gauging each... there were some who came with a 4- man battalion while most of them were just two and some like Surewaves, just one. But then, the Surewaves founder was a veteran and was heading Broadcom operations in India - so he could handle this situation but believe it or not, he too was quite nervous and edgy though he had all the right answers to Khosla's questions
They were all so nervous. I guess it was because they wouldn't have dreamt that they would get a chance at making this kind of a presentation when they had started out..but the best part of it was he was kind in his comments and even in his criticisms - which was/is an endearing trait
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