Vinod Khosla vk@khoslaventures Nov, 2010
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description
Vinod Khosla [email protected] Nov, 2010. Punditry vs. Innovation. 2010 investments in mobile/web. “All progress depends on the unreasonable man” - George Bernard Shaw. “Human salvation lies in the hands of the creatively maladjusted” - Martin Luther King. 3. - PowerPoint PPT Presentation
Transcript of Vinod Khosla vk@khoslaventures Nov, 2010
2010 investments in mobile/web
“All progress depends on the unreasonable man”
- George Bernard Shaw
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“Human salvation lies in the hands of the creatively maladjusted”
- Martin Luther King
“when the train of history hits a curve, the intellectuals fall off.”
- Karl Marx
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Experts & Pundits
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Mckinsey : US mobile subscribers
Source: American Heritage Magazine - http://www.americanheritage.com/articles/magazine/it/2007/3/2007_3_8.shtml
forecast actual
1986 forecast for 2000
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yesterday’s technology, tomorrow’s forecast1980’s phone: year 2000 phone:
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2010 phone:
300,000 available apps7bn+ apps downloaded
the folly of predictions: tetlock study
hundreds of experts.80,000+ “expert” forecasts & 20+ years
results: experts about the same accuracy as dart-throwing monkeys
Source: http://www.newyorker.com/archive/2005/12/05/051205crbo_books1
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"Cynics never do the impossible, achieve the improbable, take on the inadvisable.
Hope is only path to extraordinary success."
INSPIRATIONAL TWEET:
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TWEET?
-140 characters that millions of people follow-Can tell the mood of a nation-Creates an instantaneous backchannel-Formation of a personal brand-Promotes content
Did not exist 5 years ago!
Today: More than 100 million users65 million tweets are posted each
day
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SF Giants win World Series…
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Could McKinsey or an analyst have predicted Twitter?
Predicted 140 chars as “culture assessment tool”?
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…the sources of innovation
Google, Facebook, Twitter : Fox, NBC, CBS
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Amazon : Walmart
First Solar : Shell & BP Solar
Cree : GE
DNA Sequencing
Big companies vs. innovators
Focus on Process
Existing markets
Focus on DCF, NPV, EPS
Careful not to fail
“Push” into the market
Incrementalism
Focus on Vision
Invent new Markets/Paths
Ignore financial analysis
Constantly iterate
Create “Pull”
Disruption
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How to/not toFinancial tools: DCF, NPV,
IRR
Stage gate development or effectual reasoning?
Top down market analysis or evolution?
customer wish list or passion for a vision?
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Innovation according to the press
Apple
Microsoft
IBM
Toyota
Amazon
LG Electronics
BYD
GE
Sony
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Samsung
Intel
Ford
RIM
VW
HP
Tata
BMW
Coca-Cola
Nintendo
1-10 11-20
Amazon
Apple
Huawei
First Solar
PG&E
Novartis
Walmart
HP
Hulu
Netflix
Nike
Intel
Spotify
BYD
Cisco Systems
IBM
GE
Disney
1-10 11-20
Business Week Fast Company
What has surprised you?Source: Businessweek, Fast Company
5 years out, the group’s market cap has grown…
winners take (almost) all =investment viability
Starting Industry Structure
But leaders far exceed the also-rans
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1960 1970 1980 1990 2000 2010 2020
Dev
ices
/ U
sers
(M
M i
n L
og
Sc
ale
)
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New Computing Cycle Characteristics
Minicomputer
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Computing Growth Drivers Over Time, 1960 – 2020E
Note: PC installed base reached 100MM in 1993, cellphone / Internet users reached 1B in 2002 / 2005 respectively;Source: ITU, Mark Lipacis, Morgan Stanley Research.
1
10
100
1000
10,000
100,000
1,000,000
PC
100+
Mainframe
1+
Mobile/Gadget Internet
10000?
Desktop Internet
1000+
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The old don’t innovate – the new “create the future”
Mainframes1960s
PersonalComputing
1980s
Desktop InternetComputing
1990s
Mobile InternetComputing
2000s
MiniComputing
1970s
New Winners
NewWinners
NewWinners
NewWinners
Note: Winners from 1950s to 1980s based on Fortune 500 rankings (revenue-based), desktop Internet winners based on wealth created from 1995 to respective peak market capitalizations. Source: Factset, Fortune, Morgan Stanley Research.
Microsoft Cisco Intel Apple Oracle EMCDell Compaq
Google AOL eBay Yahoo! Amazon.com
Digital EquipmentData GeneralHPPrimeComputervisionWang Labs
IBMNCRControl DataSperryHoneywellBurroughs
NewWinners
FacebookTwitterApple (exception?)????
as surely as...
1985: NOT a PC in every home
1990: NO email for grandma
1995: NOT the internet
2000: NO pervasive mobile, seacrh
2005: NO social media / iphone
2008: NO Goldman/Morgan bankruptcy?
2010+: reason for optimism 21
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discovery
content curation
eBooks/interactive content
HTML 5…
What’s next?
Landline phone
Standalone radio
Portable DVD
Low-end Cameras/ camcorders
MP3 players
GPS
Portable gaming
Voice recorders
Translator/dictionary
Iphone Ipad
Android
Existing static products…
Difficult to predict the future, when innovation is the name of the game
recommendations
Reputation
what will it be?
Taste graphs
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curation vs. creation of online content
privacy vs. personalization
where will HTML 5 lead?
discovery vs. recommendation
curation of goods in the real world?
who do you trust? Friends, experts, crowd?
mvp with rapid iteration vs. better game play & production value?
not yet done…
Payments
Semantic Web
Convey intent
Analysis: Network, behavior,…
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sensors
medicine
privacy & authentication
personalization Everything
everywhere
Anticipate needs (agents)
Group-sourced innovation
Discovery
Reputation
Innovators
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“The fine line separating the delusional from the visionaries amongst us is often
not foresight, but rather hindsight.”
Ben Semel
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1.It is not possible to convert a gasoline engine to a Diesel, using the same transfer line. I did it and it is the most successful Diesel in the world and it was copied by everybody.
2.The combustion for a high speed Diesel is not possible. I started production with a 5000 rpm Diesel with 2000 engines/day on the gasoline engine transfer line.
3. You cannot use a rubber toothed belt to drive the camshaft and the injection pump. I did it and it is the standard solution today.
4.It is not possible to use an aluminum radiator because the corrosion will destroy the engine. I did it and it is the standard solution today.
5.It is not possible to create an “emission free” natural gas burner. I did it. It is in mass production at VIESSMANN. BUDERUS sued VIESSMANN about “emission free” and lost.
Dr. Peter Hofbauer, Chairman and CTO
Attitude matters:
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Response when told it can’t be done “everyone told me….”
Ecomotors (50% increase in engine efficiency)
“It is not because things are difficult that we do not dare, it is because we do not dare that they are difficult.”- Seneca
“Try and fail, but don't fail to try.”- Stephen Kaggwa
“Courage is doing what you're afraid to do. There can be no courage unless you're scared.”- Eddie Rickenbacker
“Only those who dare fail greatly can achieve greatly.”- Robert F. Kennedy
“You will face many defeats in your life, but never let yourself be defeated.”- Maya Angelou
The willingness to fail gives us the freedom to succeed
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The Weather Forecast …
Rate of change will accelerate…
Adaptability, agility are key!
Innovation & entrepreneurship will thrive
Fun, fortunes & failure will be in abundance
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