In this interview, Vinod Khosla shares his life story—from growing up in a modest Indian family, studying at IIT Delhi, and moving to the United States for graduate studies at Carnegie Mellon and Stanford—to founding his first companies, Daisy Systems and Sun Microsystems. He emphasizes that entrepreneurship is driven by a passionate vision rather than profit, describing how Sun was created to change the way engineers designed chips by moving away from centralized, costly computing models. Khosla rejects the traditional venture‑capital focus on financials, describing himself as a "venture assistant" who mentors founders, prioritizing the quality of the team and the societal value of the product. He reflects on the future, citing Ray Kurzweil’s The Age of Spiritual Machines and Richard Dawkins’ The Blind Watchmaker, and predicts a shift to a knowledge‑based economy where production costs plummet, potentially rendering money obsolete. He also muses on humanity’s evolution onto non‑carbon platforms and how the internet, as a new communication channel, may reorganize societies and challenge the nation‑state model. The session concludes with audience questions about his investment criteria, Sun’s technical differentiation, his mentorship style, and the broader impact of technology on evolution and social structures.
Chapters
Thank you, everybody. Apologize for being a little late getting to this conference. I wish I'd been earlier. It seems like a very wonderful and fun conference. I was told to tell you a little bit about myself, and I wasn't quite sure where to start because I grew up in a very different world. In a very different world from where I've ended up. I grew up in India. I came from a family that had no connection to either business or technology or science. My dad was orphaned when he was 3 and joined the Indian Army in the ranks, was shipped off to fight for the British during Second World War in Egypt, but There's something that I think really mattered to me, which was just reading. And I'm sure many of you do that. But what transpired for me when I was probably 15 was reading in the late '60s about the founding of a company called Intel. Craig Barrett, the CEO of Intel, is here. It developed as a role model for me of what I wanted to do. Of course, at that stage of my life, it seemed very, very far away. But many years later, and I'll tell you later that I'm a big fan of risk, I learned hang gliding. And while watching a movie about hang gliding, I saw this quote. This dedication of the movie, and it went something like this: Dedicated to those who dare to dream the dreams and then are foolish enough to try and make those dreams come true. And the operative word here is foolish, because unless you transcend what's traditional— and I think we've talked about this earlier— unless you go past what's reasonable You're not going to get someplace different. Most people do the traditional thing and get to traditional places. There is another way. The other thing that— so I developed very early on a wish to found a company. Even though I had no reasonable basis. In 1976, when I graduated from college in India, from the Indian Institute of Technology in New Delhi, I tried to start a company in New Delhi, a technology company in New Delhi, which was next to impossible. But I didn't give up. I just said, I'll come to the States, and I started to move towards Silicon Valley. Because I had a single purpose. And I couldn't get there directly. I got Carnegie Mellon to pay for me to go to Carnegie Mellon for a master's program, and then I got Stanford to accept me after that, and that led me to the Valley. And I was still in college in my MBA program at Stanford when I started my first company called Daisy. But the thing about entrepreneurship is it's not about business. It's not about investing. It's about having a desire to make a difference. Most good companies, and I suggest you look at every one of them, are built from passion for a vision. You have a vision. When I started my first company, Daisy Systems, I looked at how engineers used to design chips. We said that was silly, and that was— there was 3 of us, we just said, we'll change that way. And it was the first CAD company, really. There were a few others, but none doing quite what Daisy was doing. As soon as we started working on Daisy, we realized that engineers work the wrong way. All engineers, not just silicon engineers. And we started Sun because we wanted to change that. L— I sincerely believe to this day, to achieve anything, you really have to have passion for a vision. Today, I feel sad sometimes to see Silicon Valley become a very mercenary place. It was really, and has been until the last few years, a place for missionaries. People who are using technology for a mission to change something, either the way other people work, the products you can produce, the services you can get. So, and frankly, the other thing I've done in my life is never really worried about having a job. I've always treated work as a hobby. It's always been fun. I've been very fortunate that after Sun, I decided I was actually going to do something different. Venture capital was the furthest thing from my mind. I admire people like Mylan and others who get to design fun stuff. I actually thought I'd probably end up in something like that rather than in technology. But something else sort of crossed my path, which was the notion of coaching and mentoring. And today what I do, even though it's called the Venture Capitalist, I have often been quoted in the press as saying I don't want to be considered a venture capitalist, I'm a venture assistant. I'm a coach and a mentor for entrepreneurs. I'm a coach and a mentor for anybody who wants to change something, and that's always been very important for me. So that's, that's all that's been driving my life for the last few years. But as I look forward from here on, I'm very, very conflicted. You're very fortunate to have a number of very important people here. Last summer, sitting in the Galapagos, I read a book by Ray Kurzweil called The Age of Spiritual Machines. I suggest most of you read it. After you read that book, I went back and read a book I had read years earlier, which was Richard Dawkins' book called The Blind Watchmaker. I don't know how many people have read that book. Quite a few. I'd suggest you read these two books together. I think all of you will live in an extraordinary time. There's some very simple things happening from a business point of view, and I don't believe business is as important as people make it out to be, but what we hear about the new economy is a fundamental transformation of our society. 100 years ago, I like to say, agriculture was the bulk of employment in this country. It still is today in my home country, India. More than 50% of the people work there. 20 or 30 years ago, the industrial age, manufacturing was the bulk of employment in this country. More than 50%. All this is changing, but then there's a new knowledge-based economy, and I see 30 to 50 years from now almost all goods being free. I wonder what the concept of money will mean when the production cost of everything is so low that the concept of wealth doesn't mean anything. The more important thing is this issue that Ray Kurzweil brings up in his book, which is, what is the definition of a human being? I think we've talked about culture a little bit in the previous session. We've talked about how technology is impacting that. I think you in your lifetime will face one of the most interesting challenges. Richard Dawkins, and I think Ray also refers to it, implies that we as evolutionary human beings have reached a point where we are smart enough to invent a platform different than the carbon-based, genetic-based platform that we have evolved on. That in fact, it's a natural course of evolution that human beings within the next 50 years will start to evolve on a different platform. Those are subjects that are more interesting to me today, and I hope I get to work with them. Let me stop here and answer some questions. I only bring up the future because I think all of you should be reading these books and considering them, because the impact will be far greater than the very simplistic notion of technology impacting culture. Let me open it up for questions. Hi, my name is David Bowman and I'm from Oklahoma City.
What do you look for in a business that you are funding?
What do I look for in a business? You might find it surprising that unlike most investors, I haven't looked at the financials of a business in 10 years. I don't care about the financials. So what matters? What matters more than anything else is the people, the team, how good they are. It doesn't mean experience, it doesn't mean having run a company before, it just means how good they are. There's many, many definitions of good. Sometimes it's just how interesting they are. That's most important. The second most important thing to me is that what they propose to do really makes a difference, adds some value. There's a true societal and business value proposition. There's a contribution. I find— and I don't do this for reasons other than the fact that you can't long-term build a viable business without making a real contribution. Most people look at— they can start a business, do an IPO, make some money. Almost always that leads to businesses that are round trips, what I call— they go up and go down. To build a durable business, you really have to focus on the value proposition.
Thanks. Hello, my name is Alex Price. I'm from Reno, Nevada. And you had mentioned earlier that you established Sun because engineers were doing something wrong and you wanted to fix that. I was wondering exactly what the engineers were doing wrong and how Sun is unique in that matter.
In those days, the computing model was very much these centralized computers in glass houses. People didn't have access to them. And technology had come to a point— and I know it may be hard for people here to remember some of that— where it was possible not to have to share many of the things that were shared back then. There were other things that still needed to be shared. Believe it or not, disk drives were still important, still very expensive. And technology had brought together the possibility that you could separate some of these things and build a new computing model. It was a lot more useful model from the point of the engineers. It made a real contribution in how they worked, how much control they had on their computing environment, and the economics worked. So that was really the basis of Sun.
Thank you.
Okay. I was one—
Hi.
Go ahead.
Oh, I'm sorry. I'll take both. I was wondering what the reaction from other venture capitalists has been to your more unique mentorship approach. You know, there's always room for multiple styles of business, and people accept the fact that there are different ways to do things. I happen to have interests that are very, very different than business interests. I've really never considered myself a business person. I'm never worried about it. I've never worried about financials or money or any of the traditional metrics. It's always been a fun and a hobby thing, and people accept that very much. One of the nice things about the Valley is it is such a cross-cultural place that there's a wide acceptance of many, many different things. Last question.
Hi.
Well, everyone's sort of today and throughout this gathering has been playing around with the idea that technology, artificial intelligence, and other such things will be the next step in human evolution. And I was just wondering if anybody— I just couldn't come up with an example of any organism sort of consciously affecting its own evolution, knowing that evolution going forward will mean the end of one particular way of life, and yet still consciously going forward with it?
You know, first, obviously this is a very complex question. I wanna make two statements. First, that there is more than one way in which technology is going to impact our lives. I'll talk about two. Let me answer your specific question on evolution. Vinod Khosla, by saying, if you really are philosophical about it, it is almost irrelevant. You know, today we have chosen to be the superior being on this planet. Why are other animals not able to determine the future of this planet just because we won? This particular species won the evolutionary battle. It got smart enough where it gained enough of a lead. And now we may go back and consider them differently. So evolution is just one simple aspect. Let me tell you the other one that I worry about a lot more. I wouldn't say worry about, muse about. If you think about how the world is organized today and how our society is organized, it came to be quite incidentally because of the communication channels we had many, many years ago. What were our important communication channels? There were rivers, mountain passes, ports. So we have cities, we have states, we have countries, all organized around the communication channel that was the relevant communication channel 500 years ago. The internet is a new communication channel. How will it reorganize society? My 12-year-old daughter reminded me that already there's a site where the only language you can speak, a website on the internet, is Klingon. The internet will allow for a different organization. I wonder whether the notion of nation-states is important. That's just another way. I can think of 6 other ways that our lives will be impacted And why technology will become a driver of society. Let me stop there. Thank you very much.
