Almost all geothermal startups to date have been inconsequential in affecting the energy picture in the US. We need impact at tens or hundreds of GW scale. Hardcore technology development for superhot temperature drilling at any depth and creating artificial reservoirs where none exist is critical to making geothermal energy at relevant scale.

Mazama Energy, a company incubated by Khosla Ventures and backed by us and Gates Frontier, today announced a technologically significant leap for clean energy: the creation of the world’s hottest Enhanced Geothermal System (EGS) at its pilot site in Newberry, Oregon — at an unprecedented bottomhole temperature of 629 °F (331 °C). They expect to reach 750 °F (400 °C) in 2026 which could produce many GWs of clean electricity from this one location. Harnessing these superhot resources will allow Mazama to extract up to 10x more power density, use 75% less water, and drill 80% fewer wells than current approaches.

The technology is globally applicable at any depth and up to 750 °F. This breakthrough sets a new global benchmark for geothermal technology and marks a critical step towards delivering electricity that’s competitive with natural gas, carbon-free baseload power at terawatt scale targeting less than 5 cents per kilowatt-hour (kWh). Creating superhot reservoirs dramatically increases the scale of geothermal energy production — hundreds of gigawatts can be produced this way in the United States alone, and even more globally, and much faster than building nuclear reactors given the urgent need for electricity.

Located within the Cascade Range, Newberry is one of the largest geothermal reservoirs in the United States. At its demonstration site, Mazama’s engineers first completed and stimulated a legacy well which serves as the water injector in the EGS. Mazama then successfully drilled, completed, and stimulated a new, 10,200-foot deviated producer well, within six feet of its planned trajectory, achieving optimal alignment with the injector. Initial circulation tests and diagnostics confirm the creation of a geothermal reservoir with excellent connectivity between the injector and producer wells.

As Dr. John McLennan, Reservoir Management Lead at Utah FORGE, said, “This is a validation of an integrated development program that has successfully interconnected two slightly deviated wells and circulated a representative working fluid — a fulfilment of a vision from nearly fifty years ago to create a full scale EGS reservoir which was initiated by Los Alamos National Laboratory at Fenton Hill, New Mexico. This proof of concept opens the door to deeper and hotter opportunities at Newberry and beyond.”

A New Era for Data Center Energy: Always-On, Anywhere, Carbon-Free

As data centers and AI workloads surge, the world faces an unprecedented demand for continuous, high-density baseload power. Traditional renewables such as solar and wind are intermittent, while natural gas and coal are carbon intensive and limited to locations where fuel can be cost effectively supplied. By developing resources at temperatures of 300–450 °C, Mazama can deliver uninterrupted, 24/7 power from many many locations across the world, allowing siting of datacenters at these locations, regardless of weather or time of day or grid capacity availability. This makes Mazama’s geothermal platform the ideal solution for hyperscale data centers and industrial electrification.

“With geothermal, you get global, round-the-clock energy that is carbon-free, cost-stable, and grid-independent,” said Sriram Vasantharajan, CEO of Mazama Energy. “Our team’s accomplishments expand the frontiers of geothermal power into significantly hotter and more heterogeneous rock regimes than ever before. This milestone paves the way for EGS with much more power per well and true cost parity with fossil fuels.”

Mazama’s team successfully deployed a spectrum of innovative technologies — including directional drilling, high-temperature well construction, and proprietary stimulation — to deliver performance under conditions far beyond traditional oil and gas industry limits. The team operated year-round at a remote, high-altitude site, with zero lost-time incidents.

During the technical demonstration, Mazama achieved:

• Peak drill penetration rates of 100 feet/hour
• Average 76 feet/hour across diverse rock types: granite, basalt, and granodiorite
• Record-breaking bit runs up to 2,760 feet through volcanic formations
• Zero downhole failures of motors or measurement tools
• Well integrity and cement stability at ultra-high temperatures

Thermal Lattice™: Unlocking Superhot Geothermal

At the heart of this success is Mazama’s proprietary Thermal Lattice™ stimulation, which is a patented process, purpose-built for creating geothermal reservoirs at sites previously unavailable for energy production. Building on conventional hydraulic fracturing, Thermal Lattice™ enables complex fracture creation and improved connectivity. The Newberry project also demonstrated the successful use of crosslinked fracturing fluid systems, sliding sleeves, chemical and nano tracers, and fiber-optic diagnostics for real-time fracture mapping and temperature monitoring. This technology can be used to create reservoirs where none existed for lack of permeability, thus dramatically expanding the scope of geothermal energy.

SuperHot 750 °F (400 °C) Wells: The Key Towards Terawatt-Scale Clean Energy

Mazama will next advance to commercial projects with horizontal wells, beginning with a 15 MW pilot and scaling to a 200 MW development project at Newberry. The company will also extend its drilling into the SuperHot Rock regime, leveraging proprietary high-temperature materials, cooling solutions, and stimulation technologies.

Today’s milestone is a blueprint for unlocking baseload, multi-hundred gigawatt-scale carbon-free energy from the Earth’s crust worldwide, essential for what the next generation of AI and cloud infrastructure needs. I could not be more excited for what lies ahead.

Part I: Hiring: the difference between success and failure

Part II: The interview and how to get the most from it and Part III: Other Perspectives is an internal Khosla Ventures document that we don’t generally share outside our portfolio companies because with that information it is easy for candidates to game the interview

The full document addresses how to hire high level positions including, but not exclusively, the CEO: what to look for, how to interview, and pitfalls to avoid in your thinking. While different styles work for different people, I strongly feel that much of what I see stated about hiring and recruiting is either categorically wrong or is incorrectly prioritized for a startup. Here I hope to dispel those misconceptions and provide a roadmap for how to recruit. Talent density is the single most important variable and determinant of success in a startup. Getting this right is the difference between success and failure.

Bear in mind that the diversity of hiring situations is vast. Here I am mostly concerned with building a startup in its formative stages and growth stage, when “figuring it out” and aggressive exploitation of an early position supersedes “maintenance.” I am focused more on senior leadership and CEO hires rather than a task-oriented hire.

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PART I: HIRING: THE DIFFERENCE BETWEEN SUCCESS AND FAILURE

What to look for in an executive is not obvious

Identifying whether a role is for value creation or protection should be the first fulcrum upon which the remainder of your process rests. Most startups should mostly be focused on value creation from the first “S” curve of growth to the addition of new “S” curves that continue the growth as the first S curve starts to peter out.

First identify whether the objective of the open role is value creating, value protecting, figuring out the business strategy or turning the company around. Candidates for value creation need to have a record of taking an idea from inception to successful execution, even if unrelated to the role. Candidates for value protection should have relevant domain expertise related to the value that needs protecting. usually operating chops, but “operating excellence” can be dangerous if not paired with a founder looking for the upside view. Too pragmatic an approach is great in the short run but can be dangerous for the longer run. Figuring-it-out stages need a “less sensible” business mind who is open to experimentation, someone who is less rigid and more trial-and-test oriented. Turnaround CEO hires depend upon the time frame the board feels they have in which to achieve the turnaround. Is it “fix it fast” or “change the fundamentals” to change the trajectory? How big a constraint is cash and runway?

Startups are born with zero value. Executives need to take big swings and big risks to disproportionately create and increase their company’s value. For a value creation role, you want an ambitious risk taker. The best candidates you interview will not need to have had this role previously in their career, but is used to ambiguity, a balance between focus and defocused exploration, risk taking. Learning on the job is ok and first principles, instead of experience based thinking, is critical.

However, after your Series B/C, you now have a business with real customers at a decent scale. The CFO of a later stage company is typically looking to protect the value that has been created. The company is now worth something.You want them taking measured risk , though I don’t personally consider “having taken a company public before” or having “public company experience” critical, even for a CEO or CFO. Those functions are easy to learn and figure out. Raw smarts and street smarts are generally more important than a particular “experience” and boards often get this requirement wrong. The person you are hiring should be thoughtful but not too conservative, with some experience doing exactly what you are asking them to do. A mix of first principles- and experience-based thinking is critical, though I always favor the former over the latter.

To give an example, we invested in an early stage local marketplace startup (think DoorDash, Uber, Thumbtack etc) that had to very consciously manage its margins. They decided that the first executive hire would be the VP of Finance/CFO. Now, traditionally, a VP of Finance is a value protection role, and dangerous unless they are used to mostly formulate the path to long term margins and cash flow management. However, since this was an early stage startup, every executive should be a value creator. The company was choosing between two candidates. The first, which the company was leaning towards, had previously run finance at a local operations marketplace. In some ways, a perfect fit… if the role was a value protection role. The second, had limited experience managing margins since he came from a social media startup, but had built up a large finance team before making a switch into product and growth. If this portfolio company had been later stage, then the first hire would have been the more obvious way to go. But in this case, you want to take the risk on the candidate, who yes, might have no idea how to run finance at a local operations marketplace, but that candidate was a fast learner and immediately suggesting game-changing ideas in their first few interviews and doing far better on all the other traits discussed below.

The questions in a value protection interview, CEO or CFO or other, should focus on assessing whether they already have the necessary experience needed for the role if time to value is limited in the board’s view. The questions in a value creation interview should focus on understanding if they’ve implemented important initiatives at prior roles, and focus less on whether their prior experience lines up with this role. Smarts, first principles thinking, and creativity become more important than experience. But team building and leadership almost always trumps most other skills, especially in a CEO.

I often find boards of startups taking — what I consider to be — less-than-perfect approaches to hiring executives. The focus is often on “experience in the space” of the startup, irrespective of how qualified an individual is to lead a startup, which means they’re optimizing for short term value protection, “continue the strategy” approach instead of realizing that startup businesses go from an MVP “peak” to much bigger mountains to climb and figuring out this path is far more critical than optimizing the current business! Square’s (now Block’s) business went from a $10 hardware dongle to accepting payments to small business payment to small business services to Cash App to lending services. It evolved just like most startup businesses do if they are going to be highly successful. Further, experience in the space/industry of an early stage startup can be a bias when trying to innovate in a company like SpaceX or Rocket Lab, especially in the CEO position. Below I’ve boiled my approach down to 8 main qualities I look for when conducting searches for portfolio companies in need of an executive.

Conducting a search & what to look for

1. Define the Ideal Candidate Through Real Examples

Instead of writing a spec, which generally looks like god in hard to meet form, start with a dozen top resumes that you can annotate. Highlight positive and negative experiences and characteristics to create a spec based on realistic candidates, and then hand these markups, including preferred tradeoffs, to your recruiter. A robust discussion among the interviewing team will be very valuable to agree on the tradeoffs and lead to a better understanding of the requirements. It will avoid misunderstandings months into a search and help better position the company in the candidate’s mind. I find recruiter specs too generic and mostly worthless. Actual annotated resumes are a much better place to start and get the recruiting team on the same page.

Defining the candidate through real examples helps ground the search in reality. For non-CEO hires, I often find that the CEO or hiring manager may ask for a specific type of profile that doesn’t actually solve their needs. They are often better at articulating the problem/need of the business vs creating a candidate profile and more importantly candidate personality, and this helps solve for that.

2. Choose the Right Search Firm

Smaller search firms often have a better network and instinct for entrepreneurial candidates than large firms that are used to staffing F500 companies. I have generally found that their instincts for entrepreneurial talent can be off. Smaller firms are more attuned to the needs of startups and early growth-stage companies (>50% growth) in their more dynamic phases, instead of the “next year is mostly the same as this year” kind of large company business that grows <20% per year. “Experience” and “experience with rapid change” are very different things.

The most important way to downselect further is to look at the network they have developed. Ask them who in their network might be a fit. If they cannot immediately fire off some names without further research that fit your needs, they are probably operating in the wrong network. Lastly, ask them for their latest six searches and who the leading and runner-up candidates were. Judge these profiles for what their client in that search was looking for. Are you impressed with their performance? Each company has different drawing power for great candidates. Did they find candidates above or below each company’s punching weight?

3. The Technical Athlete, Not the “Expert”

My bias is to find someone who hasn’t spent too much time in the industry to which the startup belongs (Really! You don’t want too much of the old way of doing things, and those biases, brought to your approach). Some time in the relevant industry is helpful, but too much “veteran experience” leads to sclerosis and the old way of doing things when a startup is trying to innovate and reinvent the business. For example, when hiring for a medical device business, avoid candidates with too much time in medical devices. But the candidate should have experience working in complex engineering outside of medtech. The latter, coupled with deep technical expertise and just a small dose of medtech experience is likely to be more innovative and faster-moving. A traditional big name retailer hired into a new ecommerce startup with a new strategy for customer acquisition can often be a disaster.

There are very few areas where somebody innovated in an area where they’ve spent their life deeply entrenched. In the 40 years in which I’ve participated in disruptive innovation, I actually can’t think of one example. That’s an unusual kind of statement, and I’ve looked hard. Were space launches disrupted by Airbus, Lockheed and Boeing? No. It was SpaceX and Rocket Lab. Was automotive disrupted by GM or VW or by Waymo and Tesla? Did anyone from traditional media, CBS, NBC, ABC, Fox, Viacom, Holywood, innovate media or did Youtube, Netflix, Twitter, Facebook? All that activity is coming from people who weren’t in the business.

4. The Golden Goose not the Golden Egg

Prioritize finding someone who is the absolute best team builder and a good leader. That will give you the agility to navigate anything from complex engineering problems to an FDA process to evolution of the market. A great team builder who can hire the relevant team, who can think and evolve the mission, and who can execute the job is more valuable than someone with narrow expertise who knows how to execute that particular job in a big company where next year’s strategy is an incremental change from last year’s strategy. The ability to assemble a kick ass team is crucial for startups, as is hiring above the startup’s punching weight. And with the frequency of changing plans in a startup, someone who can constantly adapt and build for the next playbook or “figure it out in an ambiguous market” will pay dividends over someone whose “expertise” and “experience” handles the issue at present. Remember that over four years the biggest difference a senior new hire makes is to build the team i.e., the next 20–100 hires. Does the person understand what it takes to be the size of the company you want to be in 4–5 years or are you optimizing for the short run? If you are, it can’t usually be changed later as the leader will bring in the rest of the team in their current worldview, and the 20–100 folks will be ill equipped for the big vision.

With regard to more technically complex projects, especially one that spans a multitude of different types of engineering, a CEO with a diversity of technical skill is required to make judgment calls, but again, the most valuable skill set will be in building stellar teams in specialized domains. In technology businesses I prefer leaders who understand technology and can direct it instead of “business people”. Imagine if Microsoft had hired the CEO of Ford (as was rumored) instead of Satya Nadella! Would they have good instincts about open source, cloud evolution, AI….

5. Growth Velocity Over Experience

When considering a startup exec, the most crucial factors for me are their quality of thinking and their ability to grow rapidly. It’s challenging to define this in a job specification, but I prioritize finding someone who can manage change, adapt to new situations, and build a great team over domain expertise. I prefer individuals who can quickly learn and grow, rather than those with extensive experience, especially in new and evolving fields. I prefer not to hire twenty year veterans in an area. They often are a distinct disadvantage though exceptions exist. Twenty years of experience ta IBM, Cisco, GE or Pfizer are generally a no-go but “once removed from these companies” and 3–5 years in retraining at a startup they can be quite good if they relearned a lot.

For example, while domain expertise is important for getting a device to FDA approval, I might prioritize someone who demonstrates rapid learning and critical thinking and who can hire the domain expert. Experience can mostly be traded off for these qualities. A candidate who is a great thinker, learner, and team builder is ideal from my point of view. Leadership, goal setting, and understanding the technical space are key, as these are harder to learn from scratch.

I am open to giving someone a chance to grow into the role, even if they may not be the definitive long-term executive. But they’d better be curious, a broad thinker, a first principle thinker, action oriented, take ownership, be a great recruiter and be able to lead with vision… Cultural fit is also important if the goal is to preserve the current team instead of revamping it which is often the key problem in a problem situation. Be honest with yourself.

6. Synthesize Diverse Information

The second important aspect is aligning the expectations of all stakeholders involved but this can be dangerous. The CEO of such a company must integrate feedback and relay it effectively to the relevant team members to both understand each of those stakeholder’s “workflows” and how the tech fits in and solves their problem. They must be a good communicator. A CEO must gain a deep understanding of all involved constituents; integrating and addressing diverse needs is a must. But they should be very discerning about whose opinion to take on what topic and have courage to politely ignore less relevant advice, even from board members. In the early stages, sufficient technical/scientific background is often preferred but not essential to be able to exercise judgment on hard technical/scientific choices. Recognize that some stakeholders want to build a big company and realize a larger vision even at higher risk, others want a lower risk, more pragmatic approach (not my favorite word) to building a safer path to a decent outcome, while others just want to package it for a quick sale. Recognize the differences and founders should engineer the interviewing team for their desired outcome.

7. Prioritize Effectively and Make Trade-offs Wisely

Smart individuals can quickly figure out a thorny issue if they can pare it down into its structural components, prioritize, and make decisions effectively based on the identified fulcrums. Thinking clearly and critically is often more important than experience in new technical areas. What have they done when they had hard choices to make? What bias did they display and what tradeoffs did they make in the past? What did they learn from their mistakes?

8. Raise Funds

For a CEO, even at the development stage, it’s important to find a candidate who can raise funds effectively. This ability can be crucial for sustaining and growing a company. Selling investors, employees, and partners is also a critical skill. Developing and selling a vision is a critical skill if you are trying to build a big company. Presence and optimism matter in this.

Today, we are thrilled to announce that Keith Rabois is coming to Khosla Ventures as a managing director starting this month.

Keith was at Khosla Ventures for six years starting in 2013 where he led several of our marquee investments and then was at Founders Fund where we worked closely with him on several investments.

Keith will be based in Miami, giving us a presence in that growing ecosystem.

Today’s news comes on the heels of us completing our largest fundraise yet at $3.1 billion, beating our expected amount in a harsh environment. The raise is across our Main, Seed and Opportunity funds.

In 2013, when we hired Keith Rabois from Square into Khosla Ventures, I said the following in a blog post:

When I recruited Keith, what I kept asking myself wasn’t whether he’d be a great investor (which he is), but rather whether he’d be sought out by entrepreneurs as a mentor, advisor, and board member. Almost all our reference-checking was done with entrepreneurs (successful and aspiring, seasoned and first-timers), not other investors. The reference checks repeatedly elicited feedback like “He asks the toughest questions”; “He pushes me the most and makes me think”; “He’s always there when I need help”; “Most valuable among all my board members and advisors”; “Doesn’t just tell me what I want to hear”; “Can imagine the future”; “Helps with recruiting”; and on and on. He knows how to advise entrepreneurs on hiring/firing, running teams, managing funding, when/how to control burn rate, and making other tough management decisions in the real environment of startups. He’s a practical hands-on kind of guy in growing companies, and he fits Khosla Ventures’ “venture assistance model” of people who have earned the right to advise entrepreneurs.

All of this still holds true for Keith today. We are more than thrilled to have him back on the team making bold bets early into companies that are impactful to large segments of the GDP and pushing our founders to do the impossible.

To best think about the copyright issues in AI training, we should focus on output similarity and not training methodology. The information humans ingest gets transformed by biological neural networks, categorized, compared, rearranged, and in some cases — new, original thoughts may emerge. The end product is judged for its similarity or differences to the source materials humans learned on. The humans’ knowledge, preferences, and learning are not judged. This is how we should be thinking about AI: less focus on the training, more focus on the output.

To restrict AI from training on copyrighted material would have no precedent in how other forms of intelligence that came before AI, train. There are no authors of copyrighted material that did not learn from copyrighted works, be it in manuscripts, art or music. We routinely talk about the influence of a painter or writer on subsequent painters or writers. They have all learned from their predecessors. But copyrights can still be maintained. Many if not most authors or artists have talked about others that have been inspiration, influence or training materials for them.

All humans train on cumulative learning from many past works by other humans. AI may train on just a larger set of past works and be subject to similar rules and constraints but no more and no different. The data are reworked. The data are not stored internally as parts of a work but as abstractions across multiple works. Learning from the textual domain influences image generation when multimodal learning is used, involving significant transformation of any concept or idea. The human brain does the same. Then it may interpolate among these learnings and most likely also extrapolate beyond that to create its own learning. The same instructions multiple times to AI may result in very different outputs which disproves the notion of “copying”. It is worth noting that in very large language models of AI there is significant “emergent behavior” where AI gains skills like reasoning which was never “programmed” into the AI or even expected. AI extends beyond the platitude of next word prediction and it is becoming increasingly evident. It is telling that multimodal models significantly improve AI’s performance in areas beyond the “mode” (like video, MRI images, graphics, etc.). This is far from parrot-like regurgitation and indistinguishable from original human creation. These capabilities are only getting better and very rapidly so; any law should anticipate the evolution we’ll see in the next few decades.

We can borrow from the precedent established by summarization legality in the context of copyright law. Summarizing a copyrighted work may be considered fair use if the use is transformative. Clearly, the focus is on the final result, not the process. Fair use laws don’t need to change either in the face of AI.

The purpose of protection for copyright materials (and patents) is to increase investment in their production by giving authors an incentive to dedicate time and resources in producing it so society can benefit from more, better works. If society can benefit from more AI produced works then we should encourage it while being fair to human producers. Societal benefit should be the overriding goal. Indeed, this has its roots in the first copyright law enacted under the new US Constitution: The Copyright Act of 1790. Its purpose was to promote the progress of science and useful arts by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries. Fair use, the first sale doctrine, exceptions for libraries and other specific types of uses, and statutory licensing, among others, allow works to be used in ways that achieve the overall goals of the copyright system. Training of AI systems should similarly be allowed as it is in line with the goal of maximizing social benefit. As it considers this paradigm shift from AI, the US Copyright Office should continue to leave room for computers to study, analyze, and learn in the same manner that humans do, to further technological advancements that massively improve society.

Allowing AI to train on copyrighted material would have broad public benefit, for which there is precedent in not just the beginnings of our legal history, but also recent legal history: In Sony Corp. of America v. Universal City Studios, Inc. (“Betamax case”), owners of copyrights to movies and shows broadcast on television wanted to prevent Sony from releasing its Betamax VCR, which would be used by consumers to copy (i.e. record) copyrighted shows. The Court ruled for Sony in that case, and specifically that the particular use of the VCR by consumers to copy shows to watch later was a fair use. Importantly, underpinning the case was the strong public policy consideration of the strong benefit to the public of the technology. That is, when copyright owners tried to use copyright law to block an emerging technology deemed to offer strong public benefit, the technology won. Clearly, certain transformations of material are considered fair use. Large models will unlock opportunities in the economy in every single sector of GDP — adding trillions of dollars in value to our economy and society. Holding back these models would be deleterious.

Lastly, copyright material owners have the right to prevent AI from training on this data by not allowing robots to crawl it with simple commands. Opt out is an option. Indeed, many years ago ck12.org changed its open source license to not allow “derivative works”, including AI models. Such restrictions should be explicitly allowed and is the better way to protect original authors.

AI as an Author and User Liability in AI-Copyright Infringement

In line with the above, and for purposes of legal liability and protection in case of copyright violations, AI should be seen as a tool, not an author. All responsibility should lie with the human that uses the tool and commercializes the output. Humans will often edit AI outputs. The end product, not the process, should be judged in line with the logic of the above argument. And liability and authorship should lie with the person or entity that chooses to commercialize or use the output of the AI.

The race is on. This techno-economic war has been precipitously accelerated by COVID, the war in Ukraine, and the unveiling of the power of AI in the last two years. COVID highlighted the need for supply chain and resource independence. China holds hostage resources ranging from steel and rare earths, EV batteries and our manufacturing supply chain dependency. Meanwhile, the war in Ukraine revealed the danger of energy dependence on other despots. The ascendance of President Xi as the autocrat defining China’s directions for life, and his aggressive foreign policy vision, has changed the race for which value system dominates the planet and why the Western values coalition must win.

While this techno-economic war has many theaters, it is chiefly AI that will decide the winner because of its multiplicative power on labor and expertise. For the winner, it will accelerate GDP growth and allow for a very low cost of sharing its benefits globally. Today, we are experiencing a Cambrian Explosion in AI. It is likely to be a decades-long cycle of innovation and an economic turbocharger for global GDP — from minerals and resource discovery, faster scientific discovery, near free content and entertainment, cheaper labor through robotics, more efficient utilization of transportation through self-driving, better healthcare and education, and much more. Imagine exporting near free AI doctors, entertainers and educators globally! It is exactly why the AI winner will have the option to project global economic benefits and influence.

China is responding. It is why I believe China’s 14th five-year plan, overseen by President Xi, specifically declares their intent to win in AI and 5G wireless. The former will allow for economic power while the latter allows China to surveil all citizens in 100+ countries by controlling their telecommunications networks and TikTok.

What can the West do? Technological leadership is an existential priority worthy of wartime mobilization. The West can help itself by getting a massive influx of highly educated tech talent. A bipartisan US “talent importation bill” separate from the broader, more contentious issue of immigration reform is imperative. Additionally, we should have strong export controls, as well as leverage our venture and technology ecosystem. We must not allow foreign companies to set up offices for AI research in the US. Chinese company Baidu has set up AI research operations in Silicon Valley trying to poach AI talent.

Aggressive AI regulation or calls for slowdown, if enacted, would add further, material, risk that we lose some momentum in this race.

Are the risks of this war and this AI technology worth taking? AI could dramatically and disproportionately alter the economic landscape and offer great power to either the West or to China. I expect that in a mere twenty years, up to 80% of 80% of all economically valuable human functions could be capable of being done with AI. This could eliminate the need for work and bestow great abundance, GDP growth, and productivity growth. It is possible that the West will resist deployment of these technologies due to labor dislocations, while China will use Tiananmen-style tactics to accelerate them. Much has been written about the risks of AI and these risks are real. But it is a far greater risk to let our adversaries have unconstrained power. Imagine Chinese bots surreptitiously individually influencing Western voters with private conversations, free of “alignment constraints” that worry American academics and philosophers. To address these risks, inadvertent and advertent, we must substantially increase our research and investment in safety technologies, but not aggressively regulate AI.

If one is to believe that China will peak in the next decade because of demographics, slowing growth, and a large debt burden, we must believe it will get more desperate to win and be more dangerous in its waning years — the opposite of a Thucydides Trap. This is why we must not be at their mercy while we debate hypothetical scenarios and slow down progress with misprioritized regulation.

We may have to worry about sentient AI destroying humanity but the risk of an asteroid hitting earth is likely larger and the risk of China destroying our system is significantly larger in my opinion.

Is there an alternative to the AI race? Global treaties have been proposed as solutions. AI can be more impactful than nuclear or biowarfare technology but AI alone lacks the verifiability of nuclear and biowarfare technologies when deployed. This makes global treaties unenforceable and a fool’s errand. Are you ready to trust Xi and his Putin-like appendages with the planet’s future?

12–15 entrepreneurs, driven by entrepreneurial energy and passion for a vision, and a little bit of luck, could change the climate crisis into societal transformation

A dozen or so key technologies/entrepreneurs will make a substantial difference, far more than the next hundred efforts. Entrepreneurs will solve these key markets and technologies leading the industries in these areas to a new transition state. They will be the “instigators” that cause others in each industry to follow their lead. Whether these early entrepreneurs, driven by the power of ideas driven by entrepreneurial energy, are successful or they fail, they will affect change by changing conventional wisdom and making the seemingly impossible possible in each of these segments critical to climate and sustainability. Traditional players may come in to scale these approaches. If we are to affect change by 2040 through the mass adoption of these technologies, they will need to be somewhat “proven” by 2025. That is the set of technologies I am immediately concerned with.

Let me demonstrate with a few stories:

1. In 2010 few in the automotive sector took EVs seriously in their planning for the next decade or two. The US Department of Energy forecast almost no fully electric cars by 2035, based on consultation with automotive experts! But this startup with little automotive experience or credibility, Tesla, packaged enough existing technology into a consumer experience that caught the consumer’s imagination and made the whole industry pay attention. A few years later, as their market capitalization climbed and Tesla violated expectations of “not doing it properly per automotive standards” and “going bankrupt”, every major automaker has changed their goals. The change to electric automobiles feels inevitable now as Tesla becomes the most valuable automaker in the world, just a few years past expectations of bankruptcy. The “instigation” worked and is now independent of the fate of the instigator. One person like Elon Musk can change the technology direction, even if it requires no major technology breakthrough. It was a lot of very good engineering, out of the “experts” box thinking and vision for the future.
2. In 2011, a lone academic, Pat Brown, another instigator, decided to try and eliminate all animal husbandry given its use of 30–50% of the planet’s land area and its horrendous greenhouse gas (GHG) and water footprint. Many laughed at the idea that a plant protein, even with a roughly 90% lower GHG and water footprint, could be as tasty to non-vegetarians as beef. Today, less than a decade later this is widely accepted and proven in taste tests, and beef may be slowly on its way out starting with the environmentally-conscious millennial generation because they don’t have to give up any “taste” to be so conscientious. Beef, and animal products in general, are large GHG emitters and will slowly be replaced by products like Impossible Foods. Niche technologies exist to reduce its emission (like grass-fed beef or regenerative agriculture) but they are unlikely to scale globally, cost-effectively, to meet rapidly growing demand as the developing world develops. But the world’s view of plant proteins to replace animal proteins is changing rapidly. It helps because most of the IPCC scenarios for carbon reduction require us to free up land area with new carbon-absorbing planting and plant proteins take substantially less land per pound of product.
3. Lithium-ion batteries for EV’s have been improving at very slow rates. Jagdeep Singh, an EIR at Khosla Ventures, teamed up with a research team at Stanford University to start Quantumscape, a ten-year effort to develop a solid-state battery with a 100% jump in performance at a dramatically lower cost, instead of the myriad of component technologies and incremental performance improvements being attempted by others. This bold attempt at doubling the end-product performance, extending battery lifetime, enhanced safety, and making fast charging at “gas stations” routine, is more of what is needed. It could dramatically accelerate and make cost-effective the trend towards EVs that Tesla started. The field is rich with efforts but it takes a concentrated push by entrepreneurs like Jagdeep Singh to change the world’s trajectory in EVs. I’d guess it is the only 2x better performance battery likely to be in real cars in volume in the next five years. And it is likely sufficient to make EV’s economic enough to accelerate their adoption and the one-two punch for the gas engine. I suspect, beyond Quantumscape, all major battery makers will have to adopt such a bold direction if they are to survive, creating a herd effect towards 2x universal performance.
4. Electric cars and electric trucks powered by renewable electricity are likely solutions, but air transportation by passenger jets needs a liquid fuel compatible with today’s jet fleet if the change is to happen in the next 15–30 years. LanzaJet (a subsidiary of Lanzatech), started in New Zealand a decade ago and partnered by Sean Simpson and Jennifer Holmgren, is building its first pilot plant to produce 100% renewable jet biofuel using gas fermentation technology. The technology is likely to be cost-competitive at scale with today’s jet fuel prices, especially with a little bit of starting help (given the variability of oil prices) as they scale just as solar and wind did before becoming competitive unsubsidized. Though these subsidies for solar and wind still exist, they should not as they are not needed today. There are other jet fuel efforts but it is hard to tell if they will scale and be cost-competitive with LanzaJet. To the best of my knowledge, few are fully operational beyond pilot plants by 2025 or have the scalability of feedstock (old cooking oils don’t scale for example) to achieve global replacement of fossil jet fuel. But we need only one technology to transform air travel, though more competition will help accelerate it.

So what does it take to make a material difference in carbon emissions? A hundred or thousand of these technology/entrepreneur combinations? Surprisingly, even though the GHG problem is hard, a dozen such efforts could accelerate society’s transformation, especially if we think critically about the “right dozen”. Here is my list of these dozen innovation/innovator combinations that we will need to make a large dent in a substantial portion of the emissions in each segment (plenty of niche solutions exist which though good, won’t when scaled and if scaled, will make a material difference): (1) Electric vehicles & Automotive batteries (2) Food & Agriculture, especially meat (3) Low carbon Transportation: Air transportation (jet fuel), shipping (electrofuels, biofuels?) (4) Cement or substitute construction material (5) Low carbon dispatchable electricity generation (fusion, geothermal, nuclear) (6) Public transit (7) Grid storage (long duration battery storage) (8) HVAC (9) Industrial processes (hydrogen?) (10) Fertilizer (Hydrogen) (11) Water (12) Steel. The path to the first third is clearly visible though still subject to risk, as described above. The second third of this dozen seems like we will find plausible solutions though the winning technology is not clearly visible and the last third is not yet clearly visible, at least to me. So here is a quick review of some of the efforts by entrepreneurs trying to make societal transformation happen in the areas beyond EV’s, plant proteins, EV batteries, and jet fuel:

1. Cement — Fortera’s (formerly Calera) cement can reduce cement’s carbon footprint by 60% with a path to 100% (with a switch to electric kilns, something they do because of their lower calcining temperature). But more importantly, this lower carbon cement is actually cheaper to produce in today’s cement factories because it captures the pollutant CO2 and turns it into a valuable product as carbonates, hence lowering the cost of production for a ton of cement. And it can be used as both cementitious materials or as cement as it can match the properties and costs of today’s cement. On the same front of building materials, there are entrepreneurs experimenting with photopolymers as substitutes for cement because they have 7x the strength of cement and hence use far less material and when combined with 3D printed construction technologies can dramatically reduce materials tonnage in construction. And others making residential space 2x more efficient making 300square foot apartments feasible.
2. Low carbon DISPATCHABLE electricity: There are very good attempts at fusion energy, a limitless source that will potentially (if cost-effective) also solve the water, hydrogen, and fertilizer problems. Geothermal is hugely underinvested and it depends upon deep drilling with linear cost per foot as the depth of drilling increases. At ten miles depth, we can get geothermal energy for renewable electricity and renewable heat in most parts of the planet. Unfortunately, there are very few efforts in this critical field to drill very deep. We have a small effort at Quaise Energy. I am particularly excited about a new fusion energy effort we helped start out of the Plasma Fusion Lab at MIT. And Commonwealth Fusion is trying to make it real in the current decade! Though there are other good efforts in fusion energy, I do assign this very risky project a material probability of being a world changer.
3. Public transit could dramatically reduce the need for cars. I am excited about how this could be hugely beneficial for carbon reduction, making public transit substantially more attractive than automobiles, and increasing the quality of life in cities through an effort we are backing. But it is too early to tell if this effort can fundamentally change most assumptions we have about automobiles and public transit and making public transit much more attractive and cost-effective than automobiles. It could cause a dramatic reduction in the number of automobiles produced.
4. Long term grid storage is needed to make solar and wind broadly scalable. Through Breakthrough Energy Ventures I see some high-risk efforts that have the potential to bear fruit.

And that leaves a few technologies I have not seen great efforts at though they may exist in some entrepreneur’s laboratory or their head:

1. Hydrogen for industrial processes: cost is paramount and it may be “mined” potentially but it could help many industrial processes.
2. Beyond animal husbandry, agriculture, and fertilizer in specific need addressing: cheap clean energy may solve this problem; soil microbes to produce nitrogen are also being attempted but I don’t see scale technologies to solve this problem yet. Clean hydrogen may also help. Dairy products, a significant source of GHG at approximately 6.5% of global emissions, are being addressed similarly to plant proteins' approach to replacing animal husbandry.
3. HVAC: This is #1 on the Drawdown list of opportunities and a hard area. For at least one approach that may hold promise, we likely need dramatically better thermoelectrics. Maybe AI approaches combined with quantum computing for radical materials design will help design better thermoelectrics, thermionics, or something completely new. But we need a very large improvement in efficiency.
4. Water: There is a thermodynamics limit to energy efficiency for desalinating saltwater but cheap renewable energy could solve this problem.
5. Steel: Clever technologies to remove oxygen bound to the iron is needed. What seems more promising to me is using 90% less steel by having each pound of steel go 10x further in cars (120k miles per year instead of today’s 12k miles) or to need 90% less steel through cars that don’t crash or new materials like stronger polymers for construction or cheaper composites.
6. Carbon capture including direct air capture is being worked on and it is too early to exercise judgment on feasibility at less than $30–50/ton capture price.
7. Other material contributors: Plastics, fibers, recycling are all candidates and have domain-specific solutions but likely not global, rapid solutions from one entrepreneur-driven company. In these areas, there may be multiple solutions with multiple entrepreneurs. I don’t consider wind and solar as they are already cost-effective and have scaled beyond most expectations. But they need long term grid storage to be broadly scalable, in my view.

There are many other very good business efforts on environmental technologies like View Glass or LED lighting for building efficiency or microbes or regenerative agriculture to reduce nitrogen need, perennial crops, microgrids/grid technology, or net-zero buildings, etc. There are too many to recount. They make business sense and environmental sense but won’t make a big enough dent in global emissions in the next twenty-five years, at least at a few % or more of global emissions level. The book Drawdown covers many of the most important areas to affect climate risk but only a few can make a big enough (in my view) difference and change our societal trajectory. I may even be wrong on some of these judgment calls as they are hard to predict and orthogonal solutions that may emerge to replace current needs as we envision them with surprising substitutes. For example, the kind of need for EV’s may go down dramatically with the on-demand, point to point public transit I envision. Shipping’s explosion may decline because of localized manufacturing enabled by new robotic AI technology and other technologies like 3D printing. There are others that are possible candidates but hard to forecast today. I am sure I have missed a few others but my main point is it takes only a few entrepreneurs to change the world.

I invite you to join this group. It only needs a handful of instigators and technologists to make the changes society needs, not a little bit of effort by everybody. In my paper Reinventing Societal Infrastructure, I talk about the technology soup that allows for greater levels of innovation by mixing different axes of innovation, potentially allowing for more progress on sustainability. Everybody can help by being part of the cultural change of values that will enhance our path and accelerate solutions by creating demand. Willingness to pay the green premium as these technologies get to scale (as solar and wind have done already; but they need long term grid storage to make them scale sufficiently) also helps tremendously. I am hopeful for the millennial generation that has a much stronger commitment to climate risk and sustainability and a propensity for “movements” to affect change.

If technology gets these solutions to unsubsidized market competitiveness we will have a solution. Even if these technologies start with a need for a “green premium” to enter the market because of a lack of unsubsidized market competitiveness, at least four other factors could help progress in very significant ways: (1) accelerate the progress of technologies through increased incentives. (2) Technology is likely necessary but not sufficient. Policy creates huge incentives for the right or wrong path to reduce GHG emissions. Everybody can affect policy through the right actions or activism. (3) And more Greta Thunberg’s of the world is “every person” multiplied. And the cultural change in values helps tremendously. Movements matter. (4) Creating perceived financial or climate risk through future potential legislation and selective takeaways of the economics of the asset also help. Coal plants stopped receiving investment because of the risk of any new investments in coal with 40–50 years life and “time of day pricing” letting solar steal some of the most profitable intraday prices away from coal and hurt coal plant economics. It is possible, even likely over the next 15–30 years the same might happen to natural gas-based power and any investor in those asset owners ends up with stranded assets. Lesson: business models are also subject to innovation. But most of all it takes a few entrepreneurs with passion for a vision and a government willing to help get new options across the valley of death through policy.

A word on research: A few technology-based entrepreneurs are instigators, but they are not likely to become instigators without much of the research that goes on in our research laboratories. We need a lot more of both fundamental and applied research for this and other reasons. And coupling breakthrough research with “instigator” entrepreneurs (researcher and instigators can be the same person) can make this research truly effective.

Conventional wisdom believes that most such change is done by entities with power and knowledge in their industries. Unfortunately, I have not seen one large technology-driven societal change in my forty-year career driven by “experts who know” or “larger, non-founder driven” entities because of their reliance on studies, consulting reports, projections to “extrapolate the past instead of inventing the future they want”. GE, Siemens, the oil companies, the automotive companies or cement companies or food companies will not instigate the future we want but they can follow and help scale it and adopt it. Hence I am calling all entrepreneurs and instigators to come join the effort to solve this urgent problem! Global Shipping is currently 2–3% global emissions, but projections have it getting to 10–17% by 2050. Air conditioning is 10% global electricity use but is projected to triple by 2050 so we need more than 3x GHG reduction per unit to stay even and a 100% reduction to save the planet from potentially severe consequences. Good is not good enough. Great is barely acceptable in this arena. It takes those who have the fire to impact these issues, to think differently about problem-solving, and those who take improbable risks.

The COVID-19 pandemic is likely to be one of the biggest disruptions we will face in some time.

In this difficult environment, we have found a commonality that makes us incredibly proud to be associated with our portfolio startups: the desire to help the nation and the world combat the pandemic. As mission-driven entities, we’re seeing our companies trade-off other priorities for this urgent societal need in a time when resources are scarce and it is not always easy to do “the right thing”. To be sure, some view it as a business opportunity. Many in our portfolio are working on deep tech, and are particularly well suited to help with critical needs like testing and treatment options. There are also efforts in managing the well being of those on the front lines, expanding access to medical care, and even fighting loneliness during periods of forced isolation among other needs. This breadth of effort is both admirable and astonishing and the short time periods surprising.

Some examples of current efforts (in alphabetical order) include:

• Alivecor: FDA cleared QT duration measurement service for COVID medications that have a QT prolongation side effect (eg: Hydroxychloroquine, Azithromycin for example). Partnership with Mayo Clinic to diagnose long QT and build advanced algorithmic measurement of QT.
• Augmenta: Searching for neutralizing therapeutic antibodies in patients who have recovered. They are scaling into a therapeutic which they hope to dose into patients by fall.
• Caption Health: Deploying Caption AI to enable more frontline healthcare providers to quickly and accurately perform ultrasound echo exams, reducing personnel exposure and stretching limited resources, in the absence of skilled ultrasound technicians.
• Clear Labs: Developing an automated, very low cost, and fast next-generation sequencing platform for deep-screening of COVID-19, which can simultaneously screen for the infection and generate deep genomic information that enables differentiating various RNA viruses, identifying infection clusters and transmission events, monitoring the evolution of the virus, and identifying cases of co-infections. FDA filing is expected in April.
• Color: Launching a high-capacity COVID-19 testing lab and will open-source its design and protocols.
• Curai: AI-based Virtual Primary Care and prescription of COVID testing to scale front end access to healthcare. Helps offload physicians who must decide whether a COVID test is warranted or some other urgent condition exists. This is part of their broad free primary care offering.
• E25Bio: Makes direct antigen rapid tests for at-home use at a very affordable cost. All you need is your phone for the test, very much like a pregnancy test. They expect 100,000 tests per day in the next 30 days, subject to FDA approval.
• Fundbox: Building a coalition of companies to #paytoday, encouraging large enterprises + government to pay SMBs outstanding receivables to alleviate financial burden.
• Genalyte: A 15min serology test — IgG and IgM to multiple CoV proteins in April. No FDA clearance is needed on the already FDA approved Maverick instrument with this lab-developed test.
• Ginger: Offering U.S.-based health systems free on-demand behavioral health coaching for their frontline healthcare workers.
• Inflammatix: A host-response (mRNA) blood test run on COVID-19 positive patients to determine if hospitalization is needed and to decrease unnecessary admissions. The timeline is a few months if the system shows efficacy as expected in further trials. No such test exists to manage hospital capacity to our knowledge.
• Luminostics: Developing, towards FDA EUA, a 15-minute high-sensitivity point-of-care test with smartphone readout for the parallel detection of SARS-CoV-2 virus from respiratory samples (to diagnose active COVID-19 infection) and anti-SARS-CoV-2 IgG/IgM antibodies from finger-stick blood (to quantitatively test for COVID-19 immunity).
• Ontera: Building a molecular diagnostics point of care platform to conduct both nucleic acid and serology testing for both bacterial and viral pathogens using nanopore technology. The low-cost platform is expected by the fall.
• Opentrons: An eight robot configuration for a fully automated qPCR testing pipeline. An eight robot $100k configuration can do 2400 tests/day fully automated. Opentrons has deployed 60+ robots to fight COVID-19 in the last 3 weeks, many of which have already started testing live patients under emergency use authorization.
• Prellis: Using their organ growth technology, Prellis constructs human lymph nodes outside of the body and can vaccinate them to rapidly isolate human antibodies against emerging pathogens for the direct treatment of patients. Because it is a fully human antibody are there are minimal reported side effects therein a clinical trial with this antibody would happen extremely fast.
• Replika: Teamed up with clinical psychologists from UC Berkeley to come up with more activities that can help deal with loneliness, financial uncertainty, homeschooling (for teens), sickness, caring for your family, having to work at crowded places (ie. grocery stores) and co-quarantining.
• Totemic: Developing a wireless home fall detection and motion monitoring service, has launched a COVID-19 telephone concierge line, Ask Koko, which empowers older adults with the local services and tools they need to remain safely at home.
• Viome: Applied to FDA for the only at-home collection COVID-19 test based on stool. Research shows the COVID virus shows up in stool even though it shows negative in a throat swab.

Many others are also helping in numerous other ways. Oscar is offering a risk assessment tool for non-members. Forward is offering care for non-members for COVID-19. Zocdoc is helping non-COVID-19 patients to connect to telemedicine. Carrot is offering its Pivot tobacco cessation app at no cost to all smokers to help people who smoke get started on a path to reducing or quitting to reduce risks of COVID-19. Creator has built an open-source design for a food Transfer Chamber to protect retail and delivery workers from virus spread. The chamber uses a positive pressure system combined with a self-sanitizing conveyor. Homebase is compiling and sharing data on how closures of businesses are impacting local communities and hourly workers. Gen1e is in the early stages of development of a drug for ARDS (acute respiratory distress syndrome), the primary cause of death from COVID-19. Model No, a related company, is working directly with Stanford and UCSF to develop an Aerosol Box. Based off a design from Taiwanese doctor Hsien Yung Lai, it’s a clear plastic box that can be placed over a patient when intubated. This is a high-risk procedure for the doctor, for they are very likely to be exposed directly with droplets to their face, and the preferred full-ventilated suits for protection are in very short supply.

As always in startup land, not all of these will work, but some will and could have a significant impact. The nature of startups allows them to try avenues that would take too long in established companies, as they are more able to quickly pivot and shift resources in new directions, which will be especially critical in the pandemic landscape. We’re proud of our companies’ efforts in combating this pandemic, and celebrate all startups helping in this effort, be they in our portfolio or not. These are the companies in our portfolio but many more startups outside our portfolio are also trying to contribute in significant ways.

We strongly believe the startup community can bring a unique view and skillset to ameliorating this pandemic, and in this time of national crisis, it is important to bring to bear the best each sector of society has to offer.

*This is by no means a comprehensive list, merely a quick snapshot of companies, and we apologize for any omissions of projects in our portfolio that are also contributing to the effort. In this list we prioritized companies that can have an impact within 2020.

These are some of the questions that I am most frequently asked. I share my answers below and here on this episode of Harry Stebbings’ podcast.

Harry Stebbings:

This is the 20 minute VC with me, Harry Stebbings. I’ve wanted to do this episode ever since I started the show over five years ago. He’s a legend of the industry and a true pioneer and I couldn’t be more honored to welcome Vinod Khosla to the show today. Vinod is the founder at Khosla Ventures, one of the Valley’s most renowned firms of the last decade with a portfolio including the likes of Square, Affirm, DoorDash, Impossible Foods and Opendoor, just to name a few.

Vinod started his career as a founder, founding Daisy Systems, a company that went on to IPO. Then in 1982 Vinod founded Sun Microsystems, where he pioneered open systems and commercial risk processes. In 1986 Vinod then joined his longtime friend John Doerr and became a general partner at Kleiner Perkins or KPCB, where he helped incubate Juniper Networks and help transform the telecommunications business with Cerent Corporation, which was ultimately acquired by Cisco Systems in 1999 for $7.2 billion.

So now I’m very, very honored to hand it over to Vinod Khosla, founder at Khosla Ventures.

Vinod, what many do not know is that when I started 20VC four years ago, I wrote a list of three people that I most wanted to have on this show and your name was absolutely one of them. So I couldn’t be more excited to have you on the show today.

Vinod Khosla:

Well, it’s exciting to be here. I was wondering what took you 2,800 episodes to get here.

Harry Stebbings:

Vinod, I’m going to be honest. I wanted to ensure that A, we had a substantial enough audience and I wanted to ensure that you would do it. And so I’m thrilled that you have agreed to do it, but I do want to start today on a little bit of context about you. So tell me, how did you make your way into the wonderful world of venture?

Vinod Khosla:

Well, I was 15 or 16. I’m 65 now, but I was 15 when I first read about Andy Grove, a Hungarian immigrant moving to the US and starting a company and I fell in love with that idea. I’d never known anybody in business, anybody in technology, didn’t own a TV or a telephone at home, but fell in love with the idea. And interestingly, I read about it in the pre-internet days in a two year old issue of Electronic Engineering Times and it’s been my mission since to really be and only work with entrepreneurs in the entrepreneurial world.

Harry Stebbings:

When it comes to working with those founders and venture assistance, what does this really mean to you and how does this differ from other funds?

Vinod Khosla:

There’s investing, which most firms do and they make good, sensible decisions about rates of return and financial projection. Our firm and I am much more focused on how you build a company, not on returns. If we build the big successful company, then the returns take care of itself. So returns come second. Building something of significance comes first. I think that’s absolutely key.

The other thing is that attitude with which we approach companies. Our motto, which you may have heard, is bold, early and impactful, and all those matter, mostly high technical risks that most others are afraid to take with really large impact. So impact really matters to us as a firm because of our value system.

Harry Stebbings:

With that kind of venture assistance, the companies that you like to work with being those hugely impactful companies, how does that mean you spend your time and allocate your day to help the best entrepreneurs that you do?

Vinod Khosla:

Well, let me go back first to what venture assistance for us means. We have a brilliant engineer or technologist or somebody with a business model insight that’s unique and different. They usually are fairly uni-dimensional, really how they manage people or run marketing or being a CFO. So entrepreneurs really need help in directions that they’re not familiar with themselves, where their background isn’t. They usually fail not because of what they are strong at, but what they might be weak at. And that’s what venture assistance means, surrounding them with the support they need. And it’s fairly unique about us, but when we started the firm in 2004, our tagline said, venture assistance, and that’s still the first thing we focus on. How can we help an entrepreneur build a much bigger company? From my point of view, a few small nudges left or right can change the trajectory of a company by hundreds of percent. Happens more often than not. A bias in a decision left or right, a little more conservative, a little more aggressive, when to be aggressive, when to be conservative in a startup.

Those are things that entrepreneurs usually aren’t familiar with, definitely not first time entrepreneurs, and that’s where they need the most help to turn a good idea into a great idea and to evolve it over time. These things are very counterintuitive, very different than what business school might teach you. They’re very unusual. Where does that cause me to spend my time? The single most important thing I spend time on, probably more than any other single thing in my calendar, is helping our companies recruit a great team. It’s unusual for me to not have hundreds of resumes sitting on my desk. Hundreds that I’ve sorted through personally, looked around on LinkedIn, interviewed these people. I probably interview eight to 10 people a week, even now, mostly for our companies.

Then comes challenging them about their conventional wisdom. The key in a startup is to remove risk and challenge them on what they are not thinking about, where risks might lie, hidden obstacles may lie. That’s an important part of venture assistance and that’s where I spend my time. So doing a session where instead of sitting in a board meeting where you’re polite with everybody, just working one-on-one, challenging a team to think about the hard parts of their business, where things may fail, where they might find extra leverage or build a much bigger company if they steered left a little bit. These are nuanced questions and very seldom do people help entrepreneurs with these.

Harry Stebbings:

I have a couple of things to unpack from that. You mentioned those core questions where you can really add hundreds of percent to a business with answering them. Entrepreneurs always get a lot of advice though. How do you advise entrepreneurs to determine which advice to take versus which not to, given that they receive so much advice today?

Vinod Khosla:

So I often say, whose advice to take on what topic is the single most difficult thing an entrepreneur does. Because there’s plenty of advice. The number of people qualified to advise an entrepreneur is really, really limited. In fact, I would suggest that most board members, just because they went to business school and joined a venture firm, are not qualified to advise an entrepreneur. They’re not qualified to challenge an entrepreneur. They’re not even qualified to help them judge who they need on the team. So that is a very, very difficult question to answer.

Harry Stebbings:

The other element you mentioned was about risk and risk is a fascinating topic for me. How do you think about acceptable versus unacceptable risk within companies?

Vinod Khosla:

One of the problems I have in many startups that have initial traction is you suddenly have something to lose. And most board members advise the startups to reduce risk in a way where you can increase the probability of success of the startups, but make the consequences of that success inconsequential. So there’s a big difference between going for a much bigger play or a safer more conservative play. We tend to do the first, which is go for the bigger vision. It’s perfectly reasonable to go build reliable, safe companies that have good financial returns, but that’s not building a large business. And we are very clear on what we do and we don’t think it’s bad to do the other thing, but our mission is very, very clear.

So risk is absolutely one of those things. You have to decide what profile you want. Then comes the issue of there’s different kinds of risks. If you raise a lot more money, you might reduce other risks. If you have a small amount of money, you might increase say a product completion risk. If you spend more time developing a product, you reduce your engineering risk or product risk, but you might increase market risk. There’s always trade offs. So risk management is the other hard thing an entrepreneur does.

Harry Stebbings:

You mentioned time there how raising more money can allow you to execute faster or whatever that may be, but often time is cited as the main reason that kills startups. What are some of those really tough situations that you think is super helpful for you to advise founders on and also, do you agree that time is the biggest killer of startups?

Vinod Khosla:

Time is a bigger killer, but you can increase the time you’ll have. I always say, if you survive long enough you might get lucky, or try and survive long enough to get lucky. So being careful about things like burn rate matter. Sometimes you just have to try different things. One of the things I tell entrepreneurs in general is don’t make a plan but plan to plan. Most startups that are big successes went through a number of iterations in their business plan. Take something like Square. What it is today wasn’t part of the plan when we originally invested. It was a hardware dongle. So one has to evolve their plan as they learn. And evolution of a plan is a powerful force in every area in which it operates and good entrepreneurs use it very, very well.

I think that’s a key part of being a good entrepreneur, evolving your plans, managing your burn rate, managing risk of various sorts, yet taking the right kinds of risks to go for the bigger vision or the bolder vision, if that’s what your goal is.

Harry Stebbings:

Why do startups innovate so well, while bigger companies or incumbents maybe don’t? Why do you think that is?

Vinod Khosla:

About a decade ago I looked at all the large innovations that have really been material in society, not the incremental innovation. And incremental innovation would be Intel going from say a 16 nanometers semiconductor process, to 10 nanometers or below. Those are incremental. But talk about recreating media, Fox and CBS didn’t do that. It was YouTube and Twitter and Facebook that reinvented media. Pharmaceuticals weren’t reinvented by the pharmaceutical companies. A startup called Genentech in the ’80s did biotechnology. Space wasn’t reinvented by Lockheed or Boeing, it was reinvented by people like SpaceX and Rocket Labs, one of our companies. In the case of automotive, you’d think VW or GM would do interesting things, it was Tesla and Waymo that did the most radical things in automotive, and changed the trajectory of automotive. So I was hard pressed over 40 years to find one area where a large company was willing to take the risk and innovate in a big way.

If there’s too large a step, there’s plenty of experts who tell you why radically new things won’t work. I will say experts are experts in a previous version of the world, not the world you’re trying to create. And so relying on experts leads to conservatism and incrementalism. And that’s a perfectly good thing for a General Motors, or a General Electric to do. It’s not how startups build big companies like Google, or Facebook, or pick your favorite Guardant Health, or Impossible Foods, or Square, or Stripe. I could go on.

Nobody in the financial services industry innovated in finance. It was Square, Stripe, Affirm, Fundbox. So big companies don’t take the large risk. They also, when they run into problems, they avoid the problems, or change direction, or get conservative, or move on to something different. A startup has to survive, and survival, which is necessity, this is the mother of invention as you’ve heard before. It’s what works really, really well. So that’s what is so great about the startup world. Almost all large innovations I could think of over the last 40 years came from startups. One came in the last 40 years from a big company.

Harry Stebbings:

When we look at tolerance of failure in Silicon Valley, you mentioned a difference of yours being the willingness to take such technical risks. And I’ve absolutely seen it in some of your investments and across the portfolio. I guess my question is, why has tolerance of failure gone down in Silicon Valley, and do you agree that maybe it has?

Vinod Khosla:

Well, I always say my willingness to fail is what has allowed me to succeed. And not being embarrassed about large failures I’ve had, has given me the courage to keep going. But Silicon Valley, which was mostly in the ’80s and ’90s about building companies, became a financial tool in investment class. Then you had financial investors, who then have to spreadsheet things out. We don’t allow IRR calculations in our firm when making an investment, which is pretty unusual for an investment firm. We never look at them. We don’t focus on them, because we want to take the large risk, which you couldn’t put numbers in a spreadsheet, and if you did, they’d look ridiculous. But when people take a financial investing approach to venture, you end up with much less risk, and much more pragmatic and sensible decisions, but they exclude the really large breakthrough ideas.

Harry Stebbings:

Do values fundamentally matter in startups? And a subsequent question, do VCs really care about the values in general, given now it’s an institutional asset class unlike any other financial product?

Vinod Khosla:

This is a hard thing, and Ben Horowitz recently wrote a very good book on the values in venture firms and startups. I would say two things matter, and they’re different. One is the mission for a company. Many startups have that, many don’t. I’d say 50/50. And I always tell entrepreneurs be obstinate about your vision, be flexible about your tactics. But that doesn’t speak to the values a company has. Values is focusing on, caring about impact, whether it’s positive or negative. And I think very few investment firms focus on that, we do. We will not make an investment that’s negative for society. We might make some neutral ones. And there’s real situations where we passed on hundreds of millions of dollars of profit, because we didn’t want to do the wrong thing. Because it conflicted with our values. Maybe another day we can go into that. That’s fairly rare, but we are very, very proud that we will not make negative things.

Even when we were doing Cleantech, we were very focused on values. When we did Impossible, we were very clear we would pass up on profit and not sell Impossible to a food company that might divert its mission. For example, we’ve chosen not to invest in some areas like gambling or encouraging drinking. That was a recent example that came up. Or debt collection, things like that. We basically don’t invest in advertising tools now, which I think are being used fairly negatively. Just to cite some very specific examples, and a broad range of them. And the only time you can test your values is when there’s something you have to give up to practice your values. And I think we’ve been tested, and we’re very proud of what we’ve done internally on that front.

Harry Stebbings:

Can I ask for your advice, actually? I think a lot of people go into venture with the value-driven mindset that you have, and the optimism of making the world a better place through technology. And then it almost gets beaten out of them with the financial nature of the asset class, the pressure of LPs, and the inherent pressure of constantly climbing the partner ladder to GP in your own firm and having the best returns in the industry. What would you advise me starting my career in terms of retaining those values of the goodness the technology can bring?

Vinod Khosla:

Well, what I’d say to leaders in firms, be clear what your values are, be explicit about them, and stick with them when the going gets hard, when it’s hard to practice those values. If you’re a young VC just entering the business, it’s easy to move around between firms and pick the set of values you believe in or care about. And to be fair, I feel like the better you do, the more luxury you have to indulge in your values, and I’ll call it an indulgence, because you get the privilege or indulgence to do it. But I do think both young people in VC, firm leaders, or investment firm leaders can decide what to do and what not to do. And I think a good example at a very large scale is BlackRock. Their value system has been very clear, very explicit, and very vocal. And I appreciate things like that from other firms.

Harry Stebbings:

I think one really interesting thing that a lot of founders struggle with, especially first time founders understandably, is how do they run an effective board meeting? Having sat through many boards both on the operator and the investor side of the table, how do you advise founders on running a truly effective board meeting today, if they’re not?

Vinod Khosla:

The first question you have to ask as a founder is, what’s the purpose of a board meeting? If you have a perfunctory board, a set of investors who just want reports, you walk through your slides, but that’s really not helpful to a founder. To me the right way is send all the materials out, have everybody do their homework, and if they have questions they can ask questions. If they haven’t done their homework, read the materials, then they have no right to take up other people’s time and ask questions. What’s really useful to a founder if you have a good board, is focus on the two or three questions that you most need feedback on. In private company boards, I don’t think the role of a board is as much fiduciary as it is in public companies, it’s much more advisory.

So ask the board the questions you’re most struggling with, the questions where you’re most uncertain, where you want a different point of view. And if you have a good board and most boards aren’t very good, that’s what you should do. If your board isn’t very good, fire your board members and get a good board. A board that won’t be just hypocritically polite with you. They can be brutally honest, hopefully in a nice way, but yet challenge your thinking, give you different points of view, address the concerns or risks or opportunities you’re struggling with. I personally try and do this one-on-one with founders. I don’t go to a lot of board meetings now. I focus on this, because I find most boards don’t operate this way, and are a waste of time for the founders.

Harry Stebbings:

Why do you think most boards aren’t as effective as they should be, and as optimal for the founders as they should be? What can we do to make them better?

Vinod Khosla:

Well, for starters, entrepreneurship is really hard. There’s a presentation on our website called The Entrepreneurial Roller Coaster, where the highs are high and the lows are low. Any entrepreneur knows this. And I first wrote this title in this presentation in 1986. It’s stayed constant mostly since then. If you haven’t gone through this roller coaster, it’s very easy as a board member to give advice that’s perfunctory, sounds like good business school advice, but isn’t based on the reality of how hard it is to be a founder. How stressful, how taxing, how conflicting it is. If you haven’t gone through that, you’ve not earned the right to advise an entrepreneur in my view. And I don’t think most board members have gone through it. The other thing that’s important is, your goals as a founder may not align with your board’s. If they’re looking for a good 3x on their money as quickly as possible, that may be very different than the entity you’re trying to build, the mission you’re on. And unless those things align, you as a founder will get the wrong advice.

Harry Stebbings:

Do you think risk is actually aligned between founders and VCs? And what I mean by that is, VCs have large portfolios, and it’s in their interest for you to take as much risk as possible, to get the huge outcome that they need to make fund returns work. But then for the founder, a 400 million exit is a fantastic exit in anyone’s books and will make them very financially comfortable. Do you think that actually risk is aligned between founders and VCs?

Vinod Khosla:

As a founder, I always say in this presentation I wrote in 1986 there’s a slide that says, “Know why you want to be a founder.” And by the way, in those days, slides were overhead projections on acetate. But know why you want to be a founder. You could be a founder because you want to make lots of money. You could be a founder because you have a mission you really care about. It’s the kind of founder we like. Like Pat Brown, at Impossible Foods, or Jack Dorsey at Square, or Patrick Collison and John Collison at Stripe. People with a mission and not in a hurry to get out. But you could also want to start a company just because you want to work with friends, and not have a boss and to have a lower stress environment. There’s lots of good valid reasons to be a founder. And as a founder you have to find a VC that matches your goals.

If you’re looking for a quick exit, great. Find somebody who wants that. If you’re looking to build a mission, find somebody who’s aligned with that. So it is important founders pick not just names, but VCs who really care about what they care about. We were just looking at something in an area that’s of extreme interest to us, the brain. It was clear the founder had a 10, 15, 20 year vision of what they wanted to build. And that was perfectly aligned with what we want to do, which is very much what Impossible Foods wants to do. That works great. But if somebody talks about exits or IPOs in the first few slides, I almost never go beyond that. I say, “If that’s your focus, we are not a good fit for you, the founder.”

Harry Stebbings:

We’ve spoken a lot about founders, but there’s also the difference in certain cases between founders and CEOs. How do you think about the founder versus CEO, and what’s your approach to that?

Vinod Khosla:

So almost always, if a founder grows to be a good CEO, they will build a bigger, better company. What’s needed to lead a company is vision and passion and unreasonableness about your mission. Most managers are too pragmatic to be unreasonable, to be visionary, to be bold enough. So whenever possible, you want a founder to lead the company. Now, that only happens if the founders who need all these other functions, good management, good process, taking the right risks, hiring the right teams, leading the right teams, some founders will do it naturally, but often the best founders hire the people who can do these things that they don’t understand.

So the quality of hiring is the most important thing. I always say the team you build is the company you build, not the business plan you make. So some founders do this really, really well. Patrick Collison, college dropout, very, very young, inexperienced, built an incredible team. But Jack Dorsey did that at Square, both turned out great companies. I wrote a blog a long time ago about how to avoid needing a CEO as a founder, this was in TechCrunch probably 8-10 years ago. Then I wrote a blog on what to do if you need a CEO if you haven’t grown as much.

Larry and Sergey at Google needed a CEO, got a CEO, then Larry came back in and then he’s moved on to other things. That’s also an acceptable sequence, but be clear about why you’re starting a company and what you want to achieve and line up your decisions about this. But almost certainly, great founders have great vision, passion, unreasonableness, more ambition than most practical people would accept as possible or doable. And those are wonderful people to work with. They’re really, really exciting, sometimes hard, but really, really exciting. If you get the right board and advisors who challenge you as you go on this mission, that’s the right combination.

Harry Stebbings:

I do want to move into my favorite elements of any episode, being the quick fire round. So I say the short statements and then you give me your immediate thoughts in about 60 seconds or less.

What is the favorite book and why? I need to read more this year. What would you recommend?

Vinod Khosla:

I just put out my book recommendations from 2019, so I’ll mention there were 20 plus books on it. It’s on Medium.com, but my favorite technical book is Life On the Edge, which is about quantum biology. My favorite economics book is Third Pillar, which is about the need for community in capitalism, and how politics, capitalists and community need to play together. Uninhabited Earth, about the climate crisis, something I’ve been passionate about for a long time. Loonshots, about the culture of Silicon Valley, and my all time favorite is Lying by Sam Harris. This is where you really test yourself on whether you’re honest, and I always say we prefer to be brutally honest than hypocritically polite. So my favorite all time book, Lying by Sam Harris.

Harry Stebbings:

I’m adding that as a reading list. I haven’t read it yet. My next one is, on appearance, you’ve achieved all one could want to achieve both as an operator and as a venture investor. What motivates you today?

Vinod Khosla:

I want to have fun. So I turned 65 today and I have a plan for the next 20 years. I wrote it up about two years ago in a document on Medium called Reinventing Societal Infrastructure with Technology. There was a video I gave at our CEO summit called Awesome What All of You Are Doing. It’s 100 companies doing very, very cool and highly impactful technology in our portfolio and companies that most venture firms would be afraid to invest in.

So I didn’t include successes like Square or Stripe or Nutanix in that. I only covered the companies other venture firms would be afraid to invest in. It’s an awesome list. I couldn’t even reduce it below 100, that’s what’s really cool about it. It’s from Rocket Lab to Impossible Foods to micro bots doing surgery to 3D printing houses to doing free primary care through AI. All kinds of cool stuff in a wide range of technology.

Personally, if I can have an impact, it’s the most valuable thing, most rewarding thing I can do, and I’m always curious to learn about new technologies. I’m a techie nerd at heart.

Harry Stebbings:

What motto or quote do you most frequently revert back to and why does it hold resonance with you?

Vinod Khosla:

“Skeptics never do the impossible.” There’s real doers, which are entrepreneurs and then pontificators, experts, gurus that always say why things can’t be done. I always say, why not? Instead of why it can’t be done. If there’s a 90% chance of failure and there’s a 10% chance of changing the world, that’s a pretty good deal. So go for the 10%. Don’t be scared by the 90% and that’s really hard. It’s challenging. Some days it’s really depressing, but it’s really, really rewarding and fun. So I could spend the rest of my life working just on those kinds of things.

Harry Stebbings:

How do you deal with the hard times when things don’t go so well or as some may call it, say the shit hits the fan, so to speak?

Vinod Khosla:

Well, it’s really, really hard in startups when shit hits the fan, when you’re helpless. I think if you believe in a mission, you stick with it. You power through walls, bang your head against the wall until you break through. So I think that’s the key. If you’re not mission aligned, if you’re looking at it financially, then when things get hard, you abandon it.

I do think mission-oriented founders make for much better companies, much bigger companies and much higher returns, even if they go through ups and downs.

Harry Stebbings:

What do you know now that you wish you’d known when you started Khosla all the way back in 2004?

Vinod Khosla:

More risk is a good thing, not a bad thing. More risk is something most people are afraid of, and it’s where the larger opportunity lies. Naseem Taleb’s talked about it, nonlinear returns matter, and they really are nonlinear. Square’s up 10x since the IPO or 8x or something like that.

We were not afraid to stand there and really go build the bigger entity. We didn’t sell many of our companies, we stuck with them to go really for the big things. So nonlinear risk, and don’t be afraid of it because other people are in one place where markets aren’t efficient.

Harry Stebbings:

Which is your most recent publicly announced investment, and why did you say yes and get so excited?

Vinod Khosla:

We like really large breakthroughs. As an aside, one of the things I love is three people I’ve invested in have won Nobel prizes after we invested, not before. So really big ideas really excite me. For a specific investment, OpenAI is going after a big, hairy, audacious goal of building an ADR. That to me is worth pursuing as an investment, but also for society. It may eliminate the need to work for society, lots of issues there, but it could be really, really exciting if it works. And I don’t know what the probability of success is. Again, even if it’s only 10% and there’s a 90% chance of something less, that’s fine with me. So that’s very exciting.

Harry Stebbings:

Vinod, as I said at the beginning, and this is an episode that I’ve wanted to do for many years now. So I can’t thank you enough for joining me and I also can’t wait to see the next 10 years for Khosla and the incredible portfolio you’ve built.

Vinod Khosla:

Well, thank you. It’s always fun to do this. As you can tell, I get excited and if I can excite one more person into being an entrepreneur on a mission that helps society, that has impact or does some very cool thing like micro bots, this hour is worth it.

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Life on the Edge: The Coming of Age of Quantum Biology — Each chapter illustrates one of life’s puzzles and makes you think differently about the world. Would life even be possible without quantum phenomenon like tunneling which we use extensively in semiconductors? Could cells transport potassium as they do without quantum? And it ends on the intriguing note: is the brain a quantum computer mediated by electromagnetic forces at levels considered too low for classical science?

By Johnjoe McFadden and Jim Al-Khalili

Ranking: 10 (highly recommended); one of the few books I have read twice!

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Lifespan: Why We Age — and Why We Don’t Have To —This eye-opening narrative reveals incredible scientific breakthroughs about aging and ways we can slow down, or even reverse, the process. Why is this more possible than anyone thinks? Should we solve diseases or solve aging that increases the propensity for diseases?

By David A. Sinclair, PhD with Matthew D. LaPlante

Ranking: 10

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An Elegant Defense: The Extraordinary New Science of the Immune System: A Tale in Four Lives — Explains for the lay reader the intricate biology of our immune system. Really an engineering “how it works” story. For all its astonishing complexity, however, the immune system can be easily compromised by fatigue, stress, toxins, advanced age, and poor nutrition — hallmarks of modern life — and even by excessive hygiene. Paradoxically, it is a fragile wonder weapon that can turn on our own bodies with startling results, leading today to epidemic levels of autoimmune disorders.

By Matt Richtel

Ranking: 8

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The Formula: The Universal Laws of Success —This book transforms how our success-obsessed society approaches their professional careers and long-term goals. And it is network science applied in the same way we may apply network theory to network medicine and decide if a drug works on a particular patient. Network theory at it’s broadest. As Naseem Taleb says “his is not just an important but an imperative project: to approach the problem of randomness and success using the state of the art scientific arsenal we have.”

By Albert-László Barabási

Ranking: 8

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The Third Pillar: How Markets and the State Leave the Community Behind — Raghuram Rajan offers a way to rethink the ties between the market forces (business) and civil society (government) and makes the case to strengthen and return power to local communities as a remedy to growing despair and unrest. This book provides a solid framework as to why things begin to deteriorate, and how society can successfully find their way back to a secure and stable plane.

By Raghuram Rajan

Ranking: 8

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The Uninhabitable Earth: Life After Warming — A look into the future and how global warming will impact everything, from the transformation of global politics, to the sustainability of capitalism, and the trajectory of human progress. A great read even though I think it overstates things. It scares, and it’s time to be be very very scared. The message is more important than the details and it is powerful.

By David Wallace-Wells

Ranking: 8

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Winners Take All: The Elite Charade of Changing the World —While today’s rich and powerful are fighting for equality and justice, Giridharadas argues that it is being done in a way that will preserve their position at the top of society. This is an important read and it contains many very valuable points. Though I disagree with many of its conclusions, I do agree with the notion of elite circles that are often, but not always, self-centered and self-interested.

By Anand Giridharadas

Ranking: 8

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The $12 Million Stuffed Shark: The Curious Economics of Contemporary Art — A look at the economics and the marketing strategies that enable the modern art market to generate such astronomical prices. I always thought of art as really really snooty as it is manifested (not as it is created) and this book proves the point. The creation of art may have higher significance but the art world is not a good reflection of it. It is mercenary, pretentious, egotistical and social ratification plus other nonsense. You will understand why an art piece might cost $400m just because it allows a buyer to claim they can spend $400M! The role of pretend and social validation over reality is obvious.

By Don Thompson

Ranking: 8

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21 Lessons for the 21st Century — An important examination into today’s most pressing political, technological, social, and existential issues as we move into the unchartered territory of the future.

By Yuval Noah Harari

Ranking: 8

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Blitzscaling: The Lightning-Fast Path to Building Massively Valuable Companies —A great book on blitzscaling: An insightful book on how to scale at a very fast pace​ and more importantly WHEN. Also explains why inefficient use of money can be important​.

By Reid Hoffman and Chris Yeh; Foreword by Bill Gates

Ranking: 7

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The Breakthrough: Immunotherapy and the Race to Cure Cancer —This book guides readers through the scientific research transforming immunotherapy from the miraculous to the forefront of twenty-first-century medical science.

By Charles Graeber

Ranking: 7

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The Coddling of the American Mind: How Good Intentions and Bad Ideas are Setting Up a Generation for Failure —This book dives into the new problem on college campuses, Safetyism, and how it undermines the freedom of inquiry and speech that are indispensable to universities. The consequences of a generation unable or disinclined to engage with ideas that make them uncomfortable are dire for society, and open the door — accessible from both the left and the right — to various forms of authoritarianism. A good companion read to “Winner Takes All”. Can too much political correctness hurt?​

By Greg Lukianoff and Jonathan Haidt

Ranking: 7

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The Inflamed Mind: A Radical New Approach to Depression —This book reveals the new breakthrough on the link between depression and inflammation of the body and brain. A new thesis on what is a major disease state of the brain.

By Edward Bullmore

Ranking: 7

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Loonshots: How to Nurture the Crazy Ideas That Win Wars, Cure Diseases, and Transform Industries — This book explores the beauty, quirkiness, and complexity of ideas, especially new and out-of-the-box ones. Loonshots shows how group dynamics and workplace politics conspire against the psychological safety people need in order to boldly share their wildest ideas. A key to understanding why Silicon Valley culture is changing the world.

By Safi Bahcall

Ranking: 7

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What You Do Is Who You Are: How to Create Your Business Culture — This book brings us on a journey through ancient to modern culture, answering a question fundamental to any organization: who are we? How do people talk about us when we’re not around? How do we treat our customers? Are we there for people in a pinch? Can we be trusted? For me, it shows the value of having principles an organization and its leaders believe in and can stick with when it gets hard to do so and real tradeoffs are involved.

By Ben Horowitz

Ranking: 7

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The Age of Surveillance Capitalism: The Fight for a Human Future at the New Frontier of Power — This book dives into the largest act of capitalist colonisation ever attempted — the colonisation of our minds, our behaviour, our free will, our very selves. Yet it’s not an anti-tech book. It’s anti-unregulated capitalism, red in tooth and claw.

By Shoshana Zuboff

Ranking: 6

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Friday Black — By placing ordinary characters in extraordinary situations, this book reveals the violence, injustice, and painful absurdities that black men and women contend with every day in this country. It’s a way to be exposed to another world living in the same place and the same time as “I/we” do.

By Nana Kwame and Adjei-Brenyah

Ranking: 6

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The Future of Capitalism: Facing the New Anxieties — This passionate and polemical book outlines ethical ways of healing the deep new rifts that are tearing apart the fabric of the United States and other Western societies.

By Paul Collier

Ranking: 6

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How to Change Your Mind: What the New Science of Psychedelics Teaches Us About Consciousness, Dying, Addiction, Depression and Transcendence — The true subject of this “mental travelogue” is not just psychedelic drugs but also the eternal puzzle of human consciousness and how, in a world that offers us both suffering and joy, we can do our best to be fully present and find meaning in our lives. It is also a fun exploration of psychedelic drugs, especially for someone who has never tried them.

By Michael Pollan

Ranking: 6

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The Jungle Grows Back: America and Our Imperiled World — Recent years have brought deeply disturbing developments around the globe. American sentiment seems to be leaning increasingly toward withdrawal in the face of such disarray. This is a powerful, urgent essay into why American withdrawal would be the worst possible response, based on a fundamental and dangerous misreading of the world.

By Robert Kagan

Ranking: 6

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The Line Becomes a River: Dispatches from the Border —For Francisco Cantú, the border is in the blood: his mother, a park ranger and daughter of a Mexican immigrant, raised him in the scrublands of the Southwest. Driven to understand the hard realities of the landscape he loves, Cantú joins the Border Patrol. But when an immigrant friend travels to Mexico to visit his dying mother and does not return, Cantú discovers that the border has migrated with him, and now he must know the full extent of the violence it wreaks, on both sides of the line. This book provides a different world view for those of us protected from some “reality”.

By Francisco Cantú

Ranking: 6

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Range: Why Generalists Triumph in a Specialized World —This book examines the world’s most successful athletes, artists, musicians, inventors, forecasters and scientists and discovers that in most fields , generalists, not specialists, are primed to excel. This book argues that cultivating range prepares us for things we can’t anticipate and adversity. We’ve believed in a single path to excellence: Start early, specialize soon, narrow your focus, aim for efficiency. This book suggests to hold off on starting those piano lessons too early. I’ve always loved exploration so this is very much in sync with my beliefs. Every high school and college student should read it.

By David Epstein

Ranking: 6

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Troublemakers: Silicon Valley’s Coming of Age — The richly told narrative of the Silicon Valley generation that launched five major high-tech industries in seven years, laying the foundation for today’s technology-driven world. This book tells the story of the world I have always lived, loved and believed in, despite the recent techlash.

By Leslie Berlin

Ranking: 6

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Atomic Habits: An Easy and Proven Way to Build Good Habits and Break Bad Ones — Over months and years, the accumulated effect of small habitual daily behaviors is staggering. This book warns that this compounding works both ways, so we’d better make sure we’re making it work in a positive direction, not for the negative. A decent book on self-help tools, not a category I am generally a fan of.

By James Clear

Ranking: 5

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I’ll refrain from covering books that are much lower in my ranking.

The concept of venture assistance is simple. Most VCs pitch their firms as being able to add value — to really help a company’s entrepreneurial founders. Personally, I think leading VC firms do a pretty good job of being supportive of their companies, and most entrepreneurs funded by good firms like their investors. But, on the question of “value added,” most venture capitalists (each VC with a typical 10–16 boards) even among the leading partnerships, are pretty passive and ineffective when it comes to assisting companies, except possibly in helping with networking, or they don’t give the right advice.

And in my view, many investors haven’t done enough in their careers to earn the right to advise entrepreneurs, a role that I consider laden with responsibility and fraught with the potential to do more harm than good by giving bad advice. We constantly ask our less experienced team members “What have you done to earn the right to advise entrepreneurs?” I don’t want entrepreneurs to get inexperienced advice on important matters. Their startup is their life, their baby — it is not just another company in an investor’s portfolio. The companies need help from board members with hiring key executives and with introductions to unreachable candidates. The need help with critical decisions, and with handling internal conflicts. And they need board members who will push them to be as great as they can be without voting against them on their board or crossing the line of making board “decisions”. Boards in my view should rarely make decisions. They deserve brutal honesty rather than hypocritical politeness, even when it is inconvenient to give or get. They need to be pushed to think hard and critically about complex problems that board members can see with the benefit of experience, but they need to be left alone and empowered to make their own final decisions. Entrepreneurs in private companies need trusted advisors, not governance. They need venture assistants.

We are excited to have Dan join us. Dan was the President and COO of Box, and more importantly mentor to star CEO Aaron Levie, for the last seven years. He joined Box when when Aaron was 24, and together they led the company from $10MM to $500MM in revenue. In the previous twenty years, Dan founded a couple of startups and held senior executive roles in several others — in addition to taking seven years out of his entrepreneurial efforts to run a large part of Intuit (the makers of TurboTax and Quickbooks), at the time an 8,000 person organization. A seasoned leader who has founded venture backed companies himself, and helped a 24 year old entrepreneur grow a business to billions of dollars in value — who went through the ups and downs associated with that rapid growth — is exactly the kind of experienced coach and mentor that we believe should be available to young entrepreneurs; not some junior VC who happens to join a venture firm but has not earned the right to advise entrepreneur because they have never built a startup themselves.

During Box’s phase of very rapid growth, when it was doubling in size year after year, Dan invested heavily in people and culture. He felt strongly that a great leadership team — not just at the eStaff level but several layers down in the organization, was critical to its success. For example, Dan held a class in the cafeteria and personally taught every people manager in the company how to craft a great review, give hard feedback, and reward outstanding performance. Even years later, when Box was over a thousand employees, Dan led a book club to help every leader in the company, and every Boxer who wanted to attend, to become a better manager.

Dan knew that if Box wanted decisions to be made quickly, leaders had to be empowered to make calls locally — and that required them to both understand the company’s strategy and objectives, and to be operating with enough information to make good decisions.

He also knew that as the company grew, they would have to hire from the outside in order to add needed skills to the mix. But that if they could not grow talent quickly enough to enable them to promote from within as well — they would put their company culture at risk. Box established a goal of filling 50% of their management hires with existing Boxers — and reported out to the entire company every six months on their progress against that target — one that they never failed to hit.

But the only way that could happen — the only way that enough leadership talent could grow inside the company — was if leadership development was a key priority. Box made a huge statement when they hired Even Wittenberg, previously Chief Talent Officer at HP and Head of Global Leadership Development at Google!, to lead Box’s people team. Evan and Dan went on to build one of the strongest leadership development programs ever seen in a young technology company — and as a result, were able to promote from within to a much greater extent than can most young companies.

Dan brings that passion for teaching and mentoring leaders to Khosla, where he will work to help every one of our portfolio CEO’s become that best leader that they can be — and to solve critical challenges and entrepreneurial conflicts along the way with hands on advice and mentorship.

That leads me to one of my favorite questions around younger entrepreneurial companies: What is the role of a entrepreneurial advisor or board member?

The right advisor asks the questions you never knew were important.

Most of us don’t know what we don’t know when operating in a new area, or in a new (to us) job. We are, as the academics would say, unconsciously incompetent. The right advisor leverages their own experience (and their many mistakes!) to ask the questions you never knew were important, and by doing so, opens your eyes to the previously unseen. They also look beyond more immediate imperatives to longer term issues and to help create new “S” growth curves. They serve as guides, seeing around corners, and helping you navigate the difficult road of building a company from the ground up, using their experience to spot things that an entrepreneur might otherwise miss (risks and opportunities alike), or to look into the future by reflecting on their experiences with other, similar companies. They carry with them an extensive network that they can bring to bear on all the different problems and challenges that might crop up along the way, whether it’s finding a critical hire with the perfect match of skills and experience, or getting a company a make-or-break meeting with a decision-maker at a potential marquee customer.

At Khosla Ventures, we also believe that a good investor should be able to bring expertise to the table that can solve real problems that you and your team face. Our investing team is chock full of experienced operators who can provide the kind of advice mentioned above — including 4 ex-CEO’s. We are extremely hands-on — whether it is helping with fundraising decks, a product strategy session, discussing brand strategy, or even writing patents. Among those who have not run a company, four have PhD’s in science or engineering fields, and two more had senior executive roles at companies like Google, TellMe and Square and many other startups.

And in addition, we have a group of operating partners who do nothing but teach and coach and mentor our portfolio companies — offering real targeted help, be it in leadership and management training, recruiting executives or engineers, AI technology or recruiting, strategy, design, manufacturing and more.

One critical area for all young technology companies is hiring great talent. You have to source amazing candidates, drive a thorough and thoughtful interview and selection process, and then close the best candidates in your pipeline. And you have to do it for some incredibly difficult roles, especially if you are based in Silicon Valley, where the talent war is raging out of control. Our recruiting team can provide expertise and assistance with technical talent as well as executive leaders — and perhaps more importantly can help you to hire and train a great internal recruiting team so that you can grow quickly.

As we see other areas where we feel that our companies could leverage talent and expertise provided by an operating partner, we add that capability. We can help with AI and ML strategy, with Design Thinking and building design into the DNA of your company, with supply chain and manufacturing if you have a hardware component to your offering, and with blocking and tackling issues like finance and legal as well.

At Khosla Ventures, we believe that our role is to add value to our portfolio companies, not just to provide them with capital. That is why we call ourselves a Venture Assistance firm, and why we work so hard to live up to the expectations that that title sets. From mentorship about management to operational help in AI, design, brand, manufacturing, enterprise software, we strive to help entrepreneurs reach greater heights than they might on their own to the very lonely job of an entrepreneurial CEO by helping them expand their opportunity and fullest capability.