Vinod Khosla on Failure Does Not Matter. Success Matters (Full Transcript)

January 6, 2016 9:53 am | By More

Title: Vinod Khosla on Failure Does Not Matter. Success Matters – Transcript

Speaker: Vinod Khosla, Founder, Sun Microsystems and Khosla Ventures [Full bio]

Event: Roanak Desai Memorial View From The Top Talk on May 1, 2015 at Stanford Graduate School of Business.


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Vinod Khosla – Founder, Sun Microsystems and Khosla Ventures

Hello, everybody.

Interviewer: Vinod, thank you for being here today. Welcome back to the GSB.

Vinod Khosla: It’s always fun to be here. It’s a lot nicer than when I was here.

Interviewer: Yes, I’ve been hearing that quite a bit today, given the previous class here. I’m thrilled to be having this conversation. I was told that you scheduled your time in 15 minute slots. So we are taking up four of those slots right now. So, I’ll get right to it.

I have a few questions here, focusing on three things. Your leadership and management journey, your thoughts of investing and entrepreneurship and then a few questions on your personal life and legacy. After that, we’ll take a few questions from audience and from Twitter. As Dean Saloner mentioned, you were the founder and the first CEO at Sun Microsystems. About a year after you had started, you found out that Sun Microsystems was going to be shut out from a [keysym]. When you heard this, you got on a flight, got to the customer’s lobby and made phone calls refusing to leave until you met with the team. Where does this perseverance and conviction come from?

Vinod Khosla: Well so, I have a philosophy in life. Whatever I believe, I should make happen. It’s that simple. And if a customer is making a mistake, the customer isn’t always right. Trust me. And if you want to do great products, don’t listen to your customers, by the way. Lots of bad lessons in business school. I used to give a talk in the ‘80s on why not to listen to your customers and maybe somebody will ask me a question. That story is in fact true. There was a signed contract with a competitor, I stayed in the lobby all day, at 6 o’clock in the evening and I’d taken a red eye out and I parked in the lobby. I met with the CEO of the company, mostly, because he wanted me to go away. By 9 o’clock, he had — I’d convinced him to meet me in Chicago with his team the next day, because he didn’t want to be seen negotiating with us. The following morning, the day after at 5 a.m., we signed a handwritten contract, because I wouldn’t let him leave. This was the CEO of a big East Coast company, Computervision. We signed a handwritten contract and life was good.

The point is if you actually believe something, you try your best to make it happen. It doesn’t always happen, but it happens most of the time. Most of the business school entry story is also true. I actually learned that somebody had dropped out. That’s why I showed up and one of the nice ladies in the business school office, put me in her living room to her husband’s chagrin and she was real nice to me. But things do work out if you persist. Not always, but I like to say, failure does not matter, it’s success that matters. And nobody remembers what you failed at. So, everybody remembers Sun. Does anybody know a company I started before Sun that McNealy and I started together? Any hands?

Interviewer: I do, but I’ve been researching you for awhile now.

Vinod Khosla: What do you think the company is?

Interviewer: Was it Data Dump? Or was it?

Vinod Khosla: Yes. There was a company called Data Dump, we started and got funded three months before Sun. Didn’t work out. We started both roughly together. But my point is people don’t remember your failures. And I like to say my willingness to fail is what gives me the ability to succeed. I find most people are so afraid of failing, they don’t try and do the things that would be important enough to do. Anything worth doing is hard and so —

Interviewer: You’ve spoken in the past about the importance of failure or the lack of it. You started your first company at age 20 in Delhi, which did not work out as expected.

Vinod Khosla: Well, I didn’t actually get started. They told me, it’d be seven years to get a phone line.

Interviewer: How did you react to that?

Vinod Khosla: Honest to goodness. You know, I was 19 or 20 and they told me, it would be a 7 year waiting list to get a landline. I sort of picked up and went to Carnegie Mellon.

Interviewer: How was that like, the move to the US?

Vinod Khosla: You know, look, it was easy. I wanted to be in Silicon Valley, I knew I’d get here. I had no way to pay for it, so I had to figure out how to get somebody to pay for it. In the end, the Biomedical Engineering Department at CMU agreed to pay for it, so I went there. And I was very impressed in biomedical engineering. So, I did that and then applied immediately to Stanford and you’ve heard the rest of the story. They turned me down a couple of times, but the funny thing is with enough persistence, most things that seem impossible become possible. I’m always amazed at how often you can turn things around and people take no for an answer too easily. You know, it’s whether you’re trying to achieve a goal, like get into business school or my green card was the same way. I left the job that had sponsored me, but I still got my green card, even though no lawyer would take me. I became my own lawyer. Got my green card without working for, while I was in business school. And I did it perfectly legally. My strategy there was if I couldn’t convince immigration, I’d confuse them and I did. And they gave me my green card.

Interviewer: Well, Vinod, I just want to ask you, what are some of the perhaps, the early influences that made you this way? This high perseverance, high conviction person.

Vinod Khosla: Well I was sort of always this way. I didn’t grow up in this environment, nobody around — my dad was in the Indian Army since he was 16. So he joined the ranks of the Indian Army and when he was 16, got shipped off to Egypt to fight for the British. And so, I grew up in a very different environment. But I always had this view that if I determined something was right, I was going to make it happen. And this comes to, since one of the focuses of this lecture is leadership — I am amazed at how few people have a belief system. What do they actually believe in? And, yeah, it’s okay to offend you guys. 90% of you will do what’s expected of you as opposed to what you want to do. And I even, when I come to an event like this say, why am I here? Why would I even bother to take an hour of my valuable time? No, it’s true. I have to have a purpose.

My goal is very simple. If I can convert one of you, there’s probably 400, 500 people here. If I can convert one of you to follow your belief and have the guts to follow your belief, I’ll think of the hour as well spent. So, I would say, what am I trying to do and why? I don’t speak, because somebody will write nice things about it. I always sort of have a purpose, but I have a belief system. And most people, even successful companies, and I have big beef with Fortune 500 CEOs I can talk about, there’s very little leadership there, don’t have an internal compass of what they believe in. It’s what do others expect. You know when I graduated, I went into entrepreneurship. Nobody went into entrepreneurship out of the business school. And people said why wouldn’t you work for Goldman or McKinsey? And I said why would you? I couldn’t fathom why you would want to do that job. Right? I still can’t, by the way. For those of you going to those places, and I’m sure there’s plenty, I’m probably not the right person to talk to you. I frankly don’t even care to talk to you. All of you others.

I think there’s something wrong with anybody who fundamentally wants to go work for one of the consultants or the investment banks today and there’s probably — they don’t understand how the world is going to work in the future. But my point again is, have a belief system. Follow that compass. And I’m overstating it a bit, so there may be some hope for those of you going there. But only a little bit of an exaggeration.

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