vinod khosla vk@khoslaventures com nov 2010 n.
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Vinod Khosla Nov, 2010

Vinod Khosla Nov, 2010

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Vinod Khosla Nov, 2010

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  1. Vinod Khoslavk@khoslaventures.comNov, 2010 Punditry vs. Innovation

  2. 2010 investments in mobile/web

  3. “All progress depends on the unreasonable man” - George Bernard Shaw “Human salvation lies in the hands of the creatively maladjusted” - Martin Luther King 3

  4. “when the train of history hits a curve, the intellectuals fall off.” - Karl Marx 4

  5. Experts & Pundits 5

  6. Mckinsey : US mobile subscribers 1986 forecast for 2000 forecast actual 6 Source: American Heritage Magazine -

  7. yesterday’s technology, tomorrow’s forecast 1980’s phone: year 2000 phone: 2010 phone: 300,000 available apps 7bn+ apps downloaded 7

  8. the folly of predictions: tetlock study hundreds of experts. 80,000+ “expert” forecasts & 20+ years results: experts about the same accuracy as dart-throwing monkeys 8 Source:

  9. "Cynics never do the impossible, achieve the improbable, take on the inadvisable. Hope is only path to extraordinary success." INSPIRATIONAL TWEET: 9

  10. TWEET? Did not exist 5 years ago! Today: More than 100 million users 65 million tweets are posted each day • 140 characters that millions of people follow • Can tell the mood of a nation • Creates an instantaneous backchannel • Formation of a personal brand • Promotes content 10

  11. SF Giants win World Series… 11

  12. 12

  13. Could McKinsey or an analyst have predicted Twitter? Predicted 140 chars as “culture assessment tool”? 13

  14. …the sources of innovation Google, Facebook, Twitter : Fox, NBC, CBS Amazon : Walmart First Solar : Shell & BP Solar Cree : GE DNA Sequencing 14

  15. Big companies vs. innovators Focus on Process Existing markets Focus on DCF, NPV, EPS Careful not to fail “Push” into the market Incrementalism Focus on Vision Invent new Markets/Paths Ignore financial analysis Constantly iterate Create “Pull” Disruption 15

  16. How to/not to Stage gate development or effectual reasoning? • Financial tools: DCF, NPV, IRR Top down market analysis or evolution? customer wish list or passion for a vision? 16

  17. Innovation according to the press Business Week Fast Company 1-10 11-20 1-10 11-20 Apple Google Microsoft IBM Toyota Amazon LG Electronics BYD GE Sony Samsung Intel Ford RIM VW HP Tata BMWCoca-Cola Nintendo Facebook Amazon Apple Google Huawei First Solar PG&E Novartis Walmart HP  Hulu Netflix Nike Intel Spotify BYD Cisco Systems IBM GE Disney 17 What has surprised you? Source: Businessweek, Fast Company

  18. winners take (almost) all =investment viability 5 years out, the group’s market cap has grown… Starting Industry Structure But leaders far exceed the also-rans 18

  19. New Computing Cycle Characteristics Computing Growth Drivers Over Time, 1960 – 2020E 1,000,000 Mobile/Gadget Internet 100,000 Desktop Internet 10,000 10000? 1000 1000+ PC Devices / Users (MM in Log Scale) 100 100+ Minicomputer 10 10+ Mainframe 1+ 1 1960 1970 1980 1990 2000 2010 2020 19 Note: PC installed base reached 100MM in 1993, cellphone / Internet users reached 1B in 2002 / 2005 respectively; Source: ITU, Mark Lipacis, Morgan Stanley Research.

  20. The old don’t innovate – the new “create the future” Mini Computing 1970s Personal Computing 1980s Desktop Internet Computing 1990s Mobile Internet Computing 2000s Mainframes 1960s New Winners NewWinners NewWinners NewWinners NewWinners Google AOL eBay Yahoo! Facebook Twitter Apple (exception?) ?? ?? IBM NCR Control Data Sperry Honeywell Burroughs Digital Equipment Data General HP Prime Computervision Wang Labs Microsoft Cisco Intel Apple Oracle EMC Dell Compaq Note: Winners from 1950s to 1980s based on Fortune 500 rankings (revenue-based), desktop Internet winners based on wealth created from 1995 to respective peak market capitalizations. Source: Factset, Fortune, Morgan Stanley Research. 20

  21. as surely as... 1985:NOT a PC in every home 1990: NOemail for grandma 1995: NOTthe internet 2000: NOpervasive mobile, seacrh 2005: NOsocial media / iphone 2008: NOGoldman/Morgan bankruptcy? 2010+: reason for optimism 21

  22. What’s next? discovery Existing static products… HTML 5… Landline phone Standalone radio content curation Portable DVD eBooks/interactive content Iphone Ipad Android Low-end Cameras/ camcorders Difficult to predict the future, when innovation is the name of the game recommendations MP3 players Reputation GPS Portable gaming Voice recorders Translator/ dictionary 22

  23. what will it be? privacy vs. personalization Taste graphs curation vs. creation of online content who do you trust? Friends, experts, crowd? discovery vs. recommendation mvp with rapid iteration vs. better game play & production value? where will HTML 5 lead? curation of goods in the real world? 23

  24. not yet done… privacy & authentication Convey intent sensors Reputation medicine Anticipate needs (agents) • Payments Semantic Web Analysis: Network, behavior,… personalization Everything everywhere Discovery Group-sourced innovation 24

  25. Innovators 25

  26. “The fine line separating the delusional from the visionaries amongst us is often not foresight, but rather hindsight.” Ben Semel 26

  27. Attitude matters: Ecomotors (50% increase in engine efficiency) Response when told it can’t be done “everyone told me….” • It is not possible to convert a gasoline engine to a Diesel, using the same transfer line. I did it and it is the most successful Diesel in the world and it was copied by everybody. • The combustion for a high speed Diesel is not possible. I started production with a 5000 rpm Diesel with 2000 engines/day on the gasoline engine transfer line. • 3. You cannot use a rubber toothed belt to drive the camshaft and the injection pump. I did it and it is the standard solution today. • It is not possible to use an aluminum radiator because the corrosion will destroy the engine. I did it and it is the standard solution today. • It is not possible to create an “emission free” natural gas burner. I did it. It is in mass production at VIESSMANN. BUDERUS sued VIESSMANN about “emission free” and lost. • Dr. Peter Hofbauer, Chairman and CTO 27

  28. “It is not because things are difficult that we do not dare, it is because we do not dare that they are difficult.”- Seneca “Try and fail, but don't fail to try.”- Stephen Kaggwa“Courage is doing what you're afraid to do. There can be no courage unless you're scared.”- Eddie Rickenbacker“Only those who dare fail greatly can achieve greatly.”- Robert F. Kennedy“You will face many defeats in your life, but never let yourself be defeated.”- Maya Angelou The willingness to fail gives us the freedom to succeed 28

  29. The Weather Forecast … Adaptability, agility are key! • Rate of change will accelerate… Fun, fortunes & failure will be in abundance Innovation & entrepreneurship will thrive 29

  30. to predict the future, invent it! -Alan Kay 30