CCD crisis: Without failure, you can't have big success, says Vinod Khosla

Vinod Khosla
In Silicon Valley, investors are more permissive in letting founders attempt bigger and more implausible things, says billionaire venture capitalist Vinod Khosla. He was answering to a question on if he sees any flaws in the Indian entrepreneurship ecosystem, especially in the context of Cafe Coffee Day founder V G Siddhartha’s demise. He talks to Peerzada Abrar & Yuvraj Malik. Edited excerpts:

You have helped create many billion-dollar firms. What are the big bets that you are looking at in the next 10 years? You have talked about reinventing the societal infra with technology...
What I like is tech being applied in a lot of different areas. So, I love tech in transportation, housing and construction, food and health care. These are all hard tech start-ups. That is very exciting. I am pretty bullish that all these things will be revolutionised over 10-15 years.

What role do you see India playing in these kinds of technology bets?
India clearly has markets, so it depends on the entrepreneurs. Some entrepreneurs would say, “oh I want to do that.” That is how these things happen.

How do you view the start-up and entrepreneurship scene in India at this moment?
I think there are a lot of good start-ups. There is a much higher quality than it was five years ago.

Why haven’t you made big investments? How do you rate the ecosystem here versus Silicon Valley?
What has to happen is that some start-ups have to be successful. Once they are successful, those founders invest in other start-ups. Other people in the company invest in other firms. So, it takes a few cycles and you see that happening.

On one hand, you have Flipkart that got bought by Walmart, and on the other, we saw the tragedy of Coffee Day Enterprises founder V G Siddhartha...
Incidents like Coffee Day Enterprises happen, that is life. Every entrepreneur is also a human being and has a life. My general view is that if anything that the investors need to get is more permissive. In the Silicon Valley, investors are more permissive in letting founders attempt bigger and harder things and more implausible things.

How should the board behave, given that entrepreneurs go through so much stress?
Investors need to be more permissive and more supportive of entrepreneurs.

How do you view failure?
My view is unless you take the risk, you are not going to innovate. But if you take risks, you are going to fail. So, without failure, you can’t have big successes. You can have small successes. Without failure, you can’t have large successes. The key is to have small failures so that they don’t kill you. 

What are the qualities you see in entrepreneurs before investing?
Risk profile matters a lot. Quality of entrepreneur and quality of the team.

What would be your advice to an entrepreneur choosing an investor?
Different entrepreneurs have different risk profiles, and they should pick an investor that matches their risk profile. If you are going to be conservative, getting an aggressive investor is a bad idea. Matching is important.

Most major global investors are now in India. What’s stopped you from investing in a start-up here?
Most VCs invest money, I work with entrepreneurs. I have to be local, to advice them and mentor them. My style of working with them is my mentorship and not investing. I can’t do that because I am based outside.

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