What Vinod Khosla Looks for in Founders ‘Above Everything Else’

Key Takeaways

- Vinod Khosla leads Khosla Ventures, a venture capital firm that backs disruptive tech companies like Nas.com, a platform that manages marketing and ads for small businesses.

- Khosla says “AI will be able to do 80% of jobs by 2030” and sees tools like Nas.com as giving everyday people access to coding, marketing and design.

- Khosla prioritizes a founder’s “learning rate above everything else.”

Vinod Khosla, 71, still remembers the magazine article that rewrote his life. As a teenager in India, the son of an army officer with no ties to business or technology, he read about the founding of Intel and decided he wanted to build a company like that someday.

That unlikely obsession carried him from Delhi to Stanford, then into Silicon Valley’s inner circle. In 1982, he cofounded Sun Microsystems, a pioneering technology company famous for creating the Java programming language and manufacturing computer workstations, servers and software.

After Sun, Khosla became a prominent venture capitalist at Kleiner Perkins before starting the venture capital firm Khosla Ventures in 2004. The firm manages more than $15 billion in assets and focuses on investing in tech-based disruptive companies.

In April, Khosla Ventures led a $27 million Series A funding round for Nas.com, an AI platform built for solopreneurs. The platform creates online stores, produces marketing content and manages ads for creators and small business owners, making it easier for individuals to start and grow a business on their own. It has already helped create four millionaires, founder and CEO Nuseir Yassin told Entrepreneur.

Khosla Ventures has also invested in OpenAI, DoorDash and Instacart, among others. Khosla has a net worth of $15 billion, according to Forbes.

The following interview with Khosla has been edited for clarity and concision.

Vinod Khosla. (Photo by Steven Ferdman/Getty Images)

What made you decide to invest in Nas.com?

I like to invest in companies that could not have existed five years ago and will be inevitable five years from now. Nas.com is one example.

The company is trying to solve an essential problem for every business owner: finding customers.

Nuseir understood that the bottleneck was never talent or drive. It was marketing infrastructure. Anyone can build an online website. But very few knew how to find the customer.

That is the problem that has killed more small businesses than any recession in history.

I predict AI will be able to do 80% of all jobs by 2030. The good news is that AI will also be available to the everyday person who has an idea to start something of their own. Coding, customer service, marketing, and design are no longer blockers. This means millions of new entrepreneurs will be born. What I see is massive wealth creation opportunities.

When you look at a potential investment, what are the first two or three questions you ask yourself?

Is this important? Can it change the world in some meaningful way? And can this team do the nearly impossible? I prefer not to invest in incremental improvements. The second question is whether the founder can be wrong about everything except the big thesis and still find a way to win. Plans change. What matters is whether the person can navigate that.

What traits do you look for in founders?

Learning rate above everything else. I argue with founders about positions I don’t believe to see whether they push back or just agree. The ones who cave are not the ones I back. I want someone with the intellectual confidence to say I am wrong and here is why. Beyond that, I want someone who is irrational about the importance of what they are building. Rational people don’t do unreasonable things. Building a company is fundamentally unreasonable.

You invest more in people than plans. What are you trying to understand in the first meeting?

Whether this person can be consistently wrong and still get to the right answer. Every plan fails on contact with reality. What I am really asking is whether this founder has the judgment and stubbornness to find a new path when the original one closes. The roadmap is almost irrelevant.

You routinely go into “uncharted territories” where other VCs won’t go yet. What are the leading indicators that a strange idea is a good contrarian bet versus a science project?

Is there a plausible path to a real outcome, even if every step is highly uncertain? Science projects fail because there is no path. Contrarian bets succeed because the path exists even if nobody else can see it. I also ask whether the world is moving toward this idea regardless of the startup. If the underlying forces are aligning and the startup is just accelerating what was already coming, that is a very different bet than trying to change human behavior from scratch.

What made you decide to take a chance on OpenAI?

It was not a chance. I first mentioned AI publicly in 2000 and wrote about it for years. By late 2018 it was a convictio