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Vinod Khosla: Leading with compassion, the way forward

Vinod Khosla: Leading with compassion, the way forward

What’s been the journey for Khosla Ventures for the last 15 months or so?Leadership is about the courage to jump in when others are afraid to, says Vinod Khosla, the Indian-American billionaire businessman and venture capitalist. “What is critical to leadership is having an internal belief system of your own,” the founder of Khosla Ventures and the founding CEO of Sun Microsystems said in a virtual interview addressing the finalists of The Economic Times 40 Under Forty.

Edited excerpts from an interaction with Divya Rajagopal:

What do you think makes a good leader during such a world-altering crisis?

Leadership is about jumping in where others are afraid to. It’s about being able to define a very clear path. Leadership involves both fear (about the uncertainty) and courage.

The second part of leadership is getting other people to follow you. That’s best done if there’s a set of guiding principles. Most people end up doing what others expect them to do, or they end up focusing on what others are doing. What is critical to leadership is having an internal belief system of your own.

In any decade, there are no more than 10,000 people (around 100 in each of the hundred different fields) that define a field or are going to change the course of society. And those are the leaders. So, I always urge young people to think whether they’re one of those 100 people in their chosen field who will make a difference. That’s what leadership is about – that’s the challenge and the opportunity for the 40 under Forty awardees.

The pandemic has altered the way the world functions. What advice do you have for emerging leaders to wade through these uncertain times?
Even though the pandemic has had lots of negative consequences, in one way, it’s been a real boon to society, which tends not to change very rapidly. There’s real inertia in society, and we’re used to doing tomorrow what we did yesterday. What the pandemic has done is changed a lot of assumptions that people say would never happen. If you asked anyone 15 months ago if medicine could be practiced remotely, they’d say no way. If you asked anyone if employees could work from home, they’d say no way. All that has changed. Shaping society has become much easier because it’s not a solidified mass now where you can just innovate on the edges.

Now, it’s mostly up for new models. That’s a bright spot of the pandemic — much more is possible now; much faster change is possible in every important area. So, it does create an opportunity for the next set of leaders and entrepreneurs to shape society much faster.

Short term, a number of companies responded very rapidly to societal needs and Covid. If you go to New York city, almost all the testing is done by one of our companies. Now it’s a couple of hundred people, but it was 25 people last March, and they’re now doing all the testing and more testing than all the large lab testing companies.

In less than a year, we have drugs in the process for Covid. Virtual services in healthcare are much more prevalent now in many of our companies. Beyond the one year or 18 months; it has opened up new opportunities.

Because work will be remote, healthcare can be done remotely. In every area you look, there’s an opportunity. So, we’re seeing new kinds of delivery systems, local manufacturing and innovation happening everywhere. The next 10 years look very exciting to me, and there’s a real economic opportunity in creating new businesses to invent the future we want.

What do you look at when you invest in an entrepreneur and in a company, beyond the term sheets, beyond the business model?
Doing a startup is very hard. It’s very uncertain. For those who are entrepreneurs, the high is very high, and the low is very low; they are very depressing and lonely. I look for resilience and persistence. People who have a vision for the future and will follow that with a passion.

Nobody got to Mount Everest without getting to base camp first and then Camp 1 and then Camp 2 and Camp 3, Camp 4 before the final ascent. The visionary entrepreneurs imagine Mt. Everest, and they’ll get to base camp even if there’s a higher peak to climb more easily because they have the eventual goal in mind. So, where you go may not be the best maximal revenue train or companybuilding thing to do in the short term.

People trade off short terms for long terms if they’re visionary entrepreneurs. I think that’s very important for eventually building a company like Google or Amazon. You need a certain culture, persistence, a large vision— but not necessarily deep expertise in that area. In fact, deep expertise becomes a large disadvantage, surprisingly.

What we look for, more than anything, is not someone who is experienced, but how quickly they learn. And you can tell a good entrepreneur in 90 days by how quickly they take new inputs, learn and refine their model.

So, it’s exponential learning that matters more than a lot of experience in the area.

Through the pandemic, did you witness any organisation or people who exemplified leadership and reinvention in ways that could benefit the society? What about societal reinvention post-pandemic?
There are 700 million people out of the 7 billion on the planet that have a rich lifestyle. By a rich lifestyle, I mean rich in housing, rich in transportation, rich in education and healthcare, rich in entertainment.

Seven billion people want the same thing, and there’s no way to expand the resources of the planet 10 times. With 10 times more steel, 10 times more cement, we’ll destroy the planet. So, we need to reinvent societal infrastructure to make these services and this lifestyle accessible to all the people who desire it. That can only happen through technology, which is the large multiplier.

We need to produce power; without 10 times the amount of coal or natural gas or oil; we need to have cars that don’t take as much steel. All this is possible, and in fact, I would argue there are some of the largest business opportunities out there to help reinvent this infrastructure. When you make resources 10 times more efficient. It’s also the most economical. That’s the reinvention we’ll be seeing over the next decade or two decades, and this is the opportunity for all the young leaders as well as older leaders.

Many people have innovated drastically during this pandemic and changed business models. Because Covid was a health crisis, we’ve seen the most innovation in healthcare. So many companies have made such drastic changes and created large opportunities. There are just too many examples of innovation in healthcare, but it is also spreading to other areas. Now we are starting to see the longer-lasting effects in manufacturing, in the supply chain, in how food is grown, all those areas. But obviously, we need to make sure the more vulnerable parts of society aren’t left behind in this

Any parting advice? Any message for the future business leaders?

There’s a lot of opportunity to create large businesses, do a lot of interesting things, and I would say, don’t assume that any of the current assumptions are true. I’ll give you a few outlandish examples. We are starting to 3D print whole buildings, so they don’t take as much cement and steel, and if they take 1/5th the amount of material, then they will be cheaper. And they will be built faster. I think housing and construction could see complete renovation.

Things like Impossible Foods have changed the notion of animal husbandry, meat production, protein production. We have invested in a public transit company, of all things, to create a new kind of public transit.

So, opportunities are everywhere. My only suggestion to the 40 under Forty leaders is to do it with vision and principles, but also compassion. That means after you’re successful, you feel much better if you’re doing it the right way, which means you’re doing it with compassion, while sticking to your principles. The heart is as important as the brain in doing all this right, and feeling good about what you’ve achieved.

It’s hard creating large things, but I always say, not all hard things are valuable, but most valuable things are very hard, so persist through it — that’d be my parting message to the people.

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