John Doerr Ideas Are Easy Execution Is Everything

TITLE: John Doerr: Ideas are easy, execution is everything. CHANNEL: Kleiner Perkins DATE: 2015-03-05 ---TRANSCRIPT--- It’s really a privilege to be here. What I’d like is for the next hour to be your time. So, uh, this won’t be your, uh, grandfather’s usual lecture. And, and the way I’d like to organize our time is to learn a little bit about you, and to get questions of yours on this whiteboard, and then I’ll, I’ll try to address some of those. And then we’ll have time for more questions at the end of it. So first of all, a show of hands, please. How many of us are engineers? Okay, and uh, for those who are not engineers, how many would you say are technical? Right. And how many of you expect that you’ll work at a startup company? How many of you dream of starting a startup company and being entrepreneurs? Yeah. And, uh… how many of you are just not interested in any of those topics whatsoever? Someone in the very back. So here’s the grid, the whiteboard, and I’ve put some categories up, and some of you have posed questions to me already. We’ll take about five minutes to put new ones up here. We could talk about your career, and leadership. We can talk about startups and entrepreneurship. Uh, TNBT. Anybody know what that is? That stand, yep. The next big thing. We can talk about the next big thing. Uh, venture capital and Kleiner Perkins, which is the, largely the work I’m doing. Policy and politics. I’m very interested in good government and policy. Uh, personal, uh, questions. There were a number of those, like what brought me to the Valley or how do you define success. Education, uh, healthcare, any of those topics. And I, I’d be very happy to offer you some hot stock tips before the… before the afternoon is over. So here’s what we’re going to do for the next few minutes. If you’ll put your hand in the air, uh, tell me your name and the program you’re in, and either a topic or question.

My name is Kevin, I study Environmental Economics and Policy along with Computer Science. Yeah. My question is, you said your advisor told you, you know, the most important field would be, uh, the combination of biology and technology. How do you evaluate different emerging fields, like that one, and say, nanotechnology, or say, quantum computing?

Yeah, okay, so I’m gonna, I’m gonna put that under Venture Capital. And “How Evaluate New Fields”. Another question, please. Yes?

Hi, I’m Chad. Um, I’m interested to hear about the sharing economy and the public policies surrounding that area.

Okay, so we’ll put that under Policy and Politics for the sharing economy. The kind of, uh, Uber wars that are going on right now as, uh, old institutions are challenged by new ones.

How are women treated in the tech industry compared to say thirty years ago.

Compared to what?

Well, let’s say thirty years ago.

Thirty years ago. Okay, so I’m gonna put that under Personal, though it affects a lot of these. And it’s “Women in Tech”. Another question.

Uh, and I was kind of wondering on top of the first guy’s question, so when you do find an emerging market or an interesting industry that is extremely technical and you don’t know anything about it, um, how do you kind of catch up to speed and hold your own in a conversation with someone with that technical background?

Okay, I’m gonna put that under Personal, which is “How learn”, is that right? What are my, what are my personal tips?

I was wondering, uh, the status of women in the startup industry, and what do you think about how are considered, uh, women founders?

I’m creating a whole diversity category now.

You’ve invested a lot in some great startups. What would you think, what would you consider that was different when you were investing those versus some of the other investments you made?

What’s the difference between a great startup and a…

No, well like, I mean, you invested before, before they became successful.

Before it was clear Google would be successful. So what did, what did you see? I’m gonna put that under Venture Capital. So… can I call that “How tell” How you tell or what you see in a Google or an Amazon or the next big thing. That’s a really important question.

Uh, this question is for the Education portion. Uh, I know that KPCB’s investors in Coursera. I was kind of curious how you think Coursera matches up with other educational technology companies like 2U, and where you think that space is going for the future?

Great question. So how about Coursera and MOOCs and the overall opportunity there?

Hi, uh, I’m Daniel. I’m a Computer Science major and a Public Policy minor. I was wondering what, uh, what you see for the future of US companies - Facebook, Google - breaking into the Chinese market?

Mmm. Mmm. I’m gonna put that up here in a new cate-, we’ll get rid of hot stock tips. Global. Google and others in China.

Hi, my name’s Rohan. Could you talk about three of your favorite books or big ideas that have kind of shaped your approach to like, problem solving and your perspective?

Right. “Three favorite books for problem solving”. I love books. Books are my friends. Yeah.

Hi, my name is Anya. I’m a Business major, and I once heard this from Jack Ma, he said when he first came to this Valley to raise money, nobody wanted to talk to him. But last year Alibaba just became the largest IPO in the United States. So I was wondering, how do VCs evaluate foreign startups when they come here for fundraising?

Yep. Uh… we’ll call it “US or Western VCs in China”. Is that right? What’s wrong? What’s going on there? Yes?

Hi, I’m Daniel, I’m studying Computer Science. Uh, under Policy and Politics, um, self-driving cars, where you see that going, um, yeah, just a bird’s eye view.

Let’s do two more questions, and then I’ll try to tackle some of these.

Um, hi, my name is Wei, uh, and I’m a Business major. So I was wondering, uh, what do you think about virtual reality? Where is it going?

Yeah, it’s uh, up here already, so I want to talk about it as one of the next big things. Virtual and augmented reality is the question. Last question, please. Yep.

Hi, my name’s Vishal, I’m a CS major, and I was wondering what you think the importance of getting an advanced degree is on moving on up in business and maybe pursuing a startup.

Yeah. And what kind of advanced degree, a…

Some sort of graduate degree, yeah, Master’s, PhD, MBA…

“Advanced degree before moving on”.

So, um… I’m gonna pick off a few of these categories, talk about them really briefly, then I’ve got some, an overall framework I’d love to share with you, and then we can do some more questions. These are great. By the way. I’m going to start here with the kind of next big thing. Somebody asked me the question, John, you were a really outspoken proponent of investing in green technologies. In fact, you said something like, it’s the largest economic opportunity of the 21st century. Uh, were you wrong? Uh, what do you think about this right now? And, uh, my, my view of this is, uh, it remains an enormous opportunity. The planet spends about 6 trillion dollars every year on energy and energy-based systems. And I’m of the conviction that, uh, the path we’re on is not sustainable. Uh, we cannot continue to put 120 million tons of CO2 in the atmosphere every day like it’s some kind of free, open sewer. And the consequence of that is exactly what we’re seeing today, which, uh, I’d like to call global weirding. It’s not global warming, it’s global weirding as we have extremes in weather, uh, all over our country, all over the world. The people that’ll pay the highest price for this, um, social… un-good, are gonna be, uh, probably Africans, where it’s likely that a hundred million of them will starve because they can’t grow crops. And, uh… I think that the engineer in me tells me, not the data, but the engineer says, this is a problem you know that’s the integral of all the CO2 we put in the atmosphere. And, uh… and we’re probably well down the path to irreversible and catastrophic climate crisis. Uh, that means it affects a whole range of, uh, topics that are on this board. Policy, innovation, technology, entrepreneurship, they can all make the difference. And I’m quite taken by the, uh, statement of Amory Lovins, who runs the Rocky Mountain Institute, and, uh, my partner Al Gore agrees on this. We have exactly as much time as we need to solve the problem. I find that a very hopeful declaration of what needs to be done there. In the meantime, I, I want to confess that I’ve made, and my partners have made mistakes in this area of green technology. I think we invested too much, we invested too fast, and arguably there have not been really dramatic innovations to change this carbon equation. To change the carbon equation. A couple of the best that we’ve backed is a company called Opower. It’s eliminated the energy, production of carbon equal to the city of Boston already just by changing human behavior. Another very successful investment in this field is Nest, with the distributed thermometers. I think you can argue that Tesla is not having any effect on the climate, though it’s at the vanguard of, um, of electrification of transportation, which is a very large trend. And fortunately that’s innovation is happening in the area, and I believe the rumors about Apple building a car are in fact true, for reasons we may get into later on in this conversation. So, I think this is a very exciting field. It’s capital intensive. It takes longer to bring a product to market. And so I’d be very thoughtful about what part of green you go into if you choose that field. Green is not a sector. It’s a spectrum, and included in that spectrum are some places where entrepreneurs can make a big difference, and some places where entrepreneurs are likely to fail. And, uh, if you’re interested in those fields, I’d love to continue a conversation with you on, on e-mail. I think the totally disruptive technology that’s gonna be the game changer in this field will be disruptive, radically better batteries. Better batteries. If you look at improvement in energy storage over the last couple of decades, it’s been about 2% per year. And I’ve had the privilege now of backing four entrepreneurs in four different battery companies, one of which has demonstrated now, and I had in my hand on Friday, a better than lithium-ion cell with 250% of the energy density of the best other batteries. Uh, those of you who even have a… the basic understanding that I do of batteries will know that, uh, all batteries cost whatever they weigh. So if we have 250% the energy density, that means it’s going to cost 40% of what it would have otherwise. It can pack 40% more power for a given weight. And if you apply it to a vehicle like an automobile, that means a Tesla will go 750 miles, or more importantly, the most important part of a Tesla, which is that battery drivetrain, can be dramatically lower in cost. Let me boil it all down to the final benefit. If this innovation works, and it’s a Bay Area innovation, not only will it be possible, but we will build electric vehicles that cost no more than internal combustion vehicles. And we can, when we move the global transportation fleet off fossil fuels to renewables, for example, that’s gonna have a huge, rapid… relatively rapid, scalable effect on the carbon emissions. But I believe it’s the case today, we have all the technology we need to deal with this… this policy problem. Uh, another question was, well, so what are other, uh, innovative new green, new areas that you’re excited about? And I’ll tell you the one that I’m spending the most time right now is on digital health. We’ll hear more about that later. Uh, we backed the folks at Magic Leap that are building an amazing augmented reality display system. Uh, one that actually understands the physics of how the eye focuses. So that it doesn’t try to project onto an Oculus-like flat screen a simulation of 3D, which generally will give you a headache and some people think will cause neurological damage. So you want to stay very tuned for the innovation coming from Magic Leap later this year. Uh… The big deal right now, what all the venture capitalists are still excited about is SoLoMo. That’s Social, Local, and Mobile innovations in and around these amazing smartphone devices, which has propelled Apple into being the most valuable company in the world. Um, as an example of that innovation, you have on the local front, a company like Uber, which right now is generating four times the revenues in San Francisco of the entire… entire taxi industry combined. So they’re very clearly changing behavior by providing on-demand transportation. These, uh, local on-demand services, whether it’s an Uber or an Instacart or a Shyp, are, are, are really profound. Think of this smartphone as your remote controller for the world. Your remote controller for the world. And so what it will be able to do for healthcare and for education, uh… is, uh, I think as yet unappreciated. Um… what else did I put up here? New media, drones, precision agriculture. Oh, this is security. I think there’s only two kinds of institutions today. Those that have been hacked and know it, and those that have been hacked and don’t. So in this arms race, the work that we need to do to protect, defend our increasingly vital infrastructure and systems that depend on, uh, on the very insecure worldwide web is, is substantial. Okay, so that’s a quick tour of some of the, and may I say one more thing? No matter what my views are, and my partners’, we are like open for the best ideas every day. We don’t presume to be smarter than entrepreneurs, and, and, and I’m delighted and surprised every day when we get uh, new proposals that literally blow our minds. Um… why don’t we go over to venture capital for just a moment and tackle some of your questions. How do you tell the difference between an absolutely extraordinary venture and kind of an average one that may do well and may not make it. And we looked back on the investments we’ve made and found there are five key factors that distinguish the Amazons and the Googles from the rest of the pack. And the first is technical excellence. The second is outstanding founders and management. The third is strategic focus on a large, new market or unserved market. Uh, the, uh, fourth is, uh… is execution. That is, speed. How fast do you execute. And the fifth and final one is reasonable financings. Reasonable financings. And for those of you who are taking notes, I think that’s a really smart thing to do, but I’m gonna tell you at the end of this talk a way that you can get the notes, uh, from this conversation. So… five factors. Technical excellence. Why? That’s not for published papers and PhDs. It’s so you can attract the absolutely most amazing talent to your organization. Because if you have A technical people, other A technical people want to work with them. Second, outstanding management and founders. I deeply believe in founder-led companies. The difference between an Amazon or a Google or a, uh, Tradeshift, for example, that are run by, uh, Jeff Bezos and Larry Page and, and Tracy DiNunzio is really remarkable. And I’m not saying that all founders can always scale with their businesses. The really smart founders, if they know they can’t, will get a COO, or even bring in a CEO for a while and then sometimes go back and run their companies. But that commitment to have outstanding management is what’s gonna allow us to execute. Execute, because execution at speed is everything. Uh, Thomas Edison said, “Innovation without execution is a hallucination.” So, uh, your ability to execute matters enormously. I think large markets and strategic focus on those is, is pretty obvious. The last thing I’ll say about these factors is, I’ve seen ventures raise too much money as well as too little. And when you run out of money, it’s over. So you always want to have maybe a cushion greater than what your plan is. But the way to make a lot of money building an, an, a venture… if that’s your number one goal… is not by cutting a tough deal with an investor or a venture capitalist. It’s by being ruthlessly intellectually honest about what the risk is in your venture, and then, tell you what, let’s get that risk upfront and removed. Maybe can you get the product to work. Maybe can you close that strategic partner, that very large entity that’s got all the data that you need. But if you focus on that, then clearly after that, your venture is going to be more valuable and if you need to, you can raise more money. These we call are staged financings. Um… “How do you evaluate new fields” is what it says. I gotta tell you, I just try to hang around the smartest people that I can. And so I’ve built a network of advisors, whether it’s, uh, you know, Bill Joy in the future of computing, or… who would be another good example of that? Um… Larry, Larry Page, uh… uh, younger innovators, um, in, in, in their 30s. Dylan Field, who’s a Thiel fellow who dropped out. So I, I love innovation. I worship at the altar of innovators. I hang around universities. Every Wednesday night I have, uh, about eight, eight, uh, college students, mostly from Stanford, over, over to our home for dinner. And then I read like crazy. I subscribe to six, yeah, old-fashioned print newspapers that land on the front door, about 35 magazines. One of my favorites is the MIT Technology Review. Another is The Economist. And then I read stuff on the web like crazy. Uh, one of the important things I do when I’m trying to learn about a new field, and right now I’m really passionate about health and digital health, is I go to entrepreneurs and say, what should I read? What should I watch? And so I, I try to plow through about a book a week. And then, and then I’ll invite the innovators in a field like that, it’s amazing what people will do if you just call them up on the phone. I ask them if they’re going to be in the Bay Area, and then go have breakfast with them or lunch or something of that sort. I wish I had the time to go back to university to take courses. I’ve kind of grazed on the Coursera courses. Uh, some of them anyway. Um… And then I kind of blunder my way through these fields because I don’t really have to be expert in them, I just need to have some sense of taste, and rely on the entrepreneurs to be the thought leaders and the innovators. Uh… okay. What are the qualities that matter in entrepreneurs? Um… this is a pattern matching thing. It’s, it’s like when you meet Jeff Bezos, you just know that you want to be in trouble with them. Jeff was a, you know, computer scientist from Princeton, exceedingly bright. And I remember walking into his offices in a very seedy part of Seattle. In fact, the free needle clinic was right across the street from his offices. And Jeff came bounding down from the loft in this place where they were distributing the books, with a laugh that only could barely be described as a laugh. It was more like a honk. And, and, at that moment, from the intensity in his eyes and the way he talked, I knew there was a kind of, uh, personal bond that meant I would, wouldn’t mind being in trouble with Jeff. And one thing I’m pretty sure about is any of the entrepreneurs that I get to work with, who are going to do something world changing, we are going to get in trouble. We are going to get in trouble. So, the, the, the goal then, in working with them, is try to make new mistakes, not repeat the same old ones. And, uh, that was, uh, true of Larry Page, that was true of the Sun founders, it was true of a stealth entrepreneur that I can’t really tell you about right now. Uh… but it’s, it’s a great joy. I think the privilege in the work that I do is that, uh, I get to kind of be off to the side and support entrepreneurs who are going to change the world big time. So that covers pretty much of venture capital and Kleiner Perkins. We got that done. We got the next big things done. Um… Startups and entrepreneurs, how do you mentor entrepreneurs? Or what kind of mentoring do you provide? Well, I touched on it. I think there’s a whole set of mistakes, scar tissue, not really wisdom, but scar tissue from mistakes that others and I have made that we don’t have to repeat. But we’re going to get in trouble, so the goal is to make new mistakes, right? The, uh, I, I try to be, uh, online, rapid, in response, and then, uh, bring some sort of simple scalable systems to, to, uh, companies so they can be even better. I strongly recommend that entrepreneurs get a coach. I’ll try to fill in and do that job, but there’s also a network of professional coaches that make a big difference. I’m going to tell you a story about a UC Berkeley grad, Eric Schmidt, who we recruited to come work with Larry and Sergey when they were building Google. And not long after Eric arrived, I said, Eric, I think you ought to get a coach. And he was really offended by this suggestion. I said, well, I’ve got this coach I want to recommend to you. He’s actually formerly a coach, he’s the football coach of Columbia University, kind of the legendary Bill Campbell. And, and, and so Eric said, yeah, yeah, yeah, yeah, yeah. And he, he met with Campbell, and years later he said, it was the best piece of advice he’d ever gotten, because Coach Campbell, who had been a CEO before, and had coached a team before, became his co-pilot in building the Google company with Larry and with Sergey. And I think if you spent time with Larry Page today, he would say the same thing about Bill. What does a great coach do? A great coach gets totally aligned with you. They’ve got your back. They’re working with you to build the company. They might join you in a staff meeting. They’re going to privately give you constructive critical feedback. That’s one of the rarest things to get in a business setting is constructive critical feedback. And, uh, an extraordinary coach will also work with your teammates. So I gotta tell you, when Bill Campbell walks into a room, and he attends all the Monday staff meetings at Google, everybody just lights up, you know, they want to be hugged by this big burly, foul-mouthed, cussing, uh, uh, coach from, uh, Columbia University that, uh, is there, doesn’t make the decisions, doesn’t run the company, but helps the process, helps the process. So, I’ll go quickly. We’re doing pretty well here. You know what I’d like to do now, if it’s all right with you, is I’d like to share with you a framework for career decisions you might make, and a property, a quality that I think you really ought to look for when you’re thinking about either starting your own company or the kind of company you might want to join. So, without further ado, I’m gonna move this… away. I think when you’re, uh, selecting what you’re gonna do next, your top priority ought to be learning and growing. Not making a lot of money. Learning and growing. And I strongly encourage you to build a strong foundation of experiences. And if you’re gonna be the CEO and a founder of a company, I think you should learn how to sell. You really ought to learn how to get orders. If you don’t find customers, and customers aren’t gonna pay for what you’re doing, you’re gonna fail. You don’t need to learn that in a startup. You can learn that on somebody else’s nickel. Uh, you also ought to learn something about management. Leading a team, uh, of at least a dozen or so employees. And then, whatever the stage of your development, I think it’s really important to always network. To develop personal and lifelong networks. To have the confidence to cold call anybody that matters to you. Uh, I remember when I was looking for my first job in Silicon Valley, I made a point of, of interviewing with 35 companies. I didn’t care what my grades were. I wanted to talk to Hewlett-Packard, and talk to Intel, and talk to Fairchild, and talk to Oracle, and make those networks stay alive. These are, like, not LinkedIn networks. They’re not social networks. They’re personal networks. And if you’re uncomfortable at networking, get outside your comfort zone. Learn how to do that really well. If you’re uncomfortable with public speaking, get really good at public speaking. I think people are judged by their ability to think and speak on their feet more than any other skill. I do think it’s a great thing to, uh, if you’re lucky enough to find and try to sustain a couple of mentors. And then, pick your spot. Try to get in on the ground floor of a company that could be enormous. For a couple reasons. One, those companies tend to attract really good people you’re gonna learn more from. And second, uh, when the organization grows really rapidly, you’re gonna be pulled right along because the organization trusts you. Trusts you. And to get ahead, you don’t have to elbow somebody else out of the way. In 1974 that was Intel, and in 2001 it’s Google. We can talk about where that might be next. I think it’s important to be very choiceful about your field. It’s easier to change where you work, the company, than it is to move out of one field into another. If you’re passionate about healthcare, great. Choose that as a field. If you’re passionate about media, that’s another kind of field. I do think you ought to swing for the fences. Join a startup or start up your own company when the time is right. But I deeply believe you have a lot of time in which to do that. Yeah, we’re all short of time, but if you can learn a lot about growing companies from Uber or if you, uh… square whatever it is, I think you’ll, you’ll move faster further. And here’s why. I think your ambition ought to be to be a leader. To be a leader. Why? Because ideas are, relatively speaking, easy. It’s teams that make stuff happen. And you want to lead in a culture that’s going to inspire others. That’s going to put the mission ahead of their own personal interest. And having spent some time in Silicon Valley now, I’ve observed a real range of values, values in these companies, from the missionaries to the mercenaries. What do I mean by that? My partner Randy Komisar wrote a great book, and I’m going to suggest you get the book, The Monk and the Riddle. It’s the story of Lenny, who’s an entrepreneur. And he starts a venture called funerals.com, where he intends to sell caskets and other paraphernalia associated with a death. And the venture doesn’t go very well, and the employees aren’t motivated, and he has a mentor. That mentor actually is Randy, and Randy advises him to rethink his mission and the values. And instead of selling caskets, what if we focused on building a community of the bereaved, and we allowed them to share their experiences. And, and then if they want these other things at that time, that’s great. And so they shifted, they pivoted the company. And it actually really worked. It worked very well. He talks, Randy, about the difference between a missionary and a mercenary. And I want to say that you can find missionaries and mercenaries in all the companies that are in Silicon Valley, and in all organizations. And while I have a preference, I don’t want to be too judgmental here, because most realities are somewhere along this continuum. It was Andy Grove at Intel who coined the phrase, everybody heard, only the paranoid survive. Well, I’d love to argue with Andy about this, because paranoia is actually a disease state, right? And if instead of being driven by paranoia, you can be drawn into an opportunity by passion, well, that’s another force and maybe a longer, more durable one. The mercenaries tend to be more opportunistic, and theyre focused on the pitch and the deal. Whereas the missionaries are more strategic. They’re interested in kind of the big idea and how you form a partnership. Mercenaries are sprinting for the short run and obsessing on competition. Missionaries understand that their mission is actually a marathon, and they’re in it for the long run. They obsess on customers, not on competitors. Delighting customers. In mercenary organizations, you may have an aristocracy of founders. And if you’re the founder of a company, you ought to pay close attention, be really attuned to how you affect others, because in an aristocracy, you can shut down the best ideas. And what you want to do is be in a conversation, be in a debate, in a discussion, and get the all the best ideas on the table and let the best idea win. Otherwise you’re going to be limited to your own vision and your own thinking. Mercenary cultures are interested in financial statements. The missionaries in the values statements. In a mercenary culture you’re more of a loner. You’re on your own. There’s not mentoring and coaching. This is important for where you choose to build your career. Are you going to be mentored? Are you going to be coached? Is it a culture that emphasizes that? In a mercenary culture there’s kind of an attitude of entitlement as opposed to a sense that everybody should contribute. And so they’re working on, it’s an insurance term, the deferred life plan. I’m going to put off living in order to make this business succeed. As opposed to trying to strike a balance so you can have a whole life. A whole life that really works. The bottom line of all this is, it’s the difference between a lust for just making money or a lust for making meaning and money. When I meet an entrepreneur who tells me they’re not interested in making money, I’m kind of asking myself, are they really telling me the truth? And, and there are some who are. There are some who are. But I think if you have the privilege of being not just successful, but doing work that’s successful and significant, I think that will lead to a good life. A good life, well led. Ideas are easy. I worship at the altar of ideas. I love innovation. I bet everybody in the room here does. But I’ve seen so many disruptive ideas where there’s not been execution. The team doesn’t get it done, that, um, it causes me to admire the innovators who can also lead. Who can assemble, recruit, hire, and motivate a great team. So that’s the framework that I’ve found across ventures, and I encourage you when you’re interviewing at a company, or thinking about what you’re gonna do next, to, uh, look for leaders. Look for values. Look for culture. Find, find ventures that matter. What if we put some more questions up here on the board now?

Hi, I’m Sandhya. I’m in Bioengineering, and I wanted to know your take on healthcare and venture capitalists, and if they really consider FDA approval, um, as a big hurdle.

This is a great topic. I’m really interested in it. So I’m just going to put it up here in red. Healthcare and VC, including but not limited to the FDA. Okay, couple more.

My question is, uh, that in the past, did you miss out on identification of any of these big ideas and did not invest in, uh, those big companies that you regret right now?

Oh, yeah. What, uh… there’s two things I could confess to. One is my most famous failures. But the biggest problems are the acts of omission. You know, uh, big opportunities we missed. So I’ll try to get to those.

Getting back to the career aspects that you were talking about, especially early on, internships, our first job. Is it worth trying to get those big names on our resume to kind of like establish ourselves, or, ‘cause if you go straight into startups, I think a lot of times with internships, the connotation can be you couldn’t get the big name.

Okay.

How can we get in touch with you?

So my email address is jdoerr@kpcb.com. And you can send me mail. And if you would like a copy of those slides or a photo of this, uh, whiteboard, if you will send me the names of your three favorite books that sort of changed your life, or otherwise that you just think I ought to read, then I’ll send you mine. That’s the deal. So that’s how to get a hold of me.

Um, so you said that it’s important to keep your networks alive, and to create a network. Can you explain how you do that?

How do I network? Sure.

I know you talked about earlier your criteria for what you look for in a successful startup. Yep. Can you give us an example or a couple, or a pattern, where you’ve seen a startup that fits all those criteria perfectly, and then for whatever reason down the road fails?

Can I give you an example of that. Thank you. We ought to be able to come up with one. So it’s a, I’m gonna put that under startups that meet the criteria but still fail. Yeah. Alright. So, I want to, uh, do these for a while, and then maybe we’ll wrap up and cover some more topics later on. Uh, with respect to education, uh, I think of the education market, globally, as being divided into two, and I’m informed by the US education system but not confined to that. And I think there’s the elementary, public education system in the US, which is failing. It’s killing our kids. 20% of the kids in American schools don’t learn to, uh, read. They don’t learn to manipulate symbols, that’s code word for algebra. They don’t learn how to express themselves. If you don’t read, you can’t really write. You can’t program. You can’t create with art. Uh, and that’s a national tragedy. And it’s intolerable. And I’ve worked in the field of ed reform for a couple of decades, making only minimal progress. And pretty much gave up on it until I had the extraordinary privilege and luck of, through, uh, my wife Ann, meeting Sal Khan. Who, with Khan Academy and the new technologies, has finally brought 10 million students a month into a remarkable curriculum and university that basically has a faculty of one. So there’s a certain scale now that’s possible, and more important than the scale, you don’t have to work through the system. You don’t have to get approval from a district, or a union, or even a school administrator to get there. The other thing that’s happening in education that I think is pretty exciting is, uh, these smartphones. While no one was looking, 70% of the teenagers in America walked into the classroom with the device that connects them to the internet. And so ventures that take advantage of that, whether it’s messaging or content, or quizzes like Quizlet, they’re, they’re really going through the roof. Uh, higher education is a great national treasure. The US is leading there, despite some of the archaic, tenure-based systems and the pressure that there are on these institutions. Globally, we know that education, higher education costs too much and it’s not available to enough people. So, uh, I had the privilege of backing a Berkeley alum, Andrew Ng. I’d happened to be taking his machine learning course. 120,000 people signed up for it. And suddenly he was a rock star. He walked down University Avenue, and people would say, oh Andrew, how are you? I mean, that’s, that’s more people than he’d teach in his lifetime in one course, several times over. So I think these MOOCs are not going to replace the physical universities. And indeed, if you look at Coursera, two-thirds of their students are outside the US. 60% of them are not enrolled in any kind of formal undergraduate program. And they’re just getting started. So I think this whole area is pretty exciting, but it’s gonna take a long time, because fundamentally, it’s the second largest, most screwed up part of the American economy. The teachers, the parents, and the students are not linked in any rational economic system. Well, that begs the question, John, what is the most screwed up part of the American economy? Who thinks? Yep?

Healthcare.

Healthcare. Any other answers? No, it’s healthcare. Why is that? It’s because, same thing, the patients, the providers, and the payers are not linked in any rational economic system. Who knows how much it really cost to have their last healthcare procedure? And independent of what it cost, who knows how much you paid for it? Who knows how to measure whether or not that worked? Healthcare in the United States is a 3 trillion dollar industry. I just want to put that in context. You know how excited we are about Facebook and Google and, uh, uh, Twitter and all these ad-based online systems? Online advertising, globally, is about a 250 billion dollar industry. It’s less than one tenth the size of just healthcare in the US. If you took US healthcare and made a country out of it, it’d be the fifth largest country in the world. Just our healthcare. The only bigger countries would be the US itself, of course, uh, Germany, Japan, China, and then there’s US healthcare. Bigger than all of France. All of the gross domestic product of France, of 66 million people, is less than 3 trillion dollars. And we know a third of it’s wasted. A trillion dollars is unnecessary, it’s overutilization, it’s mistakes and errors. The US doesn’t have demonstrably better healthcare than in other countries. And so, uh, this is, this is a system that’s well positioned for improvement. And the really exciting thing about where we are right now in time, this moment in time, is the combination of data, big data, innovation, changes that are possible due to the Affordable Care Act, entrepreneurs. There’s an entrepreneur here in the audience who’s launched a stealth company that is going to, I believe, transform the healthcare industry. Uh, these forces are coming together in a, in a way that if I was building my career right now, I think I’d major in computer science and big data and go to work for a company in this field. Because this is valuable work. When people lose their healthcare insurance, or people they love, they die. Or they go bankrupt. Or they get divorced. Or… it cuts very, very deep. And so, uh… healthcare, healthcare innovation. You asked the question about the FDA. And the FDA has improved its act slowly during the Obama administration. But you know, fundamentally they were using, uh, procedures to approve clinical trials that didn’t exploit the targeting and the personalization of gene-based therapies. They’re gradually making changes in that part of the system. So let’s see. We’ve touched education online, we’ve touched healthcare. Uh… Global. How do Western companies succeed in China? I don’t know. There’s very few examples of it. There’s a strong commitment on the part of the Chinese government to, uh, foster and encourage, uh, national winners. There’s a law that’s been fast-tracked for both a second and third reading next month, in the middle of March, that would require any provider of innovation or network technologies to host all the data on the Chinese citizens on their ground, to provide a front door, not a back door, of access to those, to provide their source code data. And this has been put forth not by the Ministry of, of Information, but by the national security agencies. And I believe, if passed, if fast-tracked, it’ll cause companies like Apple to leave China. And that would be an extraordinary change. This is not in the interest of the Chinese people, but it’s a, it’s a very difficult place to do business. I think if you’re gonna succeed in China, the way LinkedIn has, uh, the way Evernote has, is you’re required to partner with local national champions. And of course, pretty famously, Google says, we won’t tolerate their censorship, we won’t be part of it, we’re going to pull out of the, out of the country. How many here think that was a good decision? How many think it was a terrible decision? Yeah. And how many of us don’t really know, we don’t have the data to decide. Yeah. Tough call. Largest market in the world. Maybe being there will move it towards democracy. But maybe not. I haven’t talked about women in technology. I’m the proud father of two adopted daughters, and the tech industry is terrible with respect to women. And, you know, how, in a time when we can’t get enough technical talent, we haven’t figured out how to address this problem, I don’t know. I talked to John Hennessy, the president of Stanford, about it, and I said, why aren’t there more women who stay the course right through CS? And he says, look, they look at the work that’s done in CS, the exercises, the use of talents, and this is this is crummy, you know, you’re programming in a solitary environment, you’re not leveraging your leadership or your ability to connect with and motivate others. And so I think it’s a combination of the curriculum, I think it’s the role models, it’s a lack of mentoring. And, and this is, this is a national waste. The venture capitalist industry is even worse than, than the, uh, than the tech industry per se. The average number of females in the venture industry is 4%. What kind of message do you think that sends to female entrepreneurs? I’m proud my own partnership has 20% of our general partners and investing professionals as female, and therefore, first of all, we make better decisions, and second of all, I think we’re more attractive to female founders. Which, uh, I, I want to back. I want to be part of, uh, their innovations and changing the world as much as anyone else’s. Uh, this is a problem. We’re finally starting to talk about it. I hope we do something about it. I hope we get results fast. Uh… oh, the resume question. Names, burnishing your resume, internship. I’d go for substance over resume. But I wouldn’t neglect the resume either. If you’ve been an intern at Google and somebody looks that you’ve been at Google, that’s gonna move you higher up in, in, in… well, it’s a great place to network, it’s a well-respected technical company, and that, that applies to a number of other companies as well. It’s just kind of the truth and that’s what I’m sticking with. How do I keep my networks alive? Um… to network, you gotta communicate. And you gotta be choiceful about who you want to communicate with and be clear about, uh, what you want to do and hopefully have some fun while youre doing it as well. I, I do like to say there’s always extra points for humor, so, uh… communicate like crazy. Use the social networks, use the professional networks, uh… live, live life to the crazy fullest that you possibly can. I’ll tell you what, I’ve run a little over time now. It’s, uh, it’s 6:05. I think what we’re going to do is close with four more questions. And if anybody wants to leave right now, you certainly can. Yep. Let me get a mic there.

Um, can you talk a little bit more about the sharing economy and which companies you think, you know, are really hot in the area? Specifically, you know, which sub-vertical should we be looking into?

Sharing economy. Love to do that. Let’s get three more questions up here.

What do you think about social entrepreneurship and this new fascination with impact?

Social entrepreneurs. Love them, love to talk briefly about them. Okay, two more.

Um, hi, I’m Lucas, I’m a Mechanical Engineering student. And I’d like to see what you think about companies like SpaceX and like space exploration?

Space. Last question.

Hi, I’m Aisha, I’m a Political Science student, um… a senior. And I was wondering, you mentioned that, um, the industry average in VC firms is, uh, 4% of women. If you’re a woman and you’re hoping to break into the VC industry, what would you suggest a woman do?

Women in VC. My advice here applies to women and men in VC. And I think if you want to, you cannot, uh, buy the right to be on a board of directors. You do not buy the right to advise entrepreneurs. You gotta earn that right. And you better earn it by virtue of experience. Maybe you’ll be extremely lucky. But my advice is go be a successful entrepreneur. Figure out how hard it really is to raise money, to make a payroll, to fire one of your co-founders, to inspire a team. To grow an organization. How about how hard it is to manage through managers of managers when you don’t know the names of everybody that’s in your company. You figure out how to do those things, and you will be highly sought after by venture firms. By venture firms. Because that’s the real deal. Venture capital is a service industry. And so my partners and I, while we’ve started companies, we’re not confused about what our role is. We do not run these companies. We’re there to serve the entrepreneurs. To provide them with the best advice that we can, when they want it, and sometimes when they don’t. And then to back them. To help accelerate their vision. And after all, the reason we invested is their vision is much better than ours. Uh… I, I don’t think there’s anything wrong with hanging around venture firms. Like getting a summer internship there, or getting a sense of it. Go to companies that have been backed by good VC firms, if that matters to you. But for the most part, when I first came to Silicon Valley, I thought I wanted to intern at, and work at a venture firm, why, ‘cause I heard they had something to do with starting companies. And the advice I got was, Doerr, forget it. Actually, no VC firms would hire me. They said, go get a job at a real tech company. And there was this little chip company getting started called Intel, and that’s what I did, and I’m one of the luckiest people in the world. It worked out really well. Uh… Resumes, internships, how I network. Sharing economy. I just made a commitment to an amazing company, uh… well, we’re big investors in Uber, and that’s looking good so far, I think that’s gonna work out. But, uh… there’s a lot of interest in food right now. How many people use Sprig, ever? Not so many people. Anybody use Munchery here? Yeah. More Munchery by a factor of 6 to 1. I’m going to go see Sprig tonight and Munchery on Thursday this week. So, uh… Did I miss one more question? Oh, social entrepreneurship. Regardless of the field, here’s the definition of entrepreneurs. Entrepreneurs do more than anyone thinks possible with less than anyone thinks possible. That’s the amazing thing. They do more than anyone thinks possible with less than anyone thinks possible. And that can be in a Silicon Valley VC startup, that can be in a nonprofit, like a hospital. That can be Muhammad Yunus in creating micro-loans. That can be Bono and the RED organization, in raising the Global Fund to bring anti-retrovirals to an AZT to, uh, largely women in Africa, with AIDS. Um… there’s great work to be done for social entrepreneurs, and in a lot of ways that’s harder. It’s hard to recruit great people to entrepreneurial organizations. But both the satisfaction and the impact of the work, the degree to which it changes the world, certainly can be greater than your next incremental photo web sharing site that, uh, too many people are pursuing. You asked about my three favorite books for problem solving. I told you how to find out about those, just send me your three. And then there was a question finally here of, how about ventures that kind of met those criteria, but in the end, didn’t win. And I think the reason is they got, sometimes they were too early. So Friendster, and, uh, MySpace, they were too early. Uh, but other times, primarily, they don’t execute. Ideas are easy. Execution is everything, it takes a team to win. So to each of you, there’s never been a better time than now to build an entrepreneurial career, there’s never been a better time now to start a venture, and, uh, I did say go join a big company, but if you’re the next Mark Zuckerberg, I’d like to see you right after this meeting. Thank you very much.