it it's a a a privilege to be here and even more of an honor to be here with two GSB alums partners of mine and I want to offer you some career advice and tell you the story of of Kleiner Perkins and be sure that uh Trey Vaso to your left my partner since 2000 in a GSB grad can share with you her perspective on Innovation entrepreneurs and venture capital and also chiwa Chen a grad of 2006 is that right and I'll have more to
say about both of them in just a second do you have the clicker yep I I prepared 14 slides and my goal for this time is to spend over half of it in Q&A in interaction with you so as we go along pull out your notebook write down questions we're going to try to cover as many of those as we can collectively my aim in the first part of our conversation is to tell you a little bit about Kleiner Perkins our business our
strategy uh uh to tell you a a little bit about what's going on in two of the three initiatives that we think are really important go into green technologies and digital Technologies and then to offer you some unsolicited career advice as you're thinking about where you're going with your career and perhaps even your life that's worth what you're going to pay for which is nothing and and and then and then we'll
Dive Right into to questions and answers and and and I hope hope that'll do well we will end on time in an hour so uh the Kleiner Perkins partnership is a service business we're in a service industry uh our business doesn't scale very well our job is to help entrepreneurs and the way we' figured out to best do that is to build our team of partners with people who've had significant entrepreneurial
experience so uh Trey was an an early founder of the company that uh today is uh really the core of palm Computing she designed the Palm five which is the iconic PDA uh chiwa he he worked at a a a very uh hot advertising networking uh company built ad networks and then uh we ripped them out of excel Partners to come take on a lot more responsibility here at Kleiner that ability to connect
with and serve entrepreneurs is key to being good in the Venture Capital business and and we've done a good job uh we've got a couple hundred years of investing experience in our partnership we view ourselves more as company Builders than financiers I ran more discounted cash flow statements at Intel than I ever have done since I've come to Kleiner and um and the heart I think of what we have to offer is our team this
is uh 16 of our investing professionals that's the whole team working on digital Technologies and green technologies we have some other partners who at work in the Life Sciences and of course you'll see Trey and and you'll see chiwa there uh Kleiner has always had a strategy of being a multi-generational partnership so that any time there there's three generations of Partners in our firm a venture capital firm could be an
episodic collection of talented individuals and fortunately when when I joined in 1980 as an untalented individual Tom Perkins who had built hulet Packard said we want to build a service organization that can last that can last beyond any of the partners is there anybody I should point out here Trey and and uh chiwa that's Al Gore stands out I guess U a lot of venture firms have people that are door openers
and their names on the name plate and so forth Al is not that he's an amazing leader in human being I mean we came so close within 400 votes in Florida of having him be president of the United States or one vote on the Supreme Court we'd be in a much better world today if that were the case but um Al Al is a Al Al is a nerd he's a techie he's on email he responds all the time anytime he's in
the Bay Area which is uh often several times a month he comes to the offices he comes to the partner meetings he comes to the strategy offsites and he gives us great investing insights I hope in your work in these fields that you'll get to know Al Gore thank you that's the track record those are the results a lot of jobs a lot of Investments a lot of IPOs and a lot of market value we work for the Stanford endowment and other
university endowment so they give us part of the endowment our job is to return them 10 times more what what they give us and uh we've done that pretty successfully over about a decade we distributed a billion dollars of profits a year to our limited partners on average uh it's been tougher now for public offerings and for distributions and returns but that just means uh we got to work harder and the entrepreneurs
are got to be more successful uh our strategy is to uh focus on building companies and helping the entrepreneurs of the World build companies uh that can take many different forms in the in the case of Google it took the form of helping them get a great CEO and then work on their strategies in the case of some of the companies that chiwa is working on it takes the form of forging strategic relationships and and going after the
right markets if you do all that well the one final ingredient that makes for a really great company is the culture of the company what are their values and because I believe that you'll in the next year or two be looking at where you launch your career I want to share with you an observation that Randy Kar made about companies and their values and he said you know there's there's two really different strains if you want to paint
the extreme in Silicon Valley companies and uh either one can succeed in fact we see both of them succeeding but I think if you go into your first assignment if you when you're interviewing uh have this in mind it I think can help you make better choices about what works for you and and and I refer to these strains as the mercenaries and the missionaries The Mercenaries and the missionaries right
uh in a mercenary culture there's tremendous drive and in fact Andy Grove even said only the paranoid survive in a missionary Culture by contrast there's passion drive and passion think about the difference of those too in the mercenary culture I like to say that the entrepreneurs the executives are opportunistic the missionaries are more strategic The Mercenaries focus on the pitch on the deal and their sprinting for the short
run it's AO to the missionaries who are paying attention to the big idea and understand it's a marathon in a mercenary culture you obsess on the competition and you may develop an aristocracy of the founders the missionaries by contrast focus on the customers and they build a kind of cultural meritocracy where the best ideas can win those mercenary cultures tend to focus on financial statements
and the way they develop the people is kind of uh loners kind of you're on your own in the missionary culture you'll hear a lot more about value statements and people really try to practice those and live those those are companies that are infused with coaches and they understand that it takes teams to win um in the mercenary culture you're entitled to that additional bonus from your large enterprise software company
as opposed to you've made a contri contribution and now you'll be rewarded for it it's a difference between what I like to call the Deferred life plan or the whole life that really works anybody tells you they're not interested in making money I think is not telling you the truth it's the difference between a lust for making money or yes making money and also meaning I think like to characterize it as the difference
between striving for success or success in significance I want to emphasize again either of these two cultures can work I know there's one that I prefer to be involved in which is is that missionary culture but it's something to think about I believe as you look for where you're going to invest the very important and precious next years of your lives historically Kleiner Perkins has been in two businesses the uh
information Technologies and the life sciences Technologies or as I like to call it the bits and bites and the bugs and drugs and one of the third legs that we added to the stool it's a big strategic move for us in The Last 5 Years is to spend time with the green technologies the ench Energy Technologies the biofuels and the batteries the solar solar cells the wind and it's quite a diverse industry it's
been fun to learn about that industry and to try to rise to meet the challenges that we see the main thing I want to say in orienting you about the green or the energy industry is it's an enormous industry and if you want to learn about it I encourage you to start with this slide and then get ALG gor's latest book this slide shows the energy flows to the US economy uh the sources are on the left the uses are yes are on
your right uh for someone who's interested in green as I am it's notable that renewable resources account for less than 6% of our energy sources among those wind is the largest uh through this diagram flows about um I I I guess um I I guess about a half trillion dollars a year of purchases of oil from uh places that are not particularly friendly to us the uh the petroleum expenditures and uh another notable thing is through
these energy flows almost half of the US Energy is wasted in the form of of heat or inefficient engines or transmission lines so there's tremendous opportunities to improve this energy system lower its cost and have it be renewable it's a very large Market uh we've been working in it actually seven years though we didn't know that when we started it's been five years that we've been knowingly making investments in the
field we've invested in a little over 50 companies and $600 million perhaps yeah I think that's about right I think it's about right a lot more to come yeah and more to come we're very excited about those opportunities for those of you who care about leadership in the US and economic leadership the contrast between green and digital or the internet is pretty profound um what do Microsoft and Apple and and
and Google and uh and Netscape and and and verisign and eBay and Amazon all have in common all those companies are uh leaders in the internet industry worldwide and they're all American if you look at where America stands today in the Green Tech Technologies and and just pick the top 30 companies 10 each in uh wind in solar and an advanced batteries of those 30 only four are American only four so so
so we are almost not in this race one of the top 10 battery companies one of the top 10 wind companies and two of of the top solar companies that should give us pause the reason for that is we haven't had the right policy to develop local markets we haven't had the right level of investment in R&D and so these are uh things that we all as as uh citizens and people who care about Innovation and economic leadership in our country ought
to ought to be uh calling for writing op EDS about talking to our Senators and political leaders the um if we do do that and if we get it right we can ensure that uh our country is a worldwide leader in this next great Global industry and if we don't we're going to be buying our wind turbs from uh uh China borrowing money from China to buy oil in the Middle East and then to burn it in the middle of our country
so there's there's a lot at stake and I think the next 5 to 10 years are are very critical but uh policy is not the business at Kleiner Perkins it's it's Innovation and backing entrepreneurs to build great new things and and and so I'd like try to give us an overview of all the areas in which we're making green Investments and then I'm going to ask chiwa to do the same thing for our our our digital portfolio thanks John so
as you can see we've actually been incredibly busy over the last seven years as John indicated we have over 50 companies that we would now classify as Green Tech Investments at KP one thing that I think differentiates how we invest from some other Venture firms in this area is that we haven't gone after simply the companies that look like information technology companies has applied to Green but we've really looked
at the whole Spectrum everything from supply side those are the big Renewables to efficiency companies to transportation and so I'm going to highlight a few of the companies in our portfolio and please if you have any specific questions about any one of these companies you know we're going to have a big Q&A session and feel free to ask us um some more detail then um as John pointed out you know we're less
than 6% of all of our energy comes from Renewables so we saw a huge opportunity to ramp that up and we also saw a lot of entrepreneurs Who coming to us with really deep fundamental Innovations in this area as you can see we have a lot of stealth solar companies a lot of times in our early technology companies we don't like to be very explicit about what technology we're developing but we have several companies that are focused
on Next Generation high efficiency lower cost solar we have large scale solar through solar thermal companies we're investing in geothermal um we're investing in um in fuel cells so um we have a very nice portfolio on the supply side that is really a typical for Venture but again like we said it's it's a really big leverage point for energy economy going forward we've also spent a lot of time
in renewable fuels and you can see that we have quite quite a few um fuels portfolios now this is a sector that's gotten a lot of negative press lately for people who've gone after corn ethanol and basically taking food and trying to convert it to fuel we've stayed away from that for the most part and are really focused on the garbage part of of the um uh of you know rather than taking the the the fruits taking
the parts that would otherwise be burnt or destroyed or you know people haven't been able to convert into other useful things so we have looked at every possible way chemical processes uh physical processes to convert that cellulose not into not only into fuels but also into useful chemical precursors so uh so we see a lot of exciting um Innovation and activity going on in this area despite what you may be hearing
from the market in the Press um Energy Efficiency um is really a catchall for a lot of technologies that are on on the what we call the demand side of the market it's how you use the energy and this is really about smarter energy usage um making processes that are less energy intensive and um and so this is is a broad broad range of companies um but there's one company in here I'd like to point out because it's really it's
part of a whole ecosystem of companies that we're all hearing a lot more about these days and that's called the smart grid and if you look around and you look at all the networks that exist around us you know the electric grid is one of the dumbest there is out there it was invented a 100 years ago and really has not been updated since and the best way to describe Silver Spring is it's really
overlaying the internet on top of the electric grid um you may have heard this but you know if the electricity goes out at your house right now the only way that the utility company knows about it is if you call them up and tell them it's a really truly dumb grid and Technology like Silver Spring what that means by laying the internet over the top of it you're essentially creating two-way communication points between all
the nodes on the grid so now you start to enable whole sets of ecosystems of technologies that no one has ever been able to think about before we're at the very very early stages of that and our portfolio company Silver Spring is one of the big leaders in this area and pg& um is one of their big uh partners and you may have heard but we just recently rolled out the one millionth um node on the Silver Spring Network um in the Bay
Area so there's actually some incredibly exciting stuff going on in uh the smart grid the last area that I want to point out today in in our green portfolio is really transportation and storage you know a lot of people talk about batteries being you know a key Innovation piece for not only Renewables performing better um but for um for transportation batteries are incredibly important so this is an area where we
have several stealth companies that are innovating on new chemistries better efficiencies that we think over time will be able to make electric vehicles um Renewables on the grid Farm more usable because we have appropriate and cost-effective storage techniques um the last company I just wanted to highlight is one that that I spend a lot of time on and know well is in the transportation sector um and that's the
Fisker um you may have heard a little bit about what they're doing but um the timing of of uh investing in a company like that is actually pretty extraordinary right now if you think about the automotive industry you know it's existed since the late 1800s not a ton of innovation and so for the first time you've about this whole electrification of the drivetrain um big technology shift happening and if you
look at other Industries historically those technology those major technology shifts don't normally come from the big incumbents so we've got this opportunity for new companies who are focused on this new technology to come in and meanwhile the big companies are fighting with insolvency and lots of other just macroeconomic issues so it really is an extraordinary time to be investing in um the electrification of the drivetrain
that's exactly what we're doing with a company like Fisker and so so that's a quick snapshot and with that I'll hand it back over to John that's excellent thanks very much Trey you know you might get the sense that all Kleiner is doing is green and the truth of the matter is is that our efforts in digital investing are just as big and and uh and have been longer lived than the work that we're
doing in green I'm going to fly through a similar overview of the areas in which we're investing and then we're going to dive right into the iPhone and the I fund uh for the longest time consumer fa ing businesses have been explosive in terms of their growth and uh and we continue to uh I believe be a leader in in that field the uh most exciting of all these Investments is a company called Zinga is anybody in this room
played Farmville or cafe bille or those games scramble uh Texas hold them but there's 70 million people who are playing Zinga games every month which is just a remarkably large population and and I think they found the way to monetize to get value out of the social networks and that's by allowing people to buy virtual Goods it's quite a rapidly growing company in fact the fastest I've ever seen U we going to
come to the I fund in just a moment we're seeing a real Resurgence of interest in innovation in the semiconductor fields in the science of the small Innovative new storage uh new mems kinds of devices and then for quite a while we've been investing in digital infrastructure and Innovations there it was uh June 27th of 2007 right when Apple shipped the first iPhones I think I've got that right and we were blown away at Kleiner Bill Joy
had been forecasting that this kind of a device which could be in your pocket know who you are where you are be Broadband always connected was an enormous new platform so out of strategic work that chiwa and Matt Murphy and Trey and I had done we said this is going to be the next big thing we want to go do a deal with Apple and partner with them to encourage the development the those applications and
we did and we announced that in March of last year and chiwa named the Ione dealt with the 3,000 or more plans that came in and so I'd like him to give you a quick but really privileged glimpse into what's going on with the development of applications for these new mobile devices great thanks John so why did we launch the I fund we saw several Trends evolving simultaneously that got us really excited first of all
Wireless Broadband everywhere directly into your pocket secondly a company like apple that had a real consumer brand and was uh expert at developing great consumer products coming into this Market that had historically been done by handset oems that didn't have good consumer experiences a piece of Hardware the iPhone that was fundamentally a Computing device first and a phone second app store which sits on 150
million desktops via iTunes and can deliver new forms of software directly to Consumers with no intermediaries and finally a software development kit that would enable people developers uh many of them who are in small two three person companies to develop desktop like software that had historically been Impossible on mobile devices so what we had was we had a Computing device in your pocket that was broadband connected
it was personal it was social it was context aware and it could enable an entirely new class of applications and this gives you a sense of what that really means so to put it in raw terms how many of you guys own an iPod okay that's a lot of people so the iPhone is out selling the iPod over its 2 and a half year launch period by a factor of 12 12 times as many iPhones have been sold as iPods and you saw how many
people own iPods in in its 2 and a half year launch period how many of you guys have downloaded a song on iTunes okay the App Store is out selling iTunes over its two-year launch period by 20 times two billion applications have been downloaded on the App Store in its first eight quarters and that same uh that same period of time in iTunes history only had 100 million songs downloaded put putting it in more simple
terms for something that you guys are or analogies that you guys would be familiar with Mary maker put the slide together recently and it showed what's happening with the iPhone which is on the far left iPhone and iPod Touch is a a consistent platform compared to things we know like Netscape five times as large as Netscape AOL eight times as large as AOL n mode in Japan which was was previously the most successful
mobile platform twice as big as M mode 9 qus after launch so what does that mean for us uh it suggests that there's an entirely new class of applications we've invested in nine companies so far and we're going after super verticals in those nine in in the that area of Mobile going after advertising Commerce real-time content creation communication and location based Services uh we think that there will be a significant
revolution in the way that people access information which is what this is really about when it becomes mobilized and it becomes real time and we're looking to invest in many more companies in that area let's wrap up by uh me making these unsolicited career observations for you and I realize that some of you are in various phases of your career so you can tune out anything that doesn't doesn't
feel right to you I I think as you're making the important choice about what you're going to do when you leave The Graduate School uh I'd prioritize uh learning and pick your first your next assignment based on your ability to learn and grow not so much on your level of compensation now if you're among the rare Stanford grads or almost grads who drop out the way Larry and Sergey did uh I want you to come see us right after
this conversation but I I think for the vast majority of us certainly for me I wanted to go work in a place I'd learn a lot which turned out at that moment in time to be Intel I think developing a strong Foundation of experiences and Commercial experiences not just Finance not just uh uh control but selling yeah building a business carrying a bag launching a product managing people is a really
important skill to develop I think you should try to learn really good management and Leadership processes from some of the best companies because there are some really great people to learn from in the Amazon yes the intels to this day the intuits the Googles even the GES there will come a time I think in your career where you're going to break that path and you're going to go off and really swing for the stands and
own or build your own business or build one with others that's not true for all of us but for many of us what what I want to suggest to you is you'll know when that time is right you don't need to do it right out of the business school and indeed you can learn a lot from others on their ticket and on their own money whatever path you take I believe you're going to be judged on the following your ability to listen
actively think critically and above everything else to communicate I think you're judged by your ability to speak on your feet to debate the merits of issues and that's whether you're in a large group or in a in a small group and it's for a very fundamental reason we believe ideas are easy execution is everything and in anything worth doing it takes a team to win ideas are easy executions everything it takes a team to
win the way you as leaders are going to inspire teams is by your ability to think and speak on your feet and rally others to go after that cause that that set of priorities that that business objective one thing Andy Grove taught at intel was how important it is to be able to confront a problem without confronting a person so chiwa it's not because you're a jerk because you're not you know it's
this problem that we have with the backload of I fund applications that are coming in we got to figure out a way to solve that business problem together and so that that skill which I don't possess well enough of confronting a problem without conf fronting the person is is an essential one in in leading groups so I want to really encourage you to not forego opportunities to learn how to recruit to sell to hire and fire to
inspire to manage to develop and motivate people with tough love because whatever field you work in I think it's a very fundamental skill and then finally uh there's always extra points for humor I I sure wish I had a better sense of humor and was something of a standup comic I think quite to the contrary the results of what I do or what's kind of humorous uh extra points for humor it's a very powerful social and business
weapon you're in the networking business right here and now and you are in the best place in the world to network this is so much better than any other place in the world and so I encourage you to always Network develop and sustain personal and lifelong networks and I don't mean the Facebook kinds of networks I mean face to-face personal ones find a way when you're networking to at every point in your life sustain a
mentorship relationship with somebody find someone you admire and say will you Mentor me there's nothing in it for them other than the satisfaction of helping you but you in turn can mentor someone else along your way uh Network like crazy look for positions where there's a lot of external contacts Marketing sales Business Development developer relations be prepared to take risks to ask
permission is to seek denial but all along the way please remember that in is a binary State your integrity is like sand you hold in your hands and if you ever spread your fingers apart and you let that sand fall through it it's gone forever Integrity is a binary State either you have it or you don't John can I interrupt and add one other bit of unsolicited advice please stand well so if it's not obvious I am pregnant but I
just wanted to say to you can have a career and you can have a family um because I've seen a lot of my GSB classmates drop out of out out of the workforce as life goes on and I just think uh that it's important to know that it's not easy but it can be done and so uh I just wanted to throw that out there and there never is a good time so I had my first kid when I was launching a product and a startup that I
founded John was on our board it was crazy it works out so I just want to throw that up yeah don't put off having a family too late I'm uh but that's a personal choice do you have do you have anything to interrupt me about no no not at the moment so uh this gig what we're trying to do it's a it's a marathon it's not a Sprint uh one of the things I've done past times I've been here is I've told you about uh some of my favorite books
I'll tell you what if you send me an email with your three favorite books I will send you this list and uh of these my favorite at the moment is called our choice it's Al Gore's Blockbuster book about the solutions to climate crisis not the problems so if you want to work at a startup or if you got a business plan you'd like to get funded or you'd like to work with us on an on a 380 project at least they were called that
please email me or chiwa or Trey at the addresses you see there and on that note I think we're going to move into the Q&A part of our conversation and uh I'd like to get as many questions answered as we possibly can this is your time so what we're going to do is take the questions at uh you could turn off the projector now please about three at a time we're going to throw them up on the board get as
many on the board as we can and uh and then and then try to answer them so here's the way to handle a question if you'll uh put your hand up in your name uh then I'm going to write the question on the board and uh the questions are all in uh one deep breath and they end with a question mark yes you guys stay here go ahead name uh Bron Brendan questions yeah questions are fine let's go is it enough are we doing
enough that c while oh it's going to be enough right it going to be enough for those of you who didn't see it are we going to avoid catastrophic irreversible climate crisis okay second question is of the diversity you have in Partnership as well as the people you invest in do you see a consistent trait on the partner side and you see a consistent trait on the entrepreneur side okay what are the what are the traits that we see
among the partners let's go with another question please entrepreneurs yes who's got a question oh yes ma'am name hi I'm Natalie um I was wondering I saw that most of the power generation companies in clean tech are solar what do you think about the other um clean tech uh technologies that are there at the moment power gen other than solar okay great question how about another one have you speak to Android sure okay
there was a question about Android keep going Trey do you want to feel the question yeah hi uh Pablo what what's the one piece of advice you'd give someone starting a company today okay start company advice uh Mike what are the traits that you see that are successful among the entrepreneurs that have really hit it big winning traits interest what's your view of the E SP okay e readers mainstream media journalism in
trouble where do you stand on the pay for Content pay for Content great question talk a little bit more about the culture of your Ken Thor talk a little bit more about the culture within your company and how decisions are made okay this is the Venture Capital grid AP culture um my name's Amal I'm wondering what's your thought on how important it is to in Silicon Valley for digital it startups okay my name is Juan Pablo M and I want
to ask why the life science's uh Third Leg of your stool didn't make the list today and what it would take in the industry for it to uh make your next presentation my name is Matt what's uh your best tactical advice for balancing work in family okay we're going to put the life questions over here and I love those questions yeah keep on uh Pua uh raising money while at school raising money at school
for a charity for a company for your for your tuition yeah all right that's a venture capital related question social impact investing entrepreneurship social entrepreneurs yeah investing okay samon first you worry about the capital intensity of the pr Tech business and second uh what do you see as the modernization model for I both all right so the answer to the first question is yes how dollars for green
Tucket okay you want to get two more Trey maybe two more uh name's abak uh wondering what's the biggest mistake you've ever made and how' you overcome it okay that's a life mistake thanks Kevin rric as curious about Trends in the Venture Capital space and what cliner Perkins is doing in response to them okay so this is great you know in about five minutes we threw up there 15 questions I'm really impressed by our
efficiency and and we'll take we'll take 10 minutes to answer 15 questions we won't get them all and and that would might even give us some time for some more some followup ones and I think I'll just take them in the order that we put here on the board uh I gave a talk at Ted where I got choked up at the end uh saying that the engineer and me didn't think we were going to be able to avert catastrophic climate crisis
fundamentally because of the speed and scale at which we must act to solve these problems and I I think now we will have enough Innovation to solve the part of the problem that is in the 10 to 20e time Horizon but if that's all we do we will not avert catastrophic climate crisis so most importantly we've got to get some key policies right right now in fact we got to get them right before we
go in the midterm elections and if we don't if we don't put a price on carbon a price in a cap on carbon uh I think by the end of the next set of Elections the United States will not have the political power to do it the United States doesn't lead the world's not going to follow and we could be set back five or 10 years in the most important leg of this so I'm not sure it's enough yet stay tuned it really
matters um Power Generation other than solar uh we're very long on solar more so than any other Venture Capital fund I believe but we also think there are uh equally exciting ways to generate electricity and I would say solar thermal is one of those there is a wind as a way to generate electricity we think we found a breakthrough in wind and uh what other geothermal is one that I spent a lot of time on in fact that's
one where we read an early study that said you know it's a sector where you've got a Basel load renewable the Baseel load means it's producing energy all the time regardless of whether the sun is shining or the wind is blowing and that it was underfunded um but that over the next you know 25 years we could have 100,000 megawatts of produced geothermal if we invested in it so we sought out the best team and we actually did uh
actually seed fund um a firm right now that just received a $26 million Grant from the do and is doing some of the most Innovative work in geothermal they got I didn't know they got that Grant yeah they did fantastic Trey has incubated this company it's really spectacular work by her and I want to say again in the form of career advice Trey could not have done that if she were not an entrepreneur before she came
to Kleiner she didn't have that operating experience so that's a great career role model uh how are we going to get the money that we need for Green Tech well charity begins at home so the first thing that we did is we raised a billion dooll focused Green Tech fund biggest funds Kleiner Ever Raised in addition to devoting about 40% of our our ordinary startup Venture Capital dollars to it but that's not enough we
took a look at how much Capital our current green Ventures are going to need the 50 or so Ventures it's another $4.5 billion dollar so we actively Syndicate those Investments with other Venture investors and uh God bless the Obama Administration and the US government because we have really got the A Team now working on green innovation in our country and many of these companies have applied for some have made it some have
not a loan guarantee from the Department of energy I think we're going to be able to fund these companies but I'm hoping for in fact I'm expecting a really robust market for public offerings in green starting next year um the next set of questions had to do with Venture Capital firms and uh someone astutely noted that if you look at the at the uh photos of the Kleiner Partners there's a great deal of diversity in our
partnership and you're not going to find that in any other Venture Capital Partnership I assure you most VC's are uh a half dozen to a dozen uh white male Wonder bred you know u u mbas frankly some of whom have operating experience some of whom do not and uh our experience in building companies is you just do not make good decisions that way you do not deliver High service levels you you want a diversity of ideas
and perspectives I think a third of our partners are uh not Caucasian we have have three Partners who are in the US who are fluent and Chinese we got a team in Shanghai led by Tina jeu and so U diversity is highly valued at Kleiner and in the companies we work on and in the boards of those companies uh what are the winning traits for entrepreneurs chiwa what do you see in great entrepreneurs great entrepreneurs
have a huge idea and they can motivate a large group of people to go pursue that with them that's fundamentally the most important thing that they bring they also bring great judgment because many of them often times are young so they have judgment above and beyond their experience and that's something that is not only learned but is oftentimes intuitive Trey where' you add that I would say great entrepreneurs are
oftentimes great leaders they're ones who can really Inspire others to jump on their mission because you know when you're dealing in the early stages of these startup companies it's a lot more than just the amount of dollars you're making from a salary that's motivating you to do this because you're probably not making a whole lot in the early days and so you have to really have that vision and be able to Inspire others to
follow Mark Zinga who's the CEO of Mark Zinga Mark Pinkus who's CEO of Zinga gave a talk that I think you can find online at the startup school and I was really struck by it because he said to a bunch of overwhelmingly white male Geeks U listen you know let me tell you what the gig is the venture capitalist they'll back you and then as soon as they do they want to replace you they want to get serious Professional
Management in there before you know it you've lost control of your company you were negotiating for the wrong things you negotiated for valuation you should have gone for control but he said more than anything else you should try to figure out if you can be and become a CEO he said you ought to try to run that business and you ought to be honest with yourself to figure out what it's going
to take for you to develop those skills and and I'd say the best entrepreneurs the ones that really Go the Distance with their companies are always learning they don't know what they don't know so they attempt to do the impossible they often do U but uh if you look at Jeff Bezos of amazon.com you look at Larry and Sergey a unique thing they did at Google bringing and Eric Schmidt uh these leaders these entrepreneurs uh really
try to go the distance uh winning traits and entrepreneurs we did we spent a little too much time on that kleiner's culture how do we make decisions it's a pretty collaborative culture it's uh there's a lot borrowed from Intel in the culture you want an environment where everybody can put their ideas on the table so that uh the best idea gets there and has a chance to win uh we'll disagree but after we make a decision
we'll commit any individual partner can veto an investment Trey can veto an investment I can chiwa can it doesn't happen very often because we build consensus along the way for investment decisions uh what else would you say about the culture I would add that I think we also work in teams a lot more than other Venture firms just having insight into how some other firms work where it very much is a lone wolf who
goes out finds you know his own investment and works on it himself we're um we oftentimes um have a couple of Partners the other person can call the other partners oftentimes you tend to go native on a company and and uh and it's good to have that balance of Vision on what's actually going on and so um I I would say that's something that really differentiates KP Chi you've been another venture firm what would you yeah
I think the unique model that KP brings to the Venture Capital firm is that multiple partners are involved in every single Venture so as opposed to being single threat in getting one point of view you're going to get multiple point of views and each of those are going to come through different sets of experiences which should help the entrepreneur make better decisions uh there's a topic here about investing in
Social entrepreneurs I think it's a really important thing to do you can back social entrepreneurs three ways you can back them with money if you have the money with which to do that you can back them with time and you can also back them with reputation connections or or or networking and every one of the Kleiner Partners uh spend some amount of their time giving giv back some in very
public ways others in private ways it's one of our our strongly held values uh we could talk a whole lot more about that we could have a whole session on social entrepreneurs there's a graduate of the school Kim Smith who wrote A GSB 380 plan and founded something called the new schools Venture fund which because of her work today has started not 45 schools but 40 uh 25 networks of Charter Public Schools that are allowing
100,000 kids now in total to uh in really under underserved poor areas to get far better educations as for venture capital and Emerging Markets I don't know very much about that uh we backed a team have built a team in China they make their own investment decisions we collaborate with them on those but business in China is very different than the rest of the world we do invest in India we do invest in in Europe but we
do it out of Meno Park so uh it's very select when we'll make an organiz an investment outside this area the predominant Trends in venture capital is that the industry is shrinking and it needs to because the returns have been lousy since 2000 you take the industry overall it's a loser if you put money in the Venture Capital industry you'll lose your money so we've had too many Venture capitalists chasing uh uh too few really
good ideas uh funding incrementally undifferentiated socially networked Anonymous chat sites so that you can uh get laid as you're walking down University Avenue I don't know what more to say about it than that that's certainly not what our priority is at Kleiner we'd rather help entrepreneurs build really successful significant companies they're going to make a difference I probably gotten enough trouble on
that Android chiwa yeah so Android is the second dominant platform we're watching it very closely by the end of this year there will probably be between 10 and 20 million Android devices out there for those of you that don't know Android is is an open-sourced operating system focused on mobile devices that Google's created while iPhone is a close- sourced operating system that they control end to end uh the issue
with Android that we're all going to have to watch very closely if you guys are thinking of deel developing on Android today is fragmentation of the ecosystem when you have open source and you give it to a bunch of Hardware oems each of them do different things with it they've got different screen sizes different keyboard layouts some have keyboards some don't some go horizontal some go vertical some leave GPS turned
on as default some don't so as an application developer what killed the mobile ecosystem over the last 10 years in applications was the expense associated with porting to hundreds maybe thousands of different devices for Android to be successful and we hope it is as part of this trend in open mobile it has to avoid that fate I think I probably didn't do justice to Trends in venture capital I kind of got off
this the uh the U industry is a lot tougher it takes more money to start Ventures now than it did before it takes more time to get them uh to be developed therefore I think it's fair to assume that the U that the returns are going to be lower for the industry but uh what offsets that are the outliers you know they uh most of the money in Venture Capital has been made by firms in the top desile the top
10% and and U and the industry even those have to perform better than they have in the past there is a Trend towards Green in in the industry that's the most rapidly growing sector I think it's now number two or number three to your question about the life sciences that remains an incredibly important and vibrant part of what Kleiner is doing I don't really know enough about it to give you a very good perspective on it
but we have a half dozen Partners who are the best they do that day in and day out Kleiner is not a quantity shop we're not into the volume of Investments or making money on the fees from the Investments we be quality and and back a smaller number of Ventures be more involved in trying to help those there's another important Trend in Venture Capital which is uh the rise of Angel funds and that's particularly been
encouraged by virtue of the fact that it takes less money now to start an Internet company by a factor of five or so than it did 10 years ago we've covered Android the the advice to Startup companies if you Google John door startup manual there there's a nice uh interview that was done in Fast Company with me on exactly that point uh e-readers I think we've just scratched the surface of what's possible I'm on
the board of Amazon and want to note that Amazon has said publicly when a book is available on the Kindle or available in the Amazon bookstore and they they are the world's largest book seller 30 35% of the book sales are through the Kindle and it's been out for a little over a year that's an astonishing shift so I think physical books are not going away but the e-reader I believe are going to be here to stay
even in a world where we may see tablets from Apple and others this dedicated purpose-built device uh I think will'll stick around I'm going to skip pay for Content we just don't have time Silicon Valley for digital startups I believe it is the pa place still to do a digital startup of course not because of the latitude or the longitude but because of the quality of the people that are around here and you're in an incredibly
privileged place here at the business school one more piece of advice don't take all your courses in the business school figure out a way to get into those other schools at this great University uh hang around I don't know if they're still in Margaret Jacks Hall hang around the engineering school hang around the Innovations in energy and in the Life Sciences because having taken one more or less whatever your course is
accounting marketing whatever it is is not so important I think as as reaching out and connecting with Innovation that's going on uh when I did a business school degree at Harvard I took all my independent study courses at MIT one in semiconductor physics one in speech understanding one was an independent study so you're in a very privileged place right here and you should take advantage of it uh tactical strategy for work life
balance I'm going to give you mine and then have Trey and chiwa give you theirs uh what I found the most important thing is for somebody who wants to raise a family and you may be a ways away from that probably is how many times you get home home for dinner with your kids and then that you be there while you're there for dinner so I said fine I'm going to set a goal it came from intel if you don't measure it doesn't matter
20 night 20 nights a month I'm going to be home by 6:30 to have dinner with my two daughters and my wife and uh I'm not disciplined enough to do that so Angela helps me do it but we measure it and and I've been achieving that ever since I put it in as a goal the one other thing so that you're really there is is I have everybody in our family check our iPhones and stay off the web for an hour
before dinner and an hour after we declare that to be a uh family friendly uh internet free time zone that period of time Trey um so first of all I'd say that there is no such thing is work life balance it always feels a little crazy and hectic and so the idea of you're gonna have Serenity in balancing the two is just non-existent um I think the thing that I've learned is it does require extreme prioritization and focus
on what matters to you and so to that extent it's good to write it down and focus on I'm going to be home at these times and I'm going to do my work at these times and I'm going to go exercise here and I'm going to be really anal and rigorous around planning this otherwise everything else is going to overtake my life and not let me do those things when I get home um and I try and be home you
know three of the five work nights a week which doesn't always happen but I try to um I do not turn on my computer or my iPhone until my kids are in bed it's just it's a rule I don't get a lot of sleep during the week because then after I put them in bed I'm up till the we hours of the night um getting my work done but you know it's one of the trade-offs I make and I feel with that balance I get to I get really good
quality time with my kids every night and I you know I get my work done we work really hard and and it all seems to work out yeah I think one of the critical things is to overc communicate and set very very clear goals so uh my wife and I were married when we came to business school and during that 2-year period believe in my class the class of 06 there was was eight Couples married couples who got divorced and for us that
was quite a shock to learn that and to see that and what we learned through that is to really communicate very clearly and aggressively about how we were doing with one another we have a red light yellow light green light methodology where yeah it's it's it's really simple we can just check in with each other and when she says things are yellow I know that I have to slow down uh and then the the other very clear
goal is if you set things that you need to do every day make sure that you're there and make sure that your partners know you need to do it so I have a 10-month-old at home and one of the things that I do with her every day is I get home in time to give her a bath or feed her dinner give her her bath and put her to bed and I've managed to do that almost every single day in the last 10 months because I set clear goals I
communicated that to my partners they understood that was a priority but they also understood I had other responsibilities that I would take care of on behalf of the firm I'm very proud of the culture at Kleiner and so i' I'd like to share with you what our values are because we screen for these you everybody at Kleiner really I think likes being there and respects the values of each other and our uh our
first priority is family first right and so if anybody's got to do anything to take care of their kid or their dying parent or my mom's got brain cancer in Taiwan I need to be out of the office for half the time to take care of her we just do that nothing matters more than family and not everybody is married and not everybody has kids but you get the idea it can be your extended family uh the second priority is part
Partners right so um more important than me trying to help Jeff Bezos is me working with Trey or with chiwa and vice versa because ideas are easy executions everything teams win and and so we're very much a team that spectacular Lone Ranger who can do it all on their own there's really not room for them in our partnership our third priority is portfolio portfolio these are the CEOs
if you're not in the Venture Capital business these are the clients to whom you've already made commitments we've got to serve them every day that's more important than the next new Facebook and and so we prioritize that the next priority is new Ventures new Ventures exactly Trey's too busy with the first three I got there more recently this is the this is the this is the most seductive thing the new we're Innovation
junking we like spending a lot of time with that you want to prioritize it but it's clearly less important than your family and then the fifth priority is uh some form of public or community service again in the larger in the small and in in a private way because we've been given so much uh it would be terrible if we don't give back uh sometimes I wedge into this list and notably not on it is friends and uh
if you want if if you're as busy as you are and we are and you want to have friends you better prioritize it you better invest time in it and I think on that we're at our time limit five minutes over and I'd like to thank all of you remember uh before before that if if you send us your three favorite books I'll send you the list back that we had and we'd love to talk about you with you about the future thank you very much