In Good Company with Nicolai Tangen - HIGHLIGHTS: Vinod Khosla

Starting point is 00:00:00 Hi everybody, welcome to this highlight episode of the podcast in good company. What we've decided to do is for people who are really in a hurry, we're going to clip down the episode to just be 10 minutes long. But probably what you'll see when you heard 10 minutes, you're going to want to hear the whole thing. Now, what we do Wednesday, full episode, Fridays, the short episode. Tune in. Hi everybody.

Starting point is 00:00:23 Today, we are in really good company with one of the most successful entrepreneurs and venture capital investors of all time, Vinod Kosla. Vinod co-founded Sun Microsystems back in 1982 and Kosla Ventures in 2004. And Kosla Ventures is making money in technology whilst also doing good stuff for society. So warm welcome, Enad. Great to be here. You say that it is only the improbable which is important. What do you mean by that?

Starting point is 00:00:54 You know, most in this goes immediately into my views on expert opinion. It's very good at predicting the predicting an extrapolation of the past, as opposed to a new kind of vision for the future. How do you identify these situations where experts are totally wrong? I think it's very hard to identify precisely these situations. When we invested in OpenAI in 2018, is when we made the commitment to invest, it was hard to say when there would be a breakthrough in AI.

Starting point is 00:01:37 What was predictable was the trend line was an exponential. It was very likely we were in the flat part of the curve of an exponential, the early changes. Suddenly, AI capability took off. I would call that improbable because nobody else was predicting it. What have been your best investments? In 1996, we invested in a company called Juniper that said TCPIP would be the protocol for the internet. There was not a single telco player, AT&T, Verizon, they had different names then before their mergers and all that, that predicted TCPIP would be the protocol for the internet.

Starting point is 00:02:23 that predicted TCPIP would be the protocol for the internet. And they had other more technical reasons for going with other protocols. We just bet on that. We got a 2,500 X investment over about five years. So I was at Kleine & Perkins then we made $7 billion on a $3 million investment. That was very nice. I was at Kleiner Perkins at that point. We also invested in Google.

Starting point is 00:02:54 When it was a couple of flaky PhD students, and you didn't know how large it would be, how important the improbable would be. When they were talking about organizing the world's information, it was hard to extrapolate 1996 from two kids talking about that to, it will change the world in many, many ways. So those are all improbables. Characteristics of people with the resolve and determination, with persistence, with low probability, high impact bets, and the environment being right for them to find a toehold and then expand from there. Those are characteristics we look for from an investment

Starting point is 00:03:40 point of view. So, Vinod, now I'm a flaky PhD student. I come into your office. What kind of things do you ask me? I say, Hey Vinod, I got a super plan. I'm going to change the world here. And we see that all the time. And we have to judge how persistent will there be.

Starting point is 00:03:59 If you're talking to them about the investment for a month or two, you can usually tell how fast they will learn. How do you screen for fast learning? How can you figure out whether I'm a fast learner? You can watch somebody and see how well they answer questions. If you challenge them, how they respond, are they thinking from first principles and saying, let me examine this assumption or are they being reacted? I know this to be true, which is very common in experienced business people. We've always done it this way.

Starting point is 00:04:34 We've had the world. This is always worked. I've done this for 30 years. Those are all bad signs for an entrepreneurial person. Let's utilize some of your smart thinking now and let's try to predict the future, which you have done in a fantastic TED Talk. You have identified 12 trends for the future, and I'd love to dive into each one of them if you don't mind. But just before that, just what these trends, what do they have in common? What are they about?

Starting point is 00:05:09 My particular area of expertise, and I hate to even call it expertise, it's more speculation, smart speculation, or I call them intelligent guesstimates of what might be possible, is technology driven. Let's dive into some of these radical predictions you have. First one, expertise will be free. We are very close to the point where AI is as good as the median person in most areas. And then because it's computation only, it can be replicated infinitely. There's a million doctors in the US, a couple of hundred thousand

Starting point is 00:05:53 primary care doctors and then specialists in various areas. But if you could have ten times the amount of expertise, it would be near free. And we could provide a lot more primary care without much cost and maybe even substantially lower cost. You also say that you think labour will be free. I do think, and this is a little hard to project today, but almost certainly over the next five years, we will develop bipedal robots. That means robots that have two legs and two arms that can do the kind of work humans can. If you had a billion such robots, they could do more work because they can work 24-hour shifts than all the human labor today.

Starting point is 00:06:43 What about the growth of computing power? Computing as a cost per unit of computing is declining very, very rapidly. What has been very expensive is programming these computers, and most people can't program a computer. I do think we will get to a world where you can program it with voice in natural language and you can use them much more effectively. So the range of uses could expand dramatically because what I'm talking about is essentially an AI computer programmer. So when computing is free or you know extremely cheap as electricity and water is now, what will it change?

Starting point is 00:07:32 You will be able to program almost any task. There's seven billion humans. Each could have 10 agents. So imagine 70 billion agents running around the internet doing tasks for computers. What about the tailor making or medicine? You talk about the science of medicine changing as well. We are already doing it. You know, cancer is a large problem in the world, of course, in human health, with very few really effective solutions. with very few really effective solutions. We can delay depth a little bit.

Starting point is 00:08:08 But if you could tailor design a protein to interfere with that cancer, one person's cancer, not a drug approved for all 7 billion people on the planet, AI will let us design drugs predictably for one person's cancer. What about food? The food we eat will be the food we eat. But can we produce it with a lot less chemicals, for example? Absolutely, because robots can take bugs off trees instead of bombarding them with pesticides or herbicides.

Starting point is 00:08:41 Clean power. You are also a strong believer in nuclear fusion. How do you see this? I'm very optimistic. In the next five years, nobody will doubt that fusion is a viable technology. And then we'll have the 30s and 40s to scale it up. My hope for fusion is we use current power plants, but replace coal boilers and natural gas boilers with fusion boilers. We may need to replace the turbine too. But retrofit old plants with fusion clean power, much cheaper, much cleaner, and of course, much more scalable. So then energy will be free too basically? You're free I hope.

Starting point is 00:09:27 You paint a very positive picture of the world here and in this world what is your advice to young people? I used to say pursue your passions as long as you can make a living at it. I'll drop that as long as you can make a living at it because I think there'll be enough abundance in society for society to support a minimum level of living for everybody, independent of the job. Wonderful. It's been really, really great talking to you.

Starting point is 00:09:59 All the best of luck and keep up the good work. Thank you very much. great to talk to you.

In Good Company with Nicolai Tangen - HIGHLIGHTS: Vinod Khosla

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