There were some eye openers at the 2016 Startup Grind Conference when Vinod Khosla shared the KPIs that have guided him during his 30-year venture capital investor career.
Khosla started out stating that, “no board member who comes in every six weeks for a meeting, while you’re (the founder) working 80, 90 hours a week, is qualified to make a decision, any decision… The only thing Venture Capitalists (VCs) can do is mouth off platitudes about playing golf.”
With that warmup, you may be shocked to learn that Khosla’s personal KPIs are a bit different from those of other VCs.
“I don’t go to board meetings, but I meet with founders and sometimes their teams regularly,” said Khosla. “I try to measure each meeting. If I’m going to take up two to three hours of a founder’s time, their team’s time, if it’s just a financial review, just sales reporting, I’ve wasted their time. If they walk out of a meeting, and there’s two or three important things I need to think about, or two or three people I need to chase, that to me is a metric. Or, if I haven’t doubled the potential of a company, the markets they’re going after, the way they’re approaching it. The business model innovation, (if it doesn’t) double the value of the company, then I as an investor haven’t added enough value, over the course of an investment.” This is not a quarterly or annual perspective, this is a multi-year perspective.
“Very few people look at it that way,” says Khosla. “Very few people even believe you can do that, with founders, with companies. I completely believe it.”
Khosla also shared his views on what he should contribute to hiring at startups he invests in. “I have this view that what a company plans is largely irrelevant. A company becomes the people it hires. They’re the people in the trenches with you for 80 hours a week influencing your decisions. I’ve spent an incredible amount of my time recruiting at every level in a company, whether it’s a key technologist or a product manager, individual engineers. If I can avoid a hiring mistake, or get a great resource on board, they could change this company. It’s well worth my time.”
“I can tell them (founders) what to do, that’s not going to be effective. I can raise questions. But unless their team is complete and disparate enough to have multiple points of view, they’re not going to be able to take a question and handle it well. Because it’s not just a dialog with me. It’s all the conversation that goes on after I go home. Getting the right team is the best way to help a company, to think broader, think better, think higher. So I spend an incredible amount of time doing that.”
If you found this useful you really want to read Khosla’s blog post on how founders can engineer the gene pool of their teams. At over 6,000 words it’s a bit beefier than your average post, but none of it is fat or fluff. It’s all protein.