From the archive, originally posted by: [ spectre ]


“The best way to predict the future is to invent it. [At my VC company we say] the second best way is to finance it. [So far] we’re investing $200 million dollars in disruptive technologies for greentech.”
– John Doerr

About this Talk

“I don’t think we’re going to make it,” John Doerr proclaims, in an emotional talk about climate change and investment. Spurred on by his daughter, who demanded he fix the mess the world is heading for, he and his partners at Kleiner Perkins Caufield & Byers embarked on a greentech world tour — surveying the state of the art, from the ethanol revolution in Brazil to Wal-mart’s (!) eco-concept store in Bentonville, Arkansas. KPCB is investing $200 million in green technologies to save the planet and make a profit to boot. But, Doerr fears, it may not be enough.

John Doerr, Silicon Valley’s legendary moneyman, is afraid of eco-apocalypse. After building his reputation (and a considerable fortune) investing in high-tech successes, he’s turning his focus toward green technologies, and hoping it isn’t too late.

Why you should listen to him:

John Doerr, a partner in famed VC firm Kleiner Perkins Caufield & Byers, made upwards of $1 billion picking dot-com stars like Amazon, Google, Compaq and Netscape. (He also picked some flops, like Go Corporation and the scandal-ridden He was famously quoted saying, “The Internet is the greatest legal creation of wealth in history,” right before the dot-com crash.

But now he’s back, warning that carbon-dioxide-sputtering, gas-powered capitalism will destroy us all, and that going green may be the “biggest economic opportunity of the 21st century.” So Kleiner Perkins has invested $200 million in so-called greentech, a combination of startups that are pioneering alternative energy, waste remediation and other schemes to prevent the coming environmental calamity. But Doerr is afraid that it might be too little, too late.

“[John Doerr] is, by all accounts, the most influential venture capitalist of his generation.” – Fast Company

SEE ALSO: BRAZIL, ETHANOL,,2029962,00.html


John Doerr is a partner at Kleiner Perkins Caufield & Byers. He’s optimistic, enthusiastic and energetic. John joined KPCB in 1980, and with KPCB’s partners backed many of America’s best entrepreneurial leaders, including

* Larry Page, Sergey Brin, Eric Schmidt: Google [GOOG]
* Jeff Bezos: Amazon [AMZN]
* Scott Cook, Bill Campbell: Intuit [INTU]
* Andy Bechtolsheim, Scott McNealy, Bill Joy, Vinod Khosla: Sun [SUNW]
* And many others

John was founding CEO of Silicon Compilers, a CAD software company; and co-founder of the first broadband cable network, @Home. He came to Silicon Valley in 1974 and joined a small chipmaker, Intel, just as they invented the legendary 8080 microprocessor. (He feels lucky he was in the right place, at the right time.) He worked in engineering, marketing, and sales, where he was a top-ranked sales executive.

John Chambers described John as “the single best venture capitalist in the world.” Eric Schmidt called him “one of Google’s best board members.” And Jeff Bezos said, “Doerr {and Kleiner} is the center of gravity in the internet.”

He has also been part of several big failures, most famously GO Corporation, chronicled by Jerry Kaplan in the book “Startup”.

John serves on the boards of Google, Amazon, Intuit, Homestore, and Sun. And also private ventures Good Technology, Miasole, Purkinje, Spatial Photonics.

He is passionately encouraging innovators to prevent pandemic avian flu and global infectious disease.

John is a technologist and inventor, holding patents for computer memory devices. He earned a BS and MS in Electrical Engineering from Rice University, and an MBA from Harvard.

John enjoys conversations with students and entrepreneurs, including:

John also cares a lot about public education, global poverty/health, research and innovation, science (not “intelligent design”) and women as leaders. He is backing social and policy entrepreneurs, working with

* Ted Smith and Kim Smith, as co-founder of
* Lezlee Westine, John Chambers, Jim Barksdale, as cofounder of
* Reed Hastings,
* Muhammed Yunnus, Grameen Bank
* Bono’s
* Steve & Jean Case, Dr. David Agus, Accelerate Brain Cancer Cures,, and
* Walter Isaacson, Aspen Institute

John was co-chair of

* California Proposition 39, raising $18 Billion of funding for public schools
* California Proposition 71, authorizing $3 Billion for stem cell research, and
* NO on California Proposition 211, stopping frivolous lawsuits (and frivolous lawyers)



To be considered for the funding, please submit an executive summary or power point presentation.

These documents should include:

* Introduction to the team
* Overview of the market opportunity
* Description of how your product/service/business is differentiated

You can submit your materials to:

Menlo Park
2750 Sand Hill Road
Menlo Park, CA 94025
Telephone | 650.233.2750
Fax | 650.233.0300

Unit 2505, K.Wah Center
1010 Huaihai Zhong Road, Xuhui District
Shanghai 200031
China PRC
Telephone | +86 21 5467 0500
Fax | +86 21 5404 7557

Suite 1001, China Resource Office Tower
8 Jianguomen Beidajie
Beijing 100005
China PRC
Telephone | +86 10 85192081
Fax | +86 10 85192085

A $6,000,000,000,000 BUSINESS OPPORTUNITY

“Menlo Park-based Kleiner Perkins plans to set aside $100 million of its latest $600 million fund for technologies that help provide cleaner energy, transportation, air and water. That’s on top of more than $50 million Kleiner Perkins had already invested in seven greentech ventures.

“This field of greentech could be the largest economic opportunity of the 21st century,” Doerr said. “There’s never been a better time than now to start or accelerate a greentech venture.”

As one of Silicon Valley’s most respected investors, Doerr’s decision to champion green technology as the next big thing is generating buzz in the venture capital community.

“When John Doerr talks, people listen,” said Mark Heesen, president of the National Venture Capital Association. “John appears to have an innate ability to spot trends and execute a business plan that is actually able to take advantage of those trends.”

Kleiner Perkins’ plan to ramp up investment in green technology is just the latest sign of the sector’s growth.

North American venture capitalists invested more than $1.6 billion in cleantech companies last year, a 35 percent increase over 2004, according to a report by the Cleantech Venture Network, a trade group.

“It’s a strong area for venture capital,” said Craig Cuddebach, the network’s senior vice president, whose group expects venture capital investment in the sector to double over the next three years. “It’s no longer a choice between whether you will be clean or profitable.”

Also known as clean technology, the field includes technologies related to water purification, air quality, nanotechnology, alternative fuels, manufacturing, recycling and renewable energy.

As prices of more traditional energy sources continue to rise, the global market for clean energy sources such as biofuels, hydrogen fuel cells and solar and wind energy rose to $40 billion last year, according to a report released last month by Clean Edge Inc., a Bay Area marketing firm. The figure is expected to more than quadruple to $167 billion by 2015, the report said.

Past investments in renewable energy and other clean technologies often resulted in disappointing returns, largely because the technologies and market demand weren’t strong enough, Heesen said. Alternative energy firms must fight for their share of a market that’s tightly regulated and dominated by the oil, coal and natural gas industries.

“There are a lot of obstacles that stand in the way of creating a new way of creating energy,” Heesen said.

But investors are seeing better prospects as technologies advance, more seasoned entrepreneurs enter the field and cleantech companies generate higher revenue. Successful initial public offerings by cleantech companies, such as Sunnyvale, Calif.-based SunPower Corp. and China’s SunTech Power, have also stoked investor interest.

Besides investing in greentech ventures, Doerr said he and Kleiner Perkins plan to “advocate for policies that reduce the climate crisis and increase energy innovation.”

Vinod Khosla, a Kleiner Perkins associate who recently started his own venture capital firm, is financing a California ballot initiative to fund alternative energy initiatives through tax hikes on oil companies.

Venture capitalists point to the global forces driving greentech investment: the rising cost of fuel, the economic expansion of China, India and other Asian nations; and growing worries over global warming.

“In my opinion, it’s one of the most pressing global challenges we face,” Doerr said. “It’s causing the nations of the world to put an even higher priority than we have now on innovation.”

Doerr sees another major trend: billions of people moving to cities in developing countries. Experts predict the number of people living in “megacities” with more than 10 million people will triple from 2 billion to 6 billion over the next 50 years, he said.

“This is the mother of all markets,” Doerr said. “As those Asian economies rise, people will move from rural to urban settings. All those people will want the same things that you and I want — clean water, power and transportation.”


“Kleiner Perkins Caufield & Byers is actively investing in greentech innovation and entrepreneurs, and has been since 1999. The number one trend on the planet is urbanization, and the four billion people moving to megacities in the next 50 years will need clean water, clean power, and clean transportation. At the same time, climate change is hitting crisis proportions; atmospheric CO2 levels are at an all-time high, with accelerating growth; and our addiction to increasingly expensive oil is unabating. Increased political and social awareness, combined with developments in materials technology, means now is the time to make a big difference. We believe that policy and innovation will solve these problems, with leadership from entrepreneurs who want to build profitable ventures and do good at the same time.”

Greentech Innovation Network
Greentech Portfolio
Life Sciences Portfolio


“Our annual ranking of technology’s top 100 dealmakers.”

Doerr, L John
#1 ( Up from Last Year 2004 Rank: #4)

Occupation: VC*
Company: Kleiner Perkins Caufield & Byers

“He was sanctified for backing AtHome, Handspring and Netscape in their heydays, then vilified when their stocks went to hell. All people remembered was that Doerr was the guy who claimed the Internet was underhyped at the height of the boom. Insult to injury: His investment in Martha Stewart Living Omnimedia got beaten down when the crafty doyenne got cuffed. But J.D.’s wilderness years are over. After turning $12.5 million into $4 billion in Google shares, the hyperkinetic king of Sand Hill Road is back on the throne. He’d need a doozy to top Google, but Doerr—the man who brought us Amazon, Intuit and Symantec—is gonna try. In the hopper: social-networker Friendster, big-wheeled people-mover Segway and Web-powered voice software maker TellMe Networks. Burned by his own ballyhoo, this former electrical engineer from St.Louis is keeping a low profile these days.”



Learn more about John:


A World Lit Only By Fire
Banker to the Poor
The World Is Flat
How To Change The World

State of War
The Great Influenza
Yes, Your Teen Is Crazy
Setting Limits with your Strong-Willed Child

Thomas Friedman’s columns
Charlie Rose
Silicon Beat

“Family First”

Mom and Dad

Coaching, cycling, hiking, skiing, photography, surfing (the web), traveling, reading, music, and messing around with computers/technology


“Where you live should not decide… whether you live or whether you die”
— Bono

“I strongly believe that we can create a poverty-free world, if we want to…. In that kind of world, [the] only place you can see poverty is in the museum.”
— Muhammed Yunus

“ A democratization policy in the Middle East without a different energy policy at home is a waste of time, money and, most important, the lives of our young people…. Real patriots, real advocates of spreading democracy around the world, live green. Green is the new red, white and blue.”
— Tom Friedman

“I agree with Mr. Friedman, and I agree with Americans who understand being hooked on foreign oil as an economic problem and a national security problem.”
— George W. Bush — (Interview w/ Bob Schieffer, CBS News)

“Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it’s the only thing that ever has.”
— Margaret Mead


Behind the Green Doerr
by Russ Mitchell / May 2007

If John Doerr has his way, greentech will be Silicon Valley’s new new thing—and taxpayers will foot the bill.

The final chord from “Where the Streets Have No Name” was still humming through the sold-out Oakland Arena when Bono stepped toward the edge of the circular stage. As portentous minor chords seeped out of an electronic keyboard, the rock star began a sermon about America’s historic might, moon shots, civil rights struggles, and the need to fight extreme poverty in Africa—right now. “Take out your cell phones,” he shouted. With a roar, thousands of fans happily obeyed, whipping out Treos and Razrs and pointing their screens at the U2 frontman, bathing him in an ethereal blue light. Giant-screen TVs instructed the crowd to text-message the word unite and join Bono’s antipoverty campaign, One. Then Bono said a strange thing: “I want to thank … John Doerr!”

Probably only a few U2 fans would know that the 55-year-old man Bono was giving a shout-out to is the most powerful venture capitalist in Silicon Valley. If there has been a big technology initial public offering in the past 20 years, chances are Doerr and his firm, Kleiner Perkins Caufield & Byers, were behind it. They funded an amazing string of successes, including Compaq, Intuit, Sun Microsystems, AOL, Amazon, Netscape, and Google—earning Doerr well over a billion dollars in the process. As a budding Silicon Valley financier himself, Bono has natural reasons to admire Doerr. But a bigger reason he’s a fan may be the V.C. king’s current mission. Kleiner Perkins is investing $200 million in “greentech”—a term that covers such enterprises as coal gasification, fuel cell batteries, cellulosic biofuels, and thin solar film.

Why has the V.C. firm turned so aggressively to the alternative-energy field? “It is,” Doerr explains, “the mother of all markets.” Just a narrow slice of the estimated $5 trillion worldwide energy market could set off an I.P.O. frenzy that would make the internet boom look like chump change. As he puts it, “It’s probably the largest economic opportunity of the 21st century.”

Greentech, however, is a very different animal than Silicon Valley is used to. None of the alternative energy sources being developed today—solar, wind, geothermal, or biomass—is close to financial sustainability, which means that the supersize returns V.C. funds depend on will require massive government subsidies, regulations, and mandates. Of course, government interference runs against Silicon Valley’s libertarian grain. But money is money, and since venture capital funds typically have a 10-year life span, the clock is already ticking. So ­Doerr has launched an audacious campaign to invest millions in handpicked political candidates and influential political action committees, to push for subsidies and pro-greentech policies and require the government to purchase the kinds of fuels and technologies his startups will be marketing. Since 2000, Doerr and his wife, Ann, have contributed more than $31 million to political candidates and causes.

In essence, Doerr is helping to create the biggest new market the world has seen since the dawn of the oil industry—and asking for taxpayer dollars to do it.

He’s not queasy about mixing politics and money. “I unabashedly raise money on behalf of good candidates,” he says. And to good effect, adds Kleiner Perkins partner John Denniston. “The political winds have shifted rapidly toward greentech,” he says.

Others, however, are queasy about Doerr’s collaboration with government. It’s got Jerry Taylor, a senior fellow at the country’s preeminent free-market think tank, the Cato Institute, scratching his head. “Did we need subsidies to bring DVDs or iPods to market? If subsidies worked, we’d have nuclear power too cheap to meter, and our cars would be filled with synthetic fuel,” he says. As for the government backing of the oil and coal industries, “the remedy for bad subsidies is to get rid of the subsidies.”

Vaclav Smil has a different problem with Doerr’s agenda. The respected energy analyst and author of the 2003 book Energy at the Crossroads says greentech is key to the long-term health of the planet. But it will take decades for greentech to become a significant factor in the energy market. Anyone selling the idea that alternative energy will wean the U.S. off foreign oil anytime soon, he says, is “telling people nonsense.” And within the 10-year cycle of a venture capital fund? “It’s all hype,” Smil says.

Doerr regularly trots out chum Al Gore to run through his Inconvenient Truth slide show in front of influential audiences of businesspeople and politicians. He makes regular appearances on public television’s Charlie Rose Show and has also drawn criticism for overhyping global warming—even from greentech fans.

On one episode of Charlie Rose last year, Doerr sounded grave: “The latest fear from scientists at Caltech is not that Greenland will melt but that it’s going to slip off the rocks.… If we lose Greenland, all the scientists agree that oceans will rise by 20, 30 feet. That puts downtown Manhattan underwater. That means where we are in Silicon Valley will be underwater. We will lose most of Mumbai in India.”

Quite alarming—until you discuss the topic with Caltech’s Eric Rignot, senior research scientist at the institute’s Jet Propulsion Laboratory. In an email, he offers his reaction to Doerr’s scenario: “This is certainly excessive, only the extremist part of the story. In all likelihood, Greenland will contribute one foot of sea level rise by 2100. If the climate warms very fast and all glaciers go mad, it could go up 10 feet. And then if you melt every bit of ice down to the ground, it would reach 20 feet. But even that did not happen in the last interglacial. This is a most extremist scenario.”

Doerr credits his teenage daughter with deepening his commitment to greentech. During an after-dinner conversation with friends last year, the subject of global warming arose. She piped up, “Dad, I’m scared and angry. Your generation created this problem. What are you going to do to fix it?”

What he is doing is steering at least $200 million to greentech startups, 15 of them so far. They include Altra, a builder of ethanol refineries; Amyris Biotechnologies, which is using a technique for making antimalaria drugs to convert materials including switchgrass and cornstalks into biofuel; Miasolé, a company that makes sheets of film that can be used in roofing material as affordable solar devices; Lilliputian Systems, which is engineering small fuel cells for handheld computers and cell phones; GreatPoint Energy, which is attempting to make coal gasification more efficient; and Bloom Energy, a company developing solid oxide regenerative fuel cells.

Doerr, who sits in Kleiner Perkins’ Menlo Park conference room discussing greentech, is wearing a gray button-down shirt and khakis. He’s always in motion, jiggling his legs, pinching his nose, running his fingertips along his jaw. Asked how he justifies his push for increased government subsidies, he inexplicably lifts his left arm toward the ceiling to reveal a red Indian-bead bracelet. He lets his hand fall, drops his elbows to the table, puts both hands on his face, and finally blurts, “I’m a raging capitalist!”

Happy with his setup line, he continues, “Markets are incredibly important, but they’re not perfect.” To get greentech kick-started, he argues, subsidies and mandates should be acceptable, as long as “you don’t overuse them and proceed in a bipartisan manner.”

Doerr jumped into politics in 1996, incensed by a California ballot proposition that would have left tech startups more vulnerable to class action suits. He helped organize Valley business leaders and defeat it, then channeled that momentum into creating Technet, a pro-technology lobbying group.

More victories followed. Education was an early priority, and Technet helped pass a ballot initiative in 2000 to aid charter schools; John and Ann Doerr personally contributed $8.7 million to the campaign. In 2004, California voters agreed to spend $3 billion to fund stem cell research in the state, a poke in the eye for President Bush and a boon to the Valley’s biotechnology industry. The biggest contribution came from the Doerrs: $6 million.

Last spring, Doerr and the Greentech Innovation Network, a group of academics, entrepreneurs, and business leaders (including at least one from Wal-Mart) organized by Kleiner Perkins, lobbied hard in Sacramento to limit greenhouse gases. Governor Arnold Schwarzenegger signed the bill with enthusiasm, sending shock waves through the corporate world. Suddenly business leaders began talking about nationwide carbon caps, to avoid a state-by-state patchwork of regulations. Carbon caps, of course, would boost the market for alternative energy.

Doerr and fellow Valley activists went largely undefeated until last fall, when a ballot proposal to tax oil drilled in California and fund alternative-energy research failed. Supporters pumped more than $50 million into a P.R. blitz but were no match for the old-school energy industry, which ­counterattacked with nearly $100 million.

Technet moved its headquarters from Palo Alto to the nation’s capital in 2005. It also hired Karl Rove’s former deputy, a schmoozer named ­Lezlee Westine, as C.E.O.  As Mr. Doerr goes to Washington, however, he is headed for the same buzz saw he ran into in California. “When you get into energy, you’re going up against Exxon and Chevron and cattlemen and corn. This is not a niche play,” says former Democratic operative and current lobbyist Tony Podesta.

Simon Rosenberg, whose NDN (formerly the New Democrat Network) has received Doerr donations, says, “This man has put money, time, and sweat into public policy the way no one in Silicon Valley has.” Yet, he says, the tech lobby has been tarnished by the dotcom bubble, the outsourcing of jobs overseas, and a weak record on job creation for average Americans: “They’re not the special children they were in the 1990s.”

Doerr has an unlikely solution to the tech-bubble problem: He denies there ever was one. “People think of it as a bubble,” he says, gesticulating enthusiastically. “I prefer to think of it as a boom. The payoff on some of these innovations was longer term.”

Already, alternative energy has mushroomed into one of venture capital’s fastest-growing categories. Last year alone, V.C. firms in the U.S. and Canada poured $2.1 billion into alternative energy, according to estimates from the Cleantech Venture Network, a jump of 290 percent in the past two years.

Asked if greentech could repeat the dotcom crash, Doerr admits, “It’s possible.” He pauses and rubs his forehead before repeating, “It’s possible.”

Kleiner Perkins partner Ray Lane, a sage 60-year-old, goes further. “A bubble? You can almost count on it,” he says. “Bubbles are common. They end badly for those who come in late. For those who come in early, it’s not that bad.” Lane thinks Kleiner Perkins’ greentech portfolio has big, long-term winners in it. But he predicts that alternative energy will get overheated and others will undoubtedly go up in flames. “If the bubble develops out of a whim,’’ he says, “then shame on investors. They need to get burned.”

John Doerr’s Startup Manual

If you could ask only one person for advice about starting a company or joining a startup, chances are you’d pick John Doerr.

From: Issue 07 | February 1997 | Page 82 | By: Michael S. Malone |

The 46-year-old partner at Kleiner Perkins Caulfield & Byers (KPCB) is, by all accounts, the most influential venture capitalist of his generation. Over the last 16 years, he has built an unrivaled record of backing industry-defining start-ups in fields as diverse as computing, (Sun Microsystems, Compaq), software (Lotus, Intuit), biotechnology (Genentech, Millennium) and the Internet (Netscape, But for all of those past triumphs, Doerr says, “there’s never been a better time than now to start a company. In the past, entrepreneurs started businesses. Today they invent new business models. That’s a big difference, and it creates huge opportunities.”

A graduate of Rice University and Harvard Business School, Doerr joined Intel in 1975 as an engineer and project manager. He often points to his years with the semiconductor giant as critical to his ability to empathize with young entrepreneurial teams. Doerr’s Intel record was, in fact, extraordinary. Bored after three years in the factory, he talked his way into the sales force where he quickly became Intel’s top-ranked systems salesman.

It was also at Intel where John Doerr first exhibited some of his now-legendary personality traits: his unrelenting drive and competitiveness, his willingness to take huge risks and go beyond standard procedure to achieve success. Once, to close a microprocessor deal, he even threw a lawnmower into a deal.

Doerr is also known for his almost superhuman energy. The standard image of John Doerr is that of a rail-thin man in a rumpled blue blazer, with a lick of hair falling across his forehead, rushing to a conference, simultaneously holding a conversation with three people around him and talking on his cell-phone.

Three years ago, Doerr was already a famous Silicon Valley venture capitalist. But the event that moved him to global business fame was the arrival of the Internet. Recognizing the Net’s potential before almost anyone else, Doerr has turned Kleiner Perkins into the cradle of the Web revolution. Doerr and his partners have backed dozens of ventures building and defining the Internet, from America Online to iVillage, and from Ascend to Verisign. Netscape and @Home are two of the best-known Doerr projects. But Doerr prefers to talk about linked “initiatives” rather than stand-alone investments. In June, 1996 KPCB organized a $100 million Java Fund to back a slate of startups using Sun’s Java programming language, including Active Software, Calico, Internet Security Systems, Marimba, and Netiva.

As the avatar of the Web, Doerr’s greatest contribution may prove to be his ability to network all of KPCB’s investment for mutual advantage. Thus Intuit’s Quicken incorporates the Netscape Navigator. Early adopters of Sun’s Java were Netscape and Macromedia. If you’ve seen this kind of connectedness before, think Microsoft. Although Doerr protests otherwise, with his portfolio of software and netware companies, his drive to create entrepreneurial teams, and his capacity to sight new emerging markets John Doerr may be Bill Gates’s greatest competitor.

Fast Company visited Doerr in his Sand Hill Road office outside Palo Alto and asked him to put his web of personal experiences to work advising us on the challenges of startup life.

Let’s say you’re advising a 28-year-old engineer or marketer who’s worked at a successful high-tech company for a few years and is moving up the ranks. Then one morning, his pals say, “We’re all meeting at the House of Pancakes at 9 p.m. We’ve got an idea for a startup. Do you want to come?” Should he go?

Absolutely. Remember, Compaq was conceived at the House of Pancakes. But before throwing in with the group, I’d advise the 28-year-old to think carefully about the business opportunity, the markets, and the technology. And think hardest about the team.

Why the team? Doesn’t the best technology and product win?

In the world today, there’s plenty of technology, plenty of entrepreneurs, plenty of money, plenty of venture capital. What’s in short supply is great teams. Your biggest challenge will be building a great team. There’s enormous change underway in every facet of the world. Some is technology driven, some is market driven. All that change creates unprecedented opportunity. But to take full advantage of those opportunities, focus on the team. Teams win.

So our 28-year-old goes to the startup meeting. It’s now midnight, and they’re on their 11th cup of coffee. Looking around that table, what does this person need to consider?

That’s the moment of truth. That’s when you ask: “Are these the people I want to be in trouble with for the next 5, 10, 15 years of my life?” Because as you build a new business, one thing’s for sure: You will get into trouble.

Also, measure the members of the group against some hard standards. Are they great at recruiting other talented people? Are they great at selling? In a small company, everybody is selling all the time. Believe me, selling is honorable work — particularly in a startup, where it’s the difference between life and death. And make sure that the group has a sense of humor. You’re going to be spending a lot of time living together as a team. Of course, everyone you’ll need for a great startup isn’t going to be there at that first meeting. Teams always need to grow, to get stronger and better. But be sure to answer the question, “Is this a group I wouldn’t mind getting in trouble with?”

Does it make sense to look around the table and start to identify the skills that the group needs? For example, do you start listing functions such as marketing, sales, or personnel that you need to go after?

That’s one way to do it. Often the founders at the House of Pancakes all come from the same department, usually engineering. They’re expert in their own world. But frequently their world is all they know.

But you might think about it differently. For instance, when you’re putting your team together, look for really smart people. It’s fundamental. When you get exceptionally smart people on your team, that’s a big plus. Besides smart, look for a combination of experience, drive, commitment, and passion. You don’t want all experience — but you also don’t want all drive, energy, and passion. Getting that mix right is the difference between ventures that achieve greatness and startups that are merely successful, or worse.

Let’s say the team thinks it’s got the right mix. Who writes the business plan?

Let the most articulate team member lead or edit the writing, because it is a communications piece. But don’t obsess over the plan. The better plans we’ve seen are the shorter ones — often 30 pages, but sometimes just 3. The Intel business plan was one page. The Sun business plan was three pages. What we’re looking for in a plan is how that team thinks about its business. We can figure out the rest in conversation with the founders.

What’s the most important part of any business plan?

I always turn to the biographies of the team first. For me, it’s team, team, team. Others might say, people, people, people — but I’m most interested in the team as a whole – its mix of experience and personalities, its chemistry.

Of course, once it has a great business plan, our team still has to get it to you. How can the members possibly get your attention?

Just send an email message to to get my attention. But to really stand out, get a referral from a CEO or vice president we’ve backed-they’re all listed on our web site. Today entrepreneurs are smarter about raising money than ever before. They know there’s lots of venture capital around. The really thoughtful entrepreneurs talk to other entrepreneurs before starting the process. I’ve never met a successful entrepreneur who wouldn’t take time out of his or her day to help an aspiring entrepreneur think about a new business. So if you’re serious about the venture, invite a successful entrepreneur you admire to lunch.

Most successful startups have a leader from whom everyone else takes their cues. What do you look for in a leader?

Great leaders are great communicators. They have incredible integrity: they’re usually the first to recognize problems. They’re ruthlessly, absolutely intellectually honest. They are great recruiters: They’re always building their network of talented people. And they’re great sales executives: They’re always selling the value proposition of the enterprise.

When a team comes in to see you, do you look at them and try to identify the leader? And if there isn’t one, do you try to recruit one before you work with the team?

We’re always looking for great leaders. But no, we don’t need to recruit one before we’ll work with a team. Just as important as the leader is the technical genius. At the heart of every great technology company is a technical genius. Apple had its Steve Wozniak, Sun had Andy Bechtolsheim and Bill Joy, Netscape has Marc Andreessen, @Home has Milo Medin. A great marketing company like Intuit has Scott Cook.

These founding geniuses are the heart and soul that represents the real reason for doing the startup. Its more than, “Lets build a big business and get a lot of stock and make money.” The idea is, “Let’s do something that’s technically excellent. Let’s make a difference.” Sooner or later as the venture grows we can help the founders find someone like Netscape’s Jim Barksdale, Intuit’s Bill Campbell, or @Home’s Tom Jermoluk.

Often the founding CEO — Marimba’s Kim Polese, Amazon’s Jeff Bezos, or Lightspan’s John Kernan — will go the distance. Which brings us back to the team. The biggest problem you are going to face is attracting and retaining the people that will build your business. You are competing in a world-wide scramble for talent. The very best people in technology and marketing want to work in the best organizations.

Let’s say that our team from the House of Pancakes has contacted you and gotten its chance to make a presentation to you here in the Kleiner Perkins conference room. What are you evaluating?

The team thinks it’s selling us on the technology and the product or service. But actually we’re thinking about them — the team members. We want to understand who they are, how they will work together.

For example, I’ll ask them to sell me their product. I’ll ask them to recruit me to join your team. I’ll ask practical questions about how they’ll live and breathe the business: “If I were on your team, I might qualify to be your vice president of business development, or sales. How will you manage me and the other team members? How will we agree on priorities? How will we measure whether or not we’re getting the right job done? What’s your instinct about process versus results? How will you stay ahead of competition? What will you do when someone isn’t working out?”

I’m checking your instincts, your navigation system, your values — the hygiene that’s vital to healthy, growing, winning teams.

You’ve read the business plan, and you’ve met with the team. What are the chances you’ll invest?

We receive and read 2,500 plans per year. We meet with at least a hundred teams a year. We invest in about 25.

So the odds are 100-to-1 against this team?

No, for those teams that actually make it to the meeting, the odds are maybe 4-to-1. Most of those 2,500 plans that we receive are unsolicited junk, mailed with the same cover letter to as many as 100 venture investors.

Look, this is not a matter of odds, like a lottery. It’s a matter of quality. Here’s a key: KPCB has invested in over 250 ventures. In almost every case, the project was referred to the partnership by someone — a CEO, an engineer, a lawyer, friend, or another venture capitalist — known to both the founders and our partnership.

The odds are not against you. In fact, they’re with you. There’s never been a better time than now to start a new business. America honors, supports, and encourages new business. Not that it’s easy. But part of the American dream is building a new business that creates jobs and financial independence.

How worried does the team need to be about failure? If this startup craters, do their careers go down with it?

A San Jose State survey found that across the nation, 4 of 5 new businesses fail. But, when backed by professional venture capital within 20 miles of this office, 4 of 5 new ventures succeed. Think of Silicon Valley as an incredibly effective system for getting people, projects and capital together. You can change your job without changing where you park your car.

Later this morning I have a meeting to wind up a failed venture. Investors put $15 million in four rounds. We’re writing off our investment. There were 40 employees. Other companies in our portfolio have already offered jobs to over half the team. The investors are circulating resumes to help all of the employees get great jobs. As long as you work hard with the team and don’t lie, the venture industry doesn’t penalize failure.

But realistically, if members of the team already have one failure on their records, is it a deal-killer when they come looking for venture capital?

It’s a caution. I can’t remember a team which failed, stayed together, and was backed together in a second venture. Typically the founders regroup into other efforts. In a well-publicized failure, Jerry Kaplan and I lost a ton of money at GO, trying to do something revolutionary in pen computing. Now we’re backing Jerry again as the CEO of OnSale, a really hot Web “presence” innovating in online auctions. It’s a venture we’re thrilled to be involved in. The other founders of GO haven’t fared badly either: Mike Homer is vice president marketing at Netscape. Bill Campbell is President and CEO at Intuit. Stratton Sclavos is Verisign’s CEO. Randy Komisar ran Lucas Interactive. Robert Carr is Autodesk’s chief technology officer. Great people are so hard to find that even if one particular startup fails, you’re not tainted for life.

Let’s go back to our startup team in the pancake place. Now at last, we get to the matter of money. They want to do their startup, but at the same time they’ve got families to feed and bills to pay. Are they all going to have to mortgage their homes to start their company?

Founders rarely mortgage their homes to finance a venture. We don’t ask for it. There’s already plenty of stress in starting a new venture. We are, however, seeing lots of Internet companies that bootstrapped their businesses. Guys like Jeff Bezos, the founder of He was working on Wall Street as a quant, thinking ahead of the Net phenomenon. Jeff thought long and hard about the best possible businesses to build on the Web. He was incredibly systemic, and early. So he was able to self-fund into business with a little seed capital from family and friends.

So why would Jeff Bezos go to John Doerr?

Jeff Bezos came to Kleiner Perkins because, in his words, we are a center of gravity in the Internet. Amazon was also pursued by other venture capitalists. We had to compete like crazy for the right to invest in Amazon. Jeff approached us the same way Intuit’s Scott Cook did. Jeff said, “I’m not going to publish 30 business plans along Sand Hill Road. No one will pay attention. Instead, I’ll work through my network of friends to find the good firms and best fit for Amazon.” Bezos figured he could grow without VC money, but would like their help. It’s less about capital than it is experience and relationships. So he interviewed and auditioned his venture backers. Adding an investor like Doug Mackenzie or John Doerr to a venture is like hiring a vice president. So he carefully checked references. He talked to entrepreneurs from KPCB ventures that won, and some that failed.

Entrepreneurs should insist from the beginning that the VCs communicate clearly with them. Their time, and ours, is very valuable. When the first meeting is over the entrepreneur might say, “I’d like a yes or no right now, but I understand you may be more deliberative and will need more than one meeting or one business plan. So what’s your level of interest and what’s the next step?”

Frankly, you’d prefer a swift no to a long, drawn-out maybe. Those are death. Unfortunately, few teams ask that. So I volunteer it. It’s the only responsible way to handle 2,500 incoming plans and 100 meetings a year. Now, more than before, if KPCB decides not to back a venture, another good firm will.

And our team at the House of Pancakes? What’s their fate? If the team makes it, how many of the original members will be left in few years?

It needs the passion and commitment to go beyond success – to build a durable enterprise. The best entrepreneurs don’t focus on success. They focus on building a company that can be a leader in the global economy. They know success will follow. If you focus on success, you won’t get there. If you focus on contribution and customer value, then you can win.

{Michael S. Malone ( is one of Silicon Valley’s most influential journalists}

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