Legendary VC and Entrepreneur, Vinod Khosla, on Entrepreneurship

I recently spoke at Wharton, and one of the students asked if I could periodically post on my experiences as an entrepreneur.  I thought it was a great idea, and so here is my first of many thoughts on entrepreneurship.

Starting a business is hard.  Making that business a success is even harder.  As an entrepreneur, that is what you get paid to do every day, and I learned long ago that it is wise to listen to the good advice of the pros that have preceded before you.  It is my belief that this is a requirement for success as an entrepreneur and life in general.

Vinod Khosla is the best of the best as both an entrepreneur and venture capitalist.  He co-founded Sun Microsystems and was formerly a general partner at the VC firm Kleiner Perkins Caufield & Byers. Today, I ran across an interview with Mr. Khosla by BusinessWeek, and the following is part of what he had to say about successful entrepreneurial ventures and teams.

"I’m always a big fan of what I call "managed conflict." That means getting people with different points of view together where they don’t always agree because they have different backgrounds and different assumptions about how things are usually done, the truisms in their business.

The best ideas come out of healthy debate around established truisms and their intersection. When starting a company, I tell people to engineer the gene pool of the people to have different perspectives, different backgrounds, and intuition, and to let those different intuitions be in conflict, but in managed conflict.

That’s why the management and the chief executive officer are so important. Their job is to assemble a great group and then manage them through this process. The best ideas come out of these kinds of debates. A startup isn’t going to do well if it’s doing what other people believe. It has to have a different point of view. A big company can follow conventional wisdom and do very well, startups have to have a unique angle. They have to change the rules in some way, believe in something others don’t, and leverage that into a business strategy and business advantage. That’s the process of a startup."

Mr. Khosla’s advice is fabulous.  Enabling and forcing folks with different perspectives and biases to debate the ideas on the table pushes the thinking to new levels…to levels that can change industries, create new ones, and displace old, stale paradigms.   I believe it is critical to allow the ideas to win on the merits of the argument versus the seniority of the sponsor.  When you get smart folks, with different points of view, to debate their ideas respectfully, honestly and passionately, you allow the best arguments to be vetted and ultimately, to win the day.

The challenge with this approach is that it can sometimes be painful, and this is especially true for employees that don’t embrace the "managed conflict".  Candid debate is neither easy nor fun.  It can take longer to get to an answer.  It takes a lot of work, but if done right, the answers should be better. 

With the right team, Vinod Khosla’s advice on "managed conflict" can be an invaluable competitive advantage.

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