He is the quiet ruler of Silicon Valley, who kicked off the Internet era with Netscape and made $4.4 billion on Google. John Doerr told "Global Entrepreneur": The next big opportunity is new energy to meet the needs of the global "urbanization" trend
At a time when China's venture capital industry is almost impossible to get hotter, John ? John Doerr is here.
At first glance, this thin man, who is about 1.75 meters tall, has a long and narrow face, and has an intellectual temperament, does not look amazing, nor does he speak amazingly. He always wears a dark blue tie. No matter where he goes, he carries a huge 50-pound bag with a Google logo in his right hand, and in his left hand, he only carries a very ordinary plastic watch and two wristbands worth $1 each. . Sitting down, he spoke at a steady pace and concisely - this legendary person with an excellent memory for numbers, when asked by "Global Entrepreneur" if he could remember how many companies *** had been listed on the market over the years, he simply said Spit out one word: "No".
Whether you believe his answer or not, it needs to be pointed out that Doerr is probably the person in the global venture capital industry who has the least need to talk about his achievements. Since he joined the partner firm KPCB in 1980, no one in the venture capital industry has done better than Doerr in terms of consistently creating good performance and often investing in star projects. In the 1980s, he made a series of investments around the microprocessor revolution, such as Compaq Computer, Sun Microsystems, Lotus Software, etc., all of which played a major role in the personal computer revolution. In the 1990s, he took the lead in investing in Netscape, which ultimately kicked off the Internet revolution. Since then, Doerr has become the most tireless advocate of the Internet industry, and even greatly influenced former US Vice President Al Gore. In the late 1990s, he invested US$12.5 million in a sophisticated search engine. A few years later, the website called Google became popular around the world, and Doerr made nearly US$4.4 billion in profit.
Putting aside the star effect of this series of landmark investments, Doerr’s investment also created a series of figures for KPCB Partners, the company where he works, that are the envy of all peers in the venture capital industry: KPCB has been In 33 years, *** has returned more than $17 billion to investors, with a total return rate of 29 times. In an industry often referred to as "seeding and praying," its performance is considered solid: the fund's annual return from periods 7 to 11 was 142%. Over the past 30 years, it has made 475 investments a year, of which 167 companies were successfully listed and there were 166 mergers and acquisitions. According to the latest statistics, companies listed after its investment have a total revenue of US$90 billion and a total market value of US$375 billion.
As a long-term core investor of KPCB, Doerr has received enough praises - "Living Legend", "Michael Jordan of Venture Capital Industry" and even "God of Venture Capital" - but How he accomplished all this is unclear. As a private equity firm, Kleiner Perkins Caufield & Byers receives little publicity from the outside world. Although Doerr has been interviewed by the media from time to time, most of the time, he only comments on a certain industry trend. He didn't even want to appear alone in the photo, so that in 1998, the American "Fortune" magazine had to gather all the partners of KPCB and many CEOs of its investment companies to report and photograph him.
Unsurprisingly, when he was interviewed by "Global Entrepreneur" in China in early March, he gave an answer close to the truth on the topic of investment rules: "Find good entrepreneurs. , position yourself in a big market, have leading technology, and be committed to building an amazing team - so you can have a big and lasting business."
If you want to explore the fundamental causes of Duer’s investment miracle, you need to do two things: read his memories (you will see Duer in this article "Part 2: The Growth of a Venture Capital King" a more complete version of his investment experience) and watch how he acts.
During his short stay in China, in addition to being a director of Google and meeting with Kai-fu Lee and Shaoning Zhou, the two heads of Google China (he quickly found the biggest key to Google’s development in China: “It cannot be like Yahoo and Amazon). "Also disturbed by the headquarters"), he also met with 22 local entrepreneurs. After only half an hour of communication with each person, he had clearly expressed his intention to invest in one of them.
The speech given at Tsinghua University at 4 pm on March 2 was a very true reflection of his style: without even introducing himself, he began to let the audience ask him questions. He can quickly simplify long questions, so that colleagues on the side can type the questions on the projection. When more than ten questions fill the screen, he starts to answer them one by one, still fast, concise and without nonsense. "Come on, come up with a more difficult question, the kind that embarrasses me..." Duer waved his long arms and challenged the audience - the magic of this man who looks like a university professor is that he shows his emotions in every move. With great vitality and extremely high efficiency, he can inspire others in the shortest time.
Previous article: The people who run Silicon Valley
"The Hand of God"
"The future has already happened, it's just not evenly distributed yet," Doerr said, " The best way to predict the future is to create it, and if you can’t create it, at least invest in it.”
This is a classic Doerr statement. Optimism, confidence, and most importantly, the wisdom of others. The first half of this sentence is quoted from the novel of science fiction writer William Gibson, and the second half is adapted from the famous saying of Alan Kay, the famous scientist of Xerox Company. They are not original by Doerr, but Doerr found the best way to combine them. Nice way to express it.
"Better Quote" is almost a portrayal of Doerr's work: he finds the best business ideas through various means, and then exhausts all means to turn them into reality. It is for this reason that investors in KPCB, including Doerr, do not call themselves “venture investors” but “venture-assistants.”
What distinguishes "assistants" from "investors" is the depth of the role they play: that is to say, Doerr provides more than just financial help.
Someone in Silicon Valley once summarized Doerr’s work this way: “He likes to play the hand of God in the companies he invests in: hand-picking CEOs, recommending strategies to the board of directors, and introducing leaders of each company to each other. , leading their mergers, acquisitions and various transactions. He is regarded as a Bole who can identify various talents at the technical and operational levels and recruit them."
All these jobs add up. , you can understand his identity as "part chairman and part CEO". Duer does not only play this role in one company, but also plays a role in more than ten invested companies at the same time.
Moreover, his level of involvement in every job is extraordinary. Countless entrepreneurs who have dealt with Doerr recalled that when he wanted to poach a key player, he not only called the person directly, but also established a good relationship with the person's family. He will buy a plane ticket and fly to your city as soon as possible so that you can't refuse to meet him. For those potential partners who are particularly good, he will not only invite them to take important positions in the companies he invests in, but also help them plan long-term cooperation possibilities: let them know that even if they fail this time, it will not lead to the destruction of their careers. .
What made this "impossible mission" a reality was first of all Dürr's efficiency: in the mid-1990s, the Internet entrepreneurship wave caused him to shout that he encountered a "time shortage", which forced him to He uses five phones, two pagers, two cell phones, and three computers at the same time. Now, he added a mobile phone and a Palm that can send and receive emails at any time, and lost the pager. It is even said that he will carry a mobile phone in his snow hat when skiing. In the 50-pound schoolbag he carries with him every day, there are two laptops and two cameras.
The second is his high degree of self-discipline: Over the years, Duer has always maintained extremely high-intensity work. Under great pressure, he would sometimes shake as if electrified, pull his hair, bite his lips, stamp his feet, tap his fingers on the table, and even break his pencil, but he never lost control. In order not to waste time, Duer gave up all the "luxuries" in life: he didn't like to be flattered, he didn't have much sense of humor, and he wanted to eliminate everything that hindered him.
But fundamentally, what allows it to handle such complex work is Duer’s understanding of the nature of its work: if you equate it to investing in the capital market, or being deeply involved in a company It would be a big mistake to go into the management of the company. Duer's approach best explains that business is an art about people. Its success and even failure experiences can prove that business is not simply strategy and execution, but more like the release of imagination and human vitality.
Doerr's philosophy is "think big", and his hardest work is to use his own strength to weave a huge network of talented minds and entrepreneurial spirit, and maximize the power of this network.
Unlike most venture capitalists who are extremely low-key or slightly arrogant and sneak under the radar, Doerr loves to communicate with people. One of his habits is to carry two cameras with him and take the initiative to take photos with everyone he meets. Most of his collaborators have become long-term partners: for example, Jim Clark from Stanford, whom Duer met in 1980. In the next 20 years, three of the four companies he founded successively were led by Duer. I invest. Even his biggest failed investment, his bet on the handwriting computer company Go in the late 1980s, has become an "epic failure" in the history of Silicon Valley, but most people who experienced this failure later became KPCB series companies. important force.
Because of this, you can’t even hear any negative words about Doerr in Silicon Valley. "Why would anyone attack Duer?" Someone asked: "He is the one who made everything happen!"
The Web Weaver
The actual effect of Duer's work, It’s not just a list of numerous and brilliant listed companies, but a concrete map of Silicon Valley.
Most of the companies it invests in will be carefully integrated into KPCB’s network. While most venture capital firms refer to their portfolios as "portfolios" or "families," Doerr has been referring to KPCB's portfolios since the 1980s as Keiretsu, a Japanese word that means cross-control. The corporate system, or to use the image of the famous movie: the spider's nest city.
As for why such a complex network of relationships has been established, Duer's explanation is straightforward: "It is very difficult to start an important new business, so we have to work hard to help entrepreneurs in all aspects." This is not a hypocritical statement. For a partnership firm that has to read 2,500 business plans every year, meet with hundreds of entrepreneurial teams, and ultimately make more than ten investments, if it cannot quickly develop skills at many different levels, With the help of force, the work of Duer will be more difficult.
The most superficial effect is that during the first wave of the Internet's climax, when most websites grew in isolation, all the websites invested by KPCB drove each other's traffic and income through cooperation. For example, Excite paid Netscape $70 million in 1998 for the right to provide a search engine for the other party's website. This helped its traffic surpass competitor Infoseek and become the search engine second only to Yahoo. In addition, after investing in the drug website Drugstore, Doerr also sought training from Amazon, which has accumulated a lot of experience in e-commerce.
The greater value is that if you believe that there are not many geniuses in the world, then the cost of repeatedly looking for new geniuses is destined to be extremely high. Therefore, KPCB has put a lot of thought into connecting geniuses who have proven themselves.
Over the years, Kleiner Perkins Caufield & Byers has invited about 50 top entrepreneurs to participate in one of their side funds. This side fund runs together with every fund of KPCB, and the few who participate in it can often get good returns. What's really worth noting is the list of people who have attached to the fund: Intel's Grove, Sun's founders, AOL's Steve Case and Robert Pittman, Comcast's Bob Ryan Roberts, Intuit, Netscape and Excite are some of the founders of companies that have helped KPCB achieve extremely high returns...so much so that some people say: Just making a phone call on this list can already do a lot.
Even in recent years, within KPCB, Keiretsu has been replaced by "Network" - Duer said that this is because Keiretsu is more like a complex structure that operates based on the power of a certain person. , but the network doesn’t have a true center – but the way it operates hasn’t changed at all.
The Next Big Thing
Every fall, Doerr holds a discussion at Apsen with Bill Joy, known as the "Edison of the Internet Age": What dramatic changes will occur in science, communications, society, computers, and business in the next five to ten years?
This kind of discussion may seem empty, but it is enough to help Duer mentally prepare for various opportunities. For example, in 1991, Joey said to Doerr: "John, one day you will invest in a program written by a 20-year-old kid that will change the world." Doerr immediately agreed. They didn't know at the time that the program would be called a browser, but thought it would be some kind of game software. But when 22-year-old Marc Andreessen and Netscape appeared in front of him, he was able to immediately convince other partners in the company to agree to the investment.
Keeping abreast of the changing trends of each era is an important reason for Durner’s long-term success in the venture capital industry. Although people usually position him as a high-tech investor, Doerr has actually changed his identity several times. In the 1980s, what Dürr and KPCB valued most was the technology with microprocessors as the core: from Compaq to Lotus Software, from Sun Microsystems to AOL, the common "denominator" for their success was the foundation Advances in technology. In the 1990s, Dürr turned its attention to digitization, information technology, and network applications. In the late 1990s, when everyone was going crazy about the Internet, the concept that Doerr valued was "thin client": He believed that this was a bigger revolution than the personal computer: the PC talked directly to the server without having to use a computer. Most of the software is installed on the computer. This expectation for one browser to solve all problems is being realized by Google.
In the past two years, Doerr and Bill Joy have extended their telescopes to a broader future: they believe that the most important current trend is "urbanization". In the next 50 years, the world's urban population will grow from 2 billion to 6 billion, especially in China and India. This process, which is equivalent to adding a Manhattan every year, will increase the demand for cleaner and more efficient energy around the world.
Even after Bill Joy joined KPCB in 2005 ("He increased the average IQ of each of our partners by 20 points," Doerr joked), his main investment direction was not computer-related. business, but green technology. So far, KPCB has invested in 5 companies, 3 of which are in the confidentiality stage.
KPCB has been preparing for five years to enter the field of green technology. Duer said: "The way to prepare for green technology is the same as preparing for the network and microprocessors. Of course, now we have Google, use Google to search for what you want to know. The other work is to read Reports, meetings with scientists and engineers, participation in various forums. We work with various companies in this industry to try to find the best people and get the best ideas."
, as well as the field of life science and technology. There are many promising directions in this: personal medical treatment, digitization of drugs, genetic issues, protein issues... Kosla, a partner of KPCB for many years, believes that relying on bioengineering technology, alcohol extracted from agricultural waste will be better than traditional alcohol. The efficiency extracted from corn is 4 to 8 times higher. Systems biology, which uses technology to imitate the operation of real organs, may also be realized in the next ten to twenty years.
Next article: The growth of a venture capital king
“The largest legal wealth creation in history”
About what made him a venture capital The answer given by Duer is: luck, a natural passion for innovation and entrepreneurship, and the ambition inherited from his father.
After earning bachelor's and master's degrees in electrical engineering from Rice University, Doerr went to Harvard to pursue an MBA. During this period, he had begun calling venture capital firms to find a job.
It was 1974, one of the worst years for the venture capital industry. That year, only two companies raised more than $1 million: Playboy Group and Tandem Computer Company invested by KPCB.
Therefore, although he met some heavyweight players in the industry, such as Brook Byers, one of the partners of KPCB, and Dick Kramlich, the founder of NEA, the advice he received was instead: Forget venture capital and get a real job at a good company.
In fact, this was also Duer’s answer when he was asked later what kind of training can cultivate a good venture investor: “The best preparation is to work in a high-tech company with excellent management and rapid growth. The company has operational experience.”
At that time, Doerr joined Intel, which was just established, which gave him the opportunity to work with Andy Grove, who later became the legendary CEO. Together, the two trained Intel's sales force in the United States and Europe and won chip orders for the company from large companies such as Siemens and ICL. After school started, while still studying, he worked part-time for Intel 20 hours a week as a field engineer working with DEC.
During the six years from 1974 to 1980, Doerr experienced the transition from engineer to marketer at Intel. The biggest lesson these experiences have taught him is that only by solving a problem can one earn an income - only those companies that solve big problems are eligible to receive huge returns.
In 1980, Doerr was recommended by a friend to work as a "part-time clerk" at KPCB, where his job was to review new business plans. During the interview, he mentioned that he hoped to start his own business, and the four partners of KPCB promised that just like they had successfully incubated Genentech and Tandem Computers, Duer was not without opportunities.
The timing for Doerr to enter the venture capital industry was extremely appropriate: in addition to being young and having a long time to prove himself, more importantly, with the launch of Apple Computer in 1980, Silicon Valley's Vitality is being expanded and released, and various technological innovations around microprocessors were later summarized by Doerr as "we have witnessed (and benefited from) the largest legal wealth creation in history."
Let’s take a look at his schedule at the time: In 1980, Stanford University professor Forrest Basket recommended a project called “Stanford University Network” to him, which produced low-cost The student project of the workstation became Sun Microsystems; in 1981, at a conference at Caltech, Doerr met two professors, Carver Mead of Caltech and Stanford Jim Clark. Silicon Compilers, a company co-founded by Mead and Duer that specializes in "editing silicon", became the first company incubated by Duer (the company was eventually sold for $142 million 11 years later) , and Clark founded Netscape 14 years later; in 1982, the business plan written by three resigned employees of Texas Instruments on a restaurant napkin became the Compaq that later unseated IBM from its PC supremacy... …
Of course, this is not a purely casual meeting. When Compaq's three-person entrepreneurial team first approached Doerr, they just wanted to start a hard drive company. Because they were not optimistic about the sustainability of their development, they were forced to turn to the production of portable computers. This time's idea coincided with the idea that Duer had advocated but failed when he was at Intel, which led Duer to actively persuade the partners to invest.
At that time, PC sales were in short supply, and this portable computer with a 9-inch screen and a weight of 35 pounds was obviously very competitive. Compaq was careful to position its products as complementary to IBM, allowing it to get off the ground without any hindrance from Big Blue or its vendors. In the first year of its establishment, it achieved sales of 110 million US dollars and became the fastest company in history to achieve 1 billion US dollars in revenue and the fastest to enter the Fortune 500 list.
The story of Shengyang is also a team victory. The project was initially spearheaded by Andy Bechtolsheim, but was gradually joined by a technical genius named Bill Joy and a man named Vinod Khsola. ) Indian, and an MBA named Scott Mcnealy.
Even though the four entrepreneurs were only 27 years old at the time, this team with both business acumen and technological innovation capabilities still impressed Dürr.
Time has proven that this investment in 1982 created huge value for KPCB: in addition to the success of Sun, this team also had an impact on KPCB’s investment at all levels. After exiting Sun, Becktosheim founded two companies, sold them for US$313 million, and initially provided Google with US$100,000 in start-up capital. Bill Joy, who has played the role of chief scientist at Suntech all year round, has led many heavyweight innovations including Java. KPCB has also set up a special Java fund with excellent returns. Kosla simply became a partner of KPCB. The three telecommunications equipment companies he invested in in the 1990s - Cerent, Juniper and Siara - ultimately earned KPCB more than $4 billion in returns.
“In today’s world, there are too many technologies, too many entrepreneurs, too much money, and too much venture capital. What is truly scarce is a good team. Building a good team is the greatest Challenges. The world is undergoing tremendous changes, some driven by technology and some driven by the market. All these changes bring unprecedented opportunities. If you want to take the initiative, you must focus on the team. For many years, many times.
A disastrous failure
If previous successes have clarified Duer’s investment philosophy: creativity is not difficult, execution is the key, but in the end it is the team that wins, then what he experienced subsequently A tragic defeat is enough to show that there is still a certain distance between a good team and a good business. In 1987, Go Company was established, and its handwriting operating system is still regarded as a major change in the PC industry. But it ends up being an overly ambitious story.
In addition to the revolutionary nature of the technology itself, Go is almost completely out of control in other aspects: it has no business plan, and the technology it advocates is too ahead of its time. Both Doerr and Kosla sat on the company's board of directors, and all anyone wanted at the time was a "home run" (venture capital industry parlance: a return of more than 20 times). In the atmosphere of rapid advancement, Go burned money in a completely unsustainable way. Mitch Kaboer, a former Go executive, later lamented: "The most interesting thing is that if it could spend money more prudently, this company would probably survive to this day and find a real way out."
But the extreme operating mode at that time was destined to have only two extreme choices: create a miracle, or go bankrupt quickly. In its final stage, the biggest topic every day in the company was, who will come to save Go? One day it was IBM, the next it was Intel, and in the end it was AT&T that paid the bill.
Go has become one of the most famous failure cases in Silicon Valley for a long time because of its short life, high investment and luxurious management team. Doerr himself has never been shy about mentioning this experience. He called it For "Big spetacular failer". He even joked: "The book about Go, Startup (written by Go CEO Jerry Kaplan), should be called Screwedup."
The story ends here. Finish. "If you want to do something big, you will definitely stumble a lot." Duer said, "We got everything wrong, the technology was wrong, the market was wrong, the pricing was wrong. The only thing right was that we hired a group of people. Smart people." In fact, Go's management team later became an important force in the KPCB network: Kaplan served as CEO of OnSale, another Internet company he invested in; Bill Campbell later became the CEO of Intuit Software, and now He is a consultant to Google; Norm Meyrowitz was the former vice president of Macromedia when it was sold to Adobe; Mike Homer was the vice president of marketing at Netscape; Stratton Scravos is the CEO of Verisign; Danny Scheidel became the CEO of Good Technology; Randy Kmisal became a partner at Kleiner Perkins Caufield & Byers; and Robert Carr served as a consultant for several Internet companies.
Durr did not deny his managers because of a fiasco, or in other words, he paid a tuition fee for these people.
In 1990, a company called Intuit Software approached KPCB.
At that time it had 1 million customers and sales revenue of $33 million. But company founder Scott Cook believes that he needs KPCB's help to increase the company's annual revenue to $1 billion.
KPCB invested US$4.7 million in this project in exchange for 12% of the shares. Doerr parachuted one of Go's managers, Bill Campbell, into the company as CEO. And took a series of actions to reshape Intuit: hiring a management team, assisting Quicken in launching a Windows version, releasing business-oriented application software, completing an IPO, merging with TurboTax, the largest tax software company, and even almost merging with Microsoft.
When the merger with Microsoft ultimately failed, Intuit quickly entered the Internet under the leadership of Campbell, cooperating with Excite and AOL, two other companies invested by KPcb. From 1991 to 2005, the company's revenue has grown from $33 million to $2.18 billion.
This kind of blessing in disguise makes Doerr qualified to explain the spirit of Silicon Valley: "It's okay to try and fail. It's okay to try again, just don't fail on the same mistake twice."
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