John Doerr: Green Is What’s Growing in the Valley

John Doerr, Kleiner Perkins Caufield & Byers’ high profile green venture capitalist, told attendees at the Web 2.0 Summit in San Francisco on Wednesday that cleantech is what’s growing in Silicon Valley. Perhaps not what a room full of Internet entrepreneurs wanted to hear, but Doerr and KPCB have changed investing strategies over the past couple years to reflect that trend — a third of Kleiner’s latest fund is allocated for cleantech and a third for digital media/web companies.
The current level of venture investment in cleantech — now the third largest investment area — isn’t even all that much, said Doerr, considering the massive opportunity. Two areas he sees that are underfunded are energy storage, including batteries and super capacitors, and geothermal power. KPCB has invested in a geothermal startup, AltraRock Energy.
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Just Saying: Google Didn’t Start In a Downturn

2505321929_74196ea806_mEarlier today, I attended the “How to manage your startup in a downturn” roundtable, organized by Matt Marshall, where seasoned venture capitalists and entrepreneurs dispensed advice on how to navigate the current downturn and be prepared for the worst.
Like most of these conversations, someone on the panel brought up the fact that downturns often inspire extreme innovation and lead to creation of great companies. To expound their point, these people point to the likes of Oracle (s ORCL) and Google (s GOOG). While Oracle’s story is true, Google’s story is nothing more than a modern-day fable. Read More about Just Saying: Google Didn’t Start In a Downturn

Found|LINKS: Mar. 29 – April 5

This week’s short list of stories, posts and other founder-resources you shouldn’t miss.

1.) missionaries.png From VC John Doerr, check out this slide outlining the difference between mercenaries and missionaries of entrepreneurship.

Missionaries are good (passion). Mercenaries are not (paranoia). The slide is from a presentation Doerr gave at Stanford on April 2, 2002 (!). We got it courtesy of our friends at VentureHacks, who do a great job of finding needles in haystacks.

Also watch the video of Doerr’s talk:

2.) Valuation: Bad economy? Yeah. Selling opportunity? Maybe. Check out Inc. magazine’s flagship company valuation guide, The Most Valuable Companies in America : “Investors are loaded with cash. Boomers are looking to buy. Foreign firms are eager to invest. What does that add up to? A seller’s market for your business.” It describes the main buyers (serial entrepreneurs is one to pay attention to!) and has slides on cheap vs. expensive shops. We note that besides software, the hottest businesses are “anything aimed at the aging U.S. population.” (F|R has written about this previously.)

3) Understanding Venture Capital. It’s a hard nut to crack. But this paper form Havard Working Knowledge attempts to decode the often seemingly arbitrary valuations of vc-backed startups by “explor[ing] mechanisms for limiting the asymmetric information that potentially plagues the acquisition of young venture capital-backed companies.” As you seek funding for your own company, this ought to help you understand how startups are VC-funded and why; how they’re bought and sold, and why. One of our key takeaways: it is strictly because the notion of value is relative/subjective that relationships are so important in this business; for deals to work well it is critical that perceptions of value between two parties are compatible, which usually (but not always) means interests must be aligned. Hence Harvard’s emphasis on the “bridge-building alternative [because] the personal relationship between the two firms is critical to conveying value-relevant information about both the target and the acquiring firm.” Just ask Jerry Yang at Yahoo!.

Thought of the Day: Questions vs. Answers

[Scott] Cook has an unusual ability to ask the right questions (which my partner Vinod Khosla insists is more important than getting the right answers; in business, there are often several right answers),” writes VC John Doerr, of Intuit founder Scott Cook, in the introduction to a new book about the company, Inside Intuit.

It is Khosla’s point that we’re highlighting here: Concentrate on asking the right questions, not on finding the perfect answers. The answers to any given question will change, depending on the circumstances at hand. But the most important business questions are evergreen, and we try to address them here as often as we can Read More about Thought of the Day: Questions vs. Answers

‘Coach’ Bill Campbell on Cultivating Innovation

More great stuff from the McKinsey Quarterly today. This time it’s a Q&A with Bill Cambell, a tech titan who, McKinsey writes:

“has experienced firsthand the spectrum of Silicon Valley scenarios, ranging from technological breakthroughs to the rocket trajectories of new start-ups to failed spin-offs—and the mountains of cash that go up in smoke when products don’t catch on.”

Campbell founded Claris in 1987 (acquired by Apple in 1990) then ran GO, the pen-based software shop, and eventually became CEO of Intuit (1994-2002). He remains on the boards of Apple and Intuit.
More important, Campbell is a “low-profile, high-level counselor” to many tech companies, including Google. CEO Eric Schmidt has called Campbell “priceless beyond belief” adding, “our basic strategy is to invite him to everything.” John Doerrsimply calls him “The Coach.”
This Q&A discusses how to cultivate an innovative culture at your startup . It is behind the pay wall, so we’ll offer a few highlights. Read More about ‘Coach’ Bill Campbell on Cultivating Innovation