♪ emily: he is known for shunning convention, taking massive risks that could win or lose billions, and investing in black swans, companies with a near complete chance of failure. but if they succeed, the world will be changed forever. vinod khosla grew up in india. the son of an officer in the indian army. his parents agreed he could explore his boyhood curiosities was no limits, as long as his grades did not suffer. he began by founding sun microsystems. he helps entrepreneurs take the

same risks he has no fear of taking. joining me today on "bloomberg studio 1.0" vinod khosla. thank you so much for being here. it is great to have you. vinod: great to be here. emily: you are known for being an investor who challenges -- you not only challenges conventional wisdom. you explode it. how early did that start? vinod: if you are successful early, and lock counts a lot, -- and luck counts a lot, the ability to do things others may not have the freedom to do. i used it to my advantage early. i was always interested in radical change, big ideas. i got the opportunity to do that. emily: you were raised in delhi, india. what might we find a young vinod

doing? vinod: i did not find anyone around me invested in business or technology. i grew up in an army household. i read about an immigrant coming to this country to start a company. i was 15. the technology, which was intel, sounded very cool. i fell in love with that idea stayed with that idea since. i wanted to start a company and realized how hard it is to start a company in most parts of the world. emily: you now say technology is your religion. were you raised religious? vinod: my parents were normal religious people. but i very early realized, at least priests in india were a scam. i was probably 12. i decided that if the purpose of religion was to do the most societal good, technology was the most powerful tool to do it, so i adapted science and technology almost as a religion

early in life. emily: you are best known for cofounding sun microsystems. you founded a number of companies before that. vinod: we started another company about three months before we started sun. i love this story for the following reason. no one remembers your failure. even though the probability of success was not large, failure does not matter. once you fail, it gives you the ability to succeed. if you are not willing to take risks, if you are not willing to fail, you will not do anything interesting. most interesting things are new, and new things involve risk. risk involves failure. before sun and before data dump, i started a company called daisy systems. daisy was quite successful in 1986. it went public.

frankly, daisy made more money than i ever needed in my life. so, i then wanted the freedom. i looked at careers, what else should i do? so i joined kleiner perkins, which was one of my lead investors, to essentially mentor and help entrepreneurs. emily: how does the venture industry back then compared today? vinod: there are many venture capitalists now. many bad ones. a few good ones. -- entrepreneurs should understand that. i get in trouble for saying that. there are many more options. that is great for entrepreneurs. emily: you have multiple degrees. an engineering degree, biomedical engineering at carnegie mellon, an mba at stanford. you wrote a post about majoring in liberal arts as a mistake for students. it caused some controversy, which i know you're not shy about.

one commentor wrote, "the real purpose of human existence is fundamentally tied to the regulation of wealth." vinod: that is a nonsensical response. what liberal arts has become is an excuse to do less work. it's not everybody. i speak to the 80% of students who actually do it for the wrong reason. the bottom line, if liberal arts goals are the goal, then liberal arts as taught today and taken today is the wrong curriculum. emily: what should they study? vinod: logic and philosophy should be an absolute part of any liberal arts curriculum. because otherwise you do not learn how to think. linguistics, economics. learning about how computers work. because we live in the computer age. why acquire a second language when the most important language

-- the language is computing? second not that many people ever need to code. is a style of painting the critique is all , from people who fail to understand what i was saying, which was exactly the point i was making. the comments like the one you mentioned reinforce the notion that they did not get a good education. emily: do you think college is important at all? should kids go to college? peter thiel is paying them not to. vinod: i disagree with him. i think college and high school are very important. there will be people who will do well without an education or no matter what subject they take. leaving aside those people, the top 10% or 20% i think college , gives you the grounding to be able to do things that adapt over time. emily: what do you think since -- sets coast ventures apart from other top-tier ventures?

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emily: you went on to found your own fund. what do you think sets khosla ventures apart from other top-tier ventures? andreessen horowitz, benchmark, kleiner? vinod: we tend to be much broader. we will do impossible foods. we will do rocketry like rocket lab. we will do hard science. we do very unusual things. robotics, semiconductors, even nuclear projects. emily: you believe that most

vc's hurt companies, not help them. what do you mean by that? vinod: applying traditional business flow metrics to start ups is the wrong thing. when people focus on irr's and rates of return, they actually hurt the company. i don't believe just because you are an investor, you have earned the right to advise an entrepreneur by being a board member. you should have started a company, knowing how hard it is, how difficult the trade-offs are. it is painful being an entrepreneur. life is not easy. unless you have empathy, you do not have the right to advise and -- an entrepreneur, in my view. one rule i have in 30 years, i , have never voted against an entrepreneur. they do not need hypocritical politeness from board members.

and not help them think through the risks they will face and challenge them. the same board members want to talk as if they know enough to they don't. emily: you don't go to board meetings if you can help it. vinod: i cannot stand to listen to other vc's talk about things they don't know about. emily: what is your advice? vinod: don't take advice because it is from the board. ignore the board to the maximum extent you can. consider the input of people who have real experience as input to your thinking. emily: this is interesting because we have talked about the lack of women in the venture capital industry. i know you are looking hard for a woman partner. but what do you think it takes to be a successful vc? do you need a stem degree?

i know some of your top partners don't. do you need to have been a founder, a ceo? vinod: you don't need to have a stem degree, but it helps. because you are dealing with technologies and speaking their language. it makes it easier. it does help. probably, and this is not even essential or even the most important requirement, having been an entrepreneur. emily: is that why it is so hard to find women to fill these roles? vinod: there are fewer women, so i think as women play more of an entrepreneurial role, and that is increasing. we have many entrepreneurs who are women, even a deeply technical areas, when they get enough experience, they will be great partners. you need the floor at the bottom to increase. we need to encourage more women to be entrepreneurs. emily: you mention a broad range of investments. rockets, food, ai, health, energy. companies with an unusually high

failure rate. every four years you say you go deep into an area you know nothing about. what has worked? what has not? vinod: all of them have worked in the sense that i really enjoy learning a new area. it will be five years before i know whether i am right or wrong. independent of whether the companies are successful or not, i will have learned a lot. the two most important things that can happen in technology that would really change humanity for the better is artificial intelligence and nuclear power, unlimited energy. i cannot think of any two things that would impact humanity more than those. emily: you tweeted recently that if ai happens, we will have abundant gdp to take care of anyone, but abundant disparity. only people who want to work will work. paint the picture for us. vinod: if ai does what people can do, i think it is likely in

40 years that of all the jobs that it is today, more than 50% will be done by machines. it does not matter whether it is a farmworker, a hamburger flipper, a legal researcher, a radiologist, or an oncologist. it is not just low skill work. if that happens, we will have dramatic gdp growth, dramatic productivity growth. all the traditional economic metrics. and because more people are working, more income disparity. i am pretty sure it will happen. emily: what happens to those people who do not have jobs? vinod: the critical question is how do we fairly address the people who are left out of this?

it will be most of the people. the good news is we will have enough gdp to provide basic income to everybody. i know this sounds horrific. we will have the resources. if per capita income is $150,000 or $300,000, some basic income as per capita income climbs above $100,000 will become very important. that will be a social and political issue we have to address. emily: hampton creek is a company some people have been excited about. they are facing serious allegations. when you say it is time for new leadership? ♪

emily: hampton creek is a company that so many people have been excited about. they are facing serious allegations. the sec is involved. the doj is involved. there accused of buying their own products off the shelves. when do you say it's temperament -- it is time for new leadership? vinod: there was a bloomberg article recently, the employer -- and i simply bought some stock.

if he thought he was defrauded why did he not sell the stock of that -- stock back and not lose a penny? mark benioff did not feel the fraud it. his wife is on the board. she looked at the details. maybe there's other stuff we will discover. i can't say what else we will discover. i personally talked to him. he did not have one credible allegation. he suggested talking to three other people. i talked to those people. emily: do the allegations bother you? do they concern you? vinod: any company that has any time theyny have employees leave have allegations. sometimes, 28%, 30% of the time they are right. 80% of the time they are just bitterness. if you look at them when they are serious, i will not comment on specifics, but we are always looking. bunch for yours -- entrepreneurs

push the edges. is the buyback relevant? the $77,000, that is completely irrelevant to our investment position. under a freedom of information request, the party was trying to destroy hampton great because the egg industry hated them. they withdrew the lawsuit when they realized how bad it was. there are many enemies the company has, including using federal funds in the department of agriculture to target the company whose e-mails were discovered by a reporter in washington that said how can we prevent them from getting distribution. why would a federal agency be trying? why?

because there are interests involved here. people again who are being , disrupted and will get hurt. it is a complex story. i cannot go into specifics. emily: how would you describe your faith in the ceo and the company? do you think this will be a winner in your portfolio? can they transform the food chain? vinod: hampton creek has already done a lot to change the food chain. all-male chicks when they are born are crushed. it is horrific. he is changing that practice. he's bringing visibility through it. they are making a difference. even if they are not successful, they will have made success by bringing visibility to this. as far as the ceo is concerned, we normally talk to his team. does the team support the ceo? when they don't, we have to have

a conversation with the ceo. do they make mistakes? absolutely. do we make mistakes? absolutely. it is a constant evaluation. emily: you are passionate about clean technology. you have made a lot of investments. someone say that you have made mistakes by going too far into this field. what have you learned? vinod: clean technology is an important area. climate change is a risk. i view climate change no different than i view homeland

security, nuclear proliferation, terrorism. they are all risks society faces. we should ensure against that. how much of our gdp do we spent ensuring against foreign attacks, national defense, homeland security? we should treat climate change the same way. it is a business decision. we should encourage new competitive technologies and then stopped supporting them when they get to a certain size. it is time to stop supporting wind. maybe even solar subsidies should decline. emily: really? vinod: we have done ok in clean technology. we have six companies that could be worth $1 billion. i would rather try and fail then fail to try. something that is really important. emily: it is clear that you are important about the environment. you have been philanthropic. one story that has been written about you is a lawsuit you are involved in around public access to your beach. some people would say that is at odds. vinod: normally i don't like to talk about things under litigation. giving up half your wealth will not impact my lifestyle.

it is not a huge impact. i can spend more of my time working on technology. i will probably have way more impact than from my giving. the other half of that is having principles. it is amazing to me how many fortune 500 ceo's read the press, read "wall street journal," and respond to it by saying here is what we believe is a company. passionate entrepreneurs, they have a passion that far exceeds their desire for short-term profit. because of that they make more wealth and profit over the long haul. wealth is just a tool to give you freedom to do what you want to do. many people, especially people like trump, get trapped in this cycle of making more.

that is not that interesting. doing all of the deals. he thinks it is smart to avoid taxes. that just blows my mind. i'm religious about my belief system. on the beach, act your question. it is about property rights. people who want to use coercion, they told me they would embarrass me into -- the courts of the way you resolve things, not somebody's opinion, not the press, not hyperbole. ofly: what are the dangers

technology? vinod: the way i look at it, some people have a rich lifestyle. 7 billion people wanted. technology can be used for good or bad. their technology to make a nuclear bomb or for nuclear power that provides a great services and saves hundreds of millions of lives because of the extra energy we have. and energy means less mortality. emily: you worry about it? vinod: the greater role society, theays in

greater the need to service the people at the bottom of the pyramid. worry aboutu ever overusing failure as a tool or being too willing to fail? od: america as a society cannot afford to fail. the world depends too much on us. if i am a mature company, i should not fail. it doesn't mean i should not encourage failure. always say, encourage experiments that might fail 5%re if they fail, you lose or 10% of your assets, your market cap. but if any of these succeed, you double your market cap. i do think failure is key to innovation. if you do not reward intelligent

failure, then you're not not aligning yourself to succeed in the long run. emily: emily: thank you so much joining us today. it has been great to have you. vinod: it has been fun to be here. ♪

♪ mark: welcome to this edition of "the best of with all due respect." the week before the election. all of the surrogates were spinning. latest allegations on an millionaire amid allegations from the gop the media is unfair. we begin the wrapup up with an 11-hour: bump. there