It’s hard to argue with success, and Vinod Khosla has been successful. Khosla, a co-founder of Sun Microsystems and former partner at venture capital firm Kleiner Perkins Caufield & Byers, is today the head of Khosla Ventures. His company has funded some of Silicon Valley’s hottest startups (among them Stripe, Jawbone, Square, and Bitly). In case you were curious: He’s also a billionaire.
Few of us have been as right as often as Khosla has. So when he weighs in on what makes a startup successful—and what makes a great founder great—people give him the benefit of the doubt.
At the hoary age of 34, I’m disheartened to hear that, in Vinod Khosla’s expert opinion, I've got one good year left. As he once declared: “People under 35 are the people who make change happen,” and “people over 45 basically die in terms of new ideas.”
Journalists have made hay over that quote for years now. Personally speaking, I think (or at least hope) that Khosla said it mostly for rhetorical flourish—to inspire an audience of twentysomethings, rather than to tear down the hopes and dreams of their elders. Regardless, it’s been taken at face value. And by all accounts, the venture capital industry puts its money where Khosla’s mouth is.
Accusations of ageism are causing a stir in the Valley, though, thanks to a recent industry exposé by the New Republic’s Noam Scheiber. Scheiber paints a dreary picture: of competent entrepreneurs unable to secure funding on account of their age; of a booming market for Botox among the keyboard-and-compiler set; of people over 30 dismissed by their peers and subordinates as “graybeards.”
And the most frustrating part of the story? In the end, having faced these dragons, Scheiber lays down his sword. His prescription for addressing ageism in technology, real or perceived, is tantamount to acceptance. “But even if it’s true that the young are more innovative,” he concedes, unnecessarily, “it’s not entirely clear that we’d want to elevate them above the rest of us.” As for the graybeards: “For one thing, there’s something to be said for marginal improvements.” Scheiber’s solution—that we focus less attention on risky innovation, and more on developing a German-style industrial economy—doesn’t tackle the issue of ageism (or sexism, or cultural bias, or any number of very real discriminatory issues in technology and other American industries). It dodges the question.
Silicon Valley’s startup scene is an unparalleled hub of innovation for the United States and for the world. The inconvenient truth is that a lot of that innovation has come from the green, not the gray. The industry’s most successful founders, as far back as Hewlett-Packard in the ’40s, to Apple and Microsoft in the ’70s, to Google in the ’90s and Facebook in the aughts, have been in their early-to-mid-20s. (Vinod Khosla, at 27, was positively ancient when he co-founded Sun.)
If venture capital is ageist, perhaps it’s because history has an ageist bias. The business must place bets on nascent companies that pay off over five-to-10-year horizons. Given that most of its bets will lose, it depends on megahits to make up for its losses and drive the bulk of its returns. So what’s a VC to do, when he knows full well that no amount of diligence on a startup’s traction, product, total addressable market (TAM), or even core thesis will predict its success a year out, let alone a decade? He looks at the team. And when he does, he “pattern matches.”