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Vinod Khosla on the two most important things to get right when building a company

April 08, 2025

The first thing for a startup to get right is make sure they’re inventing something radically different:

“If you’re extrapolating the past to predict the future, the big companies do that very well. Intel knows how to go from a 15nm process to 10 to 7 to 5… Entrepreneurs fundamentally have to invent the future they want in a very different way, and you have to have conviction.”

For this reason, Khosla Ventures tends not to invest in startups that are trying to do something “slightly better” (e.g. slightly lower cost, slightly more efficient, etc.) because the risk is too high.

As Vinod explains:

“If you’re fundamentally reinventing something and changing the assumptions, then you have a lot more time to get it right so there’s a lot more iterations you can do.”

Which brings Vinod back to the second thing every founder has to get right: build the right team.

“If you get the right team — it doesn’t even matter if you get the spec right — it will iterate to the right answer, and almost all good startups do that. This is why the team is more important than the market you pick.”

However, you must make sure to foster a culture of debate and disagreeing:

“If there’s a single founder and you’re dictating terms, you’re not going to evolve… You have to set up a culture so that it doesn’t matter if you’re senior or junior — you speak up if you have a concern or an idea. You’ll detect problems much earlier, and as a group you can evolve your direction.”

Vinod points out that this is one of the reasons Andy Grove started the casual, dress-down culture of Silicon Valley in the 70s:

“He wanted an engineer — whether they were junior or senior or a VP — to speak up and not be intimidated that the executives were all wearing ties and coats.”