The Khosla strategy

A colleague at the Chicago Tribune, Michael Oneal, sent us a link to an interview he conducted with Vinod Khosla (see last night's post) last week in St Louis.

Oneal says that while it is true that Khosla glosses over some of the challenges facing ethanol, he comes across as very convincing in person.

"... the point he made to me in person was that he believes there is less development risk for this technology than there has been for many of the other things he has bet on during his career," Oneal writes.

(Khosla calls it the 'biohol trajectory' in his article in Wired.)
"He views it like an engineer would view the development of a car or airplane - - are there definable, financeable steps that can be logically taken toward what eventually will be a major new product?" writes Oneal. "In this case, profitable regular corn ethanol leads to cleaner, more efficient corn ethanol (E3), which leads to cellulosic (Kergy), which leads to other more energy efficient biofuels."

Oneal notes that Khosla is a venture capitalist, so expects to make money on his investments. "Khosla assumes that if people like himself can keep making money on these various, iterative steps in two- to three-year intervals, the money and brainpower will keep getting thrown at the problem. He said the Internet was this way, interactive TV was not. It's the difference between looking at all the problems and challenges at once and concluding ethanol will never work and looking at first one problem and then the next and concluding there is a feasible staircase to climb to get where to where you ultimately need to be."

Click here to read Oneal's interview.
Click here to read Oneal's recent article on alternative energy options.

- David Adams