Funding the future is a different job from inventing it
A venture investor picks and backs other people's inventions. The job has its own skills and its own blind spots, and clean technology has tested both.
If you can’t invent the future, the next best thing is to fund it.
The computer scientist Alan Kay said in the early 1970s that the best way to predict the future is to invent it. John Doerr, who spent several years as an engineer and salesman at Intel before joining Kleiner Perkins in 1980, has credited Kay’s idea as the starting point for this line, and it has become something of a motto for his firm. The second half is modest on its face. It concedes that the investor is not the inventor, and places funding a step below.
In practice funding is a different job, with its own skills. An inventor needs depth in one problem. An investor needs a way of judging many problems quickly, and of telling which founders will keep going when the first plan fails. Kleiner’s record under that approach includes early money in Netscape, Amazon and Google, none of which Doerr invented and each of which needed capital at a moment when few others would provide it.
The line fits software well because software can be tested cheaply and grows quickly once it works. A venture fund usually has about ten years to return money to its own investors, and software companies often fit inside that window.
It fits less well where the future arrives slowly. Since 2006 Doerr has pushed Kleiner heavily into clean energy, arguing that climate change is the largest opportunity of the century. Energy technologies need factories, long testing and regulatory approval before they earn anything, and the firm’s bets in solar power, fuel cells and electric cars have needed far more capital and time than its software investments did. So far, much of their value is on paper. Funding the future assumes the future will arrive on a fund’s schedule, and some futures do not.
For founders, the line carries a practical point. Investors are buyers of futures that other people are building. They are not a substitute for invention, and they rarely create a market that does not yet exist. A company that has invented something people want will usually find funders. A company hoping funders will make its invention matter is asking them to do a job the line itself says they cannot.
There is also the question of who captures the value. Investors fund inventors in exchange for a large share of the outcome, and the best-known funds have done very well from other people’s inventions. The line is modest about the investor’s role and quiet about the investor’s return.