Tom Perkins, one of the four founders of leading venture capitalist firm Kleiner Perkins Caufield & Byers, revealed Wednesday that when his company was monitoring kit computer startups in the 1970s, he "very foolishly didn't even look at Steve and Wozniak." KPCB had looked at three other startups in the field and wasn't impressed, so the company ended up passing on an Apple pitch entirely.
"Big mistake," Perkins added, illustrating that even the most prescient of investors have to accept mistakes amid a torrent of big risk gambles. The pioneering VC was speaking alongside Don Valentine, founder of Sequoia Capital, during the final day of the TechCrunch Disrupt conference in San Francisco.
KCPB's big miss with the Apple was one of many fascinating anecdotes Perkins and Valentine told about the early days of Silicon Valley's pivotal venture capital industry. It was an industry that helped launch the likes of Hewlett Packard, Apple, Microsoft, and many more tech titans that got their start on the financial foundations laid by the very few others in the field willing to take on such high-risk investing.
For instance, Perkins described his worst investment as an up-and-coming tech industry VC was in a motorcycle-to-snowmobile conversion vehicle. "It was called -- I'm not making this up -- Snowjob," he said to inevitable audience snickering. "Customers didn't jump for it."
Valentine, who founded Sequoia in 1972 and is now 81 years of old, was more off-the-cuff than the reserved Perkins, sending out well-received zingers like "I'm against all business schools" and telling the crowd that human resources specialists are "the destroyers of companies."
"Steve Wozniak attempted at one point to be employed by HP," Valentine said as an example. But Wozniak didn't fit the look, and he infamously turned his back on dreams of joining a Silicon Valley corporation to co-found Apple.
Valentine also opened up about the early days of Atari. "Our board meetings were conducted in a hot tub," he said, adding that the notoriously quirky founder of the early game maker, Nolan Bushnell, would conduct these meetings at his house with a bottle of wine floating in the water.
When asked what it takes to be a venture capitalist, Perkins and Valentine offered advice that, while now terribly cliche when it comes out of the mouths of well-groomed modern entrepreneurs, was incredibly poignant to hear from the tech industry's original oracles.
"The investors should never be more ambitious than the CEO," Perkins said.
Valentine spoke up, adding a stipulation that's now an industry standard and one of the more controversial tech marketing campaigns. "The ability and willingness to be different," he said.