Vinod Khosla bets big on big data

Vinod Khosla bets big on big data

By Michal Lev-Ram, writer November 13, 2013: 5:48 PM ET

The Silicon Valley startup Ayasdi is just the beginning, the Sun Microsystems co-founder says.

FORTUNE—Last year, entrepreneur-turned-venture capitalist Vinod Khosla made waves when he said technology would someday replace 80% of doctors. This morning, at a Menlo Park, Calif.-based event hosted by one of his firm’s portfolio companies, Ayasdi, Khosla reiterated his belief that computational power–not people–will bring about massive improvements in nearly every field, particularly healthcare.“Almost everything doctors know about medicine will be obsolete,” Khosla told the audience. Earlier this year, the long-time technologist and co-founder of Sun Microsystems led a $10 million funding round in Ayasdi, a newish big data company that utilizes “topological analysis” to look for patterns in massive, often disparate data points. (In plain English, Ayasdi turns mountains of linear information, like what is found in health records, into geometric shapes that people can interact with.) The Palo Alto, Calif.-based company is one of an exploding number of big data start-ups. But while most companies’ offerings rely on data scientists to query systems with questions, Ayasdi says its approach enables companies to glean insights they didn’t know they were looking for. General Electric, Citi and Merck are among the company’s early customers.

“The most interesting things in highly complex data are the things we don’t know to ask,” says Khosla, who was attracted to Ayasdi’s ability to scale data science using more computational power, not more data scientists. Unlike coveted data scientists, compute power is actually getting cheaper.

But Ayasdi is also tapping into another trend: data visualization. From Seattle-based Tableau to just-launched startups like Palo Alto’s ClearStory Data, companies large and small are offering up tools that help users spin beautiful, interactive graphics from massive data sets. According to technology research firm Gartner, the big data category–visualization and other tools–will drive $34 billion of IT spending this year. The companies who are buying up big data tools are almost as diverse as the disparate data sets we can now analyze, from healthcare to retail to professional sports.

At least one area that big data has yet to significantly affect is the venture capital world. Khosla has made more than 100 investments in his many years as a venture capitalist, but says he has never calculated ROI or used any kind of data science tools to determine the likely outcome of an investment.

“There is no database large enough,” he says on the problem of using big data to inform his investing decisions. It remains to be seen how his bet on Ayasdi–or predictions on the future of healthcare–will pan out. Even topological data analysis has its limitations.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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