Vinod Khosla on his latest investments

[102]

There is an interesting interview with Vinod Khosla in the Economic Times   (http://economictimes.indiatimes.com/opinion/interviews/need-to-produce-products-at-chindia-price-vinod-khosla/articleshow/10669053.cms?curpg=1)

He makes many interesting statements on innovation.

“We are probably doing, in my little portfolio and with our five or six partners 10 times the amount of innovation that GE and Siemens are doing combined with all their resources”

“I, for one, never compute the returns on an investment. I don’t even allow it. I think it is a bad idea to do so, in fact, in all class of investments. I’m always about taking any area, understanding the fundamentals and building up from there instead of relying on whatever traditional wisdom there is. People follow rules that others have created. Everybody does it this way, but I don’t.”

“I fail often. I’m not afraid of failure; it doesn’t embarrass me. I’d rather try something and fail at it than not try at all. It is ok to fail. I lose only one times my money. I can make it back a 100 times. So why should I care what others think?”

In this same article he talks of his most recent investment that is about to issue a 1 billion dollar Initial Public Offer, a company called KiOR (http://www.kior.com/). The company shows how it is going to produce petrol and diesel starting with wood chips. The technology is not new. Their claim from what I understand is a catalyst that makes the process better in some way. I could not find the efficiency of the conversion.

Readers may want to check the figures from the website as a back of the enevelope calculation as I have done below.

It is stated in the site (http://www.kior.com/content/?s=6&s2=56&p=56&t=Production-Facilities)

1)  “500 tonnes of bone dry wood (hope this is in kgs) per day will be treated”

2) “11 million gallons of gasoline, diesel, and fuel oil blend stocks annually. (assuming all put together not individually)

3) Assumption  365 days per annum

4) Calorific values of Wood at 16000 kJ/kg

5) Calorific value of Diesel at 45000 kJ/kg  (http://www.engineeringtoolbox.com/fuels-higher-calorific-values-d_169.html)

6) Converting gallons to litres (4.5 litres to the gallon and density of diesel .8 kg/litre)

I am getting an energy conversion efficiency of 60 %

It takes roughly 3.7 kg of wood to make 1 litre of fuel.

Hope someone will check my calculation.