Plant-based food startup Hampton Creek, a crown jewel in the Khosla Ventures portfolio, has been embroiled in a lot of controversy during the past month.
Business Insider first published a story in early August in which former employees alleged bad ethics and a lack of science at the egg-replacement startup. After the CEO Josh Tetrick had an affair with an employee, text messages viewed by Business Insider showed he was worried about what Khosla would do if he found out.
“Khosla would hang me — it is a huge lawsuit” Tetrick wrote in 2013.
Later in August, the FDA sent a warning letter to the company because its Just Mayo product does not meet the federal regulation of mayonnaise. The startup then published emails showing a conspiracy between members of the egg industry to bring the Hampton Creek down.
TechCrunch wrote its own story with several lingering questions for the startup, and on-stage at TechCrunch Disrupt, senior editor Jon Shieber tried to ask its main investor Vinod Khosla about what’s happening at the company.
Khosla did not take that well, and summarily began to belittle journalists while insisting he did not want to talk about food:
Khosla: They’re [Hampton Creek] doing great. There’s a general principal we should talk about. We all love to talk about disruption and revolution and all that. if you’re doing any thing disruptive, you’re disrupting somebody and somebody’s getting hurt. revolutions are hard on people, people get killed, people get hurt. and anytime somebody does, like the egg industry. If you really want to understand the egg industry, Just Google crushed chicks, that’s how they treat half the chicks that are born, they crush them alive.
I don’t want to talk about food, I want to talk about disruption … by the way, the company is doing awesome.
Khosla: Here’s a journalist who doesn’t know what’s going on, has an opinion, just like he does, to make interesting stories.
TC: Hopefully, hopefully there will be an interesting story that comes out of this.
Khosla: I know a lot more about how they’re doing, excuse me, than you do.
TC: So please tell me.
Khosla: No no no, we don’t need to talk about Hampton Creek.
With the Hampton Creek discussion tabled, Shieber moved on to asking about whether entrepreneurs should still turn to venture capitalists these days. It’s an important question, Khosla noted, before embarking on a tirade that went downhill from there:
Khosla: … Because you writers like headlines, I’ll repeat the headlines from last year. I don’t think 90% of VCs add any value. 70% of them actually add negative value that gets tweeted a lot, so it’s good for media.
TC: It’s a nice truism.
[TC then asks if the best startups like Airbnb and Uber are overvalued]
Khosla: Again this is a question only writers like. Who cares whether they’re over valued or not, it creates an illusion of knowing to have an opinion. So I guarantee you, anyone who has given you an answer before on stage doesn’t have a clue.
TC: So Bill Gurley doesn’t have a clue?
Khosla: What I can say in general and from an entrepreneur’s point of view, what should you do if it’s a bubble, and what should you do if it’s not. That’s the important question.”
First you should take money and have plenty of money fuelling your tank. But money becomes dangerous if you assume it’s going to keep coming. Make sure you can get your burn rate to a sustainable level if you hit the brakes hard, within 90 days. So how you run your business is very very different if you say you don’t know what’s going to happen…
TC asks a question, Khosla asks if he can go back.
TC: Do your thing.
Khosla: Yah I don’t pay attention to his questions anyway.
TC: And people shouldn’t pay attention to many of your answers. They’re kind of platitudinous, but go on sir, please continue.
Khosla: OK, hopefully I’m more useful to entrepreneurs than he is.
TC: I’m sure you are, you have the money sir. You have the money.
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