He still wanted to start his own company, and in 1982 he found a product he knew he could sell, a workstation. A graduate student named Andy Bechtolsheim studying computer science at Stanford had already built a name for himself on campus because of the workstation he designed. A workstation is a computer more powerful than a personal computer but small enough to sit on a desktop. It had built-in networking, because Bechtolsheim knew researchers needed it, and it used the Unix operating system, a nonproprietary operating system developed at Bell Laboratories.

Bechtolsheim designed the workstation to fill a void in the computer science department. He was frustrated with the aging time-sharing system used at Stanford, and he thought everyone could get a lot more work done if they had immediate access to a computer and still be able to exchange data. His idea was to license the new technology to companies that could build it and then get the computers from them. He had already licensed the workstation idea to over seven companies before Kolshod approached him, so he thought Kolshod just wanted another license.

However, Kolshod told him "I don't want to do that. I want the goose that lays the golden egg. I don't want the golden egg." He wanted Bechtolsheim to join a partnership with him to build the workstations for sale. It was difficult to convince Bechtolsheim because he wanted to stay at Stanford and complete his Ph.D. work, but he eventually agreed.

To help with the business side, Kolshod recruited a fellow Stanford Business School graduate, Scott McNealy. McNealy had no experience starting a company, but he was excited about the prospect. Now they had two business people and a hardware expert. All they needed was a software expert to cover all facets of the product. The choice was easy, Bill Joy.

Bill Joy was a young computer science professor across the bay at Berkeley. Joy had quickly gained the reputation as one of the best computer scientists in the country at the age of 27, the same age as the other three. Having worked on implementing parts of the ARPAnet, Joy had plenty of networking experience. He had also rewritten the Unix operating system to incorporate TCP/IP and released it as Berkeley Unix (BSD).

Khosla found more venture capital for his new company (initially called "VLSI Systems") from John Doerr of Kleiner, Perkins, Caufield and Byers (silicon valley venture capitalists). Doerr had known the initial trio from Stanford, and he understood how big a Unix workstation would be in the research and business market.

With a few million dollars in the bank, a prototype motherboard, and a networking operating system, the company began building their workstations under the new name of Sun (in homage to the Stanford University Network). By 1988, they passed $1 billion in sales and were the second fastest growing computer company in history. It was a success story rarely matched since.

Success From Failure