It all started when Raja Singha came to Kleiner Perkins Caufield & Byers in 1996 with the idea of a custom Java-based computer chip. Kleiner Perkins partner Vinod Khosla, who had invested in Singh's previous company NextGen, was cool to the idea. He had a different vision, which he conveyed to Singh - it was necessary to create equipment for optical networks. Drawing on his extensive venture capital experience, Khosla believed that the surge in Internet traffic would create a market for devices that could handle large amounts of data. And so it happened: as the number of Internet hosts increased, so did the need for efficient optical networking technologies, and Cerent technology helped connect long-distance lines, the local telephone network and the data network.
Vinod Khosla became the co-founder and CEO of Cerent. Thanks to the reputation of Kleiner Perkins, Khosla knew the best engineers in Silicon Valley and understood what the market needed. The idea for Cerent practically fell into his lap—he just needed to find the right people to make it happen.