Bill Gurley | Legendary Investor on Missing Google, Backing Uber, and What Makes Billion-Dollar Founders

One of the most renowned and greatest venture capitalists in the entire world, Bill Gurley, talking about companies like Uber, like Zillow, the companies that people use on a regular basis, man.

You had the idea to get involved in that industry before Uber even touched your desk.

What did you see in that moment that all of your peers did not necessarily see and believe in?

This is a punchline. You've been waiting patiently for this long answer, but there's this phrase that Josh Wolfe of Lux Capital has. He says, "Chips on shoulders put chips in pockets."

You had an opportunity to invest in Google when they had about 25 employees. When it came across your desk, why did you make the decision to not invest into Google at that time?

And by the way, this concept of chips on shoulders, had I done that, like my venture career might have ended a lot sooner. Wow.

Ideas are cool, but execution is everything. You're evaluating thousands, if not tens of thousands of deals that come across your desk. What are like the traits that you look at that makes you want to lean in versus like, "this guy doesn't have it"?

I'll give you a few. And the first one I borrowed from Jeff Bezos. If me and you died tomorrow and you had one more message to leave with the younger generation, what would that be?

What's going on, everyone? Welcome back to the School of Hard Knocks Podcast. I'm James. I'm here with Jack and Josh, and we are out in Austin, Texas with a phenomenal guest for you all today. One of the most renowned and greatest venture capitalists in the entire world, Bill Gurley. Bill, you took bets on some of the biggest companies in the world early on, right? We're talking about companies like Uber, like Zillow, like the companies that people use on a regular basis, man. So I first want to say thank you so much for being with us today, my friend. I'm glad to be here. Absolutely. So you went from Wall Street to then going into venture capital, right? Going to different parts of the world where I want to get things started.

And we'll touch on a whole bunch of things today. Take us back to 2011, right? You're in the boardroom. You're sitting, you know, across the table from, at the time, a scrappy startup, right? What was like a niche black car service that a lot of people believed, but you were willing to put your reputation on the line as an investor. And you backed Uber in 2011, which went on to become one of the greatest bets in venture capital history. What did you see in that moment that all of your peers did not necessarily see and believe in?

The main thing is that I had been fortunate enough to be involved with a different company a short time before that called OpenTable, where you make reservations for restaurants. And the bet that we made when we backed OpenTable was there'd be a network effect, that if you got more people on the system online, the rest—you need to get more restaurants on the system, you got more restaurants on the system, be more compelling to get people on the system, and that you basically build a—have a very high likelihood of a network effect where it would tilt towards there being a single player. And when we made that bet, a couple of my partners pushed back and said, "You know, no one's made money selling tech to restaurants because SMB sale, you know, the economics are tough," and

And, and our pushback to them was, but if the network effect works, the sales will get easier. And I can tell you a story that was a proof point on that. That's really cool if you want, but I'm going to get to your question next. I then started thinking to myself, if you could put a digital infrastructure on top of other industries, what, In what ways would that unlock power? And in the restaurant case, with OpenTable, you can say, I have eight people and we want to eat Mexican on Thursday night at 8 p.m. and do a parametric search. Before OpenTable, you could not do that. You'd have to call each one of them. And so it unlocked a consumer value proposition that didn't exist. And the more I thought about that problem, and at the time, I was traveling as a venture capitalist and visit a city, and I had traveled as a sell-side analyst on Wall Street.

And, you know, I don't know if you guys—well, you can't, you don't know because you only have lived in Uber. But before Uber, you would go to Chicago and you would, you know, you couldn't really get a rental car because the parking's too hard. So you'd have to hire a black car service. And you'd get back to the office and be going through your T&Es and you would have spent as much on the black car that day as the plane flight back and forth. And 90% of the time, the driver's just sitting there waiting for you to come out of your meeting, you know? And so it dawned on me that if you could have a fabric on top of that, that you would have this hyper level of efficiency unlocked that you would, that would...

And I went and met with—this is a very long answer to your question, obviously—I went and met with all of the startups at the time that were thinking about that. And the vast majority were in the taxi space. And so they were trying to put a layer on top of taxis. And the more I looked at those, there was a couple of problems that were really big, which is, one, in most markets, taxis are either a monopoly or a duopoly. So there's these people that have a lot of power that aren't going to listen to you. It's regulated, so you couldn't move the price up and down. And I knew that if you wanted to create a digital marketplace, you want to use price to cause liquidity, to encourage drivers to come out at the right time.

You'd hate to give up price in a digital marketplace or auction. You never would. And then they're a crappy user experience. Like, and putting a network on top of it wasn't going to get rid of that. And I think they're a crappy user experience because it's a duopoly or a monopoly. Like, you don't have true competition, regulatory lock-in. So this is the punchline. You've been waiting patiently for this long answer. But I said to my partners, "If we ever see a company that's putting a layer on top of the black cars, we should run at it." We sought the investment pretty hard, and that's what happened.

So you had the idea, not for Uber, obviously, but to get involved in that industry before Uber even touched your desk.

Well, and Garrett Camp, who was the co-founder with Travis, probably had the same idea. One thing that I believe about startups is ideas are a dime a dozen. A lot of people have the same idea at the same time. A lot of founders will go, "They ripped me off. They copied it." But, you know, things happen. Like you guys start a podcast, other people start podcasts. It's not unique. It's the execution that differentiates who's the winner.

And that's what I think is so interesting is, like, ideas are cool, but execution is everything. And especially when you look at, like, from a VC lens, you're evaluating thousands, if not tens of thousands of deals that come across your desk. What are, like, the traits that you look at within a founder that makes you want to lean in versus, like, "This guy doesn't have it"?

I'll give you a few. And the first one I borrowed from Jeff Bezos. I had the opportunity to... I've had the opportunity to chat with him a number of times, but one time I asked him, how in the world have you made so many incredible angel bets while you're running Amazon? Because it's not like he's got a lot of free time. He said, I only look for one thing, the determinism of the founder. He said, I want to believe this person's going to go do this. Come hell or high water, whether I get involved or not, nothing's going to stop him. And that's the trait he's looking for. I thought that was interesting. The second thing I would say is the job, the founder job requires salesmanship at a level that's probably easy to underestimate and very hard to achieve.

If you are the founder, you are, first of all, you're selling the customers you're selling to. Second, you're selling to get investors. Third, you're selling to get employees. You're also the chief culture officer for the company, and that's a sales job. And then you're also the chief PR person, which is the external audience, and that's a sales job. So you're just, you have to be good at some form of sales. Different people sell in different ways. There are quiet killers that sell, you know, that way. And there are people that pound the table that sell that way. There's lots of ways, but you have to be good at it. And if you fund a timid founder, you're going to lose.

You brought up... The determination that that founder has. But at what point does that person also have a track record and credibility, right? Because somebody may have that burning desire and the fire in their eyes, but is there a certain level of you look to make sure that they've had a track record, had an exit before, built a successful company?

I know that. I might push back on it. I'm going to add two things and then come to your point. It took me probably my entire career to fully come to grips with this. They have to be good at product. And it's just, it's just real. Like most of these companies are able to break through because of some technology dislocation or disruption and being good at product means you can see through that better than others. And so that's important, really important. And lastly, they're almost all hyper-curious learners. And so the only way you can navigate the new thing, AI is the new thing now, is to be in it every day. Like if you have a founder that hasn't put a Claude bot together yet, like that's a problem.

The thing I was gonna say to you about had they done it before, You know, one of the amazing things about Travis, the founder of Uber, is his previous two didn't work out. And there's this phrase that Josh Wolfe of Lux Capital has. He says, chips on shoulders put chips in pockets. And so like, like it may just be that, that having not succeeded before gave you more firepower, more of that first thing, the determinism. So I wouldn't sort only on that. If someone failed five times, like, and, and it also, you can look at how they failed. Like, like was it effort or was it the market didn't pan out like the way you thought it would. And that kind of thing. I, I, I, in the first three or four years working with Travis, I had this sense that he recognized the uniqueness of the product market fit of what had been built, of what he had built, and that those first two tries didn't have that.

Like you could have put the best operator on top of what they were doing and it wouldn't have mattered. But, and that he, I think I said publicly once he, he like felt an obligation to the entrepreneurial society of the, of America, which doesn't exist, but as an idea to give it everything he had because he knew that these kinds of pitches don't come along all the time. Does that make sense?

One of my favorite things, probably one of my favorite quotes on Hard Knocks history, one of the things you just dropped right there, chips on shoulders, put chips in pockets.

I borrowed it from Josh Wolfe, like, to be clear.

Well, I'll just say, I mean, I even, like, look at my own story. Like, I mean, I had a couple failed ventures before Hard Knocks. But all through every single venture was a lesson and a skill that I learned to enable, you know, like, what, like, enable the success of part of the reason that we're here today. Yeah. And what I look for, what I think is just so interesting is, like, that chip on the shoulder mentality is just so important. But, like, another thing is you said that you want a founder that is obsessed with product.

But that is one side of a business. One of the other businesses I want to look at is like a physical product business. We're in a podcast studio right now. And so there's not really a huge product, per se. It's more of a service, in a way. If you were looking to launch a podcast franchise and you're looking to bring in, "Hey, I need an operator. I want an operator to come in and scale this," what are the qualities that you would look for within that founder for a physical product business or, I'm sorry, a physical service?

Yeah. One of the things that you develop as a venture capitalist is an instinct for the types of businesses that can scale and be valuable. And one of the benefits I believe I had of working on Wall Street for four years before I became a venture capitalist is I had a sense of the type of business structure that could scale and become really, really big. And so I haven't spent a ton of time in the type of business you're in. I'm going to give it a go. But with that qualification going in, obviously the king of the kings is Jimmy Donaldson, you know, MrBeast. Like, he's actually profiled in my book, which I hope we get to talk about. Absolutely. But, you know, he started with just an affection for YouTube.

Like, he had a very strong affection for YouTube and, I think, considered it a game of sorts. And how do you win the game? And I think that's true in this category as well. There's, there's, there are people that are good at it. Part of the product is... And, by the way, I would add one more thing to that list earlier of founders. Many of our best founders had a go-to-market advantage. They figured out some structural way to get customers in an advantageous way to whatever the traditional method was. I'll give a little behind-the-scenes. In promoting my book, I was approached by, cold-called by someone I'd never met who said, "You're really good at X and Twitter, but you have no profile on Instagram whatsoever."

And he said, "Let me work for 30 days free and see what I can do." He's done it. I went from 50 to 15,000 followers in, like, four weeks. And so there are tools. I mean, anytime you're in a new world—and, by the way, there are techniques of the craft that will let you soar higher and faster. And in a service business, it's hard to tell the difference between go-to-market and product because those things get all intertwined in how you promote yourself and whatnot.

Could you actually tell us your turning point going from being a very successful Wall Street analyst at the bank you worked at to then going into venture capital? Was that always something that you set out to do when you went out of school, that the endgame was going in to invest in businesses? Or could you tell us what was the transition?

Yeah, and this eventually could even tie into the book, but I had two careers before venture capital. I was a computer scientist as an undergraduate degree. I worked as an engineer for two years at Compaq Computer Corporation in Houston, then got my MBA. I then did four years as a sell-side analyst before I became a venture capitalist. When I was at the MBA program here at the University of Texas, I thought about being a venture capitalist and couldn't figure out a way to effect it. And so I had this other fascination with the people that were doing the research on the public tech companies. And I found my way over there and into that career. Both in the engineering career and in the sell-side analyst career, after a couple of years, I asked myself—I didn't read a book that said do this.

I just somehow did it instinctively. I said, one day I just reflected, "Is this what I want to be doing 30 years from now?" And in both those cases, after a couple of years of working there, it was no. And it was pretty clear in my brain. Bezos has this thing called the regret minimization framework. I don't know if you heard about it, but when he was thinking about starting Amazon, he was a very successful employee at D. E. Shaw, one of the top hedge funds. And David Shaw was trying to talk him out of leaving. And he said to himself—he came up with this idea. He said, "If I were 80 and giving myself advice, what would I do?" And I think they're similar. Mine's from the bottom up and his from top down.

But like the answer was no. And so once I realized that, I started looking for what was next. I'd always had in the back of my mind this little like inkling and interest in venture capital. And I got a phone call while I was proactively thinking, "I'm going to leave," that they gave me an opportunity to move to the Bay Area. And I jumped at it.

I love the saying that, you know, it's your 80-year-old self giving you advice. I always like to think of, when I make life decisions, is this going to make my eight-year-old self and my 80-year-old self proud? At the—at the end of the day, can inspire younger me. And will my older me look back on this and be proud of this decision? Yeah.

Stephen Covey, who is famous well before you were born, but has this book, The Seven Habits. Yeah. And one of them is "begin with the end in mind" and imagine yourself at the funeral. So there's a through-line in all those concepts. Absolutely. I actually want to ask you about, because I believe you had an opportunity to invest in Google when they had about 25 employees.

When it came across your desk, why did you make the decision to not invest into Google at that time?

And by the way, this concept of chips on shoulders, like had I done that, like my venture career might have ended a lot sooner. But yeah, I mean, it took me forever to realize that some of the best venture capitalists have this miss list. And the reason they have the miss list is because they're really effective at putting themselves in the right position to have the opportunity, which is a prerequisite to actually making the great investments. And so I was able to forgive myself a little bit in the years that followed because of that. And you're not going to bat a thousand. There's no way. Right. It's a great learning exercise that that happened. So, yeah, I met Larry and Sergey. I was very early in my career.

I brought them into the partnership and they presented and we failed to give chase. And I always use that phrase because someone'll say, 'You passed.' Well, if I say I passed, it meant I had a chance. Like, I don't know if we could have got to the finish line. But after we failed to give chase, two of the best venture capitalists in the history of venture capital, John Doerr and Mike Moritz, did the deal. And so talk about a moment of reflection, like, you know, as a young venture capitalist, like, 'Okay, I got to the right place. I was pursuing this thing.' And then I stepped back—our firm did—and, and they ran at it. And so, you know, I got to start taking notes like I did something wrong. There were a lot of—venture capital is a weird world where you start to build mental models.

You know, it becomes a game of pattern recognition. But if you build too many of those, you're going to miss something. When you miss something, it has an asymmetric return. So if I invest $5 million and it goes to zero, I lost one times my money. If I fail to put $5 million in Google, it's a much bigger number by like three orders of magnitude. You have to learn to bias yourself. My partner, Bruce Dunlevie, came up with a phrase, 'What could go right?' You have to think that way. And I will tell you, in the history of Benchmark, we didn't spend much time sweating why we made a bet that didn't work. But we would obsess over why we missed the winners. We would analyze it. Four times a year, we would study the deals our competitors did.

You know, at the time, Yahoo stock—so this is a search company, Yahoo stock—Yahoo, which, I mean, I know this, Yahoo was considered a precursor as a search leader to Google, incumbent, if you will. Their stock had fallen from 82 to 10. Part of the dot-com crash, the company Excite, another player in that space, was going bankrupt. And so you had some market signals that were not positive. Larry and Sergey were two PhD students that were insisting on being co-CEOs. PhD students as CEOs and co-CEOs are both red flags. Now they ended up working that out, you know, but it's a red flag. And so you have, there's two data points, you know, that weren't positive. Yeah, made the wrong decision. But like, maybe it was fuel for the rest of my career.

Could you tell us how you went about building your team at Benchmark, right? Because VC is a game where you have to have multiple players in place, right? Like it's not a solo journey when you're building that firm. How did you go about bringing in the right partners to build that firm?

Well, so I will tell you, I have to give all of the credit to the founders of Benchmark, of which I am not one. So I was one of the first non-founders to be asked to join. But the founders had worked in what are traditionally hierarchical partnerships. So a lot of law firms, a lot of professional service firms are structured in a hierarchical way. And what that means is there's entry level, mid-level, junior partner, senior partner, managing partner, and—yeah. And all those people make a different salary and all those people have a different set of the economics. They believed that at those firms they were at, the young people were doing the majority of the work and the senior people were taking the majority of the economics.

So when they founded Benchmark—

Now, the senior people, though, they were the ones that were putting up the majority of the funds, though, is that correct?

No, not in venture because you mostly use external money, limited partners. They had an idea when they founded Benchmark that it was going to be an equal partnership and that everyone would make the exact same economics, have the exact same decision-making power. And I got invited into that, which was awesome.

Is that a pretty uncommon structure in Silicon Valley?

It was at the time, for sure. It's been mimicked a little bit since then. And there's some downsides to it, which I could tell you about. But that was the structure. As a young person entering the business, I worked for a year and a half at a firm that was hierarchical, and I was the junior person. And when they came after me, it was such an easy yes, because you were just going to all of a sudden be advanced to, you know, the level that they were at. And there are like 10 amazing positive dynamics of that structure that I believe strongly in. And there are a few negatives, but what a wonderful place to get invited in because I had four very experienced people that were rooting for me. Because if I found great investments, they got to share in that success.

Whereas in that hierarchical firm, the young people come in pretty sharp-elbowed because it's up or out, you know, and I got to climb, or "I win, you lose" kind of thing. It doesn't exist. That culture was amazing. Never look over your shoulder.

Could you talk about the downside of that structure though?

Yeah, yeah. We couldn't scale anything. Have you been to our website? No. It's just a splash page. Yeah. We were completely ineffective at any execution on our own. But it's good because that—I remember Matt Cohler joined us. He said, "I want to make the website great." And we said, "Go for it." He realized no one else was going to do any work on it. And after a while, it got unwieldy and all this stuff. And he came into a partner meeting. He said, "I'm going to take down the website." And we said, "Okay."

They put a splash page up. And venture business is a service business. And the less we have overhead of running our business meant more time in the field with founders. So I think it was a great decision. It created an amazing culture for someone who is a go-getter on their own. Because you're out trying to find new investments. You're out working with the companies. We're together on Monday, but that's it. And then you're outside. And if you're a self-starter and someone who's comfortable with that, if you're somebody that needs to learn and needs structure and all that, it's not that. And it just tilts towards youth. Yeah.

You had mentioned that network effects is something that is huge for you when you look at potential companies to invest in, as well as obviously looking at the founder and if they have that unbelievable determination to make it happen, regardless. I'm sure you see thousands of deals. What are some of those other things if I was a startup founder and I brought to you that it's like, "These need to check the box" in order for yourself to be like, "This is a home run for me"?

Yeah. Industry structure is one a ton of people miss. I tell, you know, everybody likes to, uh, shit on MBAs out in Silicon Valley, but like there's some good businesses and there's some bad businesses. And like knowing that is important. And, um, I always tell people to read the first two chapters of Competitive Strategy by Michael Porter because, um, like, if you're building a product and trying to sell into a consolidated industry, it's really tough. Like, you want a fragmented industry where you can sell into. Part of what I love about both OpenTable and Uber—it's easier to build a network effect if supply is fragmented. You know how many people have tilted against Ticketmaster and whatnot? Like you just can't get the venues on because they're already committed to this other thing.

It's not disruptive enough. And Live Nation's rolled them all up. Like that makes it tough. And so industry structure is one that I think a lot of entrepreneurs don't think through. You know, they just don't know. It's not stupidity. It's ignorance, you know.

You were a pioneer for investing in a lot of these like marketplaces, right? Zillow, Uber, you know, OpenTable. It started with OpenTable, but yeah. A whole bunch of them. Was that always something that maintained as your core, like focus on like those specific types of businesses or... Did you ultimately kind of diversify your investments to other companies?

You know, every venture capitalist is going to start to have success if they have a reputation in an area. There's a bit of a mini network effect there because the founders know, you know more about it, but they also know that you validate them if you back it. And so it's—and you know, like Asheem Chandna at Greylock in security, like this guy's run a truck through it. Like, and he, if, if a security company wants to stand out, boy, if Asheem backs them, next thing you know, so that, that becomes a little network effect in and of itself. Yeah. And I think it just related to the timing of when I entered the business, what disruption was allowing for at that moment in time. Getting these smartphones out in everybody's hands, it just was kind of a perfect storm for me to develop an expertise in.

So over the next decade, when you think of all the industries that exist right now, is there one industry that most people, a lot of investors even would consider stable that you think is going to get disrupted big time in the next decade?

I stopped doing new investments four years ago and focused on this book. So I'm going to eventually be an old fogey that can't answer that question from where I sit. 98% of venture capitalists are only looking at AI and they're AI all day long. They don't want to see another business. And in the past five weeks, the valuations on the non-AI companies have been cut in half. And so that mentality is going to be reinforced even more. And so there's just no oxygen. If you ran a PE firm... Like maybe you should run around and roll up some of these older businesses because the venture capitalists could give a shit. Like they do not care if you're not AI right now. I could take both sides. I could debate both sides of whether that's smart or not.

From defending the industry point of view, the most money in venture capital is always made when the new wave happens and the incumbents are put at threat. And your ability to jump in front of the wave and ride it, it's just been reinforced over and over and over again. And so that's happening now.

Can you give us that perspective as to why it's not smart, though, to think that way?

Oh, groupthink, you know, contrarian investing is where you can make the most money. Those would be the reasons not to. But it is what it is. Like the one thing I would advise any entrepreneur is if you think you can somehow sail around that or get over that, you're fooling yourself. Like that is the game on the field right now.

And you mentioned that these last four years, a big focus of yours is you're releasing a post here super soon. That is correct. Tuesday. Okay. That's February 24th. Yes. Talk to us about the inspiration behind that and what some of the young entrepreneurs listening right now can expect to get out of this post.

Yeah. So I spent the majority of my career using writing as a differentiator. It turns out, I also think it helps you think. I think Bezos would agree with that. He has an annual letter and Buffett has an annual letter. Like I think you, some people say like teaching is the best way to learn. And I think when you write your ideas down, it forces you to think about, are they intellectually consistent? How would someone think if they read this? But it also creates flypaper for deal flow and your reputation and network. I mean, a lot of VCs are doing podcasts for that reason. And so I had always done that and I developed a habit of keeping ideas and like I had idea folders for probably three or four times the number of things that eventually ended up being a blog post.

So when ideas would come in my head, I would write them down. I got in the habit of that. One day I was reading biographies and I read—there was a window in my time when I really was obsessed with biographies. And I read these three in a row that were seemingly very different business or they were in different fields. But I saw this throughline and I wrote down one of those notes as if I might do a blog post. And this was 10 years ago. It wasn't recent. I just let it sit there to see if it would germinate or not. And I knew it didn't have anything to do with venture. All my other blog posts were about technology and founders and that kind of thing. One day, the University of Texas, where I went to school, the dean of the business school asked if I would talk to the MBA students.

And I said, 'Hey, I've got this idea I'd like to put in front of them. Is that OK?' He said, 'Sure.' And so I developed it a little more into a presentation, which I gave at the University of Texas on technology. It's called Running Down a Dream, about how to succeed and thrive in your dream job. Any of your entrepreneurs or any of your listeners that want to excel, I think this book, I think will really speak to them. Anyway, they put that on YouTube. People started to see it and notice it. And people started telling me, 'You should really make that a book.' One of those people that noticed it was James Clear, who might be the bestselling nonfiction author right now. Atomic Habits has sold 20 million copies, I think.

Still number two on the how-to list at New York Times five years later. And he posted it on his website. So that's like a little, 'Hey, maybe this is interesting.' And what's the name of the book? The name of the book is Running Down a Dream. Running Down a Dream. Combing through hundreds of other biographies, went through all the academic literature on career and happiness and career success, and even talked to the best authors in the field. I was able to talk to Adam Grant and James Clear and Angela Duckworth and Daniel Pink and Jon Haidt. And so I put a lot into it. Like I really put a lot into it. And my—can I tell you a quick story? Yeah, please do. Yeah. This story kind of epitomizes what I hope the book can do.

So fellow Austinite Matthew McConaughey, in his book Greenlights, when he was young, he used to tell his father he was going to be a lawyer. And his father would tell other people in the community. And so there was some weight to this promise. And he got into the University of Texas. He was pre-law track. And he met some people in the film school and really loved it and made this decision in his brain that he was going to switch to being a film major. But he knew, you know, he had this weight of anxiety that he had to tell his dad. And he was worried about it. And so it took a few weeks to get the phone call scheduled. He was very nervous. You can imagine that situation. And he tells his dad, and his dad pauses for a moment, and his dad says, 'Well, don't half-ass it.'

And McConaughey says it was the last thing he expected him to say and the best thing he could have possibly said. And the reason I tell that story is my singular goal for the book is that it serves that same inspiration that Matthew's dad did when he said, 'Okay, man, if you want to run at it, that's awesome, and go for it.' And I think we've evolved as a society, especially with what I call the college-industrial complex. I also refer to it as a conveyor belt. I think we're churning out people that are widgets, that are highly commoditized, and we're not allowing people enough to find the craft that they love. And if you approach whatever you do as a craft and an obsession, you're going to be spectacular.

Are you a football fan? Sure. So I just recently interviewed Myles Garrett, who's, you know, just this past season broke the single season sack record. No sacks of anybody in a single season history. And I asked him the best advice he ever received. And he talked about how back in high school, his football coach and athletic director sat him down with his parents. And the piece of advice that he gave him that was the most pivotal part of his life, because Myles Garrett was one of those freak athletes that could have gone pro in basketball. Right. could have gone pro in football. But the advice that he got from the athletic director, the football coaches, go all in or all out. And that's exactly what you're saying.

It's like you have to literally go, "There's no plan B," pretty much.

Well, another thing, too, is that, to your point, there's so many young people out there when they're coming up trying to pick a career, they pick what their parents want them to do.

There's no doubt. And that's what makes what McConaughey's dad did so spectacular. Because, I think, I have three young adults myself. How old are they? They're all in their 20s. The youngest is a senior in college. But I will tell you that the instinct to be worried about the economic stability of the child is high, like in every human. And it's not—it's all well-intentioned.

It's because—it's because they love them.

They love them, and they worry that they won't be economically stable. And unfortunately, that, along with how the U.S. educational system has evolved and become hyper-competitive, creates—it's a poor mix for finding creativity, for discovery, and falling in love with a career. It's a poor mix in those two—those two things.

Unfortunately, you know, a lot of people that go down that path where they do what their parents wanted them to, and not what they felt was like their actual mission and purpose is, they ultimately will probably end up resenting their parents at the end of the day.

I hope it doesn't get that bad. I find it, you know, I'm older than you guys. Like, with people moving into their 30s and 40s, like, those kind of emotions, you realize, um, are bad for you; they're bad for everybody. But to your point, there's a father that reached out to me recently who had seen the original presentation, has a son who is in college and is on a finance track, and was spending every last minute when he wasn't doing the homework studying basketball and studying modern-day valuation of basketball players, which is now creeping into college with how NIL payments work—was obsessive about it. His father said that he went through, like, four stages of: nervous, accepting, and finally got to supporting.

The kid's now gonna go try and do a career in this way. But he said to me that, first, the minute he got to supporting, he saw the confidence in the child, like, rise tremendously. But I also think, the second point, to the other side of what you said, the relationship got better, you know, which is awesome.

Did you deal with that at all growing up? Did you have any pressure to go down a certain path? No, I got to—

—tell you. I mean, some of this is discussed in, in Jonathan Haidt and Greg Lukianoff's book, The Coddling of the American Mind, which is a super popular book. He—he's—he's—he talks about—back when—some of this is in The Anxious Generation as well—when I was young, your parents would let you roam around. You'd ride your bike five miles from home, like, they didn't know where we were. Yeah. Like, there was just less of this pressure to do what every other student's doing in this modern world where everyone's worried about getting into college. By the time you're in sixth grade, Haidt calls it the resume arms race. You're getting ultra-programmed, you know, cello lessons, lacrosse lessons, chess lessons, foreign language lessons, go volunteer at the SPCA.

Like they're building your resume as a kid and you're not out playing. Rick Rubin talks about, he has a couple of chapters in his book where he says, like, we forgot to let them play. And I think there's one of, in Coddling, one of the chapters is titled like the lack of play. And so, no, I didn't have that. Like I didn't have any weight like that at all. And in fact, my father, this is such a, I was so fortunate. My father fell in love with model airplanes when he was young, gas airplanes on a rural, lived in a rural town in North Carolina, but they used to, these Cox airplanes you would fly, went to NC State, aeronautical engineer, was working in a wind tunnel at Langley Air Force Base. Him and 40,

50 of his colleagues got approached and said, "Would you like to move to Houston and help start NASA?" And he jumped at it. And so the reason I grew up in Houston, the reason I'm a Texan is because he took that leap. And I think knowing that he had done that, you know, I went to school in Florida. I went and moved to New York City by myself. Where in Florida did you go to school? I went to University of Florida. I rode crew in Florida.

Okay. You played some ball?

Well, I practice.

And for those who don't know, how tall are you?

I'm six foot eight. But the point I'm making is I jumped to New York and I jumped to Silicon Valley and didn't think much of it. And so both know my parents weren't overbearing in any way whatsoever about what I should do. And two, I knew my dad had taken these chances.

And so I didn't feel any of this thing that I think is a problem now. So I think that this is a great kind of segue. You know, one of the things that we were talking about before the podcast started was just location and just various cities. We can all, I would say, agree the best decision that we made was moving out of our hometown. We grew up in the Washington, D.C., Northern Virginia area. Yeah. All military families. Our dad, he was the garrison commander, so he ran the largest overseas military base in the world. So it was structured. You know the D.C., Virginia area. You're not going to build a company there. You're not going to be an entrepreneur and thrive there, right? And so we moved to Austin, Texas.

Yeah. Where you're exposed to these people that think a lot bigger. It's a lot more collaborative. It's a lot more entrepreneurial from your perspective, right? One of my favorite sayings and pieces of advice is like, follow the money, right? You went to New York because every dollar in the world flows to New York City. If you want to go into the entertainment business, you go to LA. I mean, now it's kind of shifting a little bit out of LA, but what are some cities from your perspective in today's world? If you were a young person, hungry person wanting to build, that you would say, "Go to these places"? I want to kind of just get your take for the people.

Yeah. And I, I'm going to, I'm going to back up just a bit and then go right at your thing. So, um, my book is structured in a very unique way. It's divided between profiles and principles. Profiles are stories of success and they're, they all are a chapter. They read like a great Atlantic article, you know, about one person. And then, um, the principles are what I believe are the tools for success, okay? And they're interleaved, which is kind of unique. They alternate back and forth. I think it makes it more readable and helps you retain it. Principle Five is called "Go to the Epicenter." And it's about this question you asked, precisely about that question. And I would, you know, I don't, I...

I tend to think more about finding your dream job is recognizing that any job can be a craft. And I don't think about it as follow the money, but go to where all the other craftspeople are so that you can learn from them and learn. Um, you, you brought up a few examples already. You know, I went to New York not to follow the money, but I decided I was going to be a sell-side analyst. There are some sell-side analysts that work in Nashville or Dallas or whatever, but the best ones work in New York. Like, that's where it all is. That's where all the clients of the, like, that you're going to be talking to are. Um, if you want to be a songwriter, you should go to Nashville, like, flat out. You know, there's a great documentary on Netflix about songwriters.

I'm not talking about, like, musical artists, some of the lyricists, right? And, and they all are in Nashville. You know, if you're going to go to Hollywood, go to Hollywood. Three, three of my other principles are hone your craft, continuous learning, uh, embrace your peers, which is about collaboration with like-minded people, and mentorship. And all three of those other principles are hyper-accelerated when you go to the epicenter.

I like that you brought up, uh, like-minded people and collaborating with them. I believe, um, on another podcast, you'd mentioned how, like, MrBeast, Jimmy Donaldson, like, he'd hop on with four other top, like, three other top YouTubers, and they would, they would just share with best practices, even though that, like, they're all kind of competing for that top spot, but they would do that. And almost saying that, like, hey, if you were just a fly on the wall in that meeting, like, you yourself would have be—

He said that on Rogan. He said if there had been a fifth person on the Skype call, they would have made a million dollars also, independently of whether they were good at it or not, just because the information they were uncovering at the time was so unique. And the other thing about that story is, at the time, YouTube was not well understood, and they were figuring out the hacks, the tricks that you—and if you've listened to any interviews with, with Jimmy, like, they're down to, like, what's the color on the thumbnail? You know, this is esoteric detail that they're running experiments on across four people. So it's accelerated learning because of that. Many people get to their career, and I think especially young people today who are burned out from that intense process that we just talked about,

and they think, 'Oh, man, I don't have to study anymore. I'm just going to go work.' And the truth of the matter is, if you want to stay on top of your field, you need to be constantly learning about whatever the edge is. They were learning about a surface area with YouTube that turned out to be worth a ton. Like, it was super valuable. I read an article today that Beast Games is going to have a $100 million budget. Think about that. Like, those are the costs.

But one last thing, and then I want your question. There's an edge to any field. There is an edge to any field, especially with AI. AI, it creates a new edge for any field. And if you want to be the best in your field, you need to be good at whatever the edge is, whatever the new things are that are changing the dynamic of what it means to compete in that field.

One of the things that I love about that is there's, like, outlying principles. One of my favorite books is—it's a book called Outliers.

And if you look at, like, Steve Jobs or Bill Gates, they had access to technology at an early age. Yes. Or how most professional hockey players are born within a couple span of a couple months.

You know, the most successful founders that you have studied and read their books and learned from, is there any outlying principles that you've noticed maybe about their upbringing or things that they've been exposed to?

You know, if you move away just from entrepreneurs and look at people, I mean, that's kind of one of the purposes of the whole book is to, especially with the profiles, to study people like this. And I think the first principle in the book is Chase Your Curiosity. And I'm trying to help people find and realize whatever it is that they're obsessed with. And the reason that's important is the second principle is Hone Your Craft, and talks about continuous learning. They reflect on one another. If I were to tell you, in order to be successful in podcasts, I think you should go write a report on the 12 most successful podcasters of all time and to deeply understand what differentiates them, and you said to me, 'Man, I don't want to do that'—

That'd be boring. I would say you should get out of podcasting. And so, but that could be applied to anything, right? And so it aligns with what you said earlier about exceptional founders, like they're tremendous learners. They are, and they're obsessed. They're obsessed with the edge, they're obsessed with technology, they're obsessed with disruption. I was just this morning, while I was working out, listening to Bret Taylor, who's one of my favorite people in Silicon Valley. He's—he was co-CEO of Salesforce, but now he started Sierra, this, uh, AI customer service. And you can just hear it. You can listen to him and hear—the other person that embodies this in such an elegant and beautiful way is Tobi at Shopify.

And if Tobi does a podcast or an interview, I'm listening to it immediately, you know, because he's so curious and so interested in where the world's going. And it's—and it's—it's fascinating, but they all do that. Like, they have this obsessive curiosity. Yeah. And they have to, because the company is going to succeed because it's riding this new wave, and the new wave has new techniques. Like, it's—it's no different than Jimmy with YouTube. They're just figuring it out for AI; he was figuring it out for YouTube.

There's a—there's a young guy, I believe, in the VC space right now. Um, I think he's in, like, his twenties and he has this massive VC firm that I think is investing in, like, OpenAI and SKIMS and all these other big companies. Uh, I forget his name; otherwise, it'd probably ring a bell.

Yes. But my question is, I look at this guy and I'm like, 'Hey, young guy getting into these opportunities and building this fund to invest into a bunch of companies.' And for us, we know a ton of young, successful entrepreneurs like ourselves that, man, how do you get access to that kind of deal flow? And so my question for you would be, is kind of two-sided. For you guys, obviously, at Benchmark, how did—how were you guys able to get access to, like, tons of deals like the ones at Uber? I'm sure relationships come into a big play there. On the flip side, for young entrepreneurs that are—that make good money today, how could they get involved in getting a lot of deal flow to potentially invest into companies?

So I would tell you two things that tie both those questions together. One, different venture capitalists differentiate themselves in different ways. Some of them are very public; some of them aren't public at all. But you have to have deal flow. It's imperative for you to be successful. People like myself created a blog. You know, I'm sure I would be doing a podcast today if I were still chasing deal flow. I did one, BG2, for a couple of years. And Jack Altman, who just joined Benchmark, has one called Uncapped. And so, like, that's a way to—to—to create inbound, like flypaper. Some people network obsessively. Some people develop a vertical expertise. Like I mentioned, Ashim, Sean were in security.

And so, there's a bunch of different techniques, but you need deal flow. Some people try and be geographic kings. I don't see that one as much; it's an older technique, like Austin Ventures used to be here in town. And so, you just got to find a way to have differentiated deal flow. Now, I want to tie in the second part. I'm a huge believer that venture capital bends towards youth. I think it's very hard to be a venture capitalist as you get older. And I think it's very easy to break into venture capital as a young person. And the two main reasons for that: one, many of the best founders are that age. And so, you know, one element of getting close to them is being in their peer group and being, you know, someone they might relate to.

The second thing is, the techniques and the tools of disruption are often better absorbed by younger people. And so, the odds that you know how to reverse engineer TikTok are higher than the odds that I do. And for a certain type of founder, that's really going to matter, right? And then the third thing—I'll add a third one—as you get older in venture capital, you, one, you get a little bit more, or you get a lot more, wealthy, and you acquire maybe a second home or a third home, and you have kids, and like, your ability to be obsessive 16 hours a day is harder. For someone that wants to break in, by the way, one thing that I would offer as an important corollary: if you think like just being young will make you good at venture capital, that's wrong.

But, and it is a job that does not have a supply-demand balance. There's way more people that want to get into venture than should. And, and so if you're going to do it, it's going to be hard as all get out. But I do believe if you obsess about something—let's pick something, let's say new UIs for AI, and you spend all day on it. I used to use the example of esports, but that's getting dated. If you meet a founder and you're young, and that's all you do all day, and you know the 10 people who are doing that at other companies, and you've already become friends with them, and you've started writing blogs or gathering notes on best practices, you can compete with a generalist like me who's in their 50s or 60s, because I don't have the time to develop that depth.

And for a lot of entrepreneurs, that will resonate more than what I can bring to the table. Does that make sense? Like, you'll meet this person, and this is how the 20-year-olds get deal flow. Like, they seem way more relevant, but it's not just relationships; it's the data you have as well. You seem more relevant to them at this moment in time because the stuff they need is all new, and you may know it more. Does that make sense? I mean, I don't mean you specifically.

Oh, 100%. So obviously, you have to build the relationship with the people in that industry. But then, too, you have to—you can't just, like, waltz in and be like, 'All right, I want to invest in AI.' Like, you actually have to understand and seem like a competent investor to them, as somebody that they would, like, 'Hey, I would actually be interested in bringing you in on the cap table.'

And look, they may bring in multiple people on the cap table. So it also may not be a zero-sum game where you have to beat me. You just have to stand out and look interesting to the founder.

I have a follow-up to that. So you mentioned that it's actually better to be younger in venture capital than to be older.

By the way, the average age of a new partner at Benchmark that becomes an equal partner is about 30.

Really? Yes. Wow. One, that's incredible.

Two—and we just added another 30-year-old with Jack.

My question on that is, like, oftentimes maybe the younger person doesn't have all the money. The older venture capitalist does. Just probably, if I was a betting man, I'd say on average probably that would be the case.

When we put them in our firm, that's not true.

For sure. For sure. For sure. Uh, um, more so, more so saying like, let's say, um, young, ambitious, yeah, have a, like, have a ton of industry knowledge, like you're obsessed with it, how would you approach maybe like people with more tenure in the game that have more capital to potentially like raise a fund? Like, how would you go about pitching that sort of thing? Yeah, more so the raising capital side of things, yeah.

Well, look, if you are interested in being in venture capital and are this young person that we just breathed life into and gave this kind of persona to, you should maybe look at firms who need, you know, you're a good puzzle fit for. And so you can study firms and see who's there. Like, if you're a firm that's aging out and you know all these new things are where the action is, someone like that's going to look really compelling. Venture's not a job that is going to be easy to break into by saying, 'Oh, I'm going to go to Stanford and get an MBA and I'm going to go to Indeed.com and look for the venture capitalists that are posting job openings.' Like, I don't think any venture capitalists got in that way.

And one of the concepts I develop in the book is become a candidate of one. Like, how can you differentiate yourself to any employer so that you might even... A lot of the people in the book approach an employer who's not hiring as like, 'I've got this stuff that's going to help you out.' Like, you're almost going to your, your career... You're creating the job. You're not, you're not applying to a job. And one of the ironies, I think, of tying all this together, of the, that kind of college industrial complex, is you create a bunch of people that are not very differentiated from one another. You maybe are creating people that are actually that, you know, the stats on job happiness aren't that great right now.

And you may also be creating people that, because they're not differentiated, are most susceptible to AI disruption. If you have these other people that are just hyper-passionate, continuously learning, differentiated all by themselves, I just think you're in a better place for survival.

Bill, we like to end these podcasts off with two questions for our guests. I'll start and then, and Jack will end this off. So my question for you, Bill, is if me and you died tomorrow and you had one more message to leave with the younger generation, what would that be?

I can't hesitate but answer with a pitch for the book. But I would say do the work you can't ignore. Whatever it is that you yearn to know more about on your own, like run at that.

Bill, if tomorrow it was all said and done, how would you want to be remembered?

It's funny, you know, if you'd have asked me that four years ago, you know, I think it would be about the mark that I had left on the venture capital world because I think I did it my own way. I think I was... willing to call a spade a spade. Like, I didn't always go with the flow. And I, and I, uh, if I thought the industry was going the wrong way, I would say it. And I believe that one of the reasons I was able to develop a reputation was that independence, that mindful independence. And, and also, um, because of, mainly because of the blog, but that I gave back. I didn't like come in and take the money and run, that I, you know, left a mark, if you will. As I get a little more optimistic about the book, you know, Jason Calacanis posted, 'I think this will be your legacy.'

I wouldn't have thought that five years ago. So let's see how it plays out. But that wouldn't be bad either. Running on a dream.

Running Down a Dream. Running Down a Dream. Bill, this was an incredible episode. I want to thank you so much for the amazing insights and advice. Thanks for having me on. For the audience watching, guys, we're going to put the link down in the description to get a copy of Running Down a Dream. Guys, let me be clear. Bill Gurley, you heard the insights. You heard the advice. I mean, one of the most incredible investors and renowned investors. So you're putting all your insights and stories from all that you learned in business inside of this book. Right. So everybody go ahead and get a copy. It's out February 24th, which will be out by the time that this podcast drops. We're putting the link down in the description.

And by the way, some people, for reasons I don't fully understand from my podcast days, like my voice, I can tell the audience, I did the audiobook. It took about 17 hours. Let's go. Come on. You might want the Kindle or Spotify. Those are always the best. Spotify now has audiobooks also. Let's go.

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