Speaker 1: You live here, now do I do? Move here about
Speaker 1: a year Austin living. It's good. It's good.
Speaker 2: It's a lot different from northern Californy about it.
Speaker 3: I'm Emily Chang, and this is the Circuit. It's the
Speaker 3: live music capital of the world, home to pulsing festivals,
Speaker 3: dangerously delicious barbecue, and an emerging tech hub. Build as
Speaker 3: an escape from the high taxes and lofty ideals of
Speaker 3: Silicon Valley. It's now also home to one venture capitalist
Speaker 3: who always stood above the crowd.
Speaker 4: What are the keys to your winning strategy?
Speaker 2: To be great at it requires a level of hustle
Speaker 2: that's really hard to explain.
Speaker 3: Bill Gurley is famous for his tech investing, betting his
Speaker 3: reputation on one of the industry's most controversial unicorns, Uber.
Speaker 3: Gurley recently relocated to Austin not to escape anything, per se,
Speaker 3: but to come home. I'm here to find out if
Speaker 3: this consummate insider has a fresh perspective from the outside
Speaker 3: looking in. Here's my conversation with Bill Gurley. You are
Speaker 3: one of the most prolific investors in Silicon Valley history.
Speaker 4: You worked at Benchmark for a couple of decades.
Speaker 3: You invested in everything from Zillo to stitch fix to Uber.
Speaker 3: And now you've made this big life change. You're living
Speaker 3: in Texas, came back to your home state. Why the
Speaker 3: big change?
Speaker 2: I think, truth be told, My wife had kind of
Speaker 2: made it a part of the marriage acceptance. When we
Speaker 2: empty nested. One day we'd come home. Her family's here,
Speaker 2: my family's here. So it's actually been planned for a
Speaker 2: long time. We bought a property about five years ago.
Speaker 3: You grew up a child of NASA. I think your
Speaker 3: dad was one of the earliest employees at NASA. I've
Speaker 3: heard you say half the dad's.
Speaker 4: On the street.
Speaker 1: Yeah, absolutely worked at NASA.
Speaker 4: What was that like?
Speaker 1: It was great.
Speaker 2: I mean, my father fell in love with model planes
Speaker 2: in rural North Carolina, so he's playing with powered airplanes,
Speaker 2: and he went to NC State, got a airn article
Speaker 2: engineering degree, went to Langley Air Force Base, and shortly
Speaker 2: after being there, they commissioned NASA and invited a bunch
Speaker 2: of them to come to Houston. And I would say
Speaker 2: that it's been more impactful later in life, because early
Speaker 2: in life I didn't know any different. Like NASA was
Speaker 2: our life, and like when the launches would go off,
Speaker 2: we'd all just like in the movie, like Apollo thirteen.
Speaker 2: You know, we'd go over to Summertown a lot like them.
Speaker 2: I don't know about the corvettes and all that, but
Speaker 2: it was a lot like the movie in terms of
Speaker 2: how the families took it all in afterward, especially when
Speaker 2: I was fortunate enough to be a part of Silicon Valley.
Speaker 2: To imagine, you know, my father going from playing with
Speaker 2: model airplanes in his backyard and then you know, and
Speaker 2: that's when it's lesi. So he's born in thirty six,
Speaker 2: so he'd be eighteen at fifty fifty four or something
Speaker 2: like that, and then sixty nine they put a man
Speaker 2: on the moon. That's a pretty short window of time,
Speaker 2: and to be a part of that is pretty spectacular.
Speaker 4: Your mom was a teacher. My mom was a teacher.
Speaker 1: Yeah.
Speaker 2: The thing that she did which was amazing, and she
Speaker 2: unfortunately passed away this past fall. She was just remarkably
Speaker 2: dedicated to civic life and volunteering. So in addition she
Speaker 2: was a substitute teacher, she was a city alderman for
Speaker 2: the first eleven years. She helped incorporate the city. She
Speaker 2: won all kind of awards for helping the school district
Speaker 2: and helping clean up the town, and having just celebrated
Speaker 2: her passing is a time to reflect on that as well.
Speaker 2: And it was really really eye opening. I got a
Speaker 2: lot of work to do to catch up with the legacy.
Speaker 3: Sheila, you had kind of an unconventional journey to Wall
Speaker 3: Street and go to a fancy school, and then you
Speaker 3: moved on to Silicon Valley.
Speaker 4: How would you describe it.
Speaker 2: I'll just tell you how it played out. My sister
Speaker 2: was probably a big part of it. She was employee
Speaker 2: sixty three at Compact, the computer company in Houston. She
Speaker 2: was a double out of Rice, so that's really her.
Speaker 2: It's a brand most people don't remember today, but pretty
Speaker 2: big company. And I worked there in the summer, and
Speaker 2: I went to work there for a couple of years.
Speaker 2: And it was funny when I was interviewing there, I
Speaker 2: was also interviewing at IBM. This kind of like classic
Speaker 2: Silicon Valley stuff. And at IBM they put you in
Speaker 2: an inside office and no one got a window because
Speaker 2: they didn't want anyone out of fairness, and each engineer
Speaker 2: had a chalkboard, and then if you worked there five years,
Speaker 2: you'd get a whiteboard. And I thought, well, that's so
Speaker 2: peculiar that you would mention that. And then at Compact
Speaker 2: in Houston, every engineer had a window office with a whiteboard,
Speaker 2: and I'm like, well, this is a little better here.
Speaker 2: So I went there and I got a little board
Speaker 2: as an engineer. After a couple of years, went to
Speaker 2: business school and then just got enamored with thinking about
Speaker 2: the business side of things and kind of begged my way.
Speaker 2: It was a classic story, like just knocking on doors
Speaker 2: one summer saying, please interview me, Please interview me.
Speaker 3: So do we need more good old fashioned grit and
Speaker 3: less classic pedigree?
Speaker 1: I don't know.
Speaker 2: I think that a lot of successful people get there
Speaker 2: via grit and kind of persistence and studying the history.
Speaker 2: And I'm actually working on a book that's somewhat related
Speaker 2: to a subject. There are certainly those that are kind
Speaker 2: of born to it on first or second base. Not
Speaker 2: that I had like an excessively difficult childhood or anything
Speaker 2: like that.
Speaker 1: I was a middle class family.
Speaker 2: But I do think that those that climb or work
Speaker 2: hard and have failure or struggle or you know, push,
Speaker 2: end up having a lot of success. I think that's
Speaker 2: a prototype.
Speaker 3: You started investing the dot com boom saw the carnage
Speaker 3: of the dot com bust. How is twenty twenty three
Speaker 3: going to go down in Silicon Valley history?
Speaker 2: It feels very similar. I mean, we could go through
Speaker 2: what's similar and what's different, because there's some of both.
Speaker 2: But I had a very, very kind of like almost
Speaker 2: an awakening understanding of just how cyclical this venture business
Speaker 2: is through I was having a conversation with Howard Marcus
Speaker 2: that unlocked all this. But he asked me to explain
Speaker 2: the tenants of the business, and when we got to
Speaker 2: the end, he says, that's a horrible business. And I
Speaker 2: said why, and he goes, it will always be cyclical.
Speaker 2: But the way the funds flow work, the way that
Speaker 2: limited partners commit to funds that used to be ten
Speaker 2: years and now or fifteen means that and a very
Speaker 2: low barriers to entry. So when things boom, everyone starts
Speaker 2: a venture firm. Right in this past boom, in addition
Speaker 2: to everyone's starting a venture firm, every venture firm started
Speaker 2: multiple venture firms and growth firm and all that money.
Speaker 1: Gets piled up.
Speaker 2: You're slowly taking on risk and you don't realize it,
Speaker 2: and it happens every single day along that path up
Speaker 2: It's like the roller coaster goes nick nick Nick, and
Speaker 2: you're taking more and more risk and you don't know
Speaker 2: it because everyone around you is taking the same amount
Speaker 2: of risk. Maybe FTX is the perfect pinnacle of this
Speaker 2: past one where a bunch of legendary investors have made
Speaker 2: five catastrophic risk assumptions where they've just ignored risk, you know,
Speaker 2: and they wouldn't have done that in two thousand and nine.
Speaker 2: And unfortunately, because the money flows come in so easily,
Speaker 2: they're hard to go out. They're committed for fifteen years.
Speaker 2: When that bubble finally burst, it's usually ugly, and it
Speaker 2: happens fast. Like risk off is right away, risk on
Speaker 2: is slow.
Speaker 4: Silicon Valley Bank collapsed in twenty four hours. Yeah right,
Speaker 4: this is the bank.
Speaker 3: Two thousands of startups, thousands of firms, thousands of funds.
Speaker 4: How did we get here?
Speaker 2: Yeah, it's a great question. First of all, there's a
Speaker 2: couple points I would make. So on March eighth, the
Speaker 2: stock was trading at two hundred and sixty dollars a share.
Speaker 2: So there are people that want to put this on
Speaker 2: risk seeking, it risk taking in Silicon Valley or the community,
Speaker 2: or Silicon Valley as a community. But Wall Street got
Speaker 2: it wrong too, right, all of Wall Street. If everyone's
Speaker 2: so smart, everyone should have been short to stock. It
Speaker 2: shouldn't have been a two hundred and sixty dollars a share,
Speaker 2: so the world believed that this bank was okay. I
Speaker 2: think that it's unquestionably a black Swan event that relates
Speaker 2: to interest rate movements. That and you know, just a
Speaker 2: combination of variables that haven't been in this place before.
Speaker 1: And then you.
Speaker 2: Had a prototypical classic run on the bank. And there's
Speaker 2: a question. There's a lot of questions about whether vcs
Speaker 2: should have been calm and supportive versus you know, And
Speaker 2: I can see both sides of the story, Like if
Speaker 2: I'm the VC that told everyone get out and they
Speaker 2: got their money out and they weren't at risk, I
Speaker 2: look smart. But I can also see the argument like, oh,
Speaker 2: you helped cause this by running out the door. And
Speaker 2: I don't think there's a right answer, Like it's very hard,
Speaker 2: but maybe because of social media and ability to communicate instantly,
Speaker 2: the run on the bank can happen a lot more severe,
Speaker 2: a lot more quickly than it ever could have.
Speaker 4: Before Twitter speed.
Speaker 2: Someone will have to write a book after the fact
Speaker 2: about whether there were issues around the venture debt.
Speaker 1: Portfolio that was part of this.
Speaker 2: The early statements are not that what they had was
Speaker 2: a duration mismatch on their loan portfolio, which any bank
Speaker 2: could have made that mistake. I'm not saying that it's
Speaker 2: okay that they made it, but any bank could. That
Speaker 2: wasn't a Silicon Valley specific. That part wasn't so anyway.
Speaker 2: So that's kind of how I look at the backdrop.
Speaker 2: Then you get into these questions of, well, what's the
Speaker 2: right thing to do. If you're going to allow every depositor,
Speaker 2: every bank to be liable for their bank's solvency, that
Speaker 2: puts an enormous burden on every consumer and every business owner.
Speaker 1: To need to be worried about that.
Speaker 2: And if all of Wall Street missed it, why is
Speaker 2: it that every startup CFO is going to have this
Speaker 2: mythical ability to judge the quality of a bank.
Speaker 1: I don't know how you can let that fall on them.
Speaker 2: And the second thing I would say is if you're
Speaker 2: going to let these fail, and there's certain people out
Speaker 2: there making that argument, then you got to be comfortable
Speaker 2: with the consequences. Banks aren't set up to liquidate everybody
Speaker 2: all at once. One other thing I would just highlight,
Speaker 2: which I think is critically important, is in two thousand
Speaker 2: and nine they're in a great financial crisis. You know,
Speaker 2: there was a moment in time where Goldman was in
Speaker 2: a difficult position. Warren Buffett did a preferred injection of
Speaker 2: capital in that and after he put that money in,
Speaker 2: the government bailed out Goldman shareholders. That was never even
Speaker 2: considered here like Silicon Valley Bank shareholders and debtholders are
Speaker 2: all white to zero. So there's a fairness question in
Speaker 2: my mind of the people that are saying, oh, you know,
Speaker 2: all the depositors should fail when it was back home
Speaker 2: in Wall Street where they even saved the equity holders.
Speaker 2: Right Like, if I were a Silicon buy Bank cherolder,
Speaker 2: I'd say, why did Goldman get special treat what?
Speaker 3: Benmark, did you take your money out? Did you tell
Speaker 3: founders to take money?
Speaker 1: We did not.
Speaker 2: We did not, and we did not kind of run
Speaker 2: for the doors either. So we did not do that,
Speaker 2: and we put our name on a lot of these
Speaker 2: support letters of it. I think those were an effort
Speaker 2: to try and get an acquire to come in and say,
Speaker 2: you know, we'll support that which didn't happen, So I
Speaker 2: don't know that that played a role.
Speaker 4: What about the folks blaming vcs, is that fair?
Speaker 2: I think it's an unanswerable question because it's that classic
Speaker 2: prisoner's dilemma problem more hazard that they study in college.
Speaker 2: You know, the only way you're you're going to be
Speaker 2: safe is if everyone behaves like you do.
Speaker 1: And that's not what happened. Right Clearly we had it
Speaker 1: run on the bank.
Speaker 2: And I can't blame an entrepreneur who has to make
Speaker 2: payroll for his employeloyees or her employees, because I've seen
Speaker 2: these people like for trying to get out first.
Speaker 1: I just that's their job.
Speaker 3: You know, you had some vic's giving out personal cash
Speaker 3: to help companies make it payroll. Do you think, if anything,
Speaker 3: this crisis will show founders.
Speaker 4: Who to trust.
Speaker 2: I'm able to talk more freely at the end of
Speaker 2: my career than if I were at the beginning. That
Speaker 2: every venture capitalist, when they open their mouth in front
Speaker 2: of a microphone, which I guess I'm doing right now,
Speaker 2: is talking to the entrepreneurs they haven't met yet. There
Speaker 2: is so much important criticality in getting in front of
Speaker 2: the right pitches that everyone wants to look like the
Speaker 2: best actor, and so I'm not at all surprised that
Speaker 2: you have these types of behavior. The problem is that's
Speaker 2: the exact same type of behavior that leads to the
Speaker 2: FTX situation because you take yourself out of a governance
Speaker 2: role completely, because you just become the founder cheerleader, because
Speaker 2: that does endear yourself to.
Speaker 1: A certain type of entrepreneur. So it's it's tricky.
Speaker 3: Well, there's this proposal that would hold vcs personally liable
Speaker 3: for their startups mistakes that actually has some support.
Speaker 4: Is that something that are kind of reforming.
Speaker 1: Here's where I would come out on the whole thing.
Speaker 2: You know, if you take a look at the you know,
Speaker 2: Fortune fifty over the past forty years, and I think
Speaker 2: what you'll see is that that companies that are kind
Speaker 2: of legacy companies in the US, like car companies or
Speaker 2: insurance companies, slowly get replaced by these few venture backed
Speaker 2: companies that become the Apples and Googles and facebooks of
Speaker 2: the world. And you know, there is a bit of
Speaker 2: a bet on the come notion that if we allow
Speaker 2: the exercise of broad experimentation against company formation, that that
Speaker 2: primordial soup will lead to these companies coming out and
Speaker 2: having growth. If you take those out, you end up
Speaker 2: where a lot of your your European economies are where
Speaker 2: the companies that are big today are the ones that
Speaker 2: were big, you know, forty years ago, and that has
Speaker 2: an impact on growth, It has an impact on job creation.
Speaker 2: If you make it harder or more difficult, or or
Speaker 2: more liability to handing out dollars, it'll just raise the
Speaker 2: cost of venture capital for the incremental entrepreneur.
Speaker 3: So when now that you can say whatever you want,
Speaker 3: when that doest settles, how bad does this get?
Speaker 4: Like what is the wreckage left?
Speaker 1: I don't know.
Speaker 2: I mean, if if let's say that the FED hadn't
Speaker 2: stepped up in Silicon Valley Bank failed and like a
Speaker 2: whole bunch of startups lost their venture dollars, that would
Speaker 2: have been an event that I think would have been
Speaker 2: way worse than O one like that would have been catastrophic.
Speaker 2: If it's funny, if you go back to the one
Speaker 2: O two oh three time frame, in ninety nine, every
Speaker 2: single major Wall Street firm opened an office on Sandhill Road.
Speaker 2: All the publications Fortune Forbes, they all had people on
Speaker 2: the ground. They were paying attention to everything. Everyone was
Speaker 2: in on it. One two oh three, they left, like
Speaker 2: the media left, the Wall Street firms left, like they
Speaker 2: just kind of moved on and they focused on other
Speaker 2: things and it got super quiet, and I actually loved
Speaker 2: that environment.
Speaker 1: That's a great environment to work on. I hate the
Speaker 1: manic stuff.
Speaker 2: But we're not there yet, and this one's going to
Speaker 2: be slower because of the amount of money that's out there.
Speaker 2: So you talked to a lot of inter capitalists. Most
Speaker 2: of them will say something like eighty percent of our
Speaker 2: companies have two years of cash. That wasn't true. In
Speaker 2: one you didn't have these stockpiles. So I think you're
Speaker 2: going to have a slower realization of the consequences of
Speaker 2: the bubble that we lived.
Speaker 4: So could we be in for a slow spiral or
Speaker 4: a slow.
Speaker 2: I think you could be on a slow, slow bursting right,
Speaker 2: like where things like company bankruptcy or shutdowns or sales
Speaker 2: for nothing happened slowly over the next three years rather
Speaker 2: than all at once. This event with Silicon Valley Bank
Speaker 2: could have been all at once moment.
Speaker 1: And you still may see.
Speaker 2: People just decide that Silicon Valley is a place that's
Speaker 2: too risky, and it gets back to this like crazy
Speaker 2: manic cyclicality that we go through, like because that's the
Speaker 2: exact opposite of where everyone was three years ago, like
Speaker 2: where I was.
Speaker 1: Being called a chicken little.
Speaker 3: Right people thought you were like the boy who cried
Speaker 3: wolf right right right.
Speaker 2: Right, right right right, and you know, and I was
Speaker 2: six years too early. But I didn't pull my chips
Speaker 2: off the table, but I was worried. But this is
Speaker 2: what happens. It's it's really unfortunate. I'd love to think
Speaker 2: of out of way to preventing it from happening, because
Speaker 2: I think the industry would be better off if it
Speaker 2: were more stable, because in these moments, people start asking
Speaker 2: questions like should you be more regulated, should you behave
Speaker 2: in a different way? And I don't think that's helpful
Speaker 2: to the fundamental premise, which is, let's invest money behind
Speaker 2: great entrepreneurs and create lots of amazing things.
Speaker 3: Do you think when you think back, do you think
Speaker 3: you were too conservative or do you feel vindicated right now?
Speaker 2: I don't think there's any value unfortunately, and this ties
Speaker 2: into the cyclicality thing. There's a saying that came up
Speaker 2: when I was talking to Howard Marx, which is the
Speaker 2: best way to protect yourself against the downside is to
Speaker 2: enjoy every last bit of the upside. Venture capital as
Speaker 2: an asset category. So talking about it from the LPCE
Speaker 2: perspective is something you can't measure in a small window.
Speaker 2: You've got to look at it over twenty to forty years,
Speaker 2: which is really bizarre because most firms don't have an
Speaker 2: employees that long. But the vast majority of the returns
Speaker 2: are in these periods at the top of these bubbles.
Speaker 2: And so I can remember back in ninety nine, ninety
Speaker 2: ninety five, ninety six, a couple of firms saying this
Speaker 2: is too manic, we're getting off the field, and then
Speaker 2: you missed the best performance possible. So no matter what
Speaker 2: I'm saying about, what I'm worried about, or my psychosis
Speaker 2: is dripping out of my mouth, you got to keep
Speaker 2: executing because the returns at that window are too valuable
Speaker 2: for the for the category, which isn't great either, right,
Speaker 2: because it looks like you're you're being opportunistic.
Speaker 4: Do you think this is going to impact innovation? More uncertainty,
Speaker 4: tighter funding.
Speaker 2: I don't see any reason that that it will impact innovation.
Speaker 2: If the FED hadn't come through, and then then you
Speaker 2: could see some type of regulatory reform that that might
Speaker 2: actually impact you know, It's funny. I was telling you
Speaker 2: this when we were talking about getting together. I'm at
Speaker 2: the end of my career. One thing that I'm remarkably
Speaker 2: aware of is just how rare success is.
Speaker 1: And we tend to.
Speaker 2: Fantasize that every startup can be the next Facebook, but
Speaker 2: we know down deep that's not true, and actually the
Speaker 2: odds are much more likely you're going to fail, and
Speaker 2: the success is so rare. When we're not staring down
Speaker 2: the barrel of a Silicon Valley bank problem, we often
Speaker 2: talk about how do you get access to capital the
Speaker 2: more entrepreneurs, how do you expand the diversity of people
Speaker 2: that can get access to capital? And all of those
Speaker 2: efforts are about making it easier to hand out money,
Speaker 2: which is is what we see when we're not in
Speaker 2: this moment of panic, which seems to be the attitude
Speaker 2: people want to have to bring entrepreneurism to a much
Speaker 2: broader array of possible outcomes. So I would hate that
Speaker 2: if we just you know, went this other way, we
Speaker 2: would kind of run contrary to that. But that's what
Speaker 2: happens in these cycles. People get caught up in the
Speaker 2: in the problem that feels right at the moment.
Speaker 4: What's your advice to startups?
Speaker 2: My advice is pretty simple, which is that thing we
Speaker 2: lived through the last three or four years that was
Speaker 2: the fantasy. Like some people sometimes I hear I'm gonna
Speaker 2: go well as soon as things go back to the
Speaker 2: way they were, that's a catastrophically disastrous like mindset, like
Speaker 2: assume this is normal. And so unfortunately, there are a
Speaker 2: lot of people that that mark themselves to market in
Speaker 2: their brain, you know, at the top of the bubble.
Speaker 1: But it's gone.
Speaker 2: Even if something like that happens again, it's fifteen years
Speaker 2: in the future. So you're not gonna You're not gonna
Speaker 2: wait around for So you've got to recognize what the
Speaker 2: reality is today, what your company really might be worth today,
Speaker 2: what you know studied the public comparables in your in
Speaker 2: your category, right, what are they trading at today?
Speaker 1: Those are the marks you're gonna have to.
Speaker 3: What about your advice to investors, It's gonna be an
Speaker 3: string three or four years back in one the investors
Speaker 3: that paid the biggest price for the late stage investors.
Speaker 2: So people that wrote really big checks at really high evaluations,
Speaker 2: and it was fairly catastrophic for a lot of those.
Speaker 2: Like I said, I think this is going to take
Speaker 2: three or four years to play out, and so it's
Speaker 2: going to be hard to know historically. And when you
Speaker 2: say investors, it's hard to know whether you're talking about
Speaker 2: a venture investor, a growth investor, or an LP that
Speaker 2: might invest in venture Historically, the cohorts that are kind
Speaker 2: of scarred are kind of scarred universally, even across the
Speaker 2: better venture capital firms. The best venture firm might have
Speaker 2: funds that are ten x or more in a good time,
Speaker 2: but in bad time there'll be one x, right, and
Speaker 2: so good times help almost everybody, but bad times hurt
Speaker 2: almost everybody. It's probably a really good time to commit
Speaker 2: money to a new venture fund, especially someone someone that
Speaker 2: has experience and is leaving another one because they're not
Speaker 2: shoveling any you know stuff.
Speaker 1: You know, they don't.
Speaker 2: Have the workload, because there's a lot of work right
Speaker 2: now that's very feels counterproductive, that is just cleaning up.
Speaker 2: And if you were new and writing new checks in
Speaker 2: this environment, you didn't have the baggage, that'd be pretty interesting, interesting,
Speaker 2: and I suspect the cohort from here forward will be
Speaker 2: pretty good.
Speaker 3: Actually, well, you did have a lot of success navigating
Speaker 3: the ups and downs. You generated more returns than any VC.
Speaker 4: It's a lot. You made a lot of money. How
Speaker 4: much was it more than a billion? Or Moth said
Speaker 4: it was more than a billion.
Speaker 2: I've never I've never had that conversation before, but it's
Speaker 2: less than that.
Speaker 3: Okay, it's a lot. The way you did it is
Speaker 3: you know, people revere you. What are the key to
Speaker 3: your winning strategy?
Speaker 2: The first thing I would say before I answer this
Speaker 2: question is there are a lot of amazing venture capitalists
Speaker 2: and they tend to come.
Speaker 1: From very different backgrounds.
Speaker 2: So, you know, I think about the way John dor
Speaker 2: executed the business. It's very different than the way Mike
Speaker 2: Maritt executed the business. And they're both legendary, right and
Speaker 2: both wildly successful. John comes from more of a sales
Speaker 2: background and is an unbelievable champion for his companies. And
Speaker 2: I always thought of Mike's approach as more kind of
Speaker 2: analytical cerebic, Like they're just all these different backgrounds. So
Speaker 2: I don't know that there's a right answer to the question,
Speaker 2: But for me, the thing that I tried to do
Speaker 2: is just study and learn and read. I think anyone
Speaker 2: in any industry or any field can benefit greatly by
Speaker 2: studying the history of the people that have come before
Speaker 2: them and thee I did a speech at University of
Speaker 2: Texas here a few years ago, and I looked.
Speaker 1: At Bob Dylan and Danny Meyer.
Speaker 2: I read it, and they both went very deep on
Speaker 2: the historic artisans in their business, and they.
Speaker 1: Tried to meet them, and they tried to hang out.
Speaker 1: And I think that a lot can come from that.
Speaker 2: The other thing I would say about venture is and
Speaker 2: one of the reasons why I eventually decided to step
Speaker 2: away from new investments is to be great at it
Speaker 2: requires a level of hustle that's really hard to explain.
Speaker 2: And the reason is you're trying to maximize the optionality
Speaker 2: that you get in front of a home run pitch,
Speaker 2: and to do that, you have to look under every
Speaker 2: rock you possibly can. And so if you're not at
Speaker 2: the incremental conference, if you're not calling on the incremental
Speaker 2: product manager, if you're not studying some new business model
Speaker 2: or new platform, you know AI, if you're not just
Speaker 2: in every meeting, then you're lowering the chance that you're
Speaker 2: going to be successful. It's an exhausting game, and there's
Speaker 2: amazing people at other firms doing the exact same thing.
Speaker 3: I mean, there's this whole debit do you have to
Speaker 3: be technical or not? Do you have to be a
Speaker 3: founder or not? Are you saying there's just no?
Speaker 1: I don't think that's true.
Speaker 2: I think that's all back to what I said earlier,
Speaker 2: which is someone talking their book hoping to spell that
Speaker 2: narrative out. There are a few great vcs that used
Speaker 2: to be operators. I'd say there's.
Speaker 1: More that aren't.
Speaker 2: Actually, you know, Writs wasn't really I mean, Door wasn't.
Speaker 2: Spending two years at a company doesn't really count as
Speaker 2: like running something.
Speaker 3: So what about this is the stuff that it took
Speaker 3: to be a good investor the last decade going to
Speaker 3: be different than the stuff it's going to take in
Speaker 3: the next I doubt it.
Speaker 2: They're part of it's being great at investing, And that's
Speaker 2: where I think studying the history not just a venture
Speaker 2: capital but of investing generally is super helpful. Like understanding
Speaker 2: how great investors think is important. The people that end
Speaker 2: up buying the product that we helped create and Shepherd
Speaker 2: is actually Wall Street right, and so understanding what matters
Speaker 2: to them matters. The problem that many operators have, and
Speaker 2: I've worked with some great was like Mitch Laski, who
Speaker 2: became a great venture capit as a benchmark. I was
Speaker 2: on his board. But the operator struggle at first with
Speaker 2: two mistakes. One they actually think they can put their
Speaker 2: hand on the wheel a lot more because they had
Speaker 2: it on the wheel, but I never had that feeling,
Speaker 2: so I'm not actually trying to take it over. And
Speaker 2: then two, sometimes they imagine themselves in the seat and
Speaker 2: don't do enough analysis of whether the individual is capable
Speaker 2: of becoming a CEO.
Speaker 4: Interesting.
Speaker 2: Interesting, And I think the flip side to make that
Speaker 2: argument as well, which I'm sure many would is some
Speaker 2: operator founders feel like the investor only VC doesn't have
Speaker 2: the right level of empathy for the day to day job.
Speaker 2: So I'm sure that's a fair argument as well. But
Speaker 2: there's no analytical data point that suggests only one kind
Speaker 2: can do it. There's winners of all backgrounds.
Speaker 3: You covered Amazon as an analyst in the nineties before
Speaker 3: Amazon was, you know, barely more than a bookstore.
Speaker 4: What really sticks with you? You saw Jeff Bezos up close.
Speaker 4: What sticks with you from those days.
Speaker 2: I had been at CSF First Boston and I was
Speaker 2: I was covering PC hardware and software and I was
Speaker 2: literally about to leave.
Speaker 1: I was going to go to the to.
Speaker 2: The Byside and for a Capitol Group work for Capital Group,
Speaker 2: and Frank qua Trone called me, and I don't remember
Speaker 2: who gave me my name, but he was leaving Morgan
Speaker 2: Stanley and starting this new bank.
Speaker 1: You know.
Speaker 2: I told him I think I'm kind of done with
Speaker 2: equity research, and he said, well, you know what, if
Speaker 2: you come to work for me, I'll and I'll bring
Speaker 2: you to Silka Vallee, I introduce you to everyone I know,
Speaker 2: and you can cover whatever category you want. So the
Speaker 2: Internet was starting to emerge, and I said, okay, Well
Speaker 2: I eventually he said okay, And at first I was
Speaker 2: terrified because I really.
Speaker 1: Didn't know what I got myself into.
Speaker 2: But I've been very fortunate in a very short career
Speaker 2: as salesia analysts to meet Michael Dell, to meet Bill
Speaker 2: Gates and just hanging out with them and having a
Speaker 2: chance to have dinner or whatever. Then you're looking in
Speaker 2: this new category and you meet someone like Jeff, and
Speaker 2: it's clear that, oh this is like that. I'd say
Speaker 2: it's easier than it sounds like. Getting the meeting might
Speaker 2: be hard, but like understanding that he's way different than
Speaker 2: the other entrepreneurs wasn't that hard. One other thing I'd
Speaker 2: say about Jeff that I still believe is true today.
Speaker 2: Because he came from D E. Shaw and because he
Speaker 2: came from Wall Street, he understood how to talk to
Speaker 2: shareholders in a way that no one else did. So
Speaker 2: if you reread his s one where he writes a letter,
Speaker 2: it's titled to our shareowners, and he talks a lot
Speaker 2: about them. All the entrepreneurs followed Jeff that wrote that letter,
Speaker 2: we're kind of like, screw you, Wall Street. I'm going
Speaker 2: to run it my own way. And it's not actually
Speaker 2: what Jeff says. And he says I'm going to run
Speaker 2: it for the long term, but he says I'm doing
Speaker 2: that for you, which is very different, whereas the other
Speaker 2: people kind of wrote We're going to run it our
Speaker 2: way and not for you. And so he was special,
Speaker 2: like you endear yourself to a community when you talk
Speaker 2: to him in a respectful way.
Speaker 3: So how much is it about the individual versus the
Speaker 3: team versus the moment, about luck versus skill in all matters.
Speaker 2: There are certain business models that are more prone to
Speaker 2: network effects a dating app or a social network, and
Speaker 2: if they take fire, it can be just hold on.
Speaker 2: And in those cases I would say it's about timing
Speaker 2: and getting the product exactly right. To get it to
Speaker 2: a really big outcome requires so one to be a
Speaker 2: great CEO. And there's this blog post Ben Horowitz wrote
Speaker 2: that I always sticks in my brain where he's talking about,
Speaker 2: and once again I think this is venture capital is
Speaker 2: talking to the founder they haven't met yet, but he's saying,
Speaker 2: we only want to back people that go all the way.
Speaker 2: And the truth matter is every VC wants that because
Speaker 2: hiring a CEO is a fifty to fifty bet. So
Speaker 2: your expected value is now cut in half.
Speaker 1: But you have to somewhere deep.
Speaker 2: In his post there's a paragraph that says that the
Speaker 2: founder has to want to learn to be a great CEO,
Speaker 2: and that part's hard. We all had a remarkably unfair
Speaker 2: kind of wild card with Bill Campbell, who who was
Speaker 2: remarkably generous to a handful of venture firms, not just
Speaker 2: Benchmark Kleiner, many others, and he spent time helping these
Speaker 2: founders be CEOs. As I understand it, he was still
Speaker 2: in the management team meeting at Google ten years after
Speaker 2: they went public, and you know, people talk about Eric
Speaker 2: Smith coming on, but they had Bill Campbell in there,
Speaker 2: you know, And so it's hard. It's hard. That part's hard,
Speaker 2: Like why in the world would a twenty two year
Speaker 2: old founder be good at managing ten thousand people?
Speaker 4: So let's talk about that.
Speaker 3: Your investment in Uber is legend in part because you
Speaker 3: made a lot of money and also all the drama.
Speaker 1: Yeah, when you look.
Speaker 4: Back on that, how do you reflect? Is there anything
Speaker 4: that you would have done differently?
Speaker 2: Yeah, I've said this publicly, like I think in a
Speaker 2: perfectly executed world from a venture capitalist perspective, that doesn't happen.
Speaker 2: Like we help the founder and the team, you know,
Speaker 2: navigate their way to a successful company. And I think
Speaker 2: I won't name any names, but I think there are
Speaker 2: plenty of entrepreneurs from previous generations that are not perfect
Speaker 2: humans and matured along the way right and became different
Speaker 2: people and different leaders, And you'd like to make that happen.
Speaker 1: It's quite sad.
Speaker 2: Emeil Michael and I were actually working quite hard to
Speaker 2: try and get Campbell, who we had both had experience with,
Speaker 2: to come in and try and help us, and he
Speaker 2: unfortunately had started to decline and health at that moment
Speaker 2: at times. So it's not from a lack of effort.
Speaker 2: There were lots and lots of tries, but it didn't
Speaker 2: work out. Whether it was adding board members or the
Speaker 2: type of governance or all that. Like, we didn't quite
Speaker 2: get it there, and things started to spiral before and
Speaker 2: at that point like it was, I think all the stakeholders, employees, customers, drivers,
Speaker 2: it was all at risk, which created the need for
Speaker 2: something a little more unusual. But yes, definitely, when I reflect,
Speaker 2: I would love to think we could have done something
Speaker 2: different that would have landed it all in a different place.
Speaker 3: I mean, some people think it should have happened sooner.
Speaker 3: There's a school of people who think if Travis was
Speaker 3: still there, who was controversial, larger than life founder, maybe
Speaker 3: Uber would be worth more.
Speaker 2: What do you think, Well, one, it's an impossible question
Speaker 2: to answer. I do think that the number of things
Speaker 2: that were going on at that I think it was
Speaker 2: the January through June of twenty seventeen, the number of
Speaker 2: things that had happened to the company were at that moment,
Speaker 2: I think insurmountable. So we had five different state attorney
Speaker 2: generals running investigations. There were so many independent committees of
Speaker 2: the board that I couldn't keep track of the meetings.
Speaker 2: The market share was in free fall, lift was taking
Speaker 2: sure left and right. I just think today we're getting
Speaker 2: over or we I still talk about it in Royal
Speaker 2: but Badara is helping execute past that stigma. But I
Speaker 2: know people I know, you know people that would just
Speaker 2: not say the word ober, wouldn't get in, one wouldn't
Speaker 2: like and that was a community of potential customers. The
Speaker 2: phrase we had used internally and with other investors as
Speaker 2: there was a group of five investors actually that that
Speaker 2: all kind of came together was this is going to
Speaker 2: happen eventually, and what's going to be the value of
Speaker 2: the ASKT if we let it go down? So I
Speaker 2: don't I don't think the theoretical, you know, would it
Speaker 2: be worth more now if someone else were running it
Speaker 2: is possible. Have there not been a change made, I
Speaker 2: think the asset value would be lower, not higher, because
Speaker 2: everything was coming in on itself. So I don't think
Speaker 2: we could have gotten to the imaginary question that they
Speaker 2: want to pose.
Speaker 4: Well, I just like to ask impossible questions.
Speaker 2: And I you know, that's funny. I sent darn note
Speaker 2: the other day at the time. You know, we taught
Speaker 2: about the CEO search in a two step way, which
Speaker 2: is we've got all these fires, like tons of fires.
Speaker 2: There was there were specific fires in South America and
Speaker 2: the UK in addition to everything else that I had mentioned.
Speaker 1: And by the way, we were losing billions of dollars
Speaker 1: a year. Did I mention that?
Speaker 2: So it was a hot mess and Dark took that job.
Speaker 2: And that's pretty bold thing to do. And if you
Speaker 2: look at where the company is today, the fires are
Speaker 2: all out. And so I realized I had in cinema
Speaker 2: note and I just said, you know, thank you because
Speaker 2: it I think everyone that has anything to do with
Speaker 2: the company of employee, shareholder, investor driver or whatever are
Speaker 2: in a better place because of what he did. And
Speaker 2: it was really hard, and some people are are now
Speaker 2: kind of getting after him, like, well, what you know,
Speaker 2: should the stock be higher? That kind of thing, and
Speaker 2: I'm like, well, you know, let's give him credit for
Speaker 2: the first part. Now he's in a place where I
Speaker 2: think the network effects are getting stronger. I think he's
Speaker 2: done a great job. I think they're right on the
Speaker 2: cost of profitability depends on how you define profitability. And
Speaker 2: he feels pretty good. So let's see. Let's see what's
Speaker 2: in the next chapter. But I gotta give him an
Speaker 2: a plus for the first half.
Speaker 4: All right, we got a grade from Bill Gurley. Okay,
Speaker 4: fair enough.
Speaker 3: It caught Hollywood's attention, and my mom is so excited.
Speaker 3: We're talking because she loves the Bill Gurley that's played
Speaker 3: by a Kyle Chandler in the Showtime Uber show.
Speaker 4: Did you watch it? Like, what did you think of
Speaker 4: his portrayal?
Speaker 2: I did watch it. I mean, I hope this doesn't
Speaker 2: sound bad. But every single female that I know came
Speaker 2: up to me and said exactly what your mom said.
Speaker 2: So they said, Wow, you're so lucky to be playing
Speaker 2: by Kyle. But none of them said and he looks
Speaker 2: a lot like you. They didn't say that second work.
Speaker 2: I just got the first part. But I was a
Speaker 2: huge fan of Friday Night Lights. I had watched the
Speaker 2: whole thing. I read the original Dissinger book that came
Speaker 2: out because I grew up in Texas and that show
Speaker 2: was amazing, and he was amazing. The person he portrayed
Speaker 2: is certainly a much better version of myself, So I
Speaker 2: should be fortunate because of that. I think, you know,
Speaker 2: it's funny because I watched I was initially nervous about
Speaker 2: watching it, but there was so much There were a
Speaker 2: lot of things that weren't true, like that were just
Speaker 2: kind of embellished. That made it easier to watch because
Speaker 2: it wasn't It wasn't like reliving the whole thing, you know.
Speaker 2: There was also this other show that Benchmark was portrayed in,
Speaker 2: We Crashed, and I thought that they did a really
Speaker 2: amazing job in that one of showing how the crazy
Speaker 2: soft bank money made it easier, I mean harder, much
Speaker 2: much harder to manage the company to the right place.
Speaker 2: You were asking me earlier about regrets and looking back,
Speaker 2: and having someone come in and just hand three billion
Speaker 2: dollars to your founder and tell them to be crazier
Speaker 2: is really hard to manage well, because.
Speaker 3: Benchmark kind of got an anti founder narrative out of that.
Speaker 4: First it was Uber, then it was Adam Newman that
Speaker 4: we were.
Speaker 1: Right, and and is that fair?
Speaker 2: The point I was making it in that one was
Speaker 2: they just did a great job of highlighting. You know,
Speaker 2: Jared's running around saying, Marsa wants me to be crazier.
Speaker 2: That's actually how it was right And I think people
Speaker 2: have a hard time believing that was true. But that
Speaker 2: was true, and it makes that shepherding job a lot
Speaker 2: more difficult.
Speaker 3: But I assume you think the whole sort of anti
Speaker 3: founder thing that came out of kind of both of
Speaker 3: those situations combines is not fair.
Speaker 2: When we were working with these four other venture firms
Speaker 2: and made a decision to try and arrest the situation
Speaker 2: at Uber, everyone knew what the consequences of that was.
Speaker 2: We weren't like blind. We set around and said, you know,
Speaker 2: if we do this, some class of humans are going
Speaker 2: to use this against us and point it out and
Speaker 2: put us in that bucket. This will sound overly dramatic,
Speaker 2: but you know, the thing we told ourselves as we
Speaker 2: had it out the door was you know, history will
Speaker 2: be on our side.
Speaker 1: And you know, no.
Speaker 2: Matter what the cost was, if I had to go,
Speaker 2: if I went back to that moment in time, I
Speaker 2: do the exact same thing, and yes, maybe there's a
Speaker 2: cost to it, but I didn't the cost wasn't worse
Speaker 2: than not doing it, Like it was a known decision
Speaker 2: that had consequences.
Speaker 3: The soft bank money, there's Tiger Global, there's big money
Speaker 3: coming from Saudi Arabia. All this money not necessarily smart.
Speaker 3: How do you think this is going to play out?
Speaker 3: How does this impact a longer term problem?
Speaker 2: Well, I mean there's a lot of great sayings I
Speaker 2: could use it this moment in time.
Speaker 1: I'll just pick one.
Speaker 2: It's like they say, if there's a fool in every market,
Speaker 2: if you don't know who it is, it's probably you.
Speaker 2: The markets have a way of separating very risk seeking
Speaker 2: individuals from their capital. It may not happen overnight, but
Speaker 2: it always happens eventually. Like there's no easy money, Like
Speaker 2: it feels like there is a moment in time, but
Speaker 2: arbitrage causes that to go away. And I love the
Speaker 2: FTX story, not because I want to pick on anybody,
Speaker 2: but to make the decision to give money to somebody
Speaker 2: whose auditor is someone out of Washington, doesn't audit anybody else,
Speaker 2: that has no board, and it has a side business
Speaker 2: that's co mingled. Who tells you it's not co mingle?
Speaker 2: Then it turns out it was co mingle, like what
Speaker 2: are you doing?
Speaker 3: Why did so many people fall for FTX and Sam
Speaker 3: bankman free We're talking about legitimate, legendary venture capital firm.
Speaker 2: The numbers were really really big, So those are seductive.
Speaker 2: The individual is unique and capable narrative and fomo if
Speaker 2: you're missing out, drives a lot of behavior. Silicon Valley
Speaker 2: a lot. It's classic. I mean, that's why I like
Speaker 2: talking about it, because until you get to that moment,
Speaker 2: you don't get to correction, Like you need excessive risk.
Speaker 1: Taking and then you get excessive.
Speaker 2: Arbitrage, which a lot of crypto writ large may have
Speaker 2: been just excessive arbitrage taking money from people that wanted
Speaker 2: to separate themselves from it, and then you get a correction.
Speaker 2: But this isn't new. This goes you know, all the
Speaker 2: legendary investment books that go back to the Tulips you
Speaker 2: know in Amsterdam, Like, this is classic, it's not new.
Speaker 3: The cult of the founder has long been this Silicon
Speaker 3: Valley ideal.
Speaker 4: Does that need to change?
Speaker 2: I don't think so. And the reason I would say
Speaker 2: it is that the really really long outcomes tend to
Speaker 2: have a founder that stays around for a very long
Speaker 2: period of time, whether it's Zuckerberg or I mean the
Speaker 2: famous you know, Jeff Bezos, you know, or Steve Jobs
Speaker 2: coming back to Apple. Can you believe Steve Jobs came
Speaker 2: back to Apple? That company's going bankrupt? Like there's a
Speaker 2: true north that they know innately, and there's a drive
Speaker 2: that they have to win at all costs that you
Speaker 2: can't get in a hired ceo.
Speaker 1: You just can't.
Speaker 3: What about Elon Musk obviously revolutionized space electric cars?
Speaker 4: Can he win at Twitter?
Speaker 1: Well, before you go to can't he win at Twitter?
Speaker 1: Look what he's done.
Speaker 2: I saw this documentary where they interviewed the astronauts when
Speaker 2: the SpaceX vehicle opened up for the first time they
Speaker 2: were on the space station. They said they'd never seen
Speaker 2: a rocket more clean and amazing. The car company in
Speaker 2: their own battery factory. These are hard businesses. I would
Speaker 2: never have put our venture dollars behind those types of
Speaker 2: businesses because they're too hard and he's made it work.
Speaker 2: So at this point, like I think, I think you
Speaker 2: have to take the other side, like why we would
Speaker 2: he fail them?
Speaker 1: Well?
Speaker 4: Benchmark back Twitter? Would you back el on Twitter?
Speaker 2: I personally have a remarkable affection for Twitter and think
Speaker 2: that it has radical amounts of optionality beyond where it
Speaker 2: is today. Now, whether he'll steer it there or not,
Speaker 2: I don't know. And he's created some obstacles that he
Speaker 2: may have not needed to create for him.
Speaker 3: Okay, well, so then talking about where you're placing bets, like,
Speaker 3: there's been so much.
Speaker 4: Hype around crypto and self driving cars and the metaverse.
Speaker 3: What is going to be the next wave of real innovation?
Speaker 2: I think my answer to this is remarkably uninteresting, which
Speaker 2: is similar to everyone else. I think the stuff that's
Speaker 2: happening in AI feels so much more real than any
Speaker 2: of those other things that you mentioned.
Speaker 4: So it's not the next bubble.
Speaker 1: I don't think so.
Speaker 2: And the things we're seeing in very particular verticals like
Speaker 2: are super big impact very fast. I think the press
Speaker 2: rit large gets caught up in can chat, GBTB a
Speaker 2: competitor to Google. Not that, but taking a model and
Speaker 2: applying it deeply to a medical use case or a
Speaker 2: legal use case, or that's where we're seeing stuff that's
Speaker 2: pretty magical.
Speaker 4: How many more billion dollar deals are out there?
Speaker 3: I mean, given sort of the environment, is it going
Speaker 3: to be a lot harder to start a billion dollar
Speaker 3: company now than it.
Speaker 2: I mean, so a couple of different things there. So one,
Speaker 2: it is still a little bit bubbly when it comes
Speaker 2: to AI. So the average if it deals hot, you know,
Speaker 2: it's pretty expensive to get at first investment, So that's
Speaker 2: a negative. On the positive side, it does feel like
Speaker 2: there are enough.
Speaker 1: Competitive models that you can go would do a startup
Speaker 1: that's that's attacking a very vertical or specific or functional.
Speaker 2: Problem and not be you know, kind of stuck like
Speaker 2: maybe startups where it feels like they.
Speaker 1: Are enough alternatives that.
Speaker 2: You can use the tools without without being caught.
Speaker 1: And so that's actually a really big positive.
Speaker 4: So it is an AI or bust. I mean, is
Speaker 4: there anything else to invest in?
Speaker 2: Well, you know, one of the reasons that people made
Speaker 2: the argument that you needed to pay attention to crypto
Speaker 2: was that the developers were all going there. And I
Speaker 2: would say one of crypto's most unbelievable challenges is right
Speaker 2: now is that the developers are completely enamored with these tools.
Speaker 2: They're quite usable, and they're quite easy to apply to
Speaker 2: a very specific use case, especially if you can get
Speaker 2: access to data. I don't hear of a lot of
Speaker 2: other things. I mean, there are there are some vcs
Speaker 2: that are very heavy on climates aims, that are doing
Speaker 2: things there that's hard to do part time. I think
Speaker 2: you're either all in on that or you're not because
Speaker 2: there's so much lobbying involved in so much regulatory work.
Speaker 2: But for the now, it's it's all Ai.
Speaker 3: The circuit continues after this quick break, after all that
Speaker 3: talk about the fate of venture capital, it's time to
Speaker 3: dig into another classic Texas barbecue.
Speaker 4: This place is amazing. I'm so excited.
Speaker 3: No, all right, I'm ready for my big Austin barbecue.
Speaker 1: Yes, he look at this.
Speaker 4: Oh my god, Oh my god, this looks amazing.
Speaker 1: You're gonna all this so much.
Speaker 4: Let's taste this brisket.
Speaker 3: Hey, guys, child, if you were going to start a
Speaker 3: company today, where would you move?
Speaker 2: Place can be very impactful, and so if I were
Speaker 2: like a twenty two year old founder starting something, I'd
Speaker 2: go to Silicon Valley just because it's going to increase
Speaker 2: your odds of success.
Speaker 4: What about like Miami, La Boston.
Speaker 2: I think many cities, whether it's Austin or Miami, they
Speaker 2: have a problem that sounds ironic, but they're a lot
Speaker 2: of fun and so I think there's a question as
Speaker 2: to whether you attract the very most determined founders.
Speaker 3: Oh, that's a little controversial.
Speaker 2: Which may explain why Seattle's done so. Not that it's
Speaker 2: not a wonderful place, but for two thirds.
Speaker 1: Of the year it's dark house exactly.
Speaker 2: I do think there are a lot of contagious qualities
Speaker 2: to successful startups. Constantly around other people that are all
Speaker 2: in the same game is super helpful.
Speaker 3: So you step back from an active role at Benchmark
Speaker 3: a few years ago, how much are you still investing?
Speaker 2: What I really did was stop making new investments, so
Speaker 2: I'm still on ten boards.
Speaker 1: The shift in the.
Speaker 2: Markets and the bubble bursting kind of increased the workload
Speaker 2: and the time frames. And I think other not naming names,
Speaker 2: but I think other vcs have hung around past their
Speaker 2: point of relevance.
Speaker 4: I didn't want to be that person you mentioned earlier.
Speaker 4: Benchmark has always stayed super small and lean.
Speaker 3: Other venture firms like Andreson Borrowitz kept gotten big, And
Speaker 3: you're often pitched against Mark Andresen as sort of an opposite.
Speaker 3: Who's model do you think is going to stand the
Speaker 3: test of time?
Speaker 4: How do you think about that?
Speaker 1: Well?
Speaker 2: I do think that there are numerous successful models in venture.
Speaker 2: I mean, it's not an industry where you can run
Speaker 2: the table. I think the one reason that Andresen created
Speaker 2: some animosity in the valley was when they came in
Speaker 2: they made these bolts statements like we're going to change everything,
Speaker 2: We're going to rewrite, We're going to take over.
Speaker 1: It doesn't been too taking over. It's just not structured
Speaker 1: any way.
Speaker 3: There are a number of vcs that seem to be
Speaker 3: sort of indulging in the politics of anti wokeism and
Speaker 3: getting into these various debates. And yeah, it happens on
Speaker 3: the other side of the aisle too.
Speaker 4: You know, what do you think of that trend?
Speaker 2: I think I understand some of the issues that caused
Speaker 2: them to adopt that mindset. In the past five years,
Speaker 2: there have been objective functions injected into startups that aren't
Speaker 2: solely how well it's the company doing or how well
Speaker 2: is the company's stocked doing. But it becomes hard to
Speaker 2: succeed if the employees aren't showing up and saying let's
Speaker 2: all march in the same direction. As I understand things
Speaker 2: at Google, there's just quite a bit of tension between
Speaker 2: the employee base executives there, and it's hard. It makes
Speaker 2: the job harder to execute the company.
Speaker 3: Well, and I wonder what happens to the cultural tension
Speaker 3: in Silicon Valley when the money's gone right, the party's over,
Speaker 3: the money, printer no longer goes or whatever it is.
Speaker 4: How do you think that's going to change things?
Speaker 1: I mean, if it is, it's a good.
Speaker 3: Thing, given obviously the environment that we're moving into. Like
Speaker 3: you saw Amazon up close, where's the next Google or
Speaker 3: Facebook or Amazon or Apple.
Speaker 4: Going to come from?
Speaker 1: There's always someone that's going to come You think.
Speaker 4: Jeff Bezos will ever come back? Would pull Steve jobs?
Speaker 1: I don't think so.
Speaker 2: I don't think it's very much fun being a public CEO,
Speaker 2: especially one of those top five. They invite you to
Speaker 2: Washington and yell at you in front of people. Yeah,
Speaker 2: where's Larry Page's been in the past ten years? You've
Speaker 2: seen him? I haven't seen him.
Speaker 4: I did see him once.
Speaker 1: I haven't seen him.
Speaker 4: I saw him once.
Speaker 1: But yes, he must be perfectly happy to do it
Speaker 1: for something.
Speaker 3: All right, Well, maybe we should invite Jeff Bezos and
Speaker 3: Larry Page to have some barbecue in Austin. Thanks so
Speaker 3: much for listening to this episode of the Circuit. I'm
Speaker 3: Emily Chang. You can follow me on Twitter and Instagram
Speaker 3: at Emily Chang TV. You can watch new episodes of
Speaker 3: the Circuit on Bloomberg Television or on demand by downloading
Speaker 3: the Bloomberg app to your Smart TV, and let us
Speaker 3: know what you think by leaving us a review. I'm
Speaker 3: your host and executive producer. Our senior producer is Lauren Ellis.
Speaker 3: Our associate producer is Lizzie Phillip. Our editor is Sarah Livesey.
Speaker 4: Thanks so much for listening.