← Tom Bilyeu's Impact Theory
Tom Bilyeu's Impact Theory
Staying Relevant in a Changing World: Bill Gurley on AI, Careers, and Policy | Impact Theory w/ Tom Bilyeu
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Tom Bilyeu
Welcome back to part two of this incredible conversation. Without further ado, here we go. I'm optimistic by nature, almost to a fault. And I look at, say, AI, which I think is, is as it's going to be as profoundly transformative as people say. It's already wildly impacted my business. Increased profitability, increased top line revenue. I mean, it's really been extraordinary even at my size. When you look out at that, Americans are terrified. The Chinese are not. Do you have a sense of, like, what's going on there? What either what thing do we understand that the Chinese should be afraid of or what do they understand that should make us more optimistic?
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Bill Gurley
One thing that happened on a recent trip there, I was having lunch with a venture capitalist, a Chinese venture capitalist, and he said, you know, one thing that fascinates me, he says, every Chinese entrepreneur reads everything they can about American entrepreneurism. So there's podcasts, there's blog posts, there's articles, there's interviews. They listen to 100% of it. Like, every Chinese entrepreneur knows what Elon Musk is thinking, knows what anthropic thinking, knows all this stuff. He goes, goes, there's zero in the other direction. There's no, there's no American entrepreneur that wakes up saying, boy, I wonder what Leon Xiaomi is thinking tomorrow. Even though some of that content's out there. And so that's pretty, pretty eye opening, just that notion, right, that they're learning from us and we're not learning from them. It's not a good fact for sure.
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Tom Bilyeu
Now, do you have a sense of what their take is on AI that keeps Them so optimistic.
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Bill Gurley
Yes. Well, this is an interesting thing. So, so the polling is. I'm going to guess at the numbers. You may have read it more deeply, but the like 70% of Americans are worried about AI and that number in China is like 20. And part of the problem is the doomerism is loudest at the biggest AI companies in America. And I fear it's because they want this regulatory capture. It is one of the most. If it's not regulatory capture, I don't know what it is. I've never seen an entrepreneur stand up and say I'm making this incredible technology and by the way, my employees are doing secondary transaction and stuffing billions of dollars in our pockets. But it's really scary and it's going to kill us all. I've never seen this. I've never seen it before. My only explanation is they want regulatory capture. But I don't know. But it's having a lot of perverse effects, including what you're talking about sentiment for the whole country. Yeah. And by the way, if we put a whole bunch of policy on top of our AI systems, I think we're going to, I think what may happen. If you look at what happened with the Internet, there was a global market that the American company served and there was a ring fence around China and the Chinese Internet companies ended up serving that because China kept out Google and Facebook and those types of companies. I think what could happen with AI is we could build a fence around ourselves and China could end up serving the rest of the world. I think that's already almost fait accompli in EVs and solar panels. But it could be true with AI technology as well.
- [04:50]
Tom Bilyeu
Now is that because they're outperforming us on the solar panels and EVs or because we've done something from a regulatory perspective that just makes the hurdle too big?
- [04:59]
Bill Gurley
Both. I mean Elon on cheeky Pinterest podcast said that he thinks American energy problem could be solved with solar panels and a huge section of Nevada like. But, but, but he said the math won't work with American sourced solar panels and that we won't do it because we won't put the Chinese panels there.
- [05:25]
Tom Bilyeu
Do me a favor really fast because people aren't going to understand what that means. Tell the story of the COVID tests and the difference. I think it was Germany versus here. Yeah, I was, I didn't hear that. I was aghast. I was clutching my pearls hearing you tell this story. This is wild.
- [05:41]
Bill Gurley
Yeah, so. So there were two types of COVID tests during COVID One was the PCR test. That's the one that took 24 hours and, and was more painful and you couldn't do it at home. You had to go. Although that was probably a fallacy too. I think the marginal cost of a PC test was below $2 and the average price that was recompensated by the government was over $100. So I've heard all these stories. This is kind of. I'll do it quick. I've heard all these stories of people that opened up PCR testing facilities, made $15 million and retired like but, but that was PCR. There was a much cheaper test which was the one that you can still buy at CVS and take home and you know, do yourself the saliva test and that one. That technology was like 40 years old. And in Germany they approved 85 vendors and the marginal cost was about a dollar. Like you could buy a test for a dollar here in the US they the, the team at the FDA that, that regulated this, the guy that regulated it and I had him in the talk, you can go watch it had worked at these two companies before and they were the only two that got a license to do it in the US so we only had two manufacturers and they charged like $12 a test. So 10x higher and the US government even when they finally got behind those tests bought them from them. So they used taxpayer money. And, and, and I, I went, I had, well the, the list is online but I had it in the presentation of the 85 vendors Germany approved. And so it was a non, it was a trivial commoditized technology that the government helped protect. Two vendors selling at God awful high prices when it could have been super helpful to everyone to have for a dollar a piece.
- [07:44]
Tom Bilyeu
Yeah, yeah, yeah. This is crazy to watch this play out in the energy markets to see that in, in the guise of. We're going to help you to your point. They like what people are saying but nobody ever stops to check to see what's actually happening. Which spirals me out of control. When we look at education. I don't even have kids and I'm mortified that we spend more per student than basically anywhere else in the world. And we're middle of the pack in terms of results and everybody's cry is to spend more money. And I'm just like this is wild. And then if you look at KIP schools to the point about do these experiments, you've got KIP schools in the same building as some of these Government schools and the KIPP schools are churning out kids that are like, oftentimes you'll have brother and sister separated. One of them goes to the KIPP school, one of them's in the public schools. They're in the same household.
- [08:33]
Bill Gurley
Yeah.
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Tom Bilyeu
And the one that's in the KIPP school crushes it. And the one that's in the public school does not. So it's like everything that you could do to make it a natural test where there's a placebo. Control. Yes, you've done. And, and we still cannot get people to do like school vouchers so that parents can vote with their feet. Like, this kind of thing literally spirals me out of control.
- [08:57]
Bill Gurley
Well, but it's happening. Like, like, like I had mentioned this professor at Harvard, Cain, he's, he's studying this School vouchers have been passed in, in Texas and that's the state by state experiment. So it's playing out here. So, like, stay tuned. I'm going to, I'm going to go tilt against this also that one man,
- [09:19]
Tom Bilyeu
I really hope you tilt hard as again, somebody that doesn't have kids. But nonetheless, I become obsessed.
- [09:26]
Bill Gurley
It's a huge problem.
- [09:27]
Tom Bilyeu
Yeah. With, you know, making sure that we are educating the life out of our kids. Again, this goes back to partly because I don't have kids. I want to pay something forward to the next generation. And then partly because I am so focused on Thucydides trap and how to be the ones that don't end up in open conflict, which doesn't happen nearly as often as conflict. But getting us up to snuff, getting us excited to be Americans, getting us excited to compete and, you know, really wanting the best and the brightest and to see that meritocratic push to get people to really, like, do something great. And that's certainly what it felt like to me in the 80s was like America was the hotbed of like, we could do anything.
- [10:10]
Bill Gurley
Like Joe Limont's tilting at some cool ideas as well with Alpha School. So we'll see those play out as well. They're going to expand that pretty dramatically and license the technology more broadly.
- [10:22]
Tom Bilyeu
Let's go.
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Bill Gurley
Yeah.
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Tom Bilyeu
What do you think is going to be the role of AI in education?
- [10:25]
Bill Gurley
Well, so if you listen to him, this is Alpha School, Joe Leamont, who's done, I think he did, Patrick o' Shaughnessy and then recently Shane Parrish. I haven't listened to that second one, but you can go listen to him talk about it. They, they use AI for the rote learning in sciences and math and, and talk a lot about pacing. So he says in any given classroom, the kids are all over the map in terms of how far along they are, but the teacher's forced to teach a curriculum that's fixed and all those kids should be on different pacing and different because they're all at different spots. And one of the problems that happens in our system is if a kid's not properly taught math in kindergarten or first grade or second grade, they get to third grade and they don't have the things, they need to listen to that so they got no chance. Like they need to, they need to go back and catch up. And so one of the things he's optimistic about is more personalized learning where everyone can kind of come along at their own pace, which we'll see. I don't have any way to know if that will work writ large, you know, and I don't have any way of knowing if every single child in every position in the socioeconomic ladder can engage with AI in that way. Let's go. Let's go test and find out.
- [11:56]
Tom Bilyeu
Taking a short break, but there's more impact theory after Stay tuned.
- [12:02]
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Tom Bilyeu
Visit audible.com Nine out of the ten largest banks get it. They get Advantagescore. The modern credit score is the leader in predictive power, improving mortgage default predictions and saving lenders billions. Better predictions, better for your business with VantageScore. Thanks for staying tuned. Now let's get back to it. You've talked about when you're investing, you're always trying to do pattern recognition. Do you see any patterns in AI that map to other technologies that give us some clue where this is going?
- [13:03]
Bill Gurley
I mean, the one that's obvious that doesn't need much discussion is like venture capitalists see these waves and they know they're disruptive and so they get behind them. And in that way, AI is the same as the Internet and the computer and all these other things. I think the venture capitalists have properly identified that this is going to change things. And it already has in certain fields. I'VE talked to lawyers that have, you know, substantially reduced the number of paralegals that work for them, you know, as an example. So it's already happening. The number of doctors that are now leaning on AI for second opinions is like 70% of the field. So like this is, this is already happening. So, so it's harder to think about it in terms of business models and winners and losers. You know, venture capitalists will talk about stacks and different places in the stack. So Nvidia's, you know, at the bottom of the stack and some application companies at the top, and all these people are in the middle. There's hosting companies and there's model providers. There does appear to have been a move recently by OpenAI and Anthropic to embrace direct customer connectivity. You know, and so one business model they could have, which they have had in the past, is we'll sell the token machine to a third party and that third party will turn it into a application. So think, you know, Anthropic powering cursor that people then used for programming. More recently, Anthropics launched their own competitor to cursor. So this move to say I want to be direct, directly connected to the customer is a sign, I think it's a pretty strong sign that there was fear that being a model provider solely was, was as protectable as they wanted it to be because people were switching out the model sometimes with open source from China and things like that. But if you have the customer lock in and contract, then you don't have to worry about that as much. So that's one thing we're seeing.
- [15:12]
Tom Bilyeu
Do you think AI is a bubble?
- [15:14]
Bill Gurley
Well, that's a very interesting question. I've said this before, but there's a wonderful book by Carlotta Perez where she says that only real waves cause bubbles. So when the questions ask, there's this notion of, well, if it's a bubble, then AI is not real. Right? And you get into this argument, no, what happens is when there are real waves, people get rich quick. That's already happening here. These huge secondaries at, at these AI companies. So people are stuffing billions of dollars in their pocket. When people get rich quick, it attracts interlopers and charlatans. And you know, and this, by the way, this was true in the gold rush. Like this isn't a new concept. Like if people are getting rich quick, everyone rushes in and that's what creates bubbles. So yes, I'm seeing actions and activity that looks speculative and, and that probably is over risk seeking. And when Will that correct? I don't know. It's a very big wave. There's real customers buying real products, there's people taking massive bets, the biggest bets ever taken in the venture capital world. And it may be that, that some form of correction doesn't happen until five years from now, but there will be one day because the spec, the speculative part is showing up.
- [16:45]
Tom Bilyeu
And how do you think about investing through something like this for the average retail investor?
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Bill Gurley
I think it's tough, man. Like at this point, like the odds that you're going to have some kind of insight around some AI company when they're raising money at the highest prices they ever have, I think it be foolhardy. And by the way, if you just had the index, you're pretty well exposed. Nvidia got so big as a percentage of the index. Like if you just had an S and P index, you have a pretty strong Nvidia position. Like, and you certainly have Microsoft and Google. Like you're doing well. Like that, that, that, that back to Burton McHale, like that generic advice would have served you fine for the AI way.
- [17:31]
Tom Bilyeu
Now do you think that AI is going to have the kind of job disruption that we're expecting? We've, we're on the back right now of a bunch of layoffs, but you've got Mark Andreessen who's saying, no, no, this is not because of AI. This is them just using a PR excuse to right size their organizations and other people saying no, no, this is AI.
- [17:50]
Bill Gurley
Yeah, I think both are true. I mean, I think, I think anyone that does a layoff today is going to write it in. Oh, we're just being smart. Like why wouldn't you? Like, it's just such an easy take. And I think Square was the one that kind of kicked this off and plenty of people pointed out that on a employee revenue dollar per employee basis, they were like 3 or 4x many of their peers. So highlighting the fact that they needed to get fit. But you know, regardless of whether, you know, AI might help or not. And so I think you're going to see some of both. Yeah, I go back to what I said earlier. Whether you're a company or an individual, if you're worried about AI disruption, become the most AI enabled version of yourself you can possibly be. If there are 30, let's, let's just pick something, let's say there's 30 paralegals at a law firm and you're of the 30, you're the one that knows most about how to use AI to do what a paralegal does, what are the odds you get fired? I think very low.
- [19:00]
Tom Bilyeu
Yeah, for sure.
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Bill Gurley
They're going to want to keep you around to run the AI tools.
- [19:05]
Tom Bilyeu
Yeah, I try to get people to see that. Same thing is, yes, it's entirely possible that the jobs market as we understand it now becomes very different in the future. But you want to be the last man standing. And so if you're the most efficient, because you are leveraging AI, you're going to be in a really good spot. Now I do think there's one question around AI, when, when I talk about what I see in the future, I, at least in my own mind, have to be very careful to delineate between AI as it stands now, which is a phenomenal tool, but it doesn't have good taste unto itself. It will routinely make things up. And so you have to know how to catch it when it's, you know, getting into a problem. You have to know which answer is better than the other. But then there's where it could possibly, it's not there yet, but it could possibly get to the point where it becomes recursively self learning and actually becomes super intelligent. Do you have any mental model for whether this is likely to become more intelligent than humans?
- [20:08]
Bill Gurley
I'm not bought in yet to the notion that that will happen. I, I, I'm one of these big believers in that phrase. What are the strong opinions loosely held? So my strong opinion right now is that's not going to happen. I know that it, that's, that certain people believe that it will. And I know other people that, that are skeptics on that. Regardless, like you have to know what it's capable of at the edge of your field, you know, and, and the only way you're going to do that is by playing with it. I, I've met many, mostly academicians for some reason who are skeptics and they got it to fail once and that's the memory they locked in their brain and then they quit testing it. And I, I said, well, when did you do that? And I said, have you tried that experiment across four versions of the same AI bot? Because you can do that now. You can go back and use the older version. And if, if it's getting better, you should be aware of that, like does it still make that mistake or not anymore? And if it's not anymore, then you can't sit around and tell me that it doesn't work because this thing you did, they're definitely getting better. And so like knowing what's possible. Certain fields are going to be more deterministic than others. I'm not saying to do it 100 like I'm not saying rely on everything it says 100 of the time but it, it can turbochar do. And if you listen to different people explaining especially like small business people talk to go out in your community and talk to small business people that have figured out that how this can help them and listen to the list of things they have it doing for them, it'll blow you away.
- [21:56]
Tom Bilyeu
That's wild. When you look at the way that we could do AI that would be better for humanity do you think Open source or traditional proprietary companies.
- [22:07]
Bill Gurley
I'm a big believer in open source for almost any technology. I'm probably out on a, on some kind of wild edge of the curve where I actually think the patent system may be a waste of time and interesting just get in the way. And part of it comes from being exposed to open source and how wonderful it is. But there's this great book by Matt Ridley called the Rational Optimist and he says most progress, and I love that word progress in the world has come from when ideas have sex. That's the phrase he uses. And the easy example to imagine is you go back to an agrarian society and a farmer walks into market and tells another farmer how he can double his crop output by doing this technique that transfer costs nothing. That idea went through and then that other farmer goes home and his whole community prosperity improves. So the teaching each other things that the other person knew is a free gift to increase prosperity. And to me patents just get in the way of that. And the argument that someone would use against me making that argument is oh well, what's the incentive to succeed? But there is a litany of academicians that have developed new ideas without ever being paid for. Like. Like there's no proof. I don't think there's any proof whatsoever that progress would stop if there wasn't an immediate economic lock in. You know this may relate to regulatory capture of like a 17 year window. And open source is just another incredible data point against that argument in that people contribute tons of time and ideas to these projects with no immediate economic gain. And, and these technologies become building blocks for other entrepreneurs because they're free. Like it's just so like any entrepreneurial endeavor, if there's an open source alternative they'll tilt towards it because it just makes their job easier and cheaper.
- [24:24]
Tom Bilyeu
Do you have a sense of why China is going open source? Is it Just for the reasons that you said or do they see a
- [24:30]
Bill Gurley
way to leverage the previous five year plan? I think that's the 14th five year plan specifically mentioned source. And I think what happened is for 20 years they are accused by the west of being IP thieves, like flat out, like just straight up called that. And so if you're in that place where you're accused of that and you see Linux and you see MySQL, this looks like a pretty good solution to your problem, right? Like, like the world has said this stuff's free. And so they got behind these programs and in a big way on a global scale. They got, I mean and this started 20 years ago. And so I think it's a, it's a pretty good foil to the accusation of being a IP if you, if you embrace this idea that that IP should be free and, and, and in AI in particular there, there's a situation there where there's probably 10 deep pocketed players who are all competing and become part of the competitive requirement and that's super powerful because they can all co learn from one another. It's wildly powerful.
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Tom Bilyeu
It's very interesting at the aggregate level but I really just don't understand what is the thing that they use to build a moat to make sure that they're successful.
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Bill Gurley
So my firm Benchmark has had liquidity events on over 10 open source companies. You come up with ways to do it, it's just more competitive. There's a notion in economics called pure competition. You can also go find the Wikipedia page on that. And in pure competition marginal revenue equals marginal cost and that's what drives the most prosperity for everyone in the eco, for all the consumers that are out there because you end up with the lowest priced product and that's pure competition. Things like patents and lock in and regulatory capture, these things prevent us from getting towards pure competition. And so you end up with products that are priced too high, you end up with margins that are ridiculously high. So I think it's bad for consumers to have that stuff. But you could build businesses in pure competition like they happen and, and there have been tons and tons Mongo, MongoDB, huge public company around an open source technology. So they're, you just end up selling it in different ways. You sell support, you sell security, you sell like.
- [27:08]
Tom Bilyeu
But do they do anything proprietary on top of the.
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Bill Gurley
They try to. Yeah, yeah. There's a huge continuum of what open source is. So different people use different licensing models and things so that they can have add ons and that Kind of thing.
- [27:22]
Tom Bilyeu
Yeah, it's interesting. So I've thought a lot about this primarily because as a video game developer, I've watched one of the more spectacular sort of dramas play out where you had a game being developed that they allowed for modding, they didn't put tight restrictions around it, and then the modded game ended up being more popular than the original game. And so they spun off like a, you know, multi billion dollar franchise off of this open source mod. And the people who made the game are obviously traumatized because they didn't see any of that revenue. I don't even know if they're still around. And so it's, it's fascinating because one of the ways for me to get attention for my game is to allow people to mod it and build off of it. And at the same time, I don't want to be a midwife to somebody going and building something with this.
- [28:09]
Bill Gurley
It's all good, man. It's all good. It's all good. It's all. Is it? Yes, it is. Like, because one of the key reasons we've been such a big backer of open source is because open source has a distribution advantage which relates to the mod thing you're talking about. Like if, if people contribute to it and adopt it organically, then you don't have to go out. You're not, you're not hiring a salesperson to go convince to use your technology. You're calling into an account that's already using your technology and say, how would you like us to help you feel more secure about this and provide patches and help you with problems? And so the, the, it has distribution built in. Like it's, that's interesting.
- [28:54]
Tom Bilyeu
You're right. It shifts the business model. It, it's maybe less interesting in entertainment, but if you're willing to do a services model or you build something new proprietarily on top of it, it's interesting.
- [29:06]
Bill Gurley
I, I've, I'm just saying it's good because it's competition. If you believe in free enterprise, you believe in, in, you know, capitalism and why America exists, it's just a, it's a more intense form of competition. So as a business person, you don't like it because it feels more wild and woolly, but it's actually better for the ecosystem.
- [29:25]
Tom Bilyeu
Yeah, it's. Well, there's no doubt on that. It is just that businesses tend to be capital intensive. You're putting yourself massively at risk. And so you're trying to think through, okay, what are the reasonable things that I should be able to control.
- [29:40]
Bill Gurley
You would have a hard time convincing me that risk capital is in shortage in America right now. I'm seeing the most risk seeking venture capital behavior I've ever seen in my entire life.
- [29:51]
Tom Bilyeu
Yeah, that's interesting. So let's talk about why, because this is where I think you and I may view. Well, I don't know. I'm going to give you my take and I'm very curious to know if we just look at this very, very differently. So I believe that the world that we see, all of the distortions, all of the madness, basically come down to two things. You have a central bank that allows you to deficit spend and money print. And then we have been successful for a very long time. And that makes people think that success is just natural. So I've explained the success is just natural part earlier. But the, the central bank creating massive distortions by making money cheap, deficits possible and debt just abundant. What do you think about that? Do you think that's creating some of the behavior you see, or is it something else?
- [30:38]
Bill Gurley
Certainly the long period that people now called zurp, where we had near zero interest rates, which was unprecedented in the history of the country, led to, I think had that not happened, you would have had a correction in venture capital, maybe in private equity as well, that I would have called it a healthy correction. But, but because of it, and then because AI came on the heels of it, that correction never happened. And so you had this prolonged availability of capital that I do think has contributed to what I described as the most risk seeking, you know, venture capital movement I've ever seen.
- [31:22]
Tom Bilyeu
How much do you think that risk seeking has to do with people understanding that because we're in an inflationary environment, they don't get into an asset somewhere, that money's just going to be eaten
- [31:32]
Bill Gurley
away when, when it, when it was zero, I, I, I've only met Warren Buffett once in my life and, and it was at a group function. So we all had one question each. And I said, you know, we've had zero interest rates for like four years in a row. And your DCF models just don't even work. They, if you set interest rates negative, they, they literally fall apart. And, and I said, so how do, and I said it just seems to create a bunch of, of risk seeking behavior. And he goes, you betcha that's what he said. So, so yeah, so I do think, yeah, I mean, rates have come back up and you know, and there's questions about the dollar and whether other currencies compete with it so it I I would be a I would I'm a believer that healthy resets aren't are good, not bad and so I I I ironically relative to your concern and I'm not as big of a dalio convinced it's all coming to an end. But if I were I would want corrections to happen because they get people more in touch with the reality of it all.
- [32:46]
Tom Bilyeu
We're hitting pause for a moment, but there's plenty more ahead so don't go anywhere.
- [32:51]
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- [33:21]
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- [33:52]
Tom Bilyeu
Thanks for sticking around. Let's get right back into the action. What's the thing you anchor around that makes you think maybe Dalio's not reading this right?
- [34:01]
Bill Gurley
I, I wouldn't go as far as to say, like, he's a very smart man and he's thought about this a long time in that little video he created. Like I want to crawl under a rock every time I watch it. So he's able to convince me that it's a problem. And I also think humans in general have a hard time looking over time and politicians certainly aren't held accountable over time. It's an area where I think transparency can help. There are states that don't have their public pensions on their balance sheets. What's that about? And, and, and so anyway, I, I'd like to go study it more. I think. I don't find any. I don't find value in the notion that, that there's no way to stop it. And it goes back to what I said about fishing all day. Like, like, let's go try and affect change to prevent that from happening. That's. I just want to tilt towards that frame of mind.
- [35:05]
Tom Bilyeu
Yeah, no, I hear that. The thing that I maybe am Tilting hardest against in my life is the K shaped economy. So we've got, if you own assets, you're winning. If you don't own assets, your life is getting more expensive by the day. Do you, as you think about the policy initiative, do you think that there are things that we can do from a policy perspective to start bringing that gap back together?
- [35:26]
Bill Gurley
I mean, I think, I think this exact issue you bring up was part of the impetus for my former podcast partner to, to launch the Invest America that became the Trump accounts. Like, like, I think this was on his brain when he came up with the idea. And it's one of the quickest policy wins I've ever seen in my entire life. Like the way they push that through and then getting private public partnership was, was that's a policy when I've never seen the likes of. So Michael Dell put six and a half billion behind this and there's more momentum around it. And it's even given me an idea. Like I keep wondering, what if you could do that for teachers? What if, what if public? What if?
- [36:16]
Tom Bilyeu
That's interesting.
- [36:17]
Bill Gurley
Private donors could help create teacher bonuses in different states in a state versus state competition. Like a way to give back. That feels, and I talked to Micha about it, like it just felt. He's got a huge foundation that's been doing charity work for 20 years. And, and there's a, in your brain you're like, is this really affecting anything? Is this really working? And the notion of a direct transfer of wealth from one party to the other feels way more, way more of a win in his brain intellectually than funding a non profit that may or may not affect change. You know, so anyway, that's an example of, of, of a very recent thing that has transpired. There's a lot of ways it could go wrong. But, but it's interesting. Everyone should go claim their Trump account for their kids. Not everyone has claimed them yet. That's millions.
- [37:15]
Tom Bilyeu
Sure. Some people just don't know.
- [37:17]
Bill Gurley
Yeah.
- [37:18]
Tom Bilyeu
Okay, so you famously back Travis Kalanick and Uber. You were, if I'm not mistaken, a character in Super Pumped 1. How true was that? And then in terms of accuracy of portraying you and events. Yeah, yeah. And then I'll have some follow ups about what, what May makes since he's still very active. What makes him such an extraordinary entrepreneur.
- [37:43]
Bill Gurley
So one, they had Kyle Chandler play him and he's way shorter than I am and, and, and most of the females I know in my life say he's, he's differently attractive than I Am. So I'll leave it at that. They seem to be fond of him and, and so I don't think he looks like me. The, the story missed a couple things. One, I think, you know, Travis is an extremely intelligent, powerful, successful entrepreneur and, and, and multi faceted, multi dimensioned. And I don't think that came across for whatever reason. And so you don't accomplish things at that scale without that ability. And so, and, and, and a three time entrepreneur. So he had, he had, he had done two before. They weren't as successful as he wanted to be. So he was motivated by that. There's just a lot of dimensions of it. The early days of the company were very traditional founder scrappiness and I think the first scene of the show, they're in some bank building like really nice offices. That's just completely false. Like it was, it was traditional, grimy, whatever, cheapest print you can get kind of place, you know. So some of, some of those pieces were wrong.
- [39:19]
Tom Bilyeu
Now an idea that I've heard about entrepreneurship that certainly I've lived and totally understand is every startup begins as pirates and ultimately has to figure out how to become the Navy. Yeah, I'm very curious. He seemed, at least from the things that I can get publicly, he seemed very good at the pirate phase and maybe less good at the Navy phase. And I wonder if that's accurate. A, and then B, if you had to define for people what that pirate phase is, what are the things that make somebody good at that?
- [39:50]
Bill Gurley
Yeah. And, and by the way, that, that idea, that metaphor meme you're talking about was a blog post written by Reid Hoffman specifically about Uber. So.
- [40:01]
Tom Bilyeu
Really? Oh, that's funny. I've heard about it secondhand.
- [40:04]
Bill Gurley
But yeah, yeah, you can go find it online. So Reed was writing about Uber and E. He made, he came up with that construct look plenty. I think you can find pirate elements in the early days of Bill Gates and Microsoft and Steve Jobs and, and, and Mark Zuckerberg. Like you can find piratey things that they did. You know, early on, anytime you end up touching government and, and Uber in particular was in a field where there was immense regulation. That idea becomes more poignant because you're going to get judged at a higher level. You know, and we ended up in a situation where we had like five state attorney generals investigating us. And so it, it got very real very fast. But, but I think that, I think that is a good, I think it's a useful metaphor. As he wrote it, a lot of disruption comes from breaking rules and I don't mean like breaking laws, I mean breaking whatever best practice thought process there was before. And a lot of Elon's thinking and the reason he's able to build SpaceX and Starlink is because he was willing to doubt that the prior best practices were right and, and willing to. To try new things and go in a different direction. So it's part and parcel with being an entrepreneur that you want to look at things differently. And quite frankly, some of the regulations were complete and utter bullshit there. In. In many of the largest cities in the US there was a rule that a black car, after it dropped its customer, had to return to base before it went out again. And those laws were written by the taxi lobby. Written specifically by the taxi lobby. And no mayor in their right mind would want to get behind a podium and explain why that law was on the books. And so we were successful as a company when I say we at Uber in getting those laws removed from the books. And those laws should have been removed like they were, they were, they were stupid and unproductive laws that existed. And so there was, I think having come up and seen some of that, it makes you more piratey, right, to. To see those things out there. But there's a lim limit to it. Right. And we certainly touched many of those limits.
- [42:35]
Tom Bilyeu
What's the role of aggression in startup CEO?
- [42:40]
Bill Gurley
I think there is. I would use a different word. I would use a word that's more like unwaveringly determined. Like. Like just. You can't take them off of it. It's, you know, in, in the book, we talk a lot about fascination. They have such a commitment to what they're doing that, that they can't sleep at night, like, thinking about how. What they got to do next and how they're going to make it better. So there's just, just this, is this unwavering commitment to what they're doing. I think that's critical because especially in this day and age with all this venture capital available, there's five other people that have the exact same idea you do. I guarantee you, like, there's no proprietary. Great idea. And you gotta run faster. Like, you gotta run faster and better than the competition or you're gonna get eaten up. There's huge rewards if you do it and get it right.
- [43:35]
Tom Bilyeu
Yeah, no doubt. Okay. So this idea of being determined you've talked a lot about in your book Running Down a Dream, you mentioned earlier with what you were saying about Angela Duckworth, it's got to be something that you're super into. You've got to have the passion in order to persevere.
- [43:50]
Bill Gurley
Yeah.
- [43:50]
Tom Bilyeu
So you've had this incredible career as an investor. Why is that the part of your experience that you focused on? What is it that you hope people will take away from this book?
- [44:04]
Bill Gurley
So I stumbled on this idea about eight or nine years ago. I was reading a bunch of biographies and I noticed this through line between these successful people that started at the bottom and were able to rise to the very top of their field. And I noticed they were all doing the same thing. And I wrote it down the way I would write a blog post about marketplace companies or something. And it just kind of grew over time. I got invited to talk at a university. I gave the talk. Certain people saw it. James Clear saw it and saw that talk and posted it on his blog post. So people started encouraging me to think about it as a book. And as I got post venture and read Arthur Brooks book and started thinking about what I want to do for the world, this book seemed like it could impact way more people than a book on how to be a good vc. Like I just don't know that the world needs that second book. And so it became, it became a passion project. It became something that, and I've been in communication with people that saw that, that original talk ended up on YouTube that saw that talk talk. The talk gave them the permission to change careers and go do something they, that they're fascinated by and love rather than what they were doing and a bit flipped in their head and they're now doing this other thing and they call me and they thank me for it. And so I think the book certainly lives in the self help category, but many of those books preach, oh, if you adopt this frame of mind and do this every day and have this, this new way of doing things, you'll eventually be better. My, my book's more trying to create this toggle in your brain where I say stop doing this and just go do this and then it'll get easier for you and you'll have more fun and you'll be more fulfilled and you'll impact more people's lives. And so I'm trying to. I don't know how many people I can do this for, but I'm trying to give people permission to go do that thing. To go do that thing.
- [46:07]
Tom Bilyeu
What is the thing that you think in modern America or just modern life, depending on how globally this works, that is trapping people into, let's call it the safe path.
- [46:17]
Bill Gurley
I, I think part of it, we talked about it earlier, but I think it's this, the way that our educational institutions have evolved and the fact that these schools won't increase capacity leads to this hyper focused. And, and by the way, I also think there's just a genetic hereditary part of your DNA that wants you to worry about your kids economic stability. And I don't, I think it's very hard to get around. And so in certain cultures, you know, like people talk about the Indian culture being very pro doctor like there are certain cultures that just push kids in certain directions. And so it, it was a lot about economic safety. And I started this idea in this book before LLMs came along. So I didn't write it as a solution to that. But certainly there is a awareness now that safe doesn't mean safe or safe isn't what it used to be. And so I think that's causing quite a bit of anxiety. And for anyone that has anxiety about their job, I would just beg them to give my book a shot and see if there might be a different path in their life than the one they're on. If you. There was a Gallup poll done three years ago that said 29% of people call themselves engaged at work. I think those people are in a good place. I don't think AI is threatening them. But they had 59% in this category. They called quiet quitting. They said they were ambivalent about their job. AI is, is coming after the ambivalent. I guarantee you. Like, like the, the, the best practices that you would learn in a physics class or an engineering class. Those are in the model model, like the rope program, the rope algorithm that you had to memorize and use on the test. Those are in the model. And if you're, if you're fascinated about your field, you live in the nuance. You live beyond those things, beyond those programatic, programmatic things that you're taught to do at school because you're constantly studying the edge and what's possible and that's what's not in the model. And so I think the artisans, you know, and I think you can use that word broadly across fields. You met salespeople that you would call artisans. Right? The best salesperson in your, in your company is an artisan, there's no doubt about it. And they have things the models don't have. But you got to put yourself in that place. And the only way I think you can be in that place is if you're doing something you're fascinated by.
- [48:56]
Tom Bilyeu
It's very interesting how easily people get trapped either because they, you know, sure, your parents are giving you something, but also economics, economic security really does help. It's a very real thing. And then I think also a lot of times people struggle to figure out how to make a living doing the thing that they love. In the book, how do you advise people? You tell a lot of incredible stories. And by the way, for anybody that's on the fence about whether you should read it, the way that the stories are told is going to give you both an intellectual understanding and like this, this visceral emotional connection to what that kind of profound change can look like and how successful people can be on the other side. But how, how do you advise them to like, okay, you've got this thing you like. How do we take that hobby and actually make it a career?
- [49:43]
Bill Gurley
I, I, I personally, and, and the, the, the, the intersecting people younger in their life will be super helpful because you have less economic realities, right? It's if you have three kids and a mortgage, it's a lot harder to be fl. One thing I feel profoundly about is a lot of these fields that we worry about being places you can't make money. You can actually have a career and do just fine. There's an anecdote at the back of the book where I was at south by Southwest and there was a panel on bedroom music or bedroom producers. These are people that can now produce an album from a bedroom because all the tracks can be sent to them digitally. And like, and, and, and the room was packed and they had a line for Q and A. And this, this girl said, you know, I really want a career in the music field, but, but my parents say, you can't make money. And one of the guys on the panel, I found him, and his name's in the book, but he stood up and he said, I've never met anyone that tried hard that wasn't able to have a career in music. Like, like just kind of flat out said that. And the trying hard part, it. I'm going to tell another anecdote I was talking to with a person that leads job placement at one of the top universities in this country about the book. And she says, well, what do I do with a poetry major? And I gave her two examples from the book. A guy that writes about the Grand Canyon and a guy in Houston that writes about Texas horticulture. And I said, look at these people. They made a career in these fields. How is that different from poetry? And she goes, but they worked really hard. And I'm like, yeah, yeah. And, and, and, and the unlock. The, the thing that, that I would tell you is if you're fascinated by something, the work's free. That's the thing that's like the key unlock here. People that are fascinated by something, it doesn't feel like work, like, they're just having fun, like, and you can see it and what they do and how they go about it. And they love learning about the feedback field. And the hardest part, I would say, and we call it the hardest part in a book is finding that thing. And you might have to wander around if you haven't found it yet. I think that's fine. Keep looking. You know, don't. I don't know that you can manifest it. Right. You gotta find it. I don't think you can just make yourself. And I think that's why Duckworth had this change of heart. A little bit about grit. Like, it, it just. Perseverance alone is not going to get you there. You need to. It needs to be free. You got to find that unlock.
- [52:22]
Tom Bilyeu
Bill, on a personal level, some relationships end because the two people fall out of love. And sometimes a relationship ends because somebody falls in love with somebody new. You've had one of the most successful investing careers ever in all of human history. Did you fall out of love with investing or did you fall in love with something new? You.
- [52:44]
Bill Gurley
A little bit of both, I think. Yeah, A little bit of both. I there. This will sound ridiculous and. But it's true. I was watching a. An episode of the, the new Letterman series where he interviews people with the long beard.
- [53:04]
Tom Bilyeu
Not my next guest needs.
- [53:05]
Bill Gurley
Yeah, and he had, he had Seinfeld on and they, they both mentioned this book, Born Standing up by Steve Martin. Have you heard of it?
- [53:16]
Tom Bilyeu
Oh, yes, very.
- [53:17]
Bill Gurley
So I went and read it immediately because they were both so emphatic. And I tore through it. And he spent, I don't know, 15 years grinding to get his big break. Steve Martin did. And then when he got it, it went vertical. Like, it just like went. And he progressed from nightclub club to arena faster probably than any comedian had at that time. Like, he just instantly was doing big shows. And one day he was on the stage in Vegas and he looked up in an arena and the upper deck was empty. And he never went on stage again.
- [53:54]
Tom Bilyeu
Wow.
- [53:55]
Bill Gurley
He never went on stage again. And he went and had an incredible career as a, as an actor and became a famous banjo player, won some Grammy. And so anyway, after I read that, I was like, I'm gonna hang them up Soon. Like I'm gonna stop soon. Not because I couldn't have kept doing it, but I had such an awesome career and loved it so much. I didn't want to hang around and start being less good at it. Does that make sense? Yeah.
- [54:26]
Tom Bilyeu
Oh yeah. Yeah. There's a quote that, that haunts me which is that genius is a young man's game and man, I really don't want it to be true, but I certainly get all the reasons why it probably is true.
- [54:38]
Bill Gurley
Oh, and VC is definitely a young person's game. And I said that my whole career. And we Benchmark is famous for bringing 27, 28 year olds in as general partners, which is when I got invited in at that age. And there it tilts to towards youth in so many ways. They're fascinated by the new stuff. The age of the new entrepreneur is much more likely to be their age. So they connect with them. Hustle. Hustle, man. Venture is a hustle job. And it's harder to hustle as you get older. It's just harder. You have more things in your life. It's harder to hustle. So it bends towards youth. And I knew that and I talked about it forever. So those two things simultaneously made it very easy for me. Me and as you can tell, I have enthusiasm about these new things. I want to go. Do you know?
- [55:30]
Tom Bilyeu
Yeah, no, I love it, man. I'm so glad that you're going into this new phase. I'm super grateful that you took the time to talk to me today. Where can people find you find the book?
- [55:39]
Bill Gurley
Yeah, the book's everywhere you can buy books. It's called running down a dream. If you type dream and girly, G R L E Y into Amazon or Google or anywhere, it'll come up immediately. So it's not hard to find. And I did some people for whatever reason like my voice, which I am not fully in touch with, but I did the audiobook and so if you, if you like my voice, you got that opportunity as well.
- [56:05]
Tom Bilyeu
Rightfully so. I think when on a book like that I think the author doing it is always much better. So.
- [56:12]
Bill Gurley
And I'm also hearing from people, it's a great graduation gift. So I'll throw that plug in as well.
- [56:17]
Tom Bilyeu
Well, for sure, yeah. Great for that. Great for any time as it's one of the most important decisions you're going to make in your life. No doubt that and who you end up marrying, those are woof. Probably the one and two biggest ones you're going to make.
- [56:30]
Bill Gurley
Although this one you can change like, well, I guess you can change the marriage.
- [56:33]
Tom Bilyeu
One, two, say plenty people.
- [56:35]
Bill Gurley
Bill, changing your careers is more or less frowned upon. Let's say that.
- [56:41]
Tom Bilyeu
Yeah, no doubt.
- [56:42]
Bill Gurley
And less traumatic, less dramatic. Anyway, all right, thank you so much.
- [56:46]
Tom Bilyeu
Thanks for taking the time man. I appreciate it everybody, if you have not already, be sure to subscribe. And until next time, my friends, be legendary. Take care. Peace.
- [56:54]
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