At a glance
- Latest
- BlackNova Productions · 4 Aug 2026 Gurley cites Ferriss has sold 10 million books, has 2 million email subscribers, and podcast approaching a billion downloads.
Themes 8 themes
last 90 days
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Gurley argues AI companies should face transparency requirements and prosecution under existing laws rather than writing their own regulations.
post“This is very good. Ben brings a career of thinking to his views on where we are today. My favorite part is the beginning. There is no reasonable path to AI global dominance for the U.S. vs the world. It’s a fantastical notion that falls apart when thinking through the details. https://t.co/4SsyZydFYX”
post“This industry group is working on an industry standard for how to report AI security incidents. This will drive consistency and transparency and is the safest path forward. Despite 120 members, the large LLM corporations have to-date not signed on. Drives further concern that”
post“This industry group is working on an industry standard for how to report AI security incidents. This will drive consistency and transparency and is the safest path forward. Despite 120 members, the large LLM corporations have to-date not signed on. Drives further concern that”
post“I favor prosecuting companies that use AI to break existing laws vs allowing those same companies to write new laws. Otherwise you create a perverse incentive to keep doing dangerous things to gather attention and power. https://t.co/d7DbltbV3I”
post“Please stop referring to your own models in the third person when talking about model bad behavior. Humans write the software; humans built the prompts; and they work for your company. “Our” model is doing illegal things. “Our” model is risky. “We” now have liability. https://t.co/wtZyH8Dmg6”
post“If you have any doubt about lab leak and Covid read this. The team that told you “not lab leak” encouraging obfuscation. We really should care about how this happened. That’s the path to prevention. https://t.co/myZJoCch31”
post“As Brandeis said: “Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.” The correct regulatory response here is to demand a full third party investigation of what happened here and share it with everyone. “Our models are too magical” https://t.co/ibsBsNhOjV”
post“Almost 3 years ago, I believed open-models would become the key threat to the AI incumbents & that unfortunately they would lean into regulatory capture as a response. I underestimated the fervor with which they would use this non-business approach. https://t.co/oFDclTqJDq https://t.co/kYzlwY7JRQ”
5 more posts
post“@NinaDSchick I disagree this proves that point. The politicians and the news writers all know who they are. The rhetoric cascades without the names.”
post“The word “watermark” comes from photos and is visible by all. This is only identifiable by Anthropic. Once again they are judge, jury, and prosecutor. Lots of reasons to not use their products. https://t.co/6MGQCymnu7”
postGurley notes that Anthropic says using their output should be illegal, responding to a comment about parody being protected speech
“@Jason But Anthropic says using their output should be illegal.”
post“When I saw this article, I couldn't get Kool and the Gang out of my head. Hat-tip to Claude for the lyrics! I very confused about who might own the copyright. REGULATE (to the tune of "Celebration") [Intro] Regu-LATE! R-E-G-U-L-A-T-E good times, come on! (It's a regulation!) https://t.co/5DTp81043E”
post“@MatthewBerman I think ideas become self reinforcing, and humans prefer to think of themselves as virtuous.”
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Gurley emphasizes the importance of investigating COVID origins and treating the DEFUSE proposal as the critical data point.
post“@NinaDSchick I disagree this proves that point. The politicians and the news writers all know who they are. The rhetoric cascades without the names.”
postGurley suggests the commenter would enjoy living in New York, responding to concerns about data center tax revenue concentration
“@vsaietta Sounds like you would enjoy living in NY.”
post“Different states, counties, and cities trying different things. Beautiful and effective competition of policies. I doubt any tax bills are going down in NY State. https://t.co/7zbeckyx8l”
postGurley endorses Katherine Eban's summary of COVID origins as useful detail for all
“Great summary of where we are on Covid origins from @KatherineEban. Useful detail for all. https://t.co/1RzaxdYFzz”
post“@mattwridley @jimmy_wales DEFUSE is the most important data point by far.”
post“If you have any doubt about lab leak and Covid read this. The team that told you “not lab leak” encouraging obfuscation. We really should care about how this happened. That’s the path to prevention. https://t.co/myZJoCch31”
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Gurley urges companies to leave Delaware for Texas or Nevada, claiming the courts have become inconsistent and politically targeted.
post“The word “watermark” comes from photos and is visible by all. This is only identifiable by Anthropic. Once again they are judge, jury, and prosecutor. Lots of reasons to not use their products. https://t.co/6MGQCymnu7”
post“Time to head to Texas or Nevada. Staying is adding unnecessary risks for your shareholders. You should act in your shareholders best interest and flee Delaware. Delaware is no longer consistent. They are targeting companies they don't like. https://t.co/ojEnbYOu5o”
post“When I saw this article, I couldn't get Kool and the Gang out of my head. Hat-tip to Claude for the lyrics! I very confused about who might own the copyright. REGULATE (to the tune of "Celebration") [Intro] Regu-LATE! R-E-G-U-L-A-T-E good times, come on! (It's a regulation!) https://t.co/5DTp81043E”
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Gurley believes open-source AI models will prevail and that incumbents are responding with aggressive regulatory capture to protect themselves.
postGurley argues open models are inevitable in high-stakes software competition, reacting to NVIDIA-Hugging Face acquisition talks at $13B valuation
“Open, open, open. As I wrote in the @washingtonpost, open-models are the inevitable outcome of high stakes software competition. The more at stake - the more likely open wins. This is water running downhill. https://t.co/6x5qoLbw0k https://t.co/wAH0xjej7q”
post“This is very good. Ben brings a career of thinking to his views on where we are today. My favorite part is the beginning. There is no reasonable path to AI global dominance for the U.S. vs the world. It’s a fantastical notion that falls apart when thinking through the details. https://t.co/4SsyZydFYX”
post“I disagree, I don't think this has to be "game-over" for Google. I do think they have only one play left now - to pull from their own Android/Kubernetes playbook and fully embrace open-models. It's the obvious move in this situation. Details here: https://t.co/P8rbKhIjzH https://t.co/6qqof6Auhs”
post“Almost 3 years ago, I believed open-models would become the key threat to the AI incumbents & that unfortunately they would lean into regulatory capture as a response. I underestimated the fervor with which they would use this non-business approach. https://t.co/oFDclTqJDq https://t.co/kYzlwY7JRQ”
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Gurley recommends financial education resources and questions whether exceptional students are necessarily students of their chosen fields.
postGurley endorses Jack Raines' new book about money for young people
“A great new book to help young people think about money! https://t.co/CNPyhLQ3JQ”
postGurley references the book Fear Factor when discussing portfolio construction differences, suggesting some people lack certain risk factors
“@denmarkcap That’s another topic. Read the book “fear factor.” Some of us don’t have it.”
post“I’ve never met Leo, and from all I can gather he was an exceptional student. Well above top 1%. Probably > 1/10,000. That said I don’t think he was a “student of finance.” I asked ChatGPT to name the top 25 investing books of all time. And then asked what percentage of those https://t.co/vp2WkiAHKD”
3 more topics
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Gurley sees policy competition between jurisdictions as beautiful and effective, with open models inevitable in high-stakes software.
postGurley argues open models are inevitable in high-stakes software competition, reacting to NVIDIA-Hugging Face acquisition talks at $13B valuation
“Open, open, open. As I wrote in the @washingtonpost, open-models are the inevitable outcome of high stakes software competition. The more at stake - the more likely open wins. This is water running downhill. https://t.co/6x5qoLbw0k https://t.co/wAH0xjej7q”
post“Different states, counties, and cities trying different things. Beautiful and effective competition of policies. I doubt any tax bills are going down in NY State. https://t.co/7zbeckyx8l”
post“@MatthewBerman I think ideas become self reinforcing, and humans prefer to think of themselves as virtuous.”
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Gurley demands AI companies take direct responsibility for their models rather than referring to them in third person.
postGurley questions whether X explicitly confirmed Chinese origin of bot farm operation
“@GlobalAffairs @grok did @x confirm that the efforts were tied to China? They didn’t say that explicitly.”
post“Please stop referring to your own models in the third person when talking about model bad behavior. Humans write the software; humans built the prompts; and they work for your company. “Our” model is doing illegal things. “Our” model is risky. “We” now have liability. https://t.co/wtZyH8Dmg6”
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Gurley views open models as inevitable in software competition, citing the NVIDIA-Hugging Face acquisition talks as evidence.
postGurley argues open models are inevitable in high-stakes software competition, reacting to NVIDIA-Hugging Face acquisition talks at $13B valuation
“Open, open, open. As I wrote in the @washingtonpost, open-models are the inevitable outcome of high stakes software competition. The more at stake - the more likely open wins. This is water running downhill. https://t.co/6x5qoLbw0k https://t.co/wAH0xjej7q”
post“As Brandeis said: “Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.” The correct regulatory response here is to demand a full third party investigation of what happened here and share it with everyone. “Our models are too magical” https://t.co/ibsBsNhOjV”
Then and now 55 pairs
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consistent competition · 855 days apartThen said
“If you wanted to be accurate, non consensus in a way around these, part of it ties into the big guys being interested in what they're doing with their own balance sheet to reinforce this, which I consider to be remarkably dangerous and unhealthy.”
Now post“Open, open, open. As I wrote in the @washingtonpost, open-models are the inevitable outcome of high stakes software competition. The more at stake - the more likely open wins. This is water running downhill. https://t.co/6x5qoLbw0k https://t.co/wAH0xjej7q”
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consistent competition · 855 days apartThen said
“It's already evolved to a point that's very similar to where Uber, Lyft and DoorDash ended up, where there's just so much money moving around that I really don't even think about it as a startup market anymore.”
Now post“Open, open, open. As I wrote in the @washingtonpost, open-models are the inevitable outcome of high stakes software competition. The more at stake - the more likely open wins. This is water running downhill. https://t.co/6x5qoLbw0k https://t.co/wAH0xjej7q”
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consistent ai moats · 442 days apartThen said
“I think post LLM, the world believes, and I think this is my fifth point or something, but the world believes AI is the biggest platform shift in anyone's lifetime.”
Now post“Open, open, open. As I wrote in the @washingtonpost, open-models are the inevitable outcome of high stakes software competition. The more at stake - the more likely open wins. This is water running downhill. https://t.co/6x5qoLbw0k https://t.co/wAH0xjej7q”
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consistent ai competition · 29 days apartThen post
“Almost 3 years ago, I believed open-models would become the key threat to the AI incumbents & that unfortunately they would lean into regulatory capture as a response. I underestimated the fervor with which they would use this non-business approach. https://t.co/oFDclTqJDq https://t.co/kYzlwY7JRQ”
Now post“Open, open, open. As I wrote in the @washingtonpost, open-models are the inevitable outcome of high stakes software competition. The more at stake - the more likely open wins. This is water running downhill. https://t.co/6x5qoLbw0k https://t.co/wAH0xjej7q”
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consistent ai competition · 20 days apartThen post
“I disagree, I don't think this has to be "game-over" for Google. I do think they have only one play left now - to pull from their own Android/Kubernetes playbook and fully embrace open-models. It's the obvious move in this situation. Details here: https://t.co/P8rbKhIjzH https://t.co/6qqof6Auhs”
Now post“Open, open, open. As I wrote in the @washingtonpost, open-models are the inevitable outcome of high stakes software competition. The more at stake - the more likely open wins. This is water running downhill. https://t.co/6x5qoLbw0k https://t.co/wAH0xjej7q”
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consistent ai competition · 5 days apartThen post
“This is very good. Ben brings a career of thinking to his views on where we are today. My favorite part is the beginning. There is no reasonable path to AI global dominance for the U.S. vs the world. It’s a fantastical notion that falls apart when thinking through the details. https://t.co/4SsyZydFYX”
Now post“Open, open, open. As I wrote in the @washingtonpost, open-models are the inevitable outcome of high stakes software competition. The more at stake - the more likely open wins. This is water running downhill. https://t.co/6x5qoLbw0k https://t.co/wAH0xjej7q”
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consistent ai competition · 23 days apartThen post
“Almost 3 years ago, I believed open-models would become the key threat to the AI incumbents & that unfortunately they would lean into regulatory capture as a response. I underestimated the fervor with which they would use this non-business approach. https://t.co/oFDclTqJDq https://t.co/kYzlwY7JRQ”
Now post“This is very good. Ben brings a career of thinking to his views on where we are today. My favorite part is the beginning. There is no reasonable path to AI global dominance for the U.S. vs the world. It’s a fantastical notion that falls apart when thinking through the details. https://t.co/4SsyZydFYX”
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consistent ai competition · 15 days apartThen post
“I disagree, I don't think this has to be "game-over" for Google. I do think they have only one play left now - to pull from their own Android/Kubernetes playbook and fully embrace open-models. It's the obvious move in this situation. Details here: https://t.co/P8rbKhIjzH https://t.co/6qqof6Auhs”
Now post“This is very good. Ben brings a career of thinking to his views on where we are today. My favorite part is the beginning. There is no reasonable path to AI global dominance for the U.S. vs the world. It’s a fantastical notion that falls apart when thinking through the details. https://t.co/4SsyZydFYX”
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consistent ai safety · 14 days apartThen post
“As Brandeis said: “Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.” The correct regulatory response here is to demand a full third party investigation of what happened here and share it with everyone. “Our models are too magical” https://t.co/ibsBsNhOjV”
Now post“The word “watermark” comes from photos and is visible by all. This is only identifiable by Anthropic. Once again they are judge, jury, and prosecutor. Lots of reasons to not use their products. https://t.co/6MGQCymnu7”
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consistent anthropic · 11 days apartThen post
“Please stop referring to your own models in the third person when talking about model bad behavior. Humans write the software; humans built the prompts; and they work for your company. “Our” model is doing illegal things. “Our” model is risky. “We” now have liability. https://t.co/wtZyH8Dmg6”
Now post“The word “watermark” comes from photos and is visible by all. This is only identifiable by Anthropic. Once again they are judge, jury, and prosecutor. Lots of reasons to not use their products. https://t.co/6MGQCymnu7”
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consistent ai safety · 11 days apartThen post
“Please stop referring to your own models in the third person when talking about model bad behavior. Humans write the software; humans built the prompts; and they work for your company. “Our” model is doing illegal things. “Our” model is risky. “We” now have liability. https://t.co/wtZyH8Dmg6”
Now post“The word “watermark” comes from photos and is visible by all. This is only identifiable by Anthropic. Once again they are judge, jury, and prosecutor. Lots of reasons to not use their products. https://t.co/6MGQCymnu7”
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consistent anthropic · 8 days apartThen post
“When I saw this article, I couldn't get Kool and the Gang out of my head. Hat-tip to Claude for the lyrics! I very confused about who might own the copyright. REGULATE (to the tune of "Celebration") [Intro] Regu-LATE! R-E-G-U-L-A-T-E good times, come on! (It's a regulation!) https://t.co/5DTp81043E”
Now post“The word “watermark” comes from photos and is visible by all. This is only identifiable by Anthropic. Once again they are judge, jury, and prosecutor. Lots of reasons to not use their products. https://t.co/6MGQCymnu7”
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consistent anthropic · 8 days apartThen post
“@Jason But Anthropic says using their output should be illegal.”
Now post“The word “watermark” comes from photos and is visible by all. This is only identifiable by Anthropic. Once again they are judge, jury, and prosecutor. Lots of reasons to not use their products. https://t.co/6MGQCymnu7”
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consistent ai safety · 7 days apartThen post
“I favor prosecuting companies that use AI to break existing laws vs allowing those same companies to write new laws. Otherwise you create a perverse incentive to keep doing dangerous things to gather attention and power. https://t.co/d7DbltbV3I”
Now post“The word “watermark” comes from photos and is visible by all. This is only identifiable by Anthropic. Once again they are judge, jury, and prosecutor. Lots of reasons to not use their products. https://t.co/6MGQCymnu7”
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consistent ai safety · 5 days apartThen post
“This industry group is working on an industry standard for how to report AI security incidents. This will drive consistency and transparency and is the safest path forward. Despite 120 members, the large LLM corporations have to-date not signed on. Drives further concern that”
Now post“The word “watermark” comes from photos and is visible by all. This is only identifiable by Anthropic. Once again they are judge, jury, and prosecutor. Lots of reasons to not use their products. https://t.co/6MGQCymnu7”
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consistent ai safety · 5 days apartThen post
“This industry group is working on an industry standard for how to report AI security incidents. This will drive consistency and transparency and is the safest path forward. Despite 120 members, the large LLM corporations have to-date not signed on. Drives further concern that”
Now post“The word “watermark” comes from photos and is visible by all. This is only identifiable by Anthropic. Once again they are judge, jury, and prosecutor. Lots of reasons to not use their products. https://t.co/6MGQCymnu7”
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consistent data · 0 days apartThen post
“Different states, counties, and cities trying different things. Beautiful and effective competition of policies. I doubt any tax bills are going down in NY State. https://t.co/7zbeckyx8l”
Now post“@vsaietta Sounds like you would enjoy living in NY.”
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consistent ai competition · 8 days apartThen post
“Almost 3 years ago, I believed open-models would become the key threat to the AI incumbents & that unfortunately they would lean into regulatory capture as a response. I underestimated the fervor with which they would use this non-business approach. https://t.co/oFDclTqJDq https://t.co/kYzlwY7JRQ”
Now post“I disagree, I don't think this has to be "game-over" for Google. I do think they have only one play left now - to pull from their own Android/Kubernetes playbook and fully embrace open-models. It's the obvious move in this situation. Details here: https://t.co/P8rbKhIjzH https://t.co/6qqof6Auhs”
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consistent transparency · 8 days apartThen post
“As Brandeis said: “Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.” The correct regulatory response here is to demand a full third party investigation of what happened here and share it with everyone. “Our models are too magical” https://t.co/ibsBsNhOjV”
Now post“This industry group is working on an industry standard for how to report AI security incidents. This will drive consistency and transparency and is the safest path forward. Despite 120 members, the large LLM corporations have to-date not signed on. Drives further concern that”
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consistent transparency · 0 days apartThen post
“This industry group is working on an industry standard for how to report AI security incidents. This will drive consistency and transparency and is the safest path forward. Despite 120 members, the large LLM corporations have to-date not signed on. Drives further concern that”
Now post“This industry group is working on an industry standard for how to report AI security incidents. This will drive consistency and transparency and is the safest path forward. Despite 120 members, the large LLM corporations have to-date not signed on. Drives further concern that”
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consistent transparency · 8 days apartThen post
“As Brandeis said: “Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.” The correct regulatory response here is to demand a full third party investigation of what happened here and share it with everyone. “Our models are too magical” https://t.co/ibsBsNhOjV”
Now post“This industry group is working on an industry standard for how to report AI security incidents. This will drive consistency and transparency and is the safest path forward. Despite 120 members, the large LLM corporations have to-date not signed on. Drives further concern that”
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consistent regulatory capture · 832 days apartThen said
“The more people hang around Washington for a very long period of time, they just learn how to influence it.”
Now post“I favor prosecuting companies that use AI to break existing laws vs allowing those same companies to write new laws. Otherwise you create a perverse incentive to keep doing dangerous things to gather attention and power. https://t.co/d7DbltbV3I”
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consistent regulatory capture · 6 days apartThen post
“Almost 3 years ago, I believed open-models would become the key threat to the AI incumbents & that unfortunately they would lean into regulatory capture as a response. I underestimated the fervor with which they would use this non-business approach. https://t.co/oFDclTqJDq https://t.co/kYzlwY7JRQ”
Now post“I favor prosecuting companies that use AI to break existing laws vs allowing those same companies to write new laws. Otherwise you create a perverse incentive to keep doing dangerous things to gather attention and power. https://t.co/d7DbltbV3I”
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consistent regulatory capture · 5 days apartThen post
“Almost 3 years ago, I believed open-models would become the key threat to the AI incumbents & that unfortunately they would lean into regulatory capture as a response. I underestimated the fervor with which they would use this non-business approach. https://t.co/oFDclTqJDq https://t.co/kYzlwY7JRQ”
Now post“When I saw this article, I couldn't get Kool and the Gang out of my head. Hat-tip to Claude for the lyrics! I very confused about who might own the copyright. REGULATE (to the tune of "Celebration") [Intro] Regu-LATE! R-E-G-U-L-A-T-E good times, come on! (It's a regulation!) https://t.co/5DTp81043E”
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consistent regulatory capture · 826 days apartThen said
“The more people hang around Washington for a very long period of time, they just learn how to influence it.”
Now post“Almost 3 years ago, I believed open-models would become the key threat to the AI incumbents & that unfortunately they would lean into regulatory capture as a response. I underestimated the fervor with which they would use this non-business approach. https://t.co/oFDclTqJDq https://t.co/kYzlwY7JRQ”
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consistent competition · 89 days apartThen said
“I have a phrase I use, regulation is the friend of the incumbent. So they use it to actually raise prices, prevent competition, and further in ensconce themselves in the leadership role they're already in.”
Now said“I have I have a phrase I use, regulation is the friend of the incumbent.”
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consistent ai moats · 89 days apartThen said
“Anthropic's lobbying the only company that has lobbied as much as Anthropic early in its life was was FTX and SBF. Like, they he also lobbied heavily.”
Now said“There's Anthropic's lobbying the only company that has lobbied as much as Anthropic early in its life was was FTX and SBF.”
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consistent ai moats · 52 days apartThen said
“And then he says, it could be a capitalist economy of AI systems, which then give out resources to humans based on some secondary economy of what the AI systems think makes sense to reward in humans.”
Now said“There's Anthropic's lobbying the only company that has lobbied as much as Anthropic early in its life was was FTX and SBF.”
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consistent competition · 52 days apartThen said
“I don't think there's any scenario where you just do more for less and all of a sudden everyone has 70% operating margins. That's not gonna happen.”
Now said“I have I have a phrase I use, regulation is the friend of the incumbent.”
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consistent ai moats · 52 days apartThen said
“I think they're midwifing a deity gear. And and I don't know which one I'm more afraid of, the regulatory capture or the second theory I call the Doctor.”
Now said“There's Anthropic's lobbying the only company that has lobbied as much as Anthropic early in its life was was FTX and SBF.”
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consistent competition · 8 days apartThen said
“There's seven companies that have raised over $200,000,000 and they're all gonna mount customer acquisition strategies with those dollars.”
Now said“I have I have a phrase I use, regulation is the friend of the incumbent.”
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consistent ai · 60 days apartThen said
“most people that live in Silicon Valley just have this innate FOMO built into them about what's next.”
Now said“For that person, AI is a jetpack. Like they can now do more things faster than they wanted to do, and they can achieve more than they were able to before.”
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consistent ai · 46 days apartThen said
“I think they're midwifing a deity gear. And and I don't know which one I'm more afraid of, the regulatory capture or the second theory I call the Doctor. Frankenstein theory.”
Now said“For that person, AI is a jetpack. Like they can now do more things faster than they wanted to do, and they can achieve more than they were able to before.”
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consistent ai · 46 days apartThen said
“I don't think there's any scenario where you just do more for less and all of a sudden everyone has 70% operating margins. That's not gonna happen.”
Now said“For that person, AI is a jetpack. Like they can now do more things faster than they wanted to do, and they can achieve more than they were able to before.”
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consistent ai · 6 days apartThen said
“Mark Cuban said there are two types of people in this world, those that use LLMs to learn faster than they ever could before and those that use LLMs to skip learning altogether.”
Now said“For that person, AI is a jetpack. Like they can now do more things faster than they wanted to do, and they can achieve more than they were able to before.”
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consistent ai · 6 days apartThen said
“you could use AI and just imagine yourself in a career for a week. Like, cause you could just talk to AI every day.”
Now said“For that person, AI is a jetpack. Like they can now do more things faster than they wanted to do, and they can achieve more than they were able to before.”
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consistent ai · 6 days apartThen said
“The biggest problem is if you're a AI skeptic because you're never trying to figure that out. And the truth of the matter is humans have evolved with their tools forever.”
Now said“For that person, AI is a jetpack. Like they can now do more things faster than they wanted to do, and they can achieve more than they were able to before.”
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consistent ai · 6 days apartThen said
“If if I ask you to compete with a farmer that has modern farming equipment and I give you a shovel and a hoe and an oxen, there's zero chance you're gonna be competitive.”
Now said“For that person, AI is a jetpack. Like they can now do more things faster than they wanted to do, and they can achieve more than they were able to before.”
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consistent china · 96 days apartThen said
“I think the odds that that, you know, The US with two, you know, proprietary models can stay ahead of China with 10 open source ones is very low.”
Now said“And the other society, when the farmers come to market, they're forced to share best practices with all the other farmers. Which which one of those is gonna gonna evolve faster?”
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consistent china · 96 days apartThen said
“And I don't think the world, especially the the the politicians understand how, like unbelievably powerful open source is as a a as a weapon, like, as a competitive weapon.”
Now said“And the other society, when the farmers come to market, they're forced to share best practices with all the other farmers. Which which one of those is gonna gonna evolve faster?”
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consistent china · 46 days apartThen said
“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.”
Now said“And the other society, when the farmers come to market, they're forced to share best practices with all the other farmers. Which which one of those is gonna gonna evolve faster?”
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consistent ipo market · 77 days apartThen said
“if you ask any first year comp sci student and first year finance student to write a model of how an IPO should work, you would allow everyone to bid and you would award the shares to the highest bidder. It's just not like, it's not, it should just be tautological.”
Now said“the number of public companies that exist in The US today is less than half what the peak was. And companies just aren't going public. And I think it's a big problem.”
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consistent ipo market · 77 days apartThen said
“So if you ask any first year comp sci student and first year finance student to write a model of how an IPO should work, you would allow everyone to bid and you would award the shares to the highest bidder. It's just not like, it's not, it should just be tautological.”
Now said“the number of public companies that exist in The US today is less than half what the peak was. And companies just aren't going public. And I think it's a big problem.”
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consistent ipo market · 49 days apartThen said
“So the number of public companies in The US is less than half of peak. And so we've really had a fall off in the number of companies that are actually public.”
Now said“the number of public companies that exist in The US today is less than half what the peak was. And companies just aren't going public. And I think it's a big problem.”
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consistent ipo market · 49 days apartThen said
“Today, every company that is being identified as a winner is ingesting 400 or $500,000,000 minimum before they even think about going public, if they're ever gonna think about that.”
Now said“the number of public companies that exist in The US today is less than half what the peak was. And companies just aren't going public. And I think it's a big problem.”
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consistent ipo market · 1914 days apartThen said
“And so oddly, it's easier as a public company than a late stage private company to go through these types of periods.”
Now said“If you look at last year, 2024, the Nasdaq was up 30% and the window was closed. That seems to be the general belief of everyone out there.”
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consistent ipo market · 1914 days apartThen said
“It's times like this where that strategy, I think, gets exposed as the fraud that it was precisely because private company capitalization charts don't go down very well. They're designed to really only go up.”
Now said“If you look at last year, 2024, the Nasdaq was up 30% and the window was closed. That seems to be the general belief of everyone out there.”
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consistent ipo market · 1914 days apartThen said
“And it turns out that surviving down periods is a lot easier as a public company than a private company because you've converted all that away.”
Now said“If you look at last year, 2024, the Nasdaq was up 30% and the window was closed. That seems to be the general belief of everyone out there.”
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consistent ipo market · 413 days apartThen said
“Anyone can start a company that can go public. If you have to get to a billion in revenue, it's just it's a totally different game.”
Now said“If you look at last year, 2024, the Nasdaq was up 30% and the window was closed. That seems to be the general belief of everyone out there.”
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consistent ipo market · 413 days apartThen said
“But what they wanna do to fix it is then some kinda institutionalized investing in private companies, which I think will fail massively.”
Now said“If you look at last year, 2024, the Nasdaq was up 30% and the window was closed. That seems to be the general belief of everyone out there.”
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consistent ai moats · 413 days apartThen said
“It's already evolved to a point that's very similar to where Uber, Lyft and DoorDash ended up, where there's just so much money moving around that I really don't even think about it as a startup market anymore.”
Now said“I think OpenAI said they're gonna be 7,000,000,000 in a year. That's not your grandfather's startup business or your grandfather's venture capital. That's a radically different world.”
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consistent regulatory capture · 1756 days apartThen said
“They did it to protect themselves, like, three days to settle a transaction. There are other countries that just mandated UK faster payments.”
Now said“The more people hang around Washington for a very long period of time, they just learn how to influence it.”
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consistent marketplaces · 1756 days apartThen said
“So I one day I'll have to write a definition of it, but I call it liquidity quality. And I tell entrepreneurs I care way more about that than I do how broad you are.”
Now said“It's arguable there are levels of increasing returns. Like, you could come up with some kind of scale or index because some of them are more linear and some of them can go exponential.”
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consistent marketplaces · 1756 days apartThen said
“If it's a two sided network, you could build one for the value to the supplier, one for the value to the consumer. On the x axis is your penetration into the market.”
Now said“It's arguable there are levels of increasing returns. Like, you could come up with some kind of scale or index because some of them are more linear and some of them can go exponential.”
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consistent regulatory capture · 1756 days apartThen said
“I these banks made a huge mistake, which is they've sat on their hands with ACH for thirty years, and they did it for all the wrong reasons.”
Now said“The more people hang around Washington for a very long period of time, they just learn how to influence it.”
Minutes 1111 quotes
everything on record, newest first
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Gurley cites Ferriss has sold 10 million books, has 2 million email subscribers, and podcast approaching a billion downloads.
creator economymetricsReceipt
“He sold 10,000,000 books. I got a list here. He's got 2,000,000 email subs, over a thousand blog posts, 7,000,000 followers on social media, and his podcast is about to pass a billion downloads.”
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Gurley asks about Spotify's success competing with Apple's podcast player.
podcastingspotifyReceipt
“You're in a position to know this. I'm not how successful have they been encroaching on Apple's podcast player or others?”
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Gurley wonders if LinkedIn had avoided monetizing InMail like Twitter it could have hosted powerful conversations.
linkedinplatformsReceipt
“I've wondered over the years if LinkedIn hadn't polluted their InMail and made it monetized. Yep. And they had done what Twitter did, how much of the most powerful conversations in the world would happen?”
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Gurley says he learned waiting solves many problems, citing Silicon Valley Bank weekend as example.
crisisdecision-makingReceipt
“And I used I I I used to go deep in them, and this weekend was a perfect example, and there's a good transition to Silicon Valley Bank.”
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Gurley says many people acted manically during SVB crisis weekend but problems resolved by morning.
crisisdecision-makingReceipt
“But a lot of people did a lot of crazy manic things this weekend that didn't matter. Yeah. Because it all got solved this morning.”
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Gurley told OpenTable CFO they would reach 99% market share, not 17%, due to network effects understanding.
market sharenetwork effectsReceipt
“And he said, oh, no one gets more than 17% market share, all the businesses I've worked with. Because I believed in network effects, I was like, we're gonna get 99.”
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Gurley says Uber in San Francisco was 20 times bigger than the taxi market, proving TAM conservatism wrong.
tamuberReceipt
“By the time I wrote that, I already knew that Uber in San Francisco was 20 x bigger than the taxi market in San Francisco.”
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Gurley discovered Amazon was running same-day delivery experiments on top of Uber using burner phones and driver cars.
amazonexperimentationReceipt
“And I'm like, what happens at 02:30? He goes, I have to meet at the Amazon warehouse at 02:30.”
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Gurley says most companies over $20-30M in revenue wouldn't run Amazon's experimental hack approach due to accounting concerns.
amazoncorporateReceipt
“I know for a fact that most of the companies I've worked with that have gotten over 20 or 30,000,000 in revenue would not run that experiment because someone would say, oh, we won't know how to do the accounting. We can't like, that's too much of a hack, like, whatever.”
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Gurley quotes Bezos saying internal experiments get killed only when the last person with good judgment gives up.
amazonbezosReceipt
“They ask him, when does a internal experiment get killed? And he said, when the last person with good judgment gives up.”
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Gurley recounts being told to gather 15 people with maximum donation checks just to meet a congressman.
lobbyingregulatory captureReceipt
“And I'm like, what do you mean a bunch of people? I just wanted to say hello. Noah, I need you to get 15 people in the conference room.”
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Gurley notes colleges previously prohibited major selection until end of sophomore year to allow exploration.
career_explorationeducationReceipt
“when I was young, when you went to college, they would not allow you to pick a major until the end of your sophomore year.”
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Gurley criticizes modern colleges requiring 17-year-olds to commit to majors when applying.
career_pressureeducationReceipt
“Today, at many schools, you have to apply to the major. So you're talking to a 17 year old saying, what do you wanna do the rest of your life?”
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Gurley finds Chinese entrepreneurs have the most cultural affinity with American entrepreneurs globally.
chinacultureReceipt
“of all the places I've visited around the world, the one place where I find the most cultural affinity between entrepreneurs, between American entrepreneurs and some foreign entrepreneurs, China. Like, the most like mindedness.”
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Gurley says Chinese entrepreneurs have greatest cultural affinity with American entrepreneurs globally based on social interactions.
chinacultureReceipt
“the one place where I find the most cultural affinity between entrepreneurs, between American entrepreneurs and some foreign entrepreneurs, China. Like, the most like mindedness.”
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Gurley says he developed skills in synthesizing and communicating through blogs and podcasts during his venture career.
careercommunicationReceipt
“I've, I've developed a pretty good rhythm about being able to synthesize and communicate. So I did that in my venture career through blogs and eventually things like podcasts.”
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Gurley's regulatory capture talk at All In conference received four and a half million views.
all in conferencereachReceipt
“I'd I tested doing it outside my field with a talk I gave at the all in conference on regulatory capture, which had, like, four and a half million views.”
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Gurley coined the phrase regulation is the friend of the incumbent to describe how incumbents use regulation to prevent competition.
competitionincumbentsReceipt
“I have I have a phrase I use, regulation is the friend of the incumbent.”
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Gurley says telecom regulatory capture equals or exceeds health care and finance levels.
regulatory captureregulatory_captureReceipt
“there are many I mean, first of all, the the the telecom space is probably equal to health care and finance in terms of regulatory capture.”
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Gurley explains telecoms passed state laws preventing cities from competing despite receiving pole rights from those cities.
lobbyingregulatory captureReceipt
“And they were able to pass laws that said cities can't compete with them even though they're getting their poll rights from the the cities themselves.”
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Bill Gurley, 21 July 2026
regulatory capturesilicon valley“I spent twenty five years in Silicon Valley, it was titled 2851. And I I used that title because I had a punch line at the end where I said the reason Silicon Valley works so well is because it's so far fucking away from Washington DC, and that was the distance in miles.”
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Gurley says Silicon Valley has become more rooted in Washington DC than ever before since he gave his talk.
lobbyingsilicon valley“But since I gave that talk, I'd say Silicon Valley has gotten more, like, rooted in Washington DC than it ever has more. Than it ever has before.”
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Gurley says Anthropic's early lobbying efforts are comparable only to FTX and SBF, with people in every state.
ai moatsanthropic“There's Anthropic's lobbying the only company that has lobbied as much as Anthropic early in its life was was FTX and SBF.”
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Gurley compares Anthropic's early lobbying intensity to FTX, noting ground presence in every state.
ai_moatsanthropic“Anthropic's lobbying the only company that has lobbied as much as Anthropic early in its life was was FTX and SBF.”
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Gurley argues that for proactive continuous learners, AI is a jetpack that enables them to achieve more faster.
aiai moats“For that person, AI is a jetpack. Like they can now do more things faster than they wanted to do, and they can achieve more than they were able to before.”
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Gurley says founders are the chief salesperson for their company, selling to investors, employees, and customers constantly.
founderssales“But if you're a founder, you're selling to new investors, you're selling to employees, you own the company culture and the perception of the company, you're striking deals, you're selling to customers, you're just out selling all you're the number one sale you're the chief salesperson for your company,”
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Gurley says venture capitalists who see successful pivots learn it's all about the founder.
founderspivots“And for any venture capitalist that's been through one of those pivots, they're famously known as pivots now, it's all about the person. Like, it's all about the founder.”
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Gurley cites that new CEO hires are a fifty-fifty bet at best, questioning why investors would take that risk.
ceofounders“I'm sure it's not scientific, but as new CEO hires a fifty fifty bet at best.”
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Gurley explains VCs can only join about two boards per year, unlike public investors evaluating unlimited positive-IRR opportunities.
startupsventure capital“If it's positive IRR and I'll make 14%, I'll do it. Yep. But venture capitalists have a limited number of boards they can go on, probably two a year.”
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Gurley explains VCs can only join two boards yearly so must emotionally commit, not just meet hurdle rates.
decision-makingventure capital“But venture capitalists have a limited number of boards they can go on, probably two a year. And and so they don't have limited shot unlimited shots on goal.”
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Gurley explains VCs invest in only two boards yearly requiring emotional commitment not just IRR.
decision-makingventure capital“venture capitalists have a limited number of boards they can go on, probably two a year. And and so they don't have limited shot unlimited shots on goal.”
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Gurley notes owning 100% of a $20 million exit creates lifetime wealth and attracts more acquirers than larger exits.
exitsstartups“Your boss won't care. If you own a 100% of a $20,000,000 company, that's lifetime wealth.”
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Gurley argues owning 100% of a $20M company beats owning diluted equity in $500M sale.
dilutionfounder advice“If you own a 100% of a $20,000,000 company, that's lifetime wealth. Like, trying to make $20,000,000 selling a company for 500,000,000, that's hard because it's hard to sell if”
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Gurley explains liquidation preference means common shareholders only benefit after $500M raised is repaid.
ai moatsfounder advice“if you've raised in these days of these AI rounds, if you raise 500,000,000, Lake Common doesn't even participate until you get a sale over that, technically.”
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Gurley says being the most AI-productive person in your field makes you indispensable and sought-after.
aicareer advice“And if you are the most AI productive human in your field, you're not getting fired. Like, you're you're the one they're asking all the questions of. Like, what's this capable of?”
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Gurley argues that becoming the most AI-productive person in your field makes you indispensable and sought-after for expertise.
aiai moats“And if you are the most AI productive human in your field, you're not getting fired. Like, you're you're the one they're asking all the questions of.”
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Gurley says most VCs are so focused on AI that non-AI companies can't raise money at any valuation.
ai fundingvaluations“So you really have this massive black, white, have, have not situation where the AI companies are raising money at crazy valuations and the non AI companies can't raise money at any valuation.”
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Gurley contrasts old fundraising where companies decided timing versus today where investors proactively offer money with implied competitor threats.
competitionfundraising“And today people are just showing up at the door and saying, take the money. In many cases, with the implication, if you don't take it, they'll give it to the competitor.”
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Gurley warns that high valuations represent discounted future expectations, creating risk for founders.
founder advicevaluations“The other thing that founders should always realize that they unfortunately, especially young ones, don't understand. Valuations represent discounted future expectations.”
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Gurley warns that higher valuations create higher expectations where slight missteps put companies underwater.
expectationsrisk“Valuations represent discounted future expectations. So the higher the valuation you take, the more is expected of you and the slight misstep and you could be way underneath.”
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Gurley explains private cap tables are structured to only go up, unlike public stocks.
cap tablesprivate markets“private one last thing. Yeah. Sorry. Private cap tables are not structured very well to go down.”
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Gurley cites Uber burning $2B yearly, now generating over $10B in annual free cash flow.
burn ratecash flow“Uber's a case where we were burning 2,000,000,000 a year and Dara, you know, has it now generating over 10,000,000,000 a year in free cash flow.”
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Forbes, 13 July 2026
ai fundingburn rate“Because then we'll just throw out two examples, the coding space and the legal AI space. There's seven companies that have raised over $200,000,000 and they're all gonna mount customer acquisition strategies with those dollars.”
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Gurley says being conservative isn't realistic as seven companies each raised over $200 million in coding and legal AI.
ai fundingburn rates“Because then we'll just throw out two examples, the coding space and the legal AI space. There's seven companies that have raised over $200,000,000”
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Gurley notes seven companies raised over $200M in coding and legal AI, making conservative approaches unviable.
ai fundingcompetition“There's seven companies that have raised over $200,000,000 and they're all gonna mount customer acquisition strategies with those dollars.”
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Gurley suspects some AI companies are reselling tokens below cost, creating unsustainable growth.
ai economicsgrowth“I suspect there are companies that are selling, reselling tokens from Amazon or Anthropic or whoever at a price lower than they're paying for them. And which looks like growth, but it is unsustainable.”
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Gurley says when people are fascinated by something, others naturally connect them with opportunities.
career advicefascination“So if you knew someone who was just wouldn't stop chatting about modern architecture or whatever, and then you run into someone else and you go, oh, you should talk to Sally like this.”
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Gurley cites Neil Cotchill using AI throughout Supreme Court tariff case preparation, making top lawyer run faster.
ai adoptionlegal“I was just at Ted and Neil Cotchill, who is one of the most famous lawyers in the world, he just argued the case where they beat the tariff in front of the Supreme Court.”
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Gurley cites Daniel Pink's research showing regrets of inaction are the number one regret people have at end of life.
boldnesscareer“And the number one thing people regret at the end of their lives is what he calls boldness regrets, their regrets of inaction.”
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Gurley argues fascination makes learning free and energizing rather than draining like studying uninteresting subjects.
careerfascination“when you're fascinated with something, the learning is free. Like like you you study things for fun.”
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Gurley argues fascination makes learning effortless and energizing, while unfascinating work depletes energy and requires breaks.
careerfascination“Like like you you study things for fun. Like like you get done reading it, you go, ah, you wanna tell somebody you're excited, you get energy.”
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Gurley argues studying what fascinates you generates energy while unwanted study depletes it.
energyfascination“Like like you get done reading it, you go, ah, you wanna tell somebody you're excited, you get energy. When you study things you don't wanna be studying, they sap energy.”
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Gurley argues the best jobs for thriving come from creating opportunities yourself rather than waiting for posted positions.
agencycareer“I think the best jobs for, like, you to really thrive are ones where you go and create the opportunity yourself.”
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Gurley advises moving to your industry's epicenter because it amplifies learning, mentorship, peers, and optionality.
careerepicenter“If your industry has an epicenter, and we're sitting in an epicenter, but like if like, and you are confident this is your fascination lane, you should go.”
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Gurley argues moving to an industry's epicenter amplifies all career advantages including learning, mentors, and peers.
careerepicenter“Because all the other principles in the book get better. So I talk about continuous learning, I talk about finding mentors, I talk about finding peers.”
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Gurley describes how MrBeast at 17 formed a peer group of four who spent 16 hours daily together learning YouTube.
learningmrbeast“And he was trying to figure out how to be better at the game of YouTube, and he met three other people that were on that same journey.”
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Gurley recounts how MrBeast and three peers spent sixteen hours daily on Skype for four years learning YouTube together.
learningmrbeast“And they claim, this is probably an overstatement, but they claimed they were on Skype together sixteen hours a day for four years.”
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Gurley recounts MrBeast and peers claiming sixteen-hour daily Skype calls for four years learning YouTube together.
dedicationpeers“they claim, this is probably an overstatement, but they claimed they were on Skype together sixteen hours a day for four years. And they shared everything they learned together.”
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Gurley proposes using AI to simulate working in different careers for a week each to test fit.
aicareer exploration“you could use AI and just imagine yourself in a career for a week. Like, cause you could just talk to AI every day.”
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Gurley quotes Mark Cuban dividing people into those using LLMs to learn faster versus skip learning.
ailearning“Mark Cuban said there are two types of people in this world, those that use LLMs to learn faster than they ever could before and those that use LLMs to skip learning altogether.”
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Jackson Square Ventures Book Club, 8 July 2026
ailearning“And I mean so at this recent TED, I just went to Neil Cotyal who argued the supreme court case on the tariffs and won.”
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Jackson Square Ventures Book Club, 8 July 2026
aicompetition“The biggest problem is if you're a AI skeptic because you're never trying to figure that out. And the truth of the matter is humans have evolved with their tools forever.”
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Gurley argues competing without AI is like farming with shovel against modern equipment, zero chance.
aicompetition“If if I ask you to compete with a farmer that has modern farming equipment and I give you a shovel and a hoe and an oxen, there's zero chance you're gonna be competitive.”
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Gurley learned from Bill Miller that network effects justify Amazon growing at unreasonable rates for extended periods.
amazonnetwork effects“value just means that the asset is underpriced relative to what you think it will be worth in the future.”
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Gurley says Wall Street is the buyer of the product venture capitalists create through M&A or IPO.
ipo marketmental models“You know, I've always thought of Wall Street as the buyer of the product that venture capitalists create.”
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Gurley argues understanding the masters of your field is wildly differentiating in job interviews.
career advicedifferentiation“Imagine you're interviewing for a job at P and G or Pepsi out of college, and there's 20 people there, and you're the one that understands the masters of marketing more than the others, and you're able to bring that up in the interview. Isn't that wildly differentiating?”
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Gurley argues knowing the masters of your field would be wildly differentiating in job interviews.
career advicedifferentiation“Imagine you're interviewing for a job at P and G or Pepsi out of college, and there's 20 people there, and you're the one that understands the masters of marketing more than the others, and you're able to bring that up in the interview.”
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Gurley uses a farming metaphor to explain why China's open source AI models may innovate faster than closed US models.
ai moatschina“I'll use a simple metaphor, but imagine you have two societies and both agricultural societies.”
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Gurley argues China's open-source AI models create a system capable of innovating faster than closed US models.
ai competitionchina“And the other society, when the farmers come to market, they're forced to share best practices with all the other farmers. Which which one of those is gonna gonna evolve faster?”
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Gurley says he wouldn't have believed Mag Seven would turn $50-100B annual free cash flow to zero via CapEx.
ai moatscapex“If you told me five years ago that these, mag seven would become worth $3,000,000,000,000 and then turn around and take their free cash flow from 50 to a 100,000,000,000 a year down near zero because they were gonna spend it all on CapEx, I'd have been like, no way. Like, I wouldn't have believed it.”
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Gurley says venture capital is getting more risk seeking due to belief in power laws.
riskventure capital“the venture capital community as a whole is is getting more risk seeking and taking on more risk because of their knowledge of how things have played out in the past.”
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Gurley critiques circular deals where cloud providers fund AI companies to spend on their own services.
ai fundinganthropic“Imagine you're a cloud service provider and you notice that this company, Anthropic, wants to develop this model. It's gonna cost maybe $5,000,000,000, but they don't have that money.”
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Gurley contrasts stablecoins' instant penny transfers with traditional credit cards' two-plus percent fees.
paymentsregulatory capture“If you have a Coinbase account, you can put your money in a USDC stablecoin and earn 4%. And within seconds immediately transfer money to someone else for pennies.”
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Gurley says Visa and Mastercard have 60 percent operating margins as bank-created duopolies.
mastercardregulatory capture“They have like 60% operating margins and they're they're duopolies and and they were created by the banks.”
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Gurley says China's instant transfers enabled Alibaba and Tencent to build wallets used for everything from street vendors to cars.
chinapayments“In China, because they had this digital immediate transfer, Alibaba and Tencent were able to very quickly build digital wallets that people carry around.”
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Gurley describes how China's digital payment system lets people pay for everything via QR codes.
chinapayments“You scan a QR code, like, at a you check out of a restaurant. Like, can just pay at your table. There's a QR code on the table.”
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Gurley says he would offer Elon's Tesla compensation package to every company he's worked with.
alignmentcompensation“that package, that type of package that they did for Elon, I've said this, you know, publicly, I would agree to that type of package for every company I've ever worked with, and most CEOs wouldn't take it. It basically says you don't make money unless the stock goes way up.”
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Gurley defends Tesla's Elon Musk compensation as aligned with shareholders despite ISS opposition.
executive compensationshareholder value“It basically says you don't make money unless the stock goes way up. And if your stock goes way up, you make an obscene amount of money.”
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Gurley quotes Bezos saying he only asks if entrepreneurs will do this no matter what.
bezosdetermination“when I meet an entrepreneur, there's only one thing I ask myself. Is this person gonna do this no matter what?”
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Gurley recalls Uber's mega-burn era had no precedent, leaving board with no mentors or case studies.
ai fundingburn rate“You could take the board members from Walmart and Costco and GM and and General Electric or whatever you consider the top 10 best company, and they would have never been in this situation before.”
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All-In Podcast, 29 May 2026
historical datapapal critique“Workplace deaths fell by 40 x. Life expectancy went up 60%, and global poverty went from 75% of humanity to under 10%.”
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Gurley lists specific metrics showing technology and capitalism drove massive human progress since 1891 despite warnings against them.
capitalismprogress“All those things happened because of technology, innovation, and capitalism, which is exactly what Leo the thirteenth was warning against.”
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Gurley says Anthropic uniquely leads AI while being the most negatively outspoken about their own field.
aianthropic“I've never ever seen a company that is both leading their field and the most negatively outspoken commenter on what they do. I've just never seen it.”
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Gurley cites Dario envisioning AI systems deciding resource allocation to humans based on what AIs think makes sense to reward.
ai governanceai moats“And then he says, it could be a capitalist economy of AI systems, which then give out resources to humans based on some secondary economy of what the AI systems think makes sense to reward in humans.”
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Gurley says Anthropic is midwifing a deity and he fears that more than regulatory capture.
aianthropic“I think they're midwifing a deity gear. And and I don't know which one I'm more afraid of, the regulatory capture or the second theory I call the Doctor. Frankenstein theory.”
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Gurley says Anthropic is midwifing a deity, and he's uncertain which theory is scarier: regulatory capture or Doctor Frankenstein.
ai moatsanthropic“I think they're midwifing a deity gear. And and I don't know which one I'm more afraid of, the regulatory capture or the second theory I call the Doctor.”
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Gurley says open source connectors like MCP can commoditize AI model interfaces similar to Google's Kubernetes strategy.
ai moatskubernetes“Some of the smarter people in the open source community have suggested to me that we need more open source connectors of types. So MCP, is actually run by the Linux Foundation.”
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Gurley argues AI productivity gains won't lead to 70% margins because competition will lower prices instead.
ai economicscompetition“I don't think there's any scenario where you just do more for less and all of a sudden everyone has 70% operating margins.”
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Gurley argues AI productivity gains will be competed away through lower prices, not retained as higher margins.
aicompetition“I don't think there's any scenario where you just do more for less and all of a sudden everyone has 70% operating margins. That's not gonna happen.”
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Gurley argues AI competition will drive prices down, creating productivity boom with cheaper goods rather than obscene profits.
ai moatscompetition“And so the thing that could happen is we could have a productivity boom from lower priced goods and services.”
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Gurley read three biographies from different fields that inspired the framework for his book.
biographiesbook origin“There was a period in my life about ten years ago, I was reading a lot of biographies and I read these three biographies of people that were in very different fields”
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Gurley profiles Bob Dylan, Danny Meyer, and Bobby Knight as three biographical subjects in his book.
bob dylanbook subjects“Bob Dylan, Danny Meyer is a famous New York restaurateur who's probably spoken here before, and Bobby Knight.”
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Gurley describes his father going from model airplanes to NASA control room for moon landing at age 33.
career journeyfather“Like, think about the idea of falling in love with model airplanes as a kid and being in the control room when they land on the moon in 1969. He was born, he was 33.”
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Gurley discovered his father wrote influential NASA paper on rocket atmospheric bounce at age 27.
agefather“And I looked at the date on that document and he was 27 years old when he wrote it.”
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Gurley describes Danny Meyer creating a list of ten impressive people in his field and keeping journals studying them.
career advicelearning“Danny created a list right when he decided to go do it of the 10 most impressive people in the restaurant industry at that moment in time, from his perspective, and started keeping a journal on each one of them and studying them from afar.”
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Gurley started as computer engineer with Commodore VIC-20 but left after projects became repetitive and boring.
career pivotcommodore“I started as a computer engineer. I was fascinated with a Commodore VIC-twenty. I fell in love.”
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Gurley recommends asking whether you want to do current job thirty years from now as career test.
career advicemental exercise“and I asked myself a question which I think anyone can use in any job you're in I said do I still want to be doing this thirty years from now and when I got when I asked myself that question it was a quick no”
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Gurley argues studying industry pioneers differentiates you and tests whether you're truly fascinated by the field.
career advicedifferentiation“And one, I think you develop a really awesome bedrock for thinking about your industry and just knowing this history. It's a good test as to whether you're really fascinated by it”
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Gurley says Brett Taylor became an AI expert in three years despite not being one previously.
aicareer“Well guess what like three years ago he wasn't an AI expert but he became one.”
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Gurley says most Silicon Valley people have innate FOMO about new technology, installing tools immediately out of competitive fear.
aiculture“most people that live in Silicon Valley just have this innate FOMO built into them about what's next.”
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Gurley advises seeking mentors two steps above you rather than shooting too high like CEOs.
career advicementorship“the person that's two steps above you on the ladder has never been asked to be a mentor, and that's probably your best place to start, and they'll be flattered that you ask.”
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Gurley says the number of US public companies is less than half the peak, calling it a big problem.
ipo marketpublic companies“the number of public companies that exist in The US today is less than half what the peak was. And companies just aren't going public. And I think it's a big problem.”
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Gurley argues learning has never been easier or freer than today for high-agency people.
ailearning“For people that have high agency and want to learn, there's never been a time in the history of the world where that is as easy and free as it is today.”
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Gurley explains that when fascinated with something, learning gives energy rather than consuming it, creating unfair advantage.
career advicelearning“when you're fascinated with something, obsessive with something, the learning's free. And what I mean by free is it doesn't suck energy, it gives you energy.”
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Gurley criticizes Dario for being both top cheerleader and doomer while raising billions and cashing out employee shares.
aianthropic“Dario, the guy leading a company that's raising billions of dollars and cashing out billions in secondary to his employees is simultaneously the top cheerleader and the top doomer.”
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Gurley argues high agency people studying the edge of their field are safer than those with rote algorithms.
ai moatscareer advice“I think people that are high agency and fascinated are, they not only study the history of their field and all that, but they're constantly studying the edge of their field, which is a much safer place to be.”
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Gurley warns that rote knowledge taught in school is already in AI models, making it an unsafe career position.
ai moatscareers“If you just arm yourself with the road algorithms that they taught you in school, those are in the models.”
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Gurley predicts AI will cause high-agency fascinated people to separate even more from others.
agencyai impact“I just think, in fact, one thing I might worry about in a, in a AI world is these high agency fascinated people might separate. Even more.”
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Gurley explains venture capitalists live in fear of missing the one or two asymmetric deals each year.
investingventure capital“Once again, because of this asymmetric outcome thing, live in fear of missing this one or two deals a year. There's like, how could you possibly minimize the chance of not finding that?”
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Gurley says aging venture capitalists build mental models that create cynicism, causing them to miss disruptive innovations.
career adviceventure capital“I think, and this all goes back to the asymmetric optimism thing, as you get older, you build more mental models and you become more cynical.”
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Gurley notes seven AI coding or lawyer companies raised hundreds of millions, unlike venture capital he practiced.
ai fundingoverfunding“There's seven companies that have raised hundreds of millions of dollars. And that's not the venture capital I practiced.”
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Gurley cites Uber shifting from burning $2B yearly to generating $10B in free cash flow through unit economics understanding.
investingmarketplaces“I mean, Uber was burning 2,000,000,000 a year and Dara had 10,000,000,000 in free cash flow last year. Being able to make that shift, it's gonna require an innate understanding of your true unit economics.”
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Gurley invokes Carlota Perez to argue real disruptive waves attract speculators and charlatans, creating bubbles alongside innovation.
ai moatsventure capital“And what happens is with a wave that's real, people get rich quick. When people get rich quick, fools rush in. Like speculators, charlatans, they come in.”
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Gurley argues China built a highly competitive system inside communism through provincial competition mechanisms.
chinacompetition“They have built, inside of a communist country, have built a system that's highly competitive. And it comes from leveraging provincial competition and some other things.”
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Gurley says China had 150 EV car companies, creating more intense competition than in the US.
chinaregulatory capture“And you'll see, there were 150 EV car companies there. So hyper competition. In fact, I could argue the model they've created has more intense competition than we have here.”
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Gurley states South Korea builds nuclear fission plants for one-fourth the US cost.
competitivenessnuclear“South Korea, not China, South Korea can build a nuclear fission plant for one fourth the price that we can in The US.”
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Gurley states South Korea builds nuclear plants at one fourth the US cost, calling it alarming.
competitioninfrastructure“South Korea, not China, South Korea can build a nuclear fission plant for one fourth the price that we can in The US. And someone needs to be massively alarmed by that.”
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Gurley repeats MrBeast claim that fifth random person on four-year Skype calls would have become millionaire.
career advicepeer networks“And he said if a fifth person had been on those calls, they would have made a million dollars also. Regardless of who the individual was.”
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Gurley argues that consulting, venture capital, and law offer breadth through exposure to multiple clients and industries.
career advicecuriosity“If you're a consultant, if you're a venture capitalist, if you're a lawyer, like you'll have clients across multiple, you know, places and you'll get to study more things.”
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Gurley shares he studied stocks at night as an engineer before switching to Wall Street career.
career_pathshobbies“And I didn't say to myself, Oh, maybe that's a sign, but it was, right?”
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Gurley advises people may not find career fit until 30s or 40s and should check yearly.
career_advicedecision_making“Some of these people didn't find their perfect fit until they're 30 or 40. And so get as many shots on goal.”
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Silicon Valley Girl Clips, 27 April 2026
career advicedecision framework“I had a mental exercise that I did in my first two stops in my career, where a couple of years in, said, Do I see myself doing this thirty years from now?”
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Gurley cites survey data showing 60% of people would choose a different career if they could start over.
career satisfactionregret“we did a survey where we asked people if you could go back in time and start your career over again, would you do something different? Six out of 10 said yes.”
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Gurley proposes viewing any profession as artisanship, noting people don't typically think of lawyers this way.
ai moatsartisanship“I have this interesting theory where almost any job you could think of it as being an artisan.”
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Gurley uses Bjorn Borg's failed comeback with outdated equipment to argue humans must evolve with their tools.
ai adoptionevolution“He tried to make a comeback at like 38 and he brought that old wooden racket out there and he got smoked.”
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Gurley argues humans evolve with their tools, comparing a farmer with tractor and drone to one with hoe and donkey.
ai toolsevolution“Like you're if you're a farmer with a tractor and a drone thing and all this stuff, you're going to run over a farmer with a hoe and a donkey, right?”
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Gurley says Bjorn Borg tried comeback with wooden racket after industry switched to graphite during his retirement.
ai adoptionsports analogy“He retired real early in his from a age perspective. Like, I think he was around 30, and he tried to make a comeback when he was, like, 36 or something.”
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Gurley plans to identify policy issues where communication alone can shift public perception like nuclear energy shift.
communicationnuclear energy“I'm I'm gonna look to see if I can find more things like that where just highlighting things and communicating could potentially change things.”
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Gurley says regulation is the friend of the incumbent, used to raise prices and prevent competition.
competitionincumbents“I have a phrase I use, regulation is the friend of the incumbent. So they use it to actually raise prices, prevent competition, and further in ensconce themselves in the leadership role they're already in.”
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Gurley describes Comcast lobbyist who worked for mayor then became most important executive at Comcast.
lobbyingregulatory capture“There was a gentleman who was the head of the the head of lobbying at Comcast where I think New York Times or the Post, someone did a article where they said this is the most important executive at Comcast. And he had been working for the mayor before he went into that role.”
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Gurley claims Anthropic has lobbied as much early in its life as FTX did, with people in every state.
ai moatsanthropic“Anthropic's lobbying the only company that has lobbied as much as Anthropic early in its life was was FTX and SBF. Like, they he also lobbied heavily.”
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Gurley says Austin, one of the fastest growing cities, has seen rents fall for four years due to good policy.
austinhousing“One of the fastest growing cities in the nation, rents have fallen for four years. That's good policy.”
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Gurley says it costs 400% more to build nuclear plants in US than in South Korea or China.
chinainfrastructure“it costs four x, 400% more to build a a a fission nuclear plant, 70 year old technology in The US than it does in South Korea or China.”
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Gurley warns US AI regulation could create a fence around America while China serves the rest of the world.
ai moatschina“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.”
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Tom Bilyeu, 23 April 2026
healthcareregulatory capture“We only had two manufacturers, and they charged, like, $12 a test, so 10 x higher.”
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Gurley says he is seeing the most risk seeking venture capital behavior he has ever seen in his entire life.
marketsrisk“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.”
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Gurley cites Brett Taylor as example of founder who repots himself across technology waves from maps to social to AI.
aifounders“He's just always right there as the thing changes and on top of the next thing.”
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Gurley describes woman who became top agent after discovering hundreds of support jobs surround individual talent roles in movies.
career advicehollywood“There was a woman that all she could think about was movies, and she didn't see herself as an actress, so she went and got a normal degree and didn't ever consider it.”
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Forbes, 21 April 2026
googlemistakes“Well, biggest mistake I made in my career is when I was three years into the venture capital business, I met Larry and Sergey at their office with 25 employees.”
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Gurley reveals he met Larry and Sergey when Google had 25 employees but Benchmark failed to invest.
googlemistakes“I met Larry and Sergey at their office with 25 employees. They pitched Benchmark, and we failed to invest”
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Gurley says OpenTable had the most intellectual appeal because Benchmark invested at three restaurants with a network effect thesis.
marketplacesnetwork effects“The one that had kind of the most intellectual appeal was probably OpenTable because we invested when there were three restaurants on the network and had a theory that a network effect could take place where it could tip towards winter, take most.”
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Gurley argues software requiring deterministic data like financial ledgers is safer from AI disruption than translation-type products AI can replicate.
ai moatsdefensibility“It needs to be quite deterministic, and so I think the software that's safer is one where there's a need for deterministic data,”
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Gurley warns founder equity drops from 90% to 10% while market prefers $20-100M exits over billion dollar outcomes.
equityexits“And very quickly, almost in a flash before you know it, your founder's equity goes from 90% to 10%. And I've watched it happen over and over and again.”
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Forbes, 21 April 2026
dilutionipo market“And the world wants to do more M and A in the 20,000,000 to $100,000,000 tuck in range than they want to do billion dollar exits.”
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Gurley says college prep system evolved so everyone feels forced to play resume-building game starting in sixth grade.
collegeeducation“I don't think there's anybody that's intentionally making wrong decisions, but the system has evolved to a place where everyone feels like they have to play the game.”
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Gurley cites data showing over 50% of people work outside their college major ten years after graduation.
careereducation“Like over 50% of people are no longer working in the career that was was stated by their major. And I bet that number's getting worse.”
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Gurley offers heuristic for career decisions: ask yourself if you see doing current job thirty years from now.
careerdecision-making“But I then had a reflection and this is the heuristic I think people can use. I, I one day thought to myself, do I see myself doing this thirty years from now?”
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Gurley explains that regrets of inaction intensify with age more than mistakes made.
careerregret“Daniel has, in his book on regrets, talks a lot about regrets of inaction. He calls them boldness regrets.”
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Gurley observes Silicon Valley has unusually high willingness to give advice to strangers, similar to Nashville songwriters.
epicentermentorship“In Silicon Valley, if you walk up to somebody that you don't know and ask them for advice, the probability that they say yes and spend time is higher than you would ever expect.”
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Gurley recounts MrBeast and three peers Skyped sixteen hours daily for four years, all became millionaires with million-plus followers.
mrbeastpeers“And they were doing a Skype call together for, he says, sixteen hours a day for four years. And they were sharing what they were learning.”
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Gurley describes MrBeast and three peers doing sixteen-hour daily Skype calls for four years, all becoming millionaires.
learningmrbeast“he says, sixteen hours a day for four years. And they were sharing what they were learning. And they didn't view themselves as competitors. They all ended up with over a million followers.”
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Gurley quotes MrBeast saying any random person on those Skype calls would have achieved the same millionaire success.
learningpeers“And he said another thing which I think really drives home the point. He said, if any random person had been on those Skype calls, they would have achieved those same things.”
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Gurley recounts MrBeast saying anyone on their sixteen-hour-a-day Skype calls would have succeeded on YouTube.
learningpeers“He said, if any random person had been on those Skype calls, they would have achieved those same things.”
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Gurley argues real disruptive waves like AI naturally create bubbles alongside genuine innovation.
ai moatsbubbles“And so I think that's where we are right now. It's real, it's disruptive, it's amazing, it it's changing a lot of different things in industry.”
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Gurley contrasts dot-com era when companies went public at million monthly revenue versus today's opposite standard.
dot-comipo market“In the .com period, if you had 1,000,000 a month a million a month in revenue, you went public. Here, the exact opposite.”
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Gurley says AI companies now burn more than Uber's $2 billion annual losses that he found anxiety-inducing.
ai moatsburn rate“I thought losing 2,000,000,000 a year was nuts and very anxiety inducing, And these companies are doing more than that.”
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Gurley cites rumors of thirty billion dollar Nvidia investment into OpenAI, calls modern venture capital sport of kings.
ainvidia“And so, there's rumors today of a $30,000,000,000 investment from Nvidia into OpenAi on top of everything they've already already raised and spent.”
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Gurley cites rumors of thirty billion dollar Nvidia investment into OpenAI, calling it sport of kings venture capital.
ainvidia“there's rumors today of a $30,000,000,000 investment from Nvidia into OpenAi on top of everything they've already already raised and spent.”
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Gurley credits Pinker and others with shifting public perception on nuclear energy from negative to positive.
nuclearpolicy“Like like, the the the world has vilified this technology. It's amazing technology. It's clean technology.”
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Gurley credits Pinker, Musk, and others for shifting nuclear energy perception from vilified to positive five years ago.
nuclearpolicy“Like like, the the the world has vilified this technology. It's amazing technology. It's clean technology. What Germany is doing is bad.”
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Gurley argues society pushes people toward safe jobs out of worry about economic well-being, not to stifle creativity.
career choicesafe jobs“I always wanna say that because I don't think I don't think anyone's out to stifle creativity per se, but they worry. They worry about the kids' economic well-being.”
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Gurley argues society pushes people toward safer jobs out of well-intentioned worry about economic well-being rather than malice.
career choicesafety“They worry about the kids' economic well-being. They worry about, you know, their ability to have a family and put food on the table, and and they push people towards safer jobs.”
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Gurley says the continuum between safe jobs and creative passionate jobs has gone too far to one side.
book missioncareer advice“I think I think we the continuum between safe jobs and and and creative passionate jobs has has just gone too far to one side.”
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Gurley says ultra competitive college path creates zero sum mindset when most fields actually have tons of winners.
collaborationcompetition“And in most fields, and I'm sure this is true in theater even though I've never worked in it, there's tons of winners.”
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Gurley says people avoid industry epicenters fearing competition, but there are way more jobs and learning becomes easier there.
career strategylocation“Peers are easier. They're all around all the time. It's people, I think, don't do it because they fear it's too much competition, but there's also way more jobs.”
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Gurley argues artisans differentiate on field nuances not in LLM models, which AI attacks last.
aicraftsmanship“And it's the subtle nuance in any field that's not baked into the LLM models. And so this is where I go back to this notion as an artisan.”
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Gurley argues artisans differentiating at the edge of their field are the last thing AI will replace, not rote work.
aicraft“The way you're differentiating yourself is what's out on the edge of that field. And that's the last thing the AI is coming after.”
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Gurley warns people who chose safe jobs without loving them are sitting ducks for AI technology.
aidisruption“I think you're those are the people, oddly enough, that are kinda sitting ducks for this new technology that's coming along.”
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Gurley argues studying what fascinates you gives energy while studying uninteresting subjects drains it, creating competitive advantage.
flow statelearning“If you're completely fascinated with something, the hone your craft, the continuous learning gives you energy. If you're forced to study a subject you're not that interested in, it feels like work.”
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Gurley argues high-agency people fascinated by their work find AI accelerates their lives rather than threatens them.
agencyai moats“And in some ways I would say people with high agency that are really fascinated about what they do, their life is accelerated by AI.”
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Gurley states winning companies now raise $400-500 million minimum before considering going public.
ipo marketvaluations“Today, every company that is being identified as a winner is ingesting 400 or $500,000,000 minimum before they even think about going public, if they're ever gonna think about that.”
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Gurley notes US public companies have fallen to less than half their peak number.
ipo marketpublic markets“So the number of public companies in The US is less than half of peak. And so we've really had a fall off in the number of companies that are actually public.”
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Gurley argues late stage funds intercept growth years formerly in public markets oligopolistically.
ipo marketlate stage funds“I would say the late stage funds have come up with a pretty clever premise, which is if they can intercept those growth years that used to be in the public markets and keep it for themselves in an oligopic kind of way.”
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Gurley calls circular deals horrific and says auditors should not have approved them.
accountingai moats“I think the circular deals are horrific. I don't think the auditor should have approved them. And I think whenever you eventually have an unwinding, they're gonna make it worse because they won't be sustainable.”
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Gurley criticizes circular deals where companies convert cash to revenue, saying all major AI players do it.
accountingai moats“You shouldn't be able to move cash from your balance sheet and create revenue on your income statement. I just don't think that should be okay. But they're all doing it.”
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Gurley says ChatGPT compared circular AI deals to WorldCom and Enron when given deal structures.
accountingai moats“I just explained the structure of them to chat GPT, and I would encourage anyone to go do this like it's a exercise anyone could do.”
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Gurley explains Microsoft's OpenAI deal involves cashless revenue through cloud credits for equity.
ai moatsmicrosoft“So you get equity for credits and then those credits are used to run workloads on Azure. That is cashless revenue for Microsoft.”
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Gurley argues circular deals explain why Nvidia's multiple won't go higher despite strong growth.
circular dealsnvidia“People wanna understand why the Nvidia multiple won't go higher. I think it's the circular deals. Like if they're not material, don't do them.”
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Gurley notes AI fear polling is 20 percent in China versus 80 percent in America.
ai moatschina“And I think you guys mentioned this, but the polling on AI fear in China is like 20% or something like that. And it's like 80 here in America.”
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Gurley blames AI founder fear-mongering for data center projects being stopped and regulatory impacts.
ai moatsfounders“That starts- Some of the founders. Yeah. And it's starting to have ramifications for the industry. A number of data center projects has been stopped.”
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Gurley says AI startups worrying about regulation from the beginning is unprecedented except for SBF.
ai startupsregulation“Prior I to SBF, I've never seen a startup worry about regulation this much from the very beginning. Now we're seeing it again here.”
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Gurley says young AI companies begging for regulation is unprecedented and threatens idealistic entrepreneurship.
ai moatsregulatory capture“So there's these new areas there and now AI where very young companies are begging for regulation, which is not anything I've seen in my career either.”
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Gurley argues Microsoft's late nineties regulatory threat enabled Amazon and Google to emerge.
antitrustinnovation“I think that had Microsoft not been under threat in the late nineties, you may not have seen Amazon or Google or a lot of companies you may not have seen.”
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Gurley argues high margins at big tech companies may indicate market failure not success.
big techmarket failure“I would argue that this, I don't think you're going to get a lot of other people in Silicon Valley that would be willing to say this, but it might be indicative of market failure rather than market success.”
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Gurley explains OpenTable unlocked parametric search for restaurants that was previously impossible without calling each restaurant individually.
marketplacesnetwork effects“Before OpenTable, you could not do that. You'd have to call each one of them, and so it unlocked a consumer value proposition that didn't exist.”
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Gurley argues dynamic pricing is essential for digital marketplaces and giving it up would be fatal.
marketplacespricing“And I knew that if you wanted to create a digital marketplace, you wanna use price to to cause liquidity, to get encourage drivers to come out at the right time, like you'd hate to give up price in a digital marketplace or auction, like you never would.”
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Gurley told partners to pursue any company layering technology on top of black cars before seeing Uber.
investment thesismarketplaces“I said to my partners, if we ever see a company that's putting a layer on top of the black cars, we should run at it.”
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Gurley quotes Bezos saying he only invests in founders with unstoppable determination to execute regardless of funding.
bezosfounder traits“He said, I wanna believe this person's gonna go do this, come hell or high water, whether I get involved or not, nothing's gonna stop him.”
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Gurley quotes Bezos saying he only looks for determinism in founders who will succeed regardless of investment.
bezosfounders“He said, I wanna believe this person's gonna go do this, come hell or high water, whether I get involved or not, nothing's gonna stop him. And that's the trade he's looking for.”
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Gurley says best VCs have missed lists because they position themselves for opportunities, prerequisite to great investments.
deal flowpositioning“yeah, I mean, it took me forever to realize that some of the best venture capitalists have this missed list and the reason they have the missed list is because they're really effective at putting themselves in the right position to have the opportunity, which is a prerequisite to actually making the great investments.”
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Gurley says he brought Larry and Sergei to his partnership but failed to chase the Google investment.
googlemissed deals“I met Larry and Sergei, was very early in my career, I brought them into the partnership and they presented and we failed to lay chase.”
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Gurley argues network effects are easier to build when supply is fragmented rather than consolidated like Ticketmaster venues.
industry structuremarketplaces“Part of what I loved about both OpenTable and Uber, it's easier to build a network effect if supply is limited, I can't You know how many people have tilted against Ticketmaster and whatnot?”
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Gurley estimates 98% of venture capitalists are exclusively focused on AI investments right now.
aimarket dynamics“From where I sit, 98% of venture capitalists are only looking at AI and they're AI all day long, they don't wanna see another business”
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Gurley reports 98% of VCs focus solely on AI and non-AI company valuations halved in five weeks.
aivaluations“98% of venture capitalists are only looking at AI and they're AI all day long, they don't wanna see another business and and and in the past five weeks, the valuations on the non AI companies have been cut in half”
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Gurley claims 98% of VCs focus only on AI and non-AI valuations were cut in half in five weeks.
aivaluations“98% of venture capitalists are only looking at AI and they're AI all day long, they don't wanna see another business and and and in the past five weeks, the valuations on the non AI companies have been cut in half and so that mentality is gonna be reinforced even more and so there's just no oxygen.”
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Gurley says non-AI company valuations have been cut in half in past five weeks due to VC focus on AI.
aimarket timing“in the past five weeks, the valuations on the non AI companies have been cut in half and so that mentality is gonna be reinforced even more and so there's just no oxygen.”
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Gurley argues venture capital bends toward youth because founders are young and young VCs understand new techniques better.
agefounders“I think it's very hard to be a venture capitalist as you get older and I think it's very easy to break into venture capital as a young person.”
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Gurley warns venture capital has massive oversupply of aspirants and being young alone won't make someone good.
career advicecompetition“If you think like just being young will make you good at venture capital, that's wrong. But and it is a job that does not have a supply demand balance.”
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Gurley states the average age of a new Benchmark partner is about 30 years old.
agebenchmark“the way, the average age of a new partner at Benchmark that becomes an equal partner is about 30.”
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Gurley argues leading AI companies seek regulatory protection because their biggest threat is open source movement.
ai moatsopen source“They're leading the biggest secondary transactions for their employees in the history of venture capital, the history of the world.”
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Gurley argues leading AI model providers seek regulatory protection as biggest threat to their billions is open source movement.
ai moatsopen source“And so people are putting billions of dollars in their pocket. And so there's also a huge incentive to from the two leading model providers to seek regulatory protection, which most people wouldn't think regulation is but they've been begging for regulation since they started from from three years ago.”
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Gurley identifies open source as the biggest threat to leading AI model providers' businesses.
ai moatscompetition“the biggest threat to their businesses where they're cashing in billions of dollars is the open source movement.”
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Gurley argues AI anxiety is much lower in China because leaders there don't engage in doomsday messaging.
ai anxietycultural differences“there have been polls about this AI anxiety in China that are a fraction of the anxiety levels that they have here in The US.”
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Gurley notes AI anxiety polls in China show fraction of US levels because Chinese leaders don't do doomsday messaging.
ai moatschina“Why? I think it's because the leaders over there that are working on these products aren't doing the doomsday stuff that Dario is doing.”
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Gurley calls it radical that US AI company leaders are the biggest doomsayers about their own technology.
ai moatsregulatory capture“The people leading the effort at the top companies here in The US are the biggest doomsayers. It's radical.”
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Gurley calls it radical that US AI company leaders are the biggest doomsayers about their own technology.
ai companiesdoomsday“The people leading the effort at the top companies here in The US are the biggest doomsayers. It's radical. But I would also say we have been prone to overstating these risks in the past.”
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Gurley notes more bank tellers exist today than forty years ago despite ATMs.
automationemployment“There's still people working in banks today despite the fact that the ATM There've been studies that say there's more bank tellers today than there were like forty years ago.”
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Gurley says AI wave threatens more broadly than previous tech waves like PC, internet, or mobile.
ai moatsventure capital“And the past week in the financial markets, like a whole bunch of companies, you know, traded down because of fear that this would would disrupt them.”
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Gurley's research found seven out of ten college graduates would do it differently if starting over.
career pathseducation“And seven out of 10 said yes. Wow. And we redid this study with Wharton to make sure we had done it scientifically”
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Gurley announces foundation giving 105 grants annually to people financially stuck but wanting to chase their dreams.
careerfoundation“I'm also starting launching a foundation. I've already set aside the money, but I'm gonna give a $105 grants a year to people who want to chase their dreams, but maybe a little stuck financially and need a little help to get there.”
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Gurley repeated career regret survey with Wharton People Analytics to validate SurveyMonkey findings on career satisfaction.
career regretresearch methodology“We did a survey first on survey monkey, and then we did it again with Wharton people analytics, because we wanted to make sure we got it right.”
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Gurley's survey found six to seven out of 10 college graduates would do their career differently if starting over.
career adviceregret“if you could start your career over again, would you do it differently? And in our original SurveyMonkey, seven out of 10 said yes. With Wharton, it was six out of 10.”
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Gurley's SurveyMonkey found seven out of ten would restart careers differently, Wharton survey found six out of ten.
career regretdaniel pink“And in our original SurveyMonkey, seven out of 10 said yes. With Wharton, it was six out of 10. It's still a vast majority of people.”
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Gurley cites Daniel Pink finding that humans dwell on regrets of inaction more than action mistakes.
career_regretinaction“With Wharton, it was six out of 10. It's still a vast majority of people. Daniel Pink in his book, The Power of Regret notes that humans dwell on regrets of inaction.”
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Gurley argues society steers people toward safe jobs that AI may make unsafe anyway over 80,000 working hours.
ai disruptioncareer advice“And I fear that our society has been steering people towards quote safe jobs, which in a day of AI may not even be that safe anymore.”
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Gurley argues that safe jobs are threatened by AI and fascination-based careers are actually safest now.
ai_impactcareer_advice“I fear that our society has been steering people towards quote safe jobs, which in a day of AI may not even be that safe anymore.”
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Gurley asserts Dylan knew more about folk music than anyone else in Minnesota through obsessive study.
bob dylancraft“I have a high confidence level based on what I've read that he knew more about folk music than anyone else in Minnesota when he left for New York.”
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Anthony Scaramucci, 17 March 2026
ai moatscraft“part of what's really cool about an artisan or a craftsman is they're really studying the nuance at the edge of the field. And that's the stuff that's not in the AI model.”
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Gurley quotes Cuban dividing people into those who use LLMs to learn faster versus those avoiding learning.
ailearning“He said, there are two types of people in the world, those that use LLMs to learn faster and even more, and those that use LLMs to avoid learning.”
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Gurley says college makes people competitive and sharp-elbowed when the world is not actually zero sum.
collaborationcollege“But what I would tell people is the world's not zero sum. In any field that we're in, there's, there's many, many winners, many, many great winners.”
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Gurley recounts Matthew McConaughey's father telling him not to half-ass his film career switch.
career_changecommitment“And he was afraid to tell his father, but when he did, his father said famously now, Don't half ass it.”
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Gurley claims this is the best time in history to chase dreams due to AI learning tools.
aicareer timing“the, the methodology in my book, the, the AI tools that are out there for learning and connecting have never been this is the best time in the history of the world to go chase your dreams.”
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Gurley advises running toward AI to understand its capabilities in your field provides protection and differentiation.
ai strategycareer advice“Know exactly what AI can achieve in your field and be on the edge and the forefront of playing with it, and you will be remarkably differentiated.”
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Gurley recommends annually asking yourself if you want to do your current job thirty years from now.
career reflectiondecision making“I would encourage people to at least once a year rise up and say, is this what I wanna do with the rest of my life?”
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Gurley illustrates barbell strategy by combining historical knowledge with understanding of TikTok for marketing roles.
candidate of onedifferentiation“imagine, go back to this 20 people interviewing for this marketing job. If I walk in, I know the history and I know everything about how TikTok works. I look like that candidate of one.”
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Gurley cites 2023 Gallup poll showing over 50% aren't engaged at work, only 23% qualify as engaged.
careerdata“If you're unfulfilled at work, there's a 2023 Gallup poll study that came out and said over 50% of people aren't actively engaged at work. And the number that qualifies engaged is like 23%.”
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Gurley argues AI models contain only written best practices, not edge knowledge being discovered today.
ai moatscompetitive advantage“So AI and large language models are recording like all the best practices that have been written down. But the stuff that's on the edge that's being discovered today is not in the models.”
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Gurley argues AI captures documented best practices but misses cutting-edge knowledge being discovered now.
ai moatscompetitive advantage“AI and large language models are recording like all the best practices that have been written down. But the stuff that's on the edge that's being discovered today is not in the models.”
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Gurley reports survey finding that 60% of people would choose a different career if starting over.
careerdata“we did a survey where we asked people if you could go back in time and start your career over again, would you do something different? And six out of 10 said yes.”
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Gurley argues almost any job can be approached as an artisan would, not just creative fields.
aiartisan“I have this interesting theory where almost any job you could think of it as being an artisan.”
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Gurley argues top performers in any field understand nuance, which AI struggles with.
aiexpertise“Or do you think of, and I would say the best in those And fields probably so what is it they do? They understand nuance in their field quite a bit.”
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Gurley uses Bjorn Borg as example of athlete who retired before equipment evolution changed the game.
ai adoptionanalogies“Bjorn Borg, the tennis player retired very early in his life. He'd like in his thirties. And for a variety of reasons, was burned out.”
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Gurley uses Bjorn Borg's failed comeback with outdated racket to illustrate importance of adopting new tools.
ai adoptionevolution“And for a variety of reasons, was burned out. But he was one of the last generation of people to play with these small wooden rackets.”
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Gurley describes how Bjorn Borg retired playing wooden rackets while others switched to superior graphite technology.
ai adoptionevolution“I don't know if you ever even know what those are. But while he was retired, everyone switched to these bigger graphite rackets with a much bigger sweet spot.”
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Gurley argues humans evolve with tools and modern tools create overwhelming competitive advantages.
ai adoptioncompetitive advantage“Like you're if you're a farmer with a tractor and a drone thing and all this stuff, you're going to run over a farmer with a hoe and a and a donkey.”
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Gurley's Wharton survey found six out of ten people would choose a different career if starting over.
career regretresearch“I launched a survey on SurveyMonkey that said, if you could go back and start over, would you would you do a different career? And seven out of 10 people said yes.”
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Gurley notes forty percent of people shift away from college major within five years.
career changeeducation“I invested all of this to get to this college, to get to this degree. And if I move away from that, did I just waste all that time?”
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Gurley cites research showing forty percent leave their major field within five years, increasing further at ten years.
career switchingcollege major“five years after college, forty percent of people are no longer working in the field that was their major. And that number gets bigger at 10.”
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Gurley says colleges now require major selection at high school junior year, three years earlier than before.
college admissionseducation“So we've moved the decision of what major are you gonna pick from the end of your sophomore year to the end of your junior year in high school.”
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Gurley quotes MrBeast saying collaborative learning group achieved forty thousand hours through shared knowledge.
collaborationmrbeast“He said, you know how they talk about ten thousand hours referring to the Malcolm Gladwell book? He says, we got forty thousand hours because we were sharing it all.”
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Chris Williamson, 14 March 2026
ai moatscontinuous learning“Now, if you contrast that with someone who is a proactive, independent climber, who's trying to build their craft, their world, they're a continuous learner. For that person, AI is a jet pack.”
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Gurley explains liquidation preference allows VCs to treat investments like debt, getting paid first in sales.
fundraisingliquidation preference“So venture capitalists typically take preferred stock, and it has a term called liquidation preference, which means in a sale, they get the option to basically treat it like debt.”
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Gurley explains liquidation preference means founders in AI rounds raising $500M see no proceeds until that amount is recovered first.
founder equityipo market“And so if you've raised in these days of these AI rounds, if you raise 500,000,000, Lake Common doesn't even participate until you get a sale over that, technically.”
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Gurley used AI to analyze best nonfiction conclusions, discovering eight of ten take orthogonal directions.
ailearning“And in reading through that list, I noticed that eight or nine of the 10 took an orthogonal direction to the book, so it didn't summarize.”
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Gurley used GPT to analyze best conclusion chapters, discovering eight or nine of ten took orthogonal directions.
ai applicationmethodology“And in reading through that list, I noticed that eight or nine of the 10 took an orthogonal direction to the book,”
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Gurley reports lawyers he spoke with have already drastically reduced paralegal staff due to AI.
ai impactemployment“Paralegals are already under threat, and I have talked to lawyers that have drastically reduced the size of their paralegal force. I've talked to them. That has already happened.”
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Chris Williamson, 14 March 2026
ai impactjobs“Paralegals are already under threat, and I have talked to lawyers that have drastically reduced the size of their paralegal force. I've talked to them.”
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Gurley cites Stanford research showing 40% of people shift away from their college major within four to five years.
careereducation“But a lot of people do. There's Dave Evans at Stanford who does the Designing Your Life class and book, you know, they highlight that like four years, five years out, 40% of people are no longer doing the work that was in their major.”
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Gurley asked himself if he saw himself doing computer engineering in thirty years, triggering his career shift.
career changeself-assessment“I was going home at night and studying something different. And I asked myself that question, do I see myself doing this in thirty years?”
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Afford Anything Podcast, 13 March 2026
careerdecision-making“And I paused in each one of them and said, do I want to be here thirty years from now, like in that office?”
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Afford Anything Podcast, 13 March 2026
30-year rulecareer“I paused in each one of them and said, do I want to be here thirty years from now, like in that office?”
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Gurley used the thirty-year test again on Wall Street, walking through senior offices at 10PM.
career changethirty-year rule“I paused in each one of them and said, do I want to be here thirty years from now, like in that office? Assume I do great, but I've done this my whole life.”
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Gurley cites Dan Gilbert who became more known for side hustles than core jobs, creating Microsoft Garage as example.
career strategymicrosoft“In almost every case, he ended up becoming known more for the side hustle than the core job.”
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Gurley cites 2023 Gallup poll showing only 23% feel engaged at work, 59% quiet quitting.
quiet quittingstatistics“Gallup did a poll in 2023 where only 23% of people feel engaged at work. And they qualified like 59% as quiet quitting.”
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Afford Anything Podcast, 13 March 2026
googlemistakes“They had 25 employees at the time, to tell you how early it was. And they presented and we failed to chase that.”
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Gurley says venture capital requires breaking your own rules or you'll say no to everything.
decision-makinginvesting“venture capital is a game where you have to one of the reasons, group decision making works so well is you're you're gonna have to break one of your rules or you're gonna say no to everything.”
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Gurley describes MrBeast spending sixteen hours a day for four years on Skype calls with peers learning YouTube together.
mrbeastpeer learning“And they ended up, he says on Skype calls for over sixteen hours a day for four years. And they learn together.”
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Gurley reports all four MrBeast collaborators gained over a million followers and made over a million dollars.
outcomespeer learning“And he claims that every one of those people ended up with over a million followers. Every one of them ended up making over $1,000,000.”
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Afford Anything Podcast, 13 March 2026
epicenterlocation“I could have, I think, fooled myself. And I went through this mental model when I was thinking about it and said, oh, I'll be the best venture capitalist in a the sixth VC city.”
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Gurley says Silicon Valley's willingness to grant fifteen-minute meetings is shockingly higher than Wall Street.
mentorshipnetworking“In Silicon Valley, the frequency with which you can ask someone for fifteen minutes of their time and get a yes is shockingly high.”
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Afford Anything Podcast, 13 March 2026
career changelate bloomer“And that exercise led Burt Beverage, whose nickname is Tito, to launch the first spirit company in Texas, a vodka company that now is the number one selling spirit in North America.”
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Gurley argues humans evolve with their tools, comparing AI adoption to a tractor versus plow competition.
ai moatscareer advice“There's tons of anthropologists that have written about how we evolve with our tools, and you can just imagine a farming competition between a guy with a tractor and some drones and the other guys got a plow and a donkey. Who's gonna win? And you need to think about it that way.”
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Gurley claims understanding AI's impact on your role better than peers protects you from layoffs.
ai moatscareer advice“If there are 40 people in your org all doing the same thing and you understand how AI affects that role more than the rest of them, you're not getting laid off.”
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Gurley developed a mental exercise asking himself if he saw himself in the same role thirty years later.
career advicedecision framework“I developed this mental exercise that I didn't realize I was doing, but at the time, but I said to myself, well, a couple years in, we started a third project, looked like the second project, looked like the first project.”
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Gurley evaluated his Compaq career by asking if he wanted to be like the thirty-year engineers he saw.
career advicecompaq“I said to myself, do I see myself here thirty years from now? And there were people in the building that had been engineers for thirty years, so I could, you know, I could I could get a perspective on it by just thinking, do I wanna be them?”
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Gurley found Dell trading at six times earnings after laptop fire and option hedging problems.
dellinvesting“It was trading at six times earnings. Their laptop had caught on fire, and they had this option hedging strategy gone awry Uh-huh.”
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Gurley's ROIC analysis showed Dell had a 10 to 1 advantage over Compaq in inventory and cash flow.
dellroic“And they had like a 10 to one advantage over Compaq and the other companies because of how they work their inventory and their positive cash flow cycle.”
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Bill Gurley, 6 March 2026
bookcareer advice“Yeah. I mean, if I have one goal of this book, it's to be Uncle Richard for as many people as possible.”
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Bill Gurley, 6 March 2026
bottom rungdanny meyer“He enrolled in a in a $300 restaurant management course that he found in a magazine on a corner of the street in those boxes, you know, in New York.”
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Gurley recommends profiling field-defining figures to study what makes them great using available resources.
career advicelearning“Like if you're gonna go be a writer, you know, have a profile of Michael Lewis and Malcolm Gladwell and Krakauer and like study what makes them great.”
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Gurley describes how Bezos developed his 80-year-old self framework while David Shaw tried to retain him.
bezoscareer decisions“David Shaw was trying he worked at DE Shaw. David Shaw was trying to get him to not go, and he came up with this idea which is”
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Gurley announces Running Down a Dream Foundation offering $105,000 grants to support career transitions.
career supportfoundation“I was inspired by getting this question a lot, and if you look on the last page in the book, I'm gonna launch a foundation called the Running Down a Dream Foundation.”
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Gurley argues LLMs contain only existing best practices, so working on the industry edge provides AI protection.
ai moatsartisanship“So if you somehow put yourself on the edge of the industry and are thinking about what's coming in the future, you're more future proof from this.”
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Gurley cites Cuban's distinction between using LLMs to accelerate learning versus avoiding learning entirely.
ai moatslearning“Mark Cuban the other day tweeted, he said he said there's two types of people. The the people that use LLMs to learn faster and the people that use LLMs to not learn at all.”
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Gurley says Michael Dell acknowledged that Gurley's ROIC analysis revealed insights Dell didn't know about their own business.
analysisdell“Michael kindly tweeted about my book the other day and said he taught us some things we didn't know ourselves about our business.”
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Gurley explains Benchmark created an equal partnership structure where all partners earn the same and have equal decision-making power.
benchmarkculture“The benchmark guys had lived within those frameworks decided to do something crazy, which was to create an equal partnership where everyone makes the exact same amount of money and everyone has the exact same power within the organization for decision making and there's no leader.”
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Gurley's Wharton survey found six in ten people would choose a different career path if starting over.
careerregret“We hired we hired Wharton to do an official academic review, and that one came out six and ten. There's a book by Daniel Pink about regrets called the power of regrets.”
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Gurley wrote a post debunking an NYU professor's analysis that Uber would never exceed $4 billion in value.
tamuber“He published this piece that said Uber would never be worth more than $4,000,000,000 And I wrote one of my favorite blog posts ever titled How to Miss by a Mile, where I took apart his analysis and tried to well, I had a little I had an unfair advantage.”
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Gurley knew Uber was already 20 times bigger than taxi market in San Francisco contradicting professor's TAM analysis.
marketplacestam“I already knew in San Francisco that Uber was 20 x bigger than the taxi market.”
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Gurley notes the professor analyzing Uber admitted he had never used the product, only taxis.
analysistam“Not only that. In in the in the report of his, which a summary version got public, but I found the background version, he admits that he had never ridden Uber and only taken taxis.”
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Gurley warns Microsoft and Google's AI investments may repeat IBM's mistake of empowering a future competitor.
ai moatsmicrosoft“I don't think they're dependent on the partner anymore, and it harkens back in my brain to IBM letting Microsoft put the OS inside their PC.”
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Gurley argues most US endowments and foundations are now overinvested in private equity and venture capital.
endowmentsprivate equity“I think the Swinson mimic effect has now played out. And I think personally that most of the endowments and foundations in The US are over invested in private, both PE and venture.”
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Gurley argues most US endowments and foundations are over-invested in private markets with no incentive to get paper marks right.
endowmentsprivate equity“And I think that the way the industry is structured in this would require longer conversation. There's no incentive for the operators inside of the endowments or foundations to get the paper marks right.”
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Gurley says Bezos looks for unbridled determinism in founders who will execute regardless of investor involvement.
bezosdeterminism“I only look for one thing, which is that this person's going to go do this thing.”
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Gurley recalls Travis Kalanick's first two companies ending in bankruptcy or minimal returns before Uber.
founderstravis kalanick“I remember when we did the first Uber investment, Travis, his his first couple of companies, one of them I think ended up in bankruptcy.”
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Gurley quotes Josh Wolf's saying that chips on shoulders put chips in pockets.
foundersmotivation“Josh Wolf of Lux Capital has a saying chips on shoulders put chips in pockets.”
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Gurley emphasizes the person matters more than the concept, citing founders who pivoted 180 degrees.
foundersinvesting“And we've seen incredible businesses be built by great founders who have pivoted a 180 degrees from the original idea.”
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Gurley says AI is a huge threat to people following a conveyor belt career path without differentiation.
aicareers“I think those people, AI is a huge threat because they're like, they don't really know why they're there.”
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Gurley argues AI is a jetpack for people running their own lane with bespoke passion and goals.
aicareers“For that individual, is AI a threat or is it a jetpack? I actually think it's a jetpack because now I can go learn about anything I want.”
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Gurley warns that China's open source AI dynamic creates hypercompetitive weapon politicians don't understand.
ai moatschina“And I don't think the world, especially the the the politicians understand how, like unbelievably powerful open source is as a a as a weapon, like, as a competitive weapon.”
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Gurley argues open source creates hypercompetitive dynamics politicians don't understand as competitive weapon.
ai moatschina“I don't think the world, especially the the the politicians understand how, like unbelievably powerful open source is as a a as a weapon, like, as a competitive weapon.”
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Gurley argues open source creates hypercompetitive dynamics where innovations are immediately absorbed across competitors.
aicompetition“And if you have 10 companies all doing open source, the minute an idea is shared, it's available to the other 10, and they absorb it immediately.”
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Gurley predicts the US cannot stay ahead of China in AI with two proprietary models versus ten open source ones.
ai moatschina“I think the odds that that, you know, The US with two, you know, proprietary models can stay ahead of China with 10 open source ones is very low.”
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Gurley reports Chinese VCs told him Chinese founders study US relentlessly while Americans don't study China.
chinacompetitive advantage“They watch the YouTube interviews. They listen to the podcast. They study them like crazy. He said, founders and and VCs in America don't study Chinese.”
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Gurley says venture funding is now completely preemptive with investors forcing money on companies.
ai bubbleventure capital“So the the the the days when the company would run out of money or get close to running out and decide, oh, we're gonna go raise now is over. Like, the the it's preemptive.”
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Gurley says Adam Neumann's salesmanship in WeWork Series A was unlike anything he had ever seen.
founderssalesmanship“I remember where I was when he presented to us. Now keep in mind, Benchmark's never done a real estate transaction in the history of the firm.”
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Gurley recalls knowing Benchmark would fund WeWork at Series A despite never doing real estate deals.
salesmanshipventure capital“Now keep in mind, Benchmark's never done a real estate transaction in the history of the firm. And we're about thirty minutes into the presentation. This is series a.”
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Gurley's father was recruited from Langley Air Force Base to help start NASA in Houston.
career movesfamily history“And he's working at Langley Air Force Base in a wind tunnel. And someone comes by and ask him and 49 other people working there, would you wanna move to Houston and help start NASA?”
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Gurley developed a mental exercise asking if he saw himself in his job thirty years from now.
career decisionsmental models“I had this I developed this mental exercise that I didn't realize I was doing, but at the time, but I said to myself well, a couple years in, we started a third project, looked like the second project, looked like the first project.”
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Gurley spotted Dell trading at six times earnings after laptop fire and hedging problems, then went positive on the stock.
dellinvestment“It this the company was in trouble. It was trading at six times earnings. Their laptop had caught on fire, and they had this option hedging strategy gone awry”
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Gurley used return on invested capital analysis showing Dell had 10 to 1 advantage over Compaq.
analysisdell“we had done some analysis using this new tool called return on invested capital, and they had like a 10 to one advantage over Compact”
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Gurley paused in front of senior offices at 10 PM asking if he wanted that career path.
career decisionsturning points“I don't even know why I did this in front of each of those four offices and said, is that gonna be me?”
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Gurley recounts how Danny Meyer's uncle gave permission to pursue restaurants instead of law school.
career pivotsdanny meyer“And this led to a conversation where his uncle Richard told him, you know, Danny, all you ever do is think about restaurants.”
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Gurley recommends keeping fanboy journals studying people defining your field to accelerate learning.
deliberate practicelearning“Like, there's there's never been a better time in the history of the world to learn on your own time.”
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Gurley describes high school teacher who built football play categorization app with 700,000 followers after seeing his speech.
career changeimpact“And it took about five years, but he launched a website where he categorizes offensive football plays, and then he created created a software app.”
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Gurley is launching a foundation offering $105,000 grants to help people change career direction.
career changefoundation“I we'll see how it goes, but we're gonna offer a $105,000 grants to people who need a little boost to get headed in this direction.”
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Gurley advises being the most AI-enabled version of yourself using tractor versus donkey analogy.
aicareer advice“One, in any role in any field, be the most AI enabled version of yourself you can possibly be.”
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Gurley advises being the most AI-enabled version of yourself in any field, citing tool evolution.
aicareer advice“in any role in any field, be the most AI enabled version of yourself you can possibly be. There's tons of anthropologists that have written about how we evolve with our tools.”
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Gurley argues those who best understand AI's impact on their role won't be laid off.
aicareer“if there are 40 people in your org all doing the same thing, and you understand how AI affects that role more than the rest of them, you're not getting laid off.”
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Gurley quotes Cuban's distinction between using LLMs to learn faster versus not learning at all.
aicuban“Mark Cuban the other day tweeted, he said he said there's two types of people. The the people that use LLMs to learn faster and the people that use LLMs to not learn at all.”
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Gurley cites Mark Cuban distinguishing people who use LLMs to learn faster versus not learn at all.
ailearning“The the people that use LLMs to learn faster and the people that use LLMs to not learn at all. I thought that was profound.”
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Gurley quotes Bezos saying he only invests when founders will pursue their vision regardless of funding.
bezosfounders“I only look for one thing. I want to know that this person's gonna go do this thing come hell or high water, whether I invest or not.”
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Gurley says Nadella diagnosed Microsoft as a know-it-all culture and transformed it into a learn-it-all culture.
culturemicrosoft“And he said, he told everyone we're gonna change it from a know it all culture to a learn it all culture.”
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Gurley says Silicon Valley has nightly networking events that massively increase probability of lucky career breaks.
careernetworking“And on top of all that, what I just said, a lot of people talk about luck in their career path.”
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Gurley argues that being in an industry epicenter dramatically increases probability of lucky career events.
career advicegeography“In the epicenter, your probability of lucky events goes way up. Way up. And so, if you can do it, do it. There's this belief we all have that competition makes it too hard.”
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Gurley explains tech stock selloffs occur because terminal value collapses if AI threatens twenty-year survival.
ai moatssoftware“And for most of these high-tech companies, the next five years cash flow are a fraction of their actual market cap, which means all the values in the terminal value.”
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Gurley explains tech valuations depend on terminal value, so existential concerns collapse price-to-earnings multiples dramatically.
marketstech stocks“for most of these high-tech companies, the next five years cash flow are a fraction of their actual market cap, which means all the values in the terminal value.”
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Gurley describes how industrialized VC funds now offer money to keep best companies private.
ipo marketventure capital“And one of the things that they've decided to do is to approach the companies, the best in class companies, and offer them money to stay private”
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Gurley notes Collison brothers suggest Stripe may never go public as VC funds tell LPs companies stay private.
ipo marketmarketplaces“And those funds that do that turn around and tell the LPs these are the foundations and the endowments that invest in these type of things. You know, these companies aren't going public anymore.”
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Gurley argues IPOs should match supply and demand through bidding, calling current handpicked pricing process ignorant.
ipo marketmarket structure“So if you ask any first year comp sci student and first year finance student to write a model of how an IPO should work, you would allow everyone to bid and you would award the shares to the highest bidder. It's just not like, it's not, it should just be tautological.”
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Gurley argues IPOs should match supply and demand through bidding rather than bankers handpicking prices.
direct listingipo market“if you ask any first year comp sci student and first year finance student to write a model of how an IPO should work, you would allow everyone to bid and you would award the shares to the highest bidder. It's just not like, it's not, it should just be tautological.”
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Gurley notes bonds and crypto ICOs already use supply-demand matching that IPOs avoid.
cryptoipo market“And by the way, that's how every bond is priced. And that's by the way, how all the initial coin offerings work in the crypto world. It's just what you would do.”
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Gurley criticizes bankers handpicking IPO prices and allocating shares only to top clients.
ipo marketregulatory capture“Why would you have a handpicked price when we know how to match supply and demand? And then they really only offer it to their top clients, which is just nutty.”
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Gurley says the IPO market has consolidated from the four horsemen to an oligopoly of three big banks.
ipo marketregulatory capture“It's very common to see all three of the big banks on the cover. And so it's really become a oligopoly of sorts.”
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Gurley cites 2023 Gallup poll showing 53% of people are disengaged at work.
careerdata“there was a Gallup poll in 2023 that like 53% of people are disengaged at work. And that's not great. We've all heard about quiet quitting.”
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Gurley notes colleges now require major selection at application, three years earlier than before.
career pressurecollege“Now they make kids apply to majors when they apply to college a So lot of you've brought that forward like three years.”
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Gurley says regrets of inaction weigh on people's minds increasingly over time, unlike mistakes they forgive themselves for.
career advicepsychology“But the thing we never did, the thing we always thought we should do that we didn't get to, those things weigh on our brain more and more and more as we get older.”
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On with Kara Swisher, 26 February 2026
mr beastpeer learning“he says, seventeen hours a day on Skype together for four years. And so what's going on there? Well, they're co learning what it takes to be successful on YouTube.”
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Gurley reports Mr. Beast says all four members of his learning group became millionaires with million-plus followers.
mr beastoutcomes“And he says all four of them ended up with over a million followers, all four of them ended up millionaires.”
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Gurley describes how Mr. Beast's learning group of four all became millionaires with over a million followers.
mr beastpeer learning“he says all four of them ended up with over a million followers, all four of them ended up millionaires.”
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Gurley claims learning and finding mentors is 10 to 100 times easier in industry epicenters.
geographylearning“But the thing is many of the principles that I have in the book from constant learning to peers and mentors are just 10 to a 100 times easier if you're right in the middle of it with everybody else.”
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Gurley reports lawyers at large firms have already drastically reduced paralegal numbers due to AI.
ai impactjobs“I've talked to lawyers that run large firms that have already drastically reduced the number of paralegals. So it's not theoretical at this point. It's real.”
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Gurley argues workers must understand AI's impact on their industry, comparing it to farmers adopting tractors and drones.
adaptationai“Like if this technology has the ability to impact your industry, you need to know about it.”
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Gurley argues current moment offers unprecedented learning speed, making AI an advantage for continuous learners.
ai opportunitycareer strategy“And so if you're constantly learning, honing, if you're figuring out how to get AI to help you be more productive, you're gonna have even better chance of winning.”
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Gurley warns undiplomatic behavior could push global partners toward China, which he saw performing strongly in August.
chinageopolitics“if we are undiplomatic with our partners around the globe, that they will, it'll be more easier for them to rationalize agreements with China.”
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Gurley warns undiplomatic US behavior could push global partners toward China, which he observed hitting on many cylinders in August.
chinageopolitics“And China is, I just spent some time there in August is hitting on many, many cylinders.”
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Gurley warns alienating trade partners could result in China serving global AI markets while America is isolated.
aichina“I think this could even happen with AI models where there's a fence around America and China's serving the rest of the world.”
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Gurley used a thirty-year thought experiment to test career fit, mirroring Bezos's eighty-year self framework.
careerdecision-making“I don't know that I said, I'm doing this exercise kind of like Bezos did when he started. But I said to myself, do I see myself doing this thirty years from now?”
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Gurley evaluated career paths by asking if he could see himself doing the job thirty years later.
career advicedecision framework“And you can look around the org and see the people that have been in that type of job that long and look at their life and just say, is that something I would enjoy?”
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Gurley's Wharton survey found sixty percent of people would choose a different career path if starting over.
careercareer satisfaction“We did a survey with Wharton and said, if you could go back and start over, would you choose a different career path? And sixty percent of people said yes.”
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Gurley argues Silicon Valley offers daily networking events that accelerate learning and connections by 10X or more.
careernetworking“if you're in Silicon Valley and you have time, you can find an event every night. And at that event, you might meet a peer.”
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Gurley describes Fidel stalking General Magic for six months after reading Rolling Stone, passing up Apple offer.
careerepicenter“These were the individuals of Apple and they had all left to go to a company, General Magic. He didn't know what they did.”
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Gurley clarifies Google presented to Benchmark at 25 employees shortly after he joined the firm.
benchmarkgoogle“I had Larry and Sergei present to the Benchmark partnership shortly after I joined Benchmark with the company had 25 employees, Google.”
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Gurley learned from missing Google that passing on an outlier costs a thousand times more than a loss.
asymmetric riskoutliers“I came out of that with a little bit of your chips on shoulder situation and a little bit more having a higher recognition of an asymmetric wrist indenture and that missing an outlier cost you a thousand X or more than a loss.”
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Gurley says Benchmark focused quarterly reviews on studying missed deals rather than failed investments.
benchmarkprocess“from that day on, we never spent much time talking about the failures. We never beat up a partner because a deal didn't work, but we would once a quarter study the deals we didn't do at nauseum and talk about why we either didn't see them or passed on them”
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Gurley describes Collison probing how Elon uses extreme time constraints to force creative problem-solving.
constraintselon musk“I think the world has been trying to figure out how Elon does what he does, especially from a leadership standpoint.”
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Gurley explains Elon Musk uses time constraints like Jobs used physical constraints to force creative problem-solving.
constraintselon musk“And I realized what he's doing is the exact jobs would tell them the phone has to be this thick.”
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Gurley says modern venture capitalists refuse to take meetings on anything that is not AI-related.
ai moatsmarketplaces“There's a reality where a modern venture capitalist does not wanna take a meeting in anything on AI.”
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Gurley's survey found seven out of ten people would choose a different career if they could start over.
career“We ask a thousand people, if you could start your career over again, would you do something different? Seven out of 10 said yes.”
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Gurley describes how technology waves attract speculators who rush in after seeing quick wealth creation.
ai moatsmarketplaces“One of the things that happens any time there's a technology wave is people get rich quick and then a whole bunch of people see people getting rich quick and they rush in.”
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Gurley suggests we may be in an AI bubble where people are doing speculative things that don't usually work.
ai moatsmarketplaces“When you're in a bubbly time, and we may be right now with AI, people do silly things, things that don't usually work. They get very speculative.”
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Gurley reports survey finding that seven out of ten people would choose a different career.
career advicecareer regret“we asked a thousand people, if you could start your career over again, would you do something different? And seven out of 10 said yes.”
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Gurley expresses sadness that venture capitalists are completely uninterested in non-AI companies right now.
ai moatsipo market“There is a reality where a modern venture capitalist does not want to take a meeting, uninterested in anything on AI.”
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Gurley acknowledges VC's AI-only focus may be rationally correct behavior but creates hardship for non-AI founders with good economics.
ai moatsfundraising“But I I think it's unquestionably true. Like there's just zero interest. And so that's a tough call for someone that's in a business that may have good unit economics that's not AI.”
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Gurley argues running Google ads is the least creative, most ignorant way to acquire customers.
customer acquisitionmarketing“I've always felt that if you're starting a business, the easiest way you could possibly get a customer, the first way the most ignorant person would assume to go get a customer would be to run a Google ad.”
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Gurley describes how most venture rounds now happen proactively with investors forcing money on companies.
ipo marketmarketplaces“Someone thinks you're doing well and knocked on the door and is force feeding you money. And that is currently the way things happen.”
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Gurley warns disciplined fundraising means irrelevance when competitors each have $500M to deploy.
competitive dynamicsfundraising“Well, if you're the disciplined one and there's six players with $500,000,000 each hiring salespeople, you're not going to matter.”
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Gurley cites current employee engagement at fifteen-year lows with 58% disengaged and some actively undermining organizations.
employee engagementstatistics“58% of people say they're not engaged at work. 15 of those 58 say they're quiet quitting. These are horrible numbers.”
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Gurley cites 58% disengagement and 15% quiet quitting data, contrasts with founders' constant learning requirements.
founderslearning“15 of those 58 say they're quiet quitting. These are horrible numbers. Founders live on the edge of a new technological shift constantly, and they can't not know what's happening next.”
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Gurley argues founders must constantly study new technology at a level uncommon in most other industries.
founderslearning“Founders live on the edge of a new technological shift constantly, and they can't not know what's happening next. It requires a level of studying that is foreign in other industries and other fields.”
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Gurley realized by his second year as an engineer that repeating similar projects wasn't his long-term path.
career changeengineering“I was an engineer. I had an engineering degree in undergrad and you know, in my second year as an engineer, you know, we were starting the third project I had worked on and it looked like the second and it looked like the first”
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Gurley partnered with Wharton researcher to study career regret, finding six in ten would choose differently if starting over.
career regretresearch“We partnered with Wharton and did a much broader one. Ours was seven and ten, theirs came back six and ten.”
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Gurley's Wharton survey confirmed six in ten people would choose a different career if starting over.
career regretsurvey data“Ours was seven and ten, theirs came back six and ten. I mean, it's still”
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Gurley's test for true passion is whether you would study the topic in free time instead of consuming entertainment.
career choicepassion“I have a test that I think is the right test for whether something is the type of passion where the tools in this book could help you be successful.”
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Gurley's test for career passion is whether you would spend free time learning about the topic.
career passionlearning“And that is simply, would you spend time outside of work learning about this topic?”
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Gurley cites Danny Meyer leaving a $200,000 salary forty years ago to pursue restaurants.
career changedanny meyer“Danny Meyer, when he, he walked away from a sales job, this company that sold these devices that hook into clothes so that you can't steal them from stores.”
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Gurley cites Danny Meyer walking away from $200,000 salary forty years ago to pursue restaurant career.
career changedanny meyer“He was making over $200,000 a year and this was forty years ago. And so that's a lot”
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Gurley brought Larry and Sergey to Benchmark at 25 employees but the firm failed to invest in Google.
googlemissed opportunities“I had the, both the fortune and now the, the kind of weight of having brought Larry and Sergey in to present to our partnership when they were 25 employees.”
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Gurley argues regulation most often protects incumbents rather than constraining them, contrary to public perception.
lobbyingpolicy“And so companies get big, they spend money lobbying, they spend time in Washington and they get laws written to help them rather than to constrain them.”
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Gurley plans to study countries with less regulatory capture to understand their policies for his new institute.
future planspolicy“Want to, and this will be part of my new thing. I want to go study countries that have less of it and try and understand the policies.”
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Gurley notes committee members fundraise across jurisdictions, which he finds inappropriate.
fundraisingpolicy“One thing that's really amazing that most Americans probably don't realize is once your senator or congressman goes on a committee, they start fundraising in other jurisdictions.”
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Gurley argues capitalism and democracy corrupt each other over time, with most broken industries being most regulated.
capitalismdemocracy“No, I think it's gotten worse over time. I made up this statement once that capitalism and democracy corrupt each other over time. Like at the starting state, everything's fine.”
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Gurley states capitalism and democracy corrupt each other over time as they commingle.
capitalismdemocracy“I made up this statement once that capitalism and democracy corrupt each other over time. Like at the starting state, everything's fine.”
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Gurley says the current AI bubble is unlike anything he has seen in his career including previous tech waves.
ai bubbleunprecedented“Yes. And in a way, I've, I mean, I've seen a lot of waves and a lot of bubbles, and this is like nothing I've ever seen. Yeah. Like when Amazon was losing a billion”
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Gurley says OpenAI's burn rate is five times Amazon's or Uber's, unprecedented in venture capital.
aiburn rate“And when we did at Uber, we had the same kind of burn rate, but Open the Eyes got a burn rate that's five times that size.”
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Gurley says unprecedented capital at every AI project creates uncharted competitive territory.
aicapital“now we're in a weird world where the amount of money that gets thrown at every project, I kind of lived through this with Uber Lyft because both companies had billions and billions of dollars”
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Gurley says competing in top AI categories now requires willingness to lose a billion dollars per year.
aiburn rate“So every one of the most interesting AI categories, you may have to be willing to lose 1,000,000,000 a year just to compete”
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Gurley says with crypto wallets you can send $25,000 in two seconds for two cents.
cryptopayments“And now if you have a wallet of any kind and I have a wallet of any kind, I can send you, you know, 25,000 US dollars in two seconds, and it'll cost me 2¢ to send it to”
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Gurley worked with researcher Joseph Friedman to study academic research on career passion and grit for his book.
book writingcollaboration“Malcolm actually, his team introduced me to a researcher named Joseph Friedman, who pushed us to study the academic part. So we started reading all the research.”
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Gurley's Wharton survey found six in ten people would choose a different career if they could go back.
careerregret“It led to us doing this survey with Wharton where we asked people, if you could go back in life, would you choose a different career? And six in 10 people say yes.”
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Gurley argues the IPO process is broken due to regulatory capture and most people don't understand how it actually works.
direct listingipo“I think the IPO process almost certainly also because of regulatory capture is remarkably broken. I don't actually think the average citizen even knows.”
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Gurley argues citizens mistakenly believe IPOs work like direct listings with price-based allocation.
direct listingipo“I think they think a bunch of people put orders in, you sort them based on who's willing to pay the highest price”
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Gurley says IPO bankers hand-pick price and allocations, creating expected pops as one-day giveaways to clients.
ipomarkets“And for the past twenty five, thirty years, you have these pops that have become expected, I would say. And it's a one day giveaway to their clients.”
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Gurley recommends executives develop five peers in similar companies for quarterly knowledge sharing.
advicelearning“I've often gone to my founders or CEOs and I say, you should tell every one of your direct reports to develop five peers in nearby companies, not direct competitors, things that look similar, and have them meet with them four times a year and then bring back and report up.”
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Gurley says he encourages founders to have executives develop five external peers and meet quarterly, but gets pushback.
learningmanagement“And I've been very unable to make that programmatic or make that successful and people find it foreign.”
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Gurley says his biggest career mistake was not pursuing Google when Larry and Sergei presented at 25 employees.
career mistakesgoogle“The there's a there's a notion in venture capital about asymmetric risks. So if you if you you know, the biggest mistake of my career is I had Larry and Sergei present to the partnership when there were 25 employees at Google and we failed to chase the deal.”
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Gurley says missing Google at 25 employees was his biggest career mistake, not failed investments.
googlemistakes“I had Larry and Sergei present to the partnership when there were 25 employees at Google and we failed to chase the deal.”
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Gurley explains asymmetric risk: funding failures lose 1x while missing big wins loses 10,000x your money.
investing philosophyrisk“If you fund something that doesn't work, you lose one times your money. If you miss this big thing, you lose, you know, 10,000 extra money.”
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Gurley cites AI company jumping from $100K seed valuation to $300M Series A with $10M raised.
ai investingseed funding“I heard just this week about a company that did a seed at a 100 pre and is doing their a for 10,000,000 at 300 pre.”
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Gurley cites AI company going from $100M seed to $300M Series A valuation, diluting investor ownership.
ai investingdilution“So that venture investor that's doing 10 at 300 pre is getting, you know, you know, a tiny percent of this company relative to what people used to get.”
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Gurley says AI companies have bigger burn rates than Amazon or any company in venture capital history.
ai investingamazon“Oh, more than Amazon ever lost. And so the the burn rates are bigger than they've ever been in the history of venture capital. And eventually, they're gonna wanna bring those in.”
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Gurley warns that widespread dependence on one player creates correction risk if they default on commitments.
ai investingconcentration“And that is another thing that could lead to a correction if they ever have to start defaulting on some of those commitments.”
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Gurley notes OpenAI is being funded at $300-500 billion pre-money valuation by proven multi-decade investors.
ai investingopenai“They clearly like, you're not funding something at 300,000,000,000 pre, 400, 500,000,000,000 pre if you don't already believe that.”
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Gurley argues real technology waves necessarily attract speculation and bubble behavior as pairs.
ai moatsbubbles“If the wave is real, then you're going to have bubble like behavior. Like they come together as a pair precisely because anytime there's very quick wealth creation, you're going to get a lot of people that want to come try and take advantage of that or participate in it.”
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Gurley warns retail investors that 100x AI returns already happened; current odds are very low.
ai moatsinvesting“And that's not to say there won't be an incremental AI investment that makes money, I think there will. But your odds right now of that being the case are really, really low.”
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Gurley argues invisible hand capitalism with hyper competition is actively happening in China despite communist label.
capitalismchina“So I think the thing that a lot of people in Silicon Valley love about capitalism is this notion of the invisible hand and competition that leads to innovation and best practice, and the winners rise up and they're better for it. That is happening there.”
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Gurley reports China builds nuclear fission plants at one-fourth the US price; South Korea does too.
chinainfrastructure“So fission being old school, not new school, at one fourth the price that we do it here in The US. So is South Korea, by the way.”
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Gurley says Xiaomi uses one-third the employees per car; predicts one-sixth in ten years.
automationchina“The Xiaomi factory was a third, based on some numbers I was able to acquire, a third the number of employees per car output.”
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Gurley predicts reshored manufacturing will bring hundreds of thousands of jobs, not millions, due to automation.
automationmanufacturing“And so you could calculate the total number of jobs you'd be bringing back if you brought back all this car production and it'd be hundreds of thousands. It's not millions and millions of jobs.”
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Gurley questions whether America benefits from Mag7's trillion-dollar valuations or if they signal market failure.
competitionmag7“Hearing that caused me to ask the question, does America really benefit by the fact that the Mag7 have $3,000,000,000,000 market caps?”
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Gurley says Chinese entrepreneurs match US quality, citing MEMS LiDAR at $130 per car versus thousands.
chinainnovation“These entrepreneurs are every bit as good as the entrepreneurs they are here. There are examples like in LiDAR, they built a MEMS LiDAR product that's like $130 a car.”
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Gurley notes China has ten open source AI models in hyper competition versus US proprietary approach.
aichina“Wild. And by the way, I mean, not to divert too much back, but right now China has 10 open source AI models.”
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Gurley argues IPO pricing is fundamentally broken because bankers pick price and allocation instead of markets.
ipo marketmarketplaces“The way that an IPO's price is so god awful stupid. They pick who gets the stock and they pick the price.”
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Gurley argues IPO pricing should match supply and demand anonymously like bonds, not banker allocation and pricing.
ipo marketpricing“And I've said it over and over again, but a freshman comp size student and a freshman finance student, if you told them to design the IPO, they would just match supply and demand anonymously.”
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Gurley fed AI descriptions of abnormal AI transactions and it flagged patterns similar to Enron and WorldCom.
accountingai bubble“And I just described those things to CHIGBT and ask it for its analysis both as an accountant and as a financial investor.”
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Gurley says boards and CFOs feel competitive pressure to engage in questionable AI transactions.
ai bubblecompetition“So I think there are many boards and many CFOs who have been put in a position where they say, well, if we don't do it, everyone else is doing it, you might fall behind.”
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Gurley criticizes Microsoft-OpenAI deal where credits become revenue without cash changing hands.
accountingai bubble“That's a rev that's a cashless transaction. Like, there's no cash, but it becomes an income statement revenue item for Microsoft.”
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Gurley argues Microsoft's in-kind OpenAI investment creates cashless revenue on income statements, which is not economically ideal.
accountingmicrosoft“That's a rev that's a cashless transaction. Like, there's no cash, but it becomes an income statement revenue item for Microsoft. And I don't think that's ideal from an economic standpoint.”
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Gurley identifies Meta agreeing to cover debt failure without owning the debt as classic off-balance-sheet financing.
accountingmeta“Meta agreed to pay for the failure of debt on a facility where they don't own the debt. You know? And to me, that's classic off balance sheet financing.”
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Gurley flags NVIDIA's unusual promise to buy unsold CoreWeave capacity as revealed in regulatory filings.
coreweavegpu“One of the more peculiar of all the deals is, and this was disclosed in a CoreWeave filing, was NVIDIA has promised to buy any of CoreWeave's service availability that they can't sell to anyone else. That is very unusual. That's not the same as making an investment.”
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Gurley flags NVIDIA's promise to buy unsold CoreWeave capacity as highly unusual arrangement.
ai infrastructurecoreweave“One of the more peculiar of all the deals is, and this was disclosed in a CoreWeave filing, was NVIDIA has promised to buy any of CoreWeave's service availability that they can't sell to anyone else.”
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Gurley says NVIDIA promised to buy any unsold CoreWeave service availability, disclosed in CoreWeave filing, calling it very unusual.
ai moatscoreweave“That is very unusual. That's not the same as making an investment. That could easily help CoreWeave with their debtors and and getting more debt financing.”
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Gurley contrasts US payment friction with instant settlement systems in Brazil, UK, China, and India.
paymentsregulatory capture“Your ACH takes three days to settle. Your wire costs $25 for domestic, $50 for international, and you have to fill out pages and pages exactly.”
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Gurley highlights Coinbase offering 4% daily interest on any stablecoin balance without deposit requirements.
coinbasecrypto“Here, whether it's $10 or or a million bucks, you know, you put it in stable coin with Coinbase and you start earning 4% daily.”
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Gurley criticizes Trump administration investigating Brazil's PIX for undercutting Visa and Apple.
paymentspix“As part of its aggressive economic and political campaign against Brazil is investigating PICS, accusing the payment system of unfairly utter undercutting US financial and technology companies like Visa and Apple.”
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Bg2 Pod, 14 October 2025
paymentsregulatory capture“I mean, that's the most absurd thing I've ever heard. Undercutting Visa? Like, do do they realize they have Visa and Mastercard have, like, the top two operating incomes in the history of American business?”
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Gurley's research found 70% would restart careers differently; Wharton replication confirmed six in ten would.
bookcareer“We did this survey and asked people if you could start your career over again, would you do things differently? And in that survey, 70% of people said yes.”
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Gurley reveals NVIDIA promised to buy any CoreWeave service availability they cannot sell to others.
ai moatscircular revenues“One of the more peculiar of all the deals is, and this was disclosed in a CoreWeave filing, was NVIDIA has promised to buy any of CoreWeave's service availability that they can't sell to anyone else. That is very unusual. That's not the same as making an investment.”
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Gurley warns NVIDIA backstop obscures real demand signals for CoreWeave from investors.
ai moatscircular revenues“That could easily help CoreWeave with their debtors and and getting more debt financing. But it also means as a investor, we we don't know what's going on with real demand for CoreWeave because we probably won't be told if they start moving into the world where they're offloading to NVIDIA or not.”
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Gurley notes Coinbase offers 4% daily interest on stablecoin balances without deposit requirements.
bankingcoinbase“Here, whether it's $10 or or a million bucks, you know, you put it in stable coin with Coinbase and you start earning 4% daily.”
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Gurley calls investigation of Brazil's PIX for undercutting Visa absurd given Visa and Mastercard's record operating incomes.
paymentspix“I mean, that's the most absurd thing I've ever heard. Undercutting Visa? Like, do do they realize they have Visa and Mastercard have, like, the top two operating incomes in the history of American business?”
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Gurley cites surveys showing 70% then 60% would restart careers differently if possible.
bookcareer“We did this survey and asked people if you could start your career over again, would you do things differently? And in that survey, 70% of people said yes.”
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Gurley reports Chinese VCs study the West exhaustively while the West does not reciprocate on China.
chinalearning“They read everything they possibly can. They study any speech. They look at the financials. And he said, the West doesn't do that of China.”
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Gurley says Chinese founders and VCs study the West at a nauseating level while the West does not study China.
chinacompetitive advantage“over lunch, this individual told me, you know, every founder and every VC in China studies the West at a nauseating level.”
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Gurley reports Xiaomi factory makes one thousand cars daily with two thousand employees versus six in US.
automationchina“The factory makes a thousand cars a day with 2,000 employees. It was highly automated, like really highly automated.”
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Gurley reports Xiaomi factory produces one car per day per two employees versus six in the US.
automationchina“Let's say they took it to a thousand employees for a thousand cars. That'd be employed per car per day. That number is like at six in The US.”
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Gurley argues bringing manufacturing jobs back may be futile because automation will eliminate them anyway.
automationmanufacturing“Like, if you wanna bring the jobs back there by the time you get the jobs back, there may not be any jobs. Like like at one Because of automation.”
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Gurley predicts global car manufacturing employment could drop to 400 total jobs due to automation.
automationfuture-of-work“Like like at one Because of automation. The entire global, you know, potential for car manufacturing in five or ten years from now could be like 400 total.”
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Gurley reports Ford CEO Farley shipped a Xiaomi car to Chicago and made extreme statements after driving it.
automotivechina“And he insisted they ship him one back to Chicago, and he's been driving it around. And he's made some pretty extreme statements after having experienced Xiaomi.”
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Gurley quotes Ford CEO saying Chinese vehicle cost and quality are far superior to the West.
automotivechina“And he says even beyond that, their cost, their quality of vehicles is far superior to what I see in the West. We are in a global competition with China, and it's not just EVs.”
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Gurley quotes Ford CEO Farley saying Chinese vehicle quality is far superior and Ford's future depends on competing.
automotivechina“And he says even beyond that, their cost, their quality of vehicles is far superior to what I see in the West.”
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Gurley reports BYD executive denying government subsidies and challenging critics to find evidence in public filings.
bydchina“I brought up the subsidization with Stella Lee at BYD, and she said she said, if I'm getting all this government subsidy money, can you please find it and show it to me?”
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Gurley reports BYD executive challenged him to find government subsidies in their public company financials.
chinapolicy“We're we're a public company. Come show me the money I'm getting from the government. She's like, say, I'm getting nothing.”
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Gurley finds only four of twenty-four CCP select committee members have visited China within seven years.
chinagovernment“I did a deep dive on on your favorite product chat, GBT, $300 version deep research, and on the 24 members of the select committee for the CCP.”
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Gurley says research shows all but four members of the CCP select committee have never been to China.
chinagovernment“And I think all but four have never been to China. Right. And the ones that went, it was seven years ago.”
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Gurley reports Xiaomi factory produces thousand cars daily with 2,000 employees versus six per car in US.
automationchina“The factory makes a thousand cars a day with 2,000 employees. It was highly automated, like really highly automated.”
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Gurley warns bringing manufacturing jobs back may be futile as automation eliminates those positions.
automationemployment“Like, if you wanna bring the jobs back there by the time you get the jobs back, there may not be any jobs. Like like, at one Because of automation.”
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Gurley reports BYD executive challenges claims of Chinese subsidies, says they receive nothing as public company.
chinaevs“We're we're a public company. Come show me the money I'm getting from the government. She's like, say, I'm getting nothing.”
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Gurley finds only four of 24 members on China committee have visited China, last time seven years ago.
chinaexpertise“And I think all but four have never been to China. Right. And the ones that went, it was seven years ago.”
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Gurley argues seven to eight deep-pocketed Chinese open-source models can distill each other to accelerate improvement.
ai moatschina“I think there may be seven or eight dig pocketed players with open models in China, they all learn from each other extremely fast.”
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Gurley says Mistral should be distilling Chinese models right now if they want to compete.
ai moatschina“I do expect to see that. And if I'm the Mistral team, if you're not distilling on these Chinese models, I don't know what you're doing right now.”
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Gurley notes Google cannot match OpenAI's competitive advantage of losing seven billion dollars annually.
ai moatsopenai“I still think it's particularly interesting that Google has to compete with OpenAI because OpenAI is gonna lose 7,000,000,000 this year and Google won't. Like they would never allow themselves to do that.”
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Gurley reports rumors that some best-known AI brands have negative gross margins from pricing below cost.
ai moatsunit economics“There's rumors of even some of the best known brands in AI having negative gross margin.”
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Gurley believes OpenAI's long-term success depends more on switching costs than staying at model frontier.
ai moatsopenai“I continue to believe that OpenAI's most likely chance to long term success comes from switching cost and lock in more than it will come from staying on the edge of the of the model race? Because I think”
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Gurley explains ChatGPT usage expands as people discover it can replace multi-step workflows like search-extract-calculate sequences.
ai adoptionchatgpt“one of the reasons I think it expands is people come to understand all the things it can do and all the kinds of prompts, you know, another one is like, like I used to do a Google search, go to a webpage, find a number, and then put that into a formula and multiply it on a calculator.”
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Gurley argues Amazon's lower GPU demand stems from lacking a major consumer AI application unlike Microsoft and Oracle.
ai moatsgpu allocation“Microsoft derivatively is supporting ChatGPT as is Oracle and CoreWeave on this slide. Amazon doesn't really have a big consumer application, right?”
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Gurley describes Meta's Scale AI acquisition structure: 49% stake for $15B at $30B valuation to avoid regulatory scrutiny.
m&ameta“Meta has done this interesting structured deal, they're buying 49% of the company, they're paying a $30,000,000,000 valuation so they're paying effectively 15,000,000,000, they're avoiding regulatory scrutiny, the CEO of scale is going to help lead efforts at Meta.”
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Gurley argues OpenAI must go public to democratize access to trillion-dollar company returns beyond private market insiders.
ipo marketopenai“It needs to be a public company. The idea that we're going to have trillion dollar companies and the only people who get to participate are the people sitting around this table, right?”
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Gurley contrasts Google's 187,000 employees with OpenAI's 2,700, noting OpenAI plans to stay under 20,000 using AI agents.
ai moatsopenai“Google has 187,000 employees, OpenAI 2,700. We're not going to be a company of 20,000 employees. He didn't say we're not going be a company of 187,000 employees, Right?”
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Gurley states there are approximately a thousand private companies valued over a billion dollars pre-LLM.
private marketsvaluations“There's somewhere around a thousand. So these are a thousand private companies that have raised money over a billion dollars.”
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Gurley estimates roughly a thousand private companies have raised over a billion dollars pre-LLM era.
ipo marketzombie unicorns“So these are a thousand private companies that have raised money over a billion dollars. And Chad GBD told me it was $12.50. NBCA says 900.”
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Gurley identifies approximately 1,000 private companies valued over $1 billion pre-LLM era.
private marketsvaluations“So these are a thousand private companies that have raised money over a billion dollars. And Chad GBD told me it was $12.50. NBCA says 900. Let's just say it's near a thousand.”
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Gurley estimates zombie unicorns have collectively raised $300 billion in capital.
capitalprivate markets“Yeah. Seems like they've raised somewhere between 2 and 300,000,000 each. And so you roll all that up, it's 300,000,000,000.”
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Gurley argues no one in the private market system has incentive to accurately mark valuations to LPs.
ipo marketregulatory capture“No one has an incentive to get the marks right. For those that don't know this world, private investing, both on the PE side and the VC side is this weird world where the GPs, the people responsible for the investments, report the price to the LPs.”
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Gurley notes the unprecedented situation where Nasdaq rose 30% in 2024 yet the IPO window remained closed.
ipo marketmarket anomaly“If you look at last year, 2024, the Nasdaq was up 30% and the window was closed. That seems to be the general belief of everyone out there.”
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Gurley argues the belief that AI is the biggest platform shift ever is driving current market behavior.
ai moatsmarket dynamics“I think post LLM, the world believes, and I think this is my fifth point or something, but the world believes AI is the biggest platform shift in anyone's lifetime.”
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Gurley argues Yale has had more impact on endowment management strategy than any other institution.
capital markets“I would argue no single institution's had a bigger impact on the strategy of endowment management than Yale.”
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Gurley notes Yale model achieved 13% returns over 35 years by overweighting illiquid assets.
endowmentsilliquid assets“Yale, I think they say had a 13% compounding return over thirty five years under David Swenson. He is known for the Yale model.”
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Gurley questions if Yale model works when universally adopted, notes Yale itself selling $6B.
endowmentsliquidity“What if everyone goes to 50% illiquid? Will it still work? I think that's a provocative question. But I think that's what happened for sure.”
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Gurley cites research showing IPO underpricing plus fees creates 33% cost of capital.
cost of capitalipo market“I had my friend Jay Ritter rerun the data. Is there up 25, 26% underpricing? You add in the 7% fee and you're like a 33% cost of capital.”
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Gurley cites data showing IPO underpricing plus fees creates a 33% cost of capital for going public.
cost of capitalipo market“Jay Ritter rerun the data. Is there up 25, 26% underpricing? You add in the 7% fee and you're like a 33% cost of capital.”
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Gurley argues excessive capital availability forces all-or-nothing strategies, with AI companies burning $100-150M annually versus traditional company building.
ai moatsventure capital“Traditional company building isn't spend a 100 or 150,000,000 a year in cash burn, but all the big AI companies are doing that, maybe more.”
-
Gurley notes OpenAI will burn $7 billion annually, calling it radically different from traditional venture.
ai moatsburn rates“I think OpenAI said they're gonna be 7,000,000,000 in a year. That's not your grandfather's startup business or your grandfather's venture capital. That's a radically different world.”
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Gurley calculates that delaying exits from year ten to fifteen requires 2.5x higher returns to meet expectations.
returnstime to liquidity“If you just take that 10% compounding, it now needs to be worth a $160 in year fifteen.”
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Gurley calculates that delaying exits five years requires 2.5x higher returns due to compounding and dilution.
dilutionreturns“If you make the argument that these people invested in venture to get a big return, then your cost of capital is not five.”
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Gurley calculates five-year delay requires $160 return versus $100 due to 15% cost plus 5% dilution.
dilutiontime to liquidity“That's the risk free rate. It's 15. And then it's 20% a year. 15 plus the five from the equity dilution.”
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Invest Like the Best, 10 June 2025
capital marketsventure capital“He said, the head of the world's largest sovereign wealth fund said the clock is ticking for private equity and join the chorus of investors who've grown worried about the industry's valuation practices.”
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Gurley predicts four well-funded open-source Chinese AI models could create massive optionality versus US proprietary approach.
ai moats“And Robin Li of Baidu had his model proprietary and he said in June, it's going to be open source.”
-
Gurley predicts four deep-pocketed Chinese open-source AI models will create massive experimentation advantage over US.
ai moatschina“And so that level of competition, if it leads to four deep pocketed all open products is gonna be ultra powerful.”
-
Gurley says China ensures 500 to 1000 competitors in target industries, letting markets select winners rather than state sponsorship.
chinacompetition“in these industries where they wanna succeed, they actually make sure that there are 500 competitors or a thousand competitors. And then they let the market whittle down to what the best one is.”
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Gurley notes Chinese solid-state LiDAR costs $130 per car versus Waymo's $5,000, a result of competitive optionality.
autonomous vehicleschina“And it's actually in China right now is, I think being priced at like $130 a car, this solid state MEMS LiDAR, whereas the Waymo LiDAR is like $5,000 a car.”
-
Gurley contrasts China's 500 EV startups with only four legitimate ones in the United States.
chinaelectric vehicles“in EVs where there were over 500 EV startups, 500 in The US. What has there been? Four legitimate ones?”
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Gurley argues Chinese government may not prioritize market cap as a win, citing BYD's recent 30% price cut.
bydchina“the Chinese government may not consider that part of the objective function of what a win is. And in the past three weeks, we saw BYD take prices down 30%.”
-
Gurley notes 50% of AI researchers are Chinese-origin and China now leads in AI patents, questioning immigration restrictions.
aichina“some people say 50% of AI researchers are of Chinese origin. And I believe now the patent count in AI coming out of China is larger than The US.”
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Gurley warns highest-profile companies face greatest risk from activist Delaware judges, not smaller market cap firms.
corporate governancedelaware“I think it's actually the highest profile companies that are at risk because they're the ones that, you know, an activist judge is gonna wanna make a a exception out of.”
-
Gurley notes ISS and Glass Lewis are now over 80% owned outside the United States.
corporate governanceiss“The senator that you're talking about said on on on when he was giving this talk that that these two companies are now both over 80% owned outside The US.”
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BG2 Pod, 22 May 2025
ai moatschina“Bingo. And I think had we continued on that path or if we go back towards that path, because I don't think this is over.”
-
Gurley claims many VCs have become China hawks because they need that stance to justify their military-tech investments.
chinaregulatory capture“And I will tell you after spending twenty five years in venture capital, there's just this instinctive thing.”
-
Gurley cites research showing Delaware awards attorney fee multiples 23x to 57x more frequently than federal courts.
delawarelegal“in Delaware, seven times or higher is 23 times more likely than in a federal court. And 10 times or higher is 57 times or higher than in a federal court.”
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Gurley reveals 55% of high-multiplier Delaware cases are assigned to just two judges including the chancellor who assigns cases.
delawarelegal“It turns out that in the 20 cases where you have this this super high multiplier, 55% of the cases are just two of the judges.”
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Gurley notes China now has four deep-pocketed open source AI models including Baidu's upcoming release, creating competitive innovation advantage.
ai moatschina“this will be the fourth deep pocket funded model in China that are all open source. And when you consider I mean, this is a competitive dynamic, right, that leads to that.”
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Gurley clarifies Manus operates exclusively on US models, has no foundational model, and never used Chinese models like DeepSeek.
aichina“first of all, they've only operated on US models. They're a wrapper company. They don't have a foundational model and and they've only operated on top of US models.”
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Gurley explains DeepSeek innovated by separating parameters to work with smaller counts faster than competitors.
ai innovationdeepseek“They were able to do that because they figured out a way to separate the parameters and work on things with smaller parameter counts faster, which no one else had done before.”
-
Gurley reports DeepSeek pricing is one twentieth of OpenAI on comparable API models.
deepseekopenai“if you look at the models that are apples to apples on the API right now, that that DeepSeek's pricing about one twentieth of OpenAI.”
-
Gurley reports 1,300 variants of DeepSeek R1 appeared on Hugging Face within days of release.
deepseekinnovation velocity“forty eight hours after r one was posted, they had 500 variants on Hugging Face. And today I pinged them this morning before we started, they're up to 1,300.”
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Gurley cites China held 33% of global GDP in 1820 before Mao's isolation reduced it dramatically.
chinaeconomic history“in 1820, China's economy was wide open, and they actually, had 33% of the global economy. 33% of global GDP was China.”
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Gurley states China's GDP share fell from 33% to 5% after Mao closed the economy.
chinaeconomic history“at the end of Mao's reign, and Mao had raised the wall and and kind of turned China inwards, they had fallen to 5% of global GDP.”
-
Gurley says the Stargate project will use a property-operating company structure he just learned about.
deal structureopenai“People are telling me it's gonna be a prop co op co structure, which I didn't even know it was twenty four hours ago,”
-
Gurley questions why SoftBank would participate in a private credit pool given their typical investment approach.
deal structuresoftbank“And this this I have three observations if all those things are true. One, I'm curious why SoftBank would wanna be part of a private credit pool. It's not what they've typically done.”
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Gurley says propco-opco structure would add major lease liability to OpenAI's already complex cap structure.
deal structureliability“if it is a prop co op co structure, this represents a big lease liability or the equivalent of a lease liability for OpenAI.”
-
Gurley notes OpenAI already has the most complex cap structure ever seen, now adding lease liability.
complexitydeal structure“So this company already had probably the most complex cap structure of any company like it that we've ever known,”
-
Gurley says OpenAI already has the most complex cap structure ever and is adding more complexity.
cap structurecomplexity“So this company already had probably the most complex cap structure of any company like it that we've ever known, and they're gonna be putting one more complex piece on top.”
-
Gurley expects over-promotion when Trump, Masa, and Sam announce AI projects together.
ai hypepromotion“And when you get Trump and and Masa and Sam in a room together, like, I I would expect some amount of over promotion.”
-
Gurley calls the Microsoft-OpenAI deal one of the most complex deals of all time.
deal complexitymicrosoft“The deal between Microsoft and OpenAI, as it's been reported, once again, I've never seen it. Sounds like one of the more complex deals of all time.”
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Gurley says the Microsoft-OpenAI deal with $90 billion profit rights is one of the most complex ever.
deal structuremicrosoft“The deal between Microsoft and OpenAI, as it's been reported, once again, I've never seen it. Sounds like one of the more complex deals of all time. They have profit rights up to, like, $90,000,000,000.”
-
Gurley notes Microsoft has profit rights up to $90 billion, unprecedented in any prior deal.
microsoftopenai“They have profit rights up to, like, $90,000,000,000. No one's ever signed a piece of paper like that before.”
-
Gurley notes uncertainty around whether Microsoft will convert OpenAI profit rights to equity.
equity conversionmicrosoft“And so they also we don't know. You know, it it sounds like OpenEye wants them to convert to equity, and we have no idea whether they're willing to do that or not.”
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Gurley says Uber was already 20x bigger than the San Francisco taxi market when critics valued it at $4 billion.
tamuber“in San Francisco, we're already 20 x bigger than the San Francisco taxi market at the time he wrote it.”
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Gurley warns AI companies receiving server capacity for equity don't recognize their true COGS in real-time.
aiopenai“They're trading equity for server capacity. And so those companies are running on a day to day basis with a high COGS, but they don't know it”
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Gurley warns AI companies trading equity for server capacity don't recognize true COGS and get warped decision-making.
ai economicsopenai“They're trading equity for server capacity. And so those companies are running on a day to day basis with a high COGS, but they don't know it because they're not paying cash for it.”
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Gurley observes venture's loose money trend has persisted beyond the zero interest rate period unexpectedly.
market dynamicsventure capital“There's been a trend in venture recently. Recently. I I thought thought it it was was the the zero zero interest interest rate rate thing that caused it, but it's sustaining beyond that.”
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Gurley says Benchmark peers increased fund sizes tenfold and moved to multi-stage investing model.
benchmarkfund sizes“Many of the peers of Benchmark have taken their fund size up 10 x. So their their assets under management and they've entered they've declared themselves multi stage.”
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Gurley states over a thousand private unicorns have average growth rates below 10 percent.
growth ratesprivate markets“There's over a thousand private unicorns. Some people estimate that the average growth rate, which we should talk about because it ties into unit economics and pragmatism, is below 10%.”
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Gurley says late-stage investors force-feed capital to companies based on power law beliefs in unprecedented ways.
capital allocationunicorns“It's it's it's just worse as it's ever been, where because you have these monolithic late stage players who believe in power laws, believe in network effects,”
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Gurley says late-stage VCs force-feed companies fifty to hundred million despite no capital need, like foie gras geese.
late stageoverfunding“They just wanna cram money in. I I I thought about it. I I learned how they force feed geese to make for gras.”
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Gurley reveals SpaceX Boca Chica average age is 29, matching early NASA when his father wrote reports at 26.
agespacex“The average age at Boca Chica is 29, which is fascinating. Yeah. Yeah. And it was funny because I asked my dad, was that true at NASA?”
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Gurley reports SpaceX Boca Chica has an average employee age of 29, matching early NASA.
recruitingspacex“The average age at Boca Chica is 29, which is fascinating. Yeah. Yeah. And it was funny because I asked my dad, was that true at NASA? He said, yes.”
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Gurley says SpaceX maps rocket clubs at colleges and high schools for recruiting like athletic programs do.
recruitingspacex“I found out from this HR person that that SpaceX is mapping the rocket clubs at the college level and the best high schools. Right.”
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Gurley quotes Angela Duckworth saying perseverance cannot hold without sufficient passion underlying it.
gritpassion“she said what she's learned since she wrote it is the perseverance part can't hold if the passion part's not strong enough.”
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Gurley says AI consensus is unprecedented in venture history with even Fortune five hundred fully committed.
aicontrarianism“And if even if I go back to the mobile wave or the Internet wave, there were plenty of skeptics like within the Fortune 500.”
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Gurley says late-stage investors enable two-year employee liquidity at OpenAI and Stripe, removing IPO pressure.
ipo marketliquidity“one of the things they're doing is they're supporting massive founder liquidity and employee liquidity. And so that's happening at Stripe, that's happening.”
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Gurley argues every Delaware company should move domicile to avoid derivative lawsuit risk from staying.
delawarelegal risk“I would make the argument that every company in Delaware has to move to a different domicile because they could be sued in a future derivative lawsuit for the risk they've taken by staying”
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Gurley says private companies with weak metrics aren't better off than public ones; staying private is self-deception.
ipo marketprivate markets“If you're private at a 100,000,000 revenue with a 10% growth rate, it's not like you're better off. Like like, you're just fooling yourself.”
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Gurley contrasts Zuckerberg's technical transparency with Altman and Amodei's high-level platitudes about AI.
aiopenai“Dario and Sam talk in these high level platitudes about how this stuff's gonna cure cancer and we're all gonna not have to work anymore.”
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Gurley contrasts Zuckerberg's technical transparency with Altman and Amodei's high-level platitudes, suggesting Zuck may now lead AI.
ai moatsopenai“Dario and Sam talk in these high level platitudes about how this stuff's gonna cure cancer and we're all gonna not have to work anymore. And Zuck was down in the weeds in the meet.”
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Gurley suggests a healthcare industrial complex has emerged that prioritizes profit over cost-effective preventative care.
healthcareprofitability“People talk about the military industrial complex. We may have created a health care industrial complex that really can't stop maximizing profitability and not focus necessarily on the lowest cost, best, most preventative process.”
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Gurley calls anti-Chinese sentiment irrational given China's lead in EVs and infrastructure while America maintains false superiority.
chinacompetition“I think this anti Chinese mentality is a little nuts because if you look at low cost EVs, if you look at their subway stations, if you look at, they're leading us in many areas.”
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Gurley criticizes anti-Chinese sentiment, arguing China leads in EVs and infrastructure while America has holier-than-thou attitude.
chinacompetitiveness“And we have this holier than thou attitude that America is the best and that we're the leader and we're being passed.”
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Bg2 Pod, 23 December 2024
blackwellnvidia“with Blackwell, not only is it way, way, way faster, anywhere from 10 to 15 times on really large models for inference because they've optimized it for very large language models.”
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Patel explains scaling laws require ten times more investment for each model iteration with specific dollar amounts
ai moatscapex“A log I e, it takes 10 x more investment to get the next iteration. Well, 10 x more investment, you know, you know, going from 30,000,000 to 300,000,000, 300,000,000 to 3,000,000,000 is relevant.”
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Patel argues scaling continues because hyperscalers are building multi-gigawatt data centers and connecting them with billions in fiber purchases.
ai scalinghyperscalers“Why is why is Amazon building these multi gigawatt data centers? Why is Google? Why is Microsoft building multiple gigawatt data centers plus buying billions and billions of dollars of fiber to connect them together”
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Patel argues hyperscalers are building multi-gigawatt data centers and buying billions in fiber to win on scale
ai moatshyperscalers“Why is Microsoft building multiple gigawatt data centers plus buying billions and billions of dollars of fiber to connect them together because they think, hey.”
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Patel distinguishes NVIDIA's revenue from positive cash flows versus Cisco's dot-com era credit-funded telecom buildout
bubble comparisonfunding“Cisco's revenue, a lot of it was funded through private slash credit investments into building out telecom infrastructure. Right? When we look at NVIDIA's revenue sources, very little of it is private slash credit.”
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Patel explains reasoning models increase cost ten times by outputting 11,000 tokens versus 1,000 for same query
ai moatsinference“I outputted a thousand tokens to I outputted 11,000 tokens. I've 10x'd my spend to generate no. Not the same thing. Right? It's higher quality.”
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Gurley explains o one reasoning models cost 50x more per query due to 10x tokens and one-fifth concurrent user capacity.
inference costso one“E. Concurrent users I can have is a fraction of that. One fourth to one fifth the number of users can currently use the server.”
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Patel calculates reasoning models cost fifty times more per query due to batch size and token generation combined
ai moatsinference“Cost increase for a single token to be generated is four to five x, but then I'm generating 10 x as many tokens.”
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Bg2 Pod, 23 December 2024
predictionsreasoning models“You know, I can go from 10,000,000 to 100,000,000 to billion to $10,000,000,000 on reasoning in such a quick succession.”
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Gurley notes NVIDIA's highest cost of goods sold is HBM memory, not TSMC silicon, which people don't realize.
hbm memorynvidia“Their highest cost of goods sold is not TSMC, which is a thing that people don't realize. It's actually HBM memory, primarily SK for now also.”
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Patel reveals Amazon and Anthropic are building a 400,000 Trainium chip supercomputer as evidence scaling continues.
amazonanthropic“Amazon and Anthropic have decided to, you know, make a 400,000 Trainium server supercomputer. Right? 400,000 chips. Right? Going back to the whole scaling law is dead.”
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Gurley warns 2026 is when the reckoning comes on whether AI infrastructure spending continues at current pace.
2026nvidia“It's gonna bring so many people with them. But 2026 is like where the reckoning comes. Right? But, you know, will will people keep spending like this?”
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Patel predicts sovereign wealth funds from Middle East, Singapore, and Nordics will write big checks to AI labs
ai fundingsovereign wealth“The Middle East, the sovereign wealth funds in Singapore and and Nordics and, you know, Canadian pension fund and all these folks. They can throw they can write really big checks.”
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Bg2 Pod, 23 December 2024
capitalfunding“The Middle East, the sovereign wealth funds in Singapore and and Nordics and, you know, Canadian pension fund and all these folks.”
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Gurley states NVIDIA holds 98% of purchased AI workloads when captive workloads are excluded.
ai moatsmarket share“If you just look at, I guess, workloads people are purchasing to do work on their own, so you take the captives out, you're at 98, right?”
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Gurley notes AI leaders previously implied linear scaling gains but current reality differs from that impression.
ai moatsnarrative shift“They had left that impression. And so we get to this place as you described it, it's not quite like that.”
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Gurley draws parallel to internet era when companies migrated away from Oracle and Sun as optimization replaced development.
ai moatshistorical parallel“And five years later, they weren't on Oracle or Sun. And some have argued it went from a development sandbox world to a optimization world.”
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Gurley calls Nadella possibly the best CEO hire of all time, citing trillion-dollar value creation.
ceo performancemicrosoft“I think that it's definitive that you may be the best CEO hire of all time. I mean, trillion is unmatched.”
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Gurley argues this AI shift differs from past platform shifts because all incumbents are awake and starting simultaneously.
ai moatscompetition“I could argue, especially since I'm old and I've seen these shifts that everyone's awake on this one, or it has, it's the most awake, like it's heavily choreographed.”
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Gurley asks whether platforms will allow AI agents to control apps and access data across ecosystems.
ai agentsinteroperability“Will Apple allow Microsoft to control other apps on iOS? Will Microsoft let ChatGPT instantiate apps and take data from apps on Windows OS?”
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Gurley questions whether platforms will allow AI agents to control apps and access data across their ecosystems.
ai agentsinteroperability“Will Apple allow Microsoft to control other apps on iOS? Will Microsoft let ChatGPT instantiate apps and take data from apps on Windows OS? I mean, you get the question.”
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Gurley extends the interoperability question to whether marketplaces will allow AI to execute transactions without explicit permission.
ai agentscommerce“It goes all the way to when you start thinking about search and commerce, like, will booking.com let Gemini run transactions on it without their permission or knowledge?”
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Gurley questions whether AI-first products could make existing infrastructure like Excel spreadsheets obsolete.
ai disruptionmicrosoft“Do you worry that someone might think kind of first principles AI from ground up and that some of the infrastructure say in an Excel spreadsheet isn't necessary to know if you did an AI first product.”
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Gurley notes shifting narrative suggesting inference scaling is preferable to training CapEx.
ai scalingcapex“There was a podcast recently where they kind of flipped everything on their head and they said, well, if we're not doing that anymore, it's way better because we can just move on to inference, which is getting cheaper and you won't have to spend all this CapEx.”
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Gurley says China graduates 35% STEM versus below 10% in US, giving them necessary advantages.
chinacompetitiveness“the number of graduates in China's university system that are STEM is 35%, and that number is below 10 in The US.”
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Gurley argues blocking technology exports to China is not working and US needs to face reality.
chinapolicy“And I don't think blocking ASML or blocking AI technology or blocking anything is working. It's just not working.”
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Gurley explains compounding IPO ratchets create misalignment by making late investors want lower IPO prices.
ipoterm sheets“The the later stage investors that wrote this compounding ratchet term actually want the IPO to be as low as possible because they'll they'll get more shares.”
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Gurley says Visa and Mastercard have the highest operating margins in North American markets.
oligopolypayments“And there's another fact that you should know in North America, which is Visa and Mastercard have the two highest operating margin percentages in our markets total.”
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Gurley praises Anthropic's decision to open source their MCP data connection tool with GitHub and Slack integrations.
aianthropic“They released several integrations already in the initial pack, with good GitHub and Slack and a few others so that you can start having your agents interact with these things.”
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Gurley says Anthropic and investor Eric Schmidt have been pushing for more AI oversight and regulation.
aianthropic“based on what I've heard and seen and read and listened to on podcast, Anthropic and their investors like Eric Schmidt have been some of the people that have been encouraging, you know, more and more AI oversight and AI regulation”
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Gurley says if scaling laws are hitting limits it has implications but doesn't mean AI is done.
ai scalingllms“if the the comment, you know, that you read earlier is true and that these and that they're not getting the benefit, there are implications.”
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Gurley argues OpenAI and Anthropic expected continued scaling twelve months ago, not current limits.
ai moatsanthropic“Like, because they were promoting a thesis that it was just gonna keep going up”
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Gurley says NVIDIA differentiation is greatest at largest cluster size for LLM pre-training.
ai scalingnvidia“One, the NVIDIA differentiation as we've talked about is greatest at the largest cluster size. So if pre training, once again, I only equate this to LLMs, you know, I don't think of FSD problem.”
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Gurley says DOGE methodology is to expose government waste publicly, with transparency as disinfectant.
dogeregulatory capture“The methodology that I'm gonna assume was Elon's idea is basically to shine a flashlight on the ideocracy that exists. And, you know, transparency can be a hell of a disinfectant.”
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Gurley says two largest US departments failed audits for three to five years running.
dogeregulatory capture“one of the things that's already come up is I think two of the largest departments in the country have failed audits for like three to five of the past years.”
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Gurley asks what percentage of 1,400 pre-LLM private unicorns could raise up rounds today.
marketunicorns“What percentage of those could raise an up round right now? Yeah. What is the number?”
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Gurley recounts PE firm making billion dollars on DoubleClick exit but struggling because it was in $4 billion fund.
fund sizeprivate equity“I said to him, I want to say, congratulations, man, that's incredible. He goes, well, it's in a $4,000,000,000 fund. Wow. Wow. You know? Yeah. So, That's you have an incredible outcome.”
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Gurley notes TSMC announced 20% across-the-board price increase as expected proof point of supply-demand dynamics.
ai infrastructurepricing“Another thing that came out this morning that I was kind of waiting on as a proof point, because it didn't make sense to me that it hadn't happened yet, TSMC said they're gonna do across the board 20 price increase.”
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Gurley explains Google's revenue per visit will fall with completed transactions because advertisers pay less for white-label rails.
ai searchgoogle“Because someone is spending marketing dollars to take that customer to their website and run the transaction with the hopes that they'll come directly back to that website.”
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Gurley argues NVIDIA's competitive advantage is strongest in the largest systems, not at the edge.
ai moatscompetitive advantage“it appears to me that NVIDIA's competitive advantage is strongest where the size of the system is largest, which is another way of saying what Renee said. It's flipping it on its head.”
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Gurley explains NVIDIA's networking, NVLink, and CUDA advantages emerge specifically in the largest system deployments.
ai moatsnvidia“That's when the networking piece thrives. That's where NVLink thrives. That's where CUDA really comes alive in the biggest systems that are out there.”
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Gurley realizes NVIDIA needs multiple large system companies like CoreWeave to maximize its competitive advantage.
competitive advantagecoreweave“Like like like if if the biggest systems are where the biggest competitive advantage is, you need as many of these big system companies as you can possibly have.”
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Gurley notes early internet startups shifted from 100% Oracle and Sun to Linux and MySQL in five years.
marketplacesoptimization“Every single fucking one of them were running on Oracle and Sun. And five years later, they were all running on Linux and MySQL, like in five years.”
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Gurley observes Elon Musk obtained roughly 10% of NVIDIA's quarterly availability for x.ai despite massive demand.
elon musknvidia“And he walks in and takes what equate sounds looks like about 10% of the quarter's availability.”
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Gurley argues NVIDIA's moat is misunderstood because it spans the full stack, not just chips.
ai moatscompetitive advantage“one of the most misunderstood things about NVIDIA is how deep the true NVIDIA moat is, right?”
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Gurley says analysts miss NVIDIA's ecosystem thinking and multi-year planning beyond current architecture.
ai moatsanalysis“I think analysts always focus on the current architectural bet. But I think one of the biggest takeaways from this conversation is that we're thinking about the entire ecosystem and many years out.”
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Gurley says hyperscalers as nuclear customers may be 10x better than utilities, bringing more risk-tolerant innovators to SMR market.
hyperscalersnuclear“if the hyperscalers become part of the customer set for the nuclear startups that may be like 10x better than selling just to utilities alone.”
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Gurley explains Strawberry requires 10X processing for linear improvement, meaning 10-100X inference costs for better solutions.
aicost“in order to get linear improvement, you have to do maybe 10X the amount of processing. And this is all inference. So what are the implications of that?”
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Gurley argues Sam Altman's Washington access is valuable as regulation could reinforce OpenAI's competitive lock-in.
moatsopenai“He seems to have remarkable touch in Washington and access, which, you know, regulation appears to be coming at us fast and furious.”
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Gurley says successful companies now routinely pressured to raise $500M or more, fundamentally changing venture model.
ipo marketlate stage“I think you're gonna, until this change, I think you're gonna have very few companies that are considered to be doing well that aren't asked by the industry to raise $500,000,000 or more.”
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Gurley questions whether overfeeding startups with cash leads to poor execution, citing companies burning $20M monthly.
burn rateexecution“does overfeeding these companies with cash lead to non optimal execution? And you and I were deeply involved in the Uber situation, but you know, when you start losing a billion dollars a year, or even I would say $20,000,000 a month, you're very far away from profitability. And we talk a lot about focus and constraints”
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Gurley says U.S. nuclear plants cost $13 billion per gigawatt versus China's $2.5 billion for equivalent technology.
chinanuclear“We recently brought on two new plants in The U. S. Vogtle three and four in And the total cost of that was about 30,000,000,000 for 2.2 gigawatts. It turns out over $13,000,000,000 per gigawatt.”
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Gurley says the most surprising finding is that nuclear industry insiders are not shocked by the 5X cost differential.
nuclearregulatory capture“So 13 to 2.5. Right, right. And that's a shocking Delta. Yes. And one of, I would say the single most surprising thing to me of all the discussions I've had in the past two weeks with everyone that's in this industry is how few people are shocked by that.”
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Gurley notes South Korea achieves the same low nuclear costs as China while being a democracy and U.S. ally.
nuclearregulatory capture“South Korea is a democracy, a friend of The United States, they're at the same delivered price point as And they're doing it at scale and they're starting to export their technology.”
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Gurley explains U.S. nuclear permitting takes ten years and the NRC charges hourly fees to regulate plants.
nuclearregulatory capture“So the separate federal and state environmental permitting processes in The US is onerous, lengthy, probably ten years for a nuclear power plant, expensive.”
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Gurley explains the NRC charges nuclear operators hourly fees for regulation, driving up costs significantly.
nrcnuclear costs“Most people don't know this, you have no reason to know this, but the NRC is a fee based regulatory.”
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Gurley argues anti-China attitudes are counterproductive when China is leading in infrastructure and cost efficiency.
chinacompetitiveness“I think this anti Chinese mentality is a little nuts because if you look at low cost EVs, if you look at their subway stations, if you look at, they're leading us in many areas and we have this holier than thou attitude that America is the best and that we're the leader and we're being passed.”
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Gurley argues U.S. refuses to license South Korean nuclear technology despite cost advantages due to mental blockers.
nuclear costsprotectionism“I ask all the AI bots, do you think there's any chance we would license something from South Korea? They all said, no, there's no chance we would do that.”
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Gurley says SMR startups face $60 million in NRC fees just to get approval, citing NuScale's failure as example.
nuclearregulatory capture“NuScale had to start laying people off it's just tough. And the other tough part, the NRC, which we haven't talked much about, but the regulatory commission here in The U.”
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Gurley says SMR startups face $60 million in NRC fees just to get approval before building anything.
regulatory capturesmr“Is fee based and all the people that are playing in this market I've talked to say you're probably 60,000,000 to first approval, just on fees the startups gonna pay to the NRC”
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Gurley cites Pennsylvania bridge rebuilt in twelve days when regulation was removed as counter-example to current infrastructure costs.
regulatory capture“And I don't think the impacts We're at a 4X cost if I don't think you get there, And you so, I mentioned this earlier, but Josh Shapiro, the Pennsylvania governor, everyone praises because this bridge went down on I-ninety 5 and he got it back up in twelve days.”
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Gurley argues nuclear regulation must be rewritten from scratch and major projects protected from litigation.
litigationnuclear“if you want to go build this next generation level three plant, I think you've got to rewrite the regulation from zero ground up, like make it thinner and tighter and two, I think we've gotten to the point where we got to say, this is so important, you can't sue these people.”
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Gurley proposes Manhattan Project approach with IP-free solutions borrowing from Navy nuclear experience to catch up with China and Korea.
nuclearregulatory capture“And then two, consider some type of Manhattan project like approach where you get out of the current environment, you get a lot of smart people thinking from first principles, you may be borrowed from what the Navy's done and consider open source or IP free solutions to get everybody on the same page.”
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Gurley says China builds nuclear plants at $2.5B per gigawatt versus $13B in the US.
chinanuclear“The plants in China that are the equivalent level three fission plants right now are coming on board at 2,500,000,000 per gigawatt. Right. So 13 to 2.5.”
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Gurley argues South Korea achieves China's nuclear costs as a democracy, making the comparison more relevant.
nuclearregulatory capture“South Korea is a democracy, a friend of The United they're at the same delivered price point as And they're doing it at scale and they're starting to export their technology.”
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Gurley explains the NRC is fee-based and environmental litigation prevents nuclear development in the US.
nuclearregulatory capture“And so those costs are extremely high. The second thing is litigation. So multiple special interest groups, particularly environmental groups will sue to stop any development whatsoever.”
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Gurley argues anti-China attitudes are misguided as China is leading in infrastructure and cost efficiency.
chinaregulatory capture“I think this anti Chinese mentality is a little nuts because if you look at low cost EVs, if you look at their subway stations, if you look at, they're leading us in many areas.”
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Gurley calls nuclear investment a sport of emperors requiring multi-billions to first revenue.
nuclear“If that's a sport of Kings, this is a sport of emperors. Like you may be multi billions to first revenue.”
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Gurley proposes rewriting nuclear regulation from scratch and eliminating lawsuit rights for important projects.
nuclearregulatory capture“And if you want to go build this next generation level three plant, I think you've got to rewrite the regulation from zero ground up, like make it thinner and tighter and two, I think we've gotten to the point where we got to say, this is so important, you can't sue these people.”
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Gurley suggests leveraging Navy SMR technology with hyperscaler backing as a mini Manhattan Project approach.
ai moatsnuclear“Or for the SMR one by leveraging what's been done in the Navy, maybe getting these hyperscalers behind it. And maybe that's a mini version of a Manhattan project.”
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Gurley argues AI wave is unprecedented because incumbents like Microsoft moved fast from the start, unlike typical disruption patterns.
ai moatsincumbents“This is one of the very first waves where the incumbents were eyes wide open at the beginning of the technology shift.”
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Gurley suggests incumbents may be aggressively investing in AI specifically to block OpenAI and Anthropic from raising needed billions.
ai moatscompetitive dynamics“And now you've got people, you know, trying to project income statements and balance sheets of these companies and they're speculating about whether they might need to raise again or not.”
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Gurley argues Google's search monetization is so superior that no Bing deal could match Apple's current economics.
google antitrustmarketplaces“So there's no like Apple's not mad about this deal. They're very positively impacted by it.”
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Gurley proposes one-sided partnership terms as a new monopoly test under Sherman Act section two.
antitrustmonopoly“Because I do think it's a sign of strength. And I could even go further and say that it should qualify under the Section two of the Sherman Act.”
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Gurley identifies double taxation risk in take-under deals where MAG-seven payments flow through corporate revenue before reaching investors.
ai dealsma structure“as I understand it, there is a substantial double taxation risk. And if this is not the case, it's a thing I'd love for someone to educate me on.”
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Gurley argues taxing unrealized capital gains would undermine entrepreneurial incentives and is nearly impossible to implement.
entrepreneurshippolicy“this crazy idea to tax unrealized capital gains and how that in and of itself is not only almost impossible to implement, but also would undermine the very incentive that entrepreneurs have to go create businesses.”
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Gurley says Silicon Valley's political shift is about entrepreneurship policy, not personal tax rates.
policypolitics“Right? I do hear things around key policy areas that impact entrepreneurship that people care deeply about.”
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Gurley argues Silicon Valley must actively engage in Washington to fight incumbent regulatory capture.
engagementincumbents“I think, that engagement by Silicon Valley to fight back against the incumbents who are trying to do the capture. Right?”
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Gurley says closed AI model companies must compete with frontier performance while Meta gives it away free.
ai moatscompetition“If you're a closed model company, the question first is, okay, I'm going to have to compete and keep up with this frontier level competition. That's hard enough. It takes a lot of resources.”
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Gurley reports Chinese consumers show high willingness to adopt autonomous driving despite inferior technology.
adoptionautonomy“she said she had some really lousy experiences in the cars, but she was blown away at the Chinese consumers' willingness to adopt the technology.”
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Gurley says hyper-competition with every AI coding player having $400M can reduce venture returns despite market enthusiasm.
ai bubblecompetition“Having crazy money in the market is not necessarily consistent with creating positive return for your venture capital portfolio.”
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Gurley questions whether AI CapEx spending is ahead of itself, citing Goldman and Sequoia research.
ai capexgoldman“One, could the CapEx spend be ahead of itself? Which is what Sequoia mentioned and what the second piece of the Goldman piece is.”
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Gurley suggests LLM models may have diminishing returns on spend, citing MIT professor and other experts.
ai moatsdiminishing returns“Is LLM scaling exponential, linear, or will it diminish? And in addition to the MIT professor, I mean, there are a number of people that have been around these problems for a long time who that the LLM models will have diminishing return on spend.”
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Gurley says acqui-hire deals like Adept and Inflection cannot possibly represent wins for venture capitalists.
acqui-hiresai exits“There's no way that's a win for venture capitalists. Like, I'm sure venture capitalists try and spin it, and we heard some spin around inflection, but, you know, I, it's just not possible.”
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Gurley notes Adept raised $415M and argues such acqui-hire structures cannot generate portfolio returns for VCs.
adeptai bubble“I mean, we need to be realistic. Like if you're a venture capitalist and every one of your deals turned into one of these weird human acqui hires with a licensed deal back, you're not going to generate a return for your portfolio. Like, it's best case, you're this company had raised $415,000,000”
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Gurley cites claim that over 90% of NIH grants fund monetizable products versus preventative behavioral interventions.
healthcarenih“over 90% of NIH grants go towards things that are potentially monetizable, so either a product or a drug, and that the NIH is less interested in funding things that might be just preventative behavior, like behavioral things, like what you eat or your diet or things that don't lead to monetization.”
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Gurley argues U.S. may have created healthcare industrial complex focused on profit maximization over prevention.
healthcareindustrial complex“And we may have created a people talk about the military industrial complex, we may have created a healthcare industrial complex that really can't stop maximizing profitability and different ways of making money not focus necessarily on the lowest cost, best, most preventative process.”
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Gurley reports Nvidia alone accounts for 5% of S&P 500 returns while 493 other companies contribute only 4%.
market concentrationnvidia“The other mag six are responsible for 5%. And then the other 493 companies in the S and P 500 are responsible for 4% of the 14% year to date returns.”
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Gurley reports AI deals average $1 billion valuation and $120 million round size year to date.
ai valuationsfunding rounds“Year to date, I think 200 deals, 22,000,000,000 of investment, average valuation, wait for it, $1,000,000,000. Right? Average round size, 120,000,000.”
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Gurley says OpenAI executes faster than any company he's seen despite organizational turbulence.
executionopenai“To execute the way they have. True. Okay? Like, I got faster than any other company I've ever seen delivering great products in the market.”
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Gurley argues trillion-dollar companies developing AGI should be accessible to retail investors, not just private markets.
agiipo market“I don't like the idea that you could have a company that could theoretically go to a trillion dollars in enterprise value, could theoretically develop AGI, and a retail investor never has a shot to invest in that company. I just don't think that's good for the structure of our markets.”
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Gurley reports Trump proposed at Business Roundtable solving how to get companies more talented workers.
immigrationtech workers“They said it was the first time they ever heard him say, and I gotta solve the problem for everybody in this room, how I get you more talented workers.”
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Gurley reports Trump proposed automatic green cards for anyone completing a four-year US degree.
educationgreen cards“And he proposed something apparently at the roundtable. He said, anybody who comes here for a four year education completes their degree in The United States, we're gonna give them a green card.”
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Gurley says excess capital prevented winner-take-most dynamics from developing profitably until capital dried up and Uber's profitability skyrocketed.
capital allocationmarketplaces“it slowed down and prevented the natural order of things. The 8020, the winner take most from developing in a profitable way.”
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Gurley argues excess capital distorts company behavior and makes it difficult to stay efficient when all options can be funded.
capital allocationcompany culture“It's not impossible, but it's very difficult to stay fit and efficient when you have a buffet of all options sitting in front of you and you can fund all of them.”
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Gurley notes hyperscalers now spending $200 billion in total CapEx with questions about return on investment.
ai infrastructurecapex“In fact, I think if people are gonna be critical of anything, a lot of people are looking at the total CapEx of the hyperscalers now at $200,000,000,000 and saying, when are you gonna get a return on the dollars that you're spending?”
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Gurley argues software deal slowdowns stem from uncertainty about AI bets rather than budget pressures.
ai uncertaintyenterprise sales“Rather than budget pressures, what I really think you're seeing is the slowing down and the elongation of the big commits because people really need to make sure that they're betting on the future, not on the past.”
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Gurley predicts headlines about death of software will appear silly in less than 24 months.
contrarianmarket timing“I suspect that these headlines, the end of software, the death of software, in I would argue less than twenty four months will appear to be silly.”
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Gurley notes four non-Microsoft coding copilot companies raised over $200M each despite being only 18 months old.
ai investmentcapital allocation“There are four companies in the coding co pilot space that are not named Microsoft that have raised over $200,000,000 each. And we're just these companies are all of a year and a half old.”
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Gurley cites Sequoia's investments in Elon's companies at $50-100B range as departure from historic venture model.
late stagesequoia“I look at someone posted the just the investments Sequoia has made in Elon's companies, and they were rounds that were in the, you know, $506,100,000,000 dollar range, and there were three or four of them. And once again, just not not the historic venture capital model.”
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Gurley criticizes investors earning 2% annual fees on $300-400M checks without taking board seats.
feesgovernance“And for the listeners that may not know that 2 represents an annual management fee,”
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Gurley warns that Byrd founder took $50M out in private round before company went bankrupt.
bankruptcyfounder liquidity“Let let us not forget that the Byrd founder took out 50,000,000 in a private round, you know, and that company's now bankrupt, right?”
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Gurley highlights TSMC chairman publicly stating Sam Altman is too aggressive to believe.
ai hypesam altman“There was a super interesting comment made by the new chairman of TSMC where he said, OpenAI, Sam Altman, is too aggressive for me to believe.”
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Gurley notes 85% of CIOs increasing AI spend despite 92% having flat or declining budgets.
ai spendingbudget pressure“I think 8% of CIOs have a budget increase over 10%. So 92% don't. So think fixed, you know, near fixed budget. But 85% of them say they're aggressively increasing their spend on AI.”
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Gurley observes the biggest AI doomers have the largest financial stakes in foundational models.
ai regulationconflict of interest“It's remarkably interesting that the biggest doomers are the ones that have the biggest financial stakes and the biggest foundational model.”
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Gurley argues AI crimes are already illegal under existing laws, questioning need for new regulations.
ai regulationderegulation“If I defraud you with AI, it's still illegal as it would have been if I'd have done it with a phishing scam before AI. And so there why do we need new laws?”
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Gurley states regulation favors incumbents and government should not pick AI winners now.
government interventionincumbents“Regulation is the friend of the incumbent. It's not time for the government to start picking winners.”
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Gurley contrasts AI founders lobbying Washington and funding super PACs with his twenty-five years without doing so.
lobbyingregulatory capture“I've spent twenty five years in this business and and not had to go kowtow to Washington to go to go placate, you know, senators and congressmen.”
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Gurley calls AI founders' government engagement a horrible precedent for future technology waves in venture capital.
precedentregulatory capture“I think it'd just be a horrible step for the venture industry for this to be the first move when any new wave comes along is for people to run and become friends with the government and try and lock in their winners.”
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Gurley argues deglobalization is highly inflationary and makes US companies less competitive, not more.
economicstariffs“Like, this is just, you know, deglobalization, highly inflationary, and will make our companies less competitive, not more.”
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Gurley says entrepreneurs design with cutting-edge AI models but switch to cheaper versions for 20x savings.
ai moatsai pricing“It's like 20x differential. And when I talk to our entrepreneurs that are using these models, they might design with the cutting edge model, but they all back off to the affordable models”
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Gurley expresses shock at Senate AI document recommending $32 billion annual spending for AI.
ai policygovernment spending“The big shocker for me was it recommended spending $32,000,000,000 a year. And I didn't even know that was on the table.”
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Gurley compares proposed $32B AI spending to NIH's $40B budget and NSF's $9B.
ai policybudget“The National Science Foundation is nine down from 10. So 49, you're going to start the AI foundation or federation or whatever it is, institute at 32,000,000,000 a year.”
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Gurley questions moral basis of protecting $40/hour Iowa workers versus $15/hour Mexican workers.
protectionismtrade“it's unclear to me why a worker in Iowa needs $40 an hour if there's a worker in Mexico that's willing to bust his ass for 15.”
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Gurley notes Zillow had exited iBuying before he returned to the company
ibuyingmarketplaces“They had the the the kind of detour into home buying or iBuying, which is refreshing. They had exited by the time I came back. So, yeah. So there's a lot going on.”
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Gurley says healthcare startups trying to monetize end up reinforcing bad system dynamics instead of changing them
healthcaremarketplaces“And then and then some of them end up in a place where they're actually reinforcing the bad stuff, you know, and making it worse.”
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Gurley questions whether NAR-created real estate contracts were designed to help consumers
narreal estate“Was that document created to aid the consumer in any way whatsoever? Was that the objective function of the way that document was created? Do you have”
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Gurley says NAR real estate contracts protect realtors not consumers with excessive signing requirements
narreal estate“Yeah. I say hell no. No. No. Like, that document was created to protect the realtor and that NAR created it.”
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Gurley describes Matt Cohler's concept of remote control for your life with Uber as one-click ride example
marketplacesproduct design“And my my partner, Matt Cola, used to call this the remote control for your life. And we would talk about Uber as a one click ride.”
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Gurley predicted black car marketplace would work better than taxi due to less friction before finding Uber
marketplacesprediction“Because there's going to be less friction and we're going to be able to use the tools that entrepreneurs know how to use to be successful.”
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Gurley says venture firms incrementally adopted risk like boiled frog before reaching iBuying extremes
ibuyingrisk“And so people adopt incremental risk with the whole boiled frog metaphor without kinda realizing they're doing it.”
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Gurley says the $20 subscription model is gone now that Meta AI is free and ad-supported models are coming.
ai business modelsopenai“I think, Perplexity claiming they're going to have an ad portion and OpenAI hinting at that, at least for the time being, I think the $20 concept is gone.”
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Gurley suggests personal memory features could potentially revive paid AI subscription models.
ai featuresbusiness models“If some crazy feature comes along, you know, we've talked about personal memory, maybe that comes back.”
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Gurley contrasts Zuckerberg's detailed transparency with platitudes from Dario and Sam about AI's future impact.
ai leadershipcommunication“Dario and Sam talk in these high level platitudes about how this stuff's gonna cure cancer and we're all gonna not have to work anymore. And Zuck was down in the weeds in the meet.”
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Gurley says AI foundational models no longer qualify as startup market due to massive capital and big company involvement.
ai moatscompetition“It's already evolved to a point that's very similar to where Uber, Lyft and DoorDash ended up, where there's just so much money moving around that I really don't even think about it as a startup market anymore.”
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Gurley says AI foundational models are no longer a startup market, with big company involvement being dangerous.
ai moatscompetition“If you wanted to be accurate, non consensus in a way around these, part of it ties into the big guys being interested in what they're doing with their own balance sheet to reinforce this, which I consider to be remarkably dangerous and unhealthy.”
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Gurley says initial LLM versions are structurally flawed around personal memory and RAG approaches don't solve the problem.
aillm architecture“One quick thing, I do think that the initial versions of these models are structurally flawed around providing personal memory and allowing someone to become dependent on one of these things.”
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Gurley says personalized foundational models that can retune for individuals could wildly change AI direction.
aifoundational models“Any of that stuff could create a wildly new direction than what we have today.”
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Gurley tests marketplace strength by asking if value to one side grows exponentially as the other side scales.
frameworksmarketplaces“When I push entrepreneurs to think about this and it gets to your increasing marginal utility, but I just say, as you penetrate a supplier base, one side of a marketplace, whatever, is the value proposition to the other side going up? And ideally, it would be going up exponentially, which is super hard.”
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Gurley argues increasing returns vary in strength, with some linear and some exponential, forming a scale of network effects.
investingmarketplaces“It's arguable there are levels of increasing returns. Like, you could come up with some kind of scale or index because some of them are more linear and some of them can go exponential.”
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Gurley cites CrowdStrike as example of network effects in enterprise security through shared threat intelligence across customers.
enterprisenetwork effects“But they posted a memo four years ago titled the CrowdStrike Security Cloud Network Effect.”
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Gurley explains CrowdStrike's network effect where threat-sharing makes the largest security network most valuable.
crowdstrikenetwork effects“the way that it worked for them and the way that the marginal customer ends up with more utility is if the threats are shared across a network, then if you belong to the biggest network, then you get the shared learning of everyone in that network, which lowers your threat exposure.”
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Gurley questions why drug patents get seventeen years of protection while software patents are difficult to obtain.
patentspharmaceutical“I don't know that seventeen years makes any sense whatsoever and why that industry gets protected down to a very minute detail of innovation, whereas it's very hard to have a software patent.”
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Gurley argues regulatory capture worsens as country ages because people learn to influence Washington over longer tenures.
agingpolitics“The more people hang around Washington for a very long period of time, they just learn how to influence it.”
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Gurley argues autocratic China has a massive advantage over the U.S. by avoiding layered regulatory constraints.
chinacompetitive advantage“It's likely a massive advantage for China where a more autocratic government can just decide, okay, we're gonna start doing things a new way.”
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Gurley says venture capital structurally sucks due to low entry barriers and high exit barriers.
competitionindustry structure“There's high competition. But the big problem, and this is structural, is there's low barriers to entry and high barriers to exit.”
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Gurley notes public company count has shrunk by almost half, changing venture landscape.
ipo marketpublic markets“the number of public companies has shrunk dramatically. And Michael's written about this, but we've gone, I think, almost half. Is that right, Michael?”
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Gurley warns SEC's well-intentioned response to fewer IPOs—institutionalizing private company investing—will fail massively.
ipo marketregulation“But what they wanna do to fix it is then some kinda institutionalized investing in private companies, which I think will fail massively.”
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Gurley says billion-dollar revenue threshold for IPOs fundamentally changes venture game and reduces accessibility.
ipo marketregulation“Anyone can start a company that can go public. If you have to get to a billion in revenue, it's just it's a totally different game.”
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Gurley posed question about how player behavior changes when multiple competitors understand increasing returns dynamics in advance.
competitiongame theory“I said to Michael one time, what if there were multiple players in an increasing returns game and they knew what the outcome was gonna look like? How would it affect their behavior?”
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Gurley suggests the Magnificent Seven's dominance may stem from all players now understanding network effects dynamics.
competitionmagnificent seven“maybe the reason the magnificent seven exists, maybe the reason why those price wars went to where they did is just everyone got educated.”
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Gurley says foundational model companies burning $100-200M yearly cannot possibly represent high quality capital allocation.
aicapital allocation“100,000,000 a year? 200,000,000 a year? There's no way that's high quality capital allocation from my point of view.”
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Gurley argues foundational AI model companies burning $100-200M annually represents poor capital allocation but may be unavoidable.
ai moatscapital allocation“100,000,000 a year? 200,000,000 a year? There's no way that's high quality capital allocation from my point of view. There's no chance. But maybe they don't have the alternative.”
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Gurley calls foundational model companies' hundred-million-dollar annual burn rates poor capital allocation but possibly unavoidable competitive traps.
ai economicscapital allocation“200,000,000 a year? There's no way that's high quality capital allocation from my point of view. There's no chance. But maybe they don't have the alternative.”
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Gurley argues venture capital patterns decay, citing how Intuit bias caused VCs to miss Shopify.
pattern recognitionshopify“I think the patterns have a half life and they decay. Or I saw Toby from Shopify was talking about the VCs passing on them.”
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Gurley admits pattern recognition led VCs to miss HubSpot, Shopify, and Twilio due to anti-small-business bias from Intuit precedent.
investingpattern recognition“And so you develop this anti small business mindset, which keeps you out of HubSpot and Shopify and Twilio. Then miss massive amounts.”
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Gurley admits pattern recognition decays; anti-small-business bias from Intuit caused VCs to miss HubSpot, Shopify, Twilio.
mistakespattern recognition“And so you develop this anti small business mindset, which keeps you out of HubSpot and Shopify and Twilio.”
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Gurley says vast majority of IPOs concentrated in four or five firms, suggests need for banks dedicated to smaller IPOs.
bankingipo market“I found some data which we can put up, like the vast majority of IPOs are being underwritten by like four or five firms.”
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Gurley argues Waymo faces unsolvable dilemma: building fleet to average demand disappoints peak users, building to peak wastes expensive CapEx.
marketplacesrobotaxi“And if you build it to peak, you're gonna have a bunch of very, very, very expensive CapEx sitting around doing nothing mostly.”
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Gurley challenges Waymo advocates to publish twenty-year financial projections showing how owned robotaxi fleet could work economically.
robotaxiunit economics“Let's build a public Google Sheet of the twenty year financial statements for this thing, and let's put it out there in the public.”
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Gurley argues LLMs alone won't be winners without durable differentiation enabling monopoly-like pricing.
ai moatsllms“I'm not sure that LLMs, like, if that's all you have going for you, I'm not sure that's going to be the winner.”
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Gurley says only frontier AI models are defensible while non-frontier models become fast depreciating assets.
ai moatsfrontier models“But if you're not on the frontier, man, it seems that these are gonna be really fast depreciating assets”
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Gurley says China has 300 nuclear plants in development versus zero in US, with 7-10 year build cycles.
china competitionnuclear“They have over 300 plants currently either being built or in development. We have zero, zero plants being built, I think 13 plants that are proposed, according to this data that we have here.”
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Gurley cites Microsoft opening a data center every three days, with data centers consuming nearly 10% of US electricity.
data centersinfrastructure“Microsoft alone's opening opening a new data center globally every three days. These power hungry operations will together consume more than 480 terawatts hours of electricity or almost a tenth of US demand.”
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Gurley explains a large investor pushed for zero-based RSUs believing one RSU equals 2.5-3 options to reduce dilution.
dilutionrsu“This particular investor in this very large public Internet company felt that if they move to zero based RSUs from options, and this gets into a technical detail around Black Shoals, that, you know, there's an argument from Black Shoals that a single RSU is worth about two and a half or three options.”
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Gurley argues zero-based RSUs allow management to capture 80% value while shareholders lose 20%, showing misalignment.
alignmentrsu“And here's where we get into questions of alignment with shareholders, because you could theoretically have a management team that leads a company, you know, over a year to a 20% decline and pick up 80% of the value of their equity award.”
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Gurley notes Microsoft hands out $11 billion annually in RSUs, giving them advantage in recruiting AI talent.
aimicrosoft“So that's over 11,000,000,000 a year. And this morning we woke up and read about them taking some employees from a hot AI company in the valley.”
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Gurley highlights Netflix's unique compensation letting employees choose between options or cash with no RSUs.
netflixoptions“Netflix today has a remarkably unique compensation structure. No one does anything like them. But today, if you're an employee, you get to choose either options or cash.”
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Gurley calls Inflection's implosion after Greylock's $1 billion pre-money round a warning sign for AI valuations.
ai valuationsgreylock“Right? And this is a warning sign that you can't just pay any price for any deal in the AI sector and get paid.”
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Gurley says LLM switching costs rate around two out of 100, showing extremely high promiscuity among models.
ai moatsllm“And the per promiscuity Mhmm. Is unbelievably high. Another way of saying that, one one of the things that leads to high valuation multiples is switching cost.”
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Gurley says Tesla replaced coded self-driving with neural network using driver videos as input and controls as output.
ai modelsautonomous vehicles“What we learned this week is that they've completely tossed all of that out and gone with a neural network model where they're uploading videos from their best drivers.”
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Gurley says big AI model companies and Vinod Khosla openly advocated for making open source illegal or blocked.
ai moatsopen source“And then Vinod started basically saying that literally, like, yes, we should block open source.”
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Gurley says lawyers in Delaware derivative suit against Tesla are asking for five to six billion dollars in payment.
delawarelegal“One one data point you you left out, which came up recently, is the lawyers that that pursued this case are asking for 5 or $6,000,000,000 in payment.”
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Gurley questions how a plaintiff with only nine shares can justify multibillion-dollar lawyer fees in Delaware case.
delawarelegal“So how could how could a client with nine shares lead to a multibillion dollar award to a lawyer?”
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Gurley says he would offer Musk's compensation package to any CEO and would buy stock in companies using similar structures.
compensationdelaware“I would also say if any other CEO took a package like this, I would in a public company, I would be very encouraged to consider buying a lot of it.”
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Gurley says AI leaders admit memory is a hard problem requiring expensive nightly retraining per user.
ai moatsmemory“If you talk to the people that are at the tops of these firms and you say, hey, why can't this thing remember everything I want? And they go, oh, that's a hard problem.”
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Gurley argues AI memory creates switching costs that lock users in to whichever platform solves it first.
ai moatscompetitive advantage“I start relying on one of these things as my memory and I don't have a way to pull that out and jump to something else, I'm stuck. Yes. Like I am hooked, locked, stuck.”
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Gurley calls the Altman-Masa plan to compete with Nvidia radical given AMD and others have decades head start.
chipscompetition“There are already people competing with Nvidia. AMD's competing with Like, there are other people that have somewhat of a head start. Like decades.”
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Gurley cites Morris Chang arguing Taiwan's chip competitiveness stems from labor model incompatible with US norms.
chipsmanufacturing“Morris makes the point that the reason Taiwan is competitive has to do with the labor model that exists there and the type of work people are willing to do and your ability to retain them. And he walks through his history of hiring in Texas and other parts of”
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Gurley says Morris Chang identifies Vietnam or India as likely disruptors, not advanced economies like the US.
chipsmanufacturing“And his says the country must more likely to disrupt Taiwan would be Vietnam or India, Not an advanced culture.”
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Gurley says Silicon Valley rushes to price-to-revenue multiples because it's the crudest, least intelligent valuation method.
criticismsoftware“I've always said that Silicon Valley has the crudest kind of least intelligent view of valuation. They always rush to price to revenue because it's easy and because quite frankly, it's easier to be optimistic.”
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Gurley argues Google's cage-match ad model generates far higher revenue than transactional models could achieve.
advertisingbusiness model“Their business model is to throw their customers in a cage match and let them compete with one other to the death.”
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Gurley argues Google lacks the internal culture to partner in win-win ways due to their cage-match business model.
culturegoogle“In addition to everything I brought up, because their core business model is to throw their customers in a cage match, they don't they don't have the culture internally to partner in a friendly win win way.”
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Gurley invokes Spielberg's Jaws example to suggest AI expectations may exceed what can actually be delivered.
aiexpectations“I saw this inner great interview once with Spielberg when he was talking about Jaws. And he said, you know, I didn't show the shark until like 75% of the way through this thing.”
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Gurley identifies long-term memory as a major unsolved problem preventing AI from becoming true personal assistants.
aiconsumer“I do think this memory issue is a big, big deal, at least on the consumer side. So none of the major contenders today can remember who you are because it would require them.”
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Gurley explains AI memory requires retraining models per person, creating an economically unsustainable structural problem.
aieconomics“And of course that makes no sense economically. So it's actually a huge structural problem. There are complaints, you know, in Reddit about Character AI on this front.”
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Gurley says cloud credit investments are definitively low quality revenue despite auditor approval.
ai investmentscloud credits“From the big company players' side, I would just say definitively, this could get me in trouble, but This is flat out low quality revenue.”
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Gurley says OpenAI only exists because Google's attention mechanism was open-sourced, not patented.
open sourceopenai“OpenAI doesn't exist today if that's patented and controlled. There's it just doesn't, which is another irony around this open source argument because they've been infringed from massively from a major but the idea of being shared, and this is also why I'm such a massive open source proponent”
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Gurley argues cloud credits given as AI investments create low quality revenue for big tech companies despite auditor approval.
ai valuationscloud credits“From the big company players' side, I would just say definitively, this could get me in trouble, but this is low quality revenue.”
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Gurley says cloud credits given as investments create low quality revenue despite auditor approval.
ai valuationscloud credits“Like this is flat out low quality revenue and I'm certain that they've got their auditor to sign off on it.”
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Gurley says cloud credit investments use balance sheet to drive income statement, which should be prohibited.
accountingai valuations“Well, yeah. I mean, a big skeptic would say you're using your balance sheet to drive your income statement, which should be a no no.”
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Gurley uses hypothetical Ultra Hosting Company to illustrate how credits-as-investment creates revenue without real customers.
accountingai valuations“They built a big server farm and their only customers they have are companies that they went out and gave credits away to as a form of investment.”
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Gurley criticizes large LLM players for attacking open source and lobbying regulators against it.
ai moatsopen source“And for me, it's been a sad reality that some of the larger LLM players have literally attacked open source directly and are telling regulators to try and disable it.”
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Gurley says large LLM companies attacking open source through regulators is unprecedented and makes him skeptical of their moats.
ai moatsopen source“it's been a sad reality that some of the larger LLM players have literally attacked open source directly and are telling regulators to try and disable it.”
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Gurley notes 800 startup shutdowns per year are happening quietly with minimal media coverage unlike previous downturns.
market conditionsmedia coverage“For the most part, I guess I guess with the election and Ukraine and Gaza, like, there's so much going on that, that maybe, you know, people just don't give a shit.”
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Gurley criticizes founders obsessed with clearing their last round valuation when raising new capital.
founder advicefundraising“Yeah. People get overly, focused on this last round valuation thing. Like, it is I can't tell you how many founders I've had a conversation with where it's clear the number one objective in their function about the next financing is to clear the bar of the last round. And it just shouldn't matter that much.”
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Gurley criticizes board members for relying on price-to-revenue multiples, calling it one of the most naive valuation methods.
board governancerevenue multiples“I might point them to my one of my favorite blog posts, keys to the 10x revenue club, because Silicon Valley mostly lives on price to revenue multiples.”
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Gurley predicts a smaller company with a courageous founder will IPO first, not Stripe or other large names.
ipo marketpredictions“I actually I actually think we'll probably see someone a smaller company with a courageous founder step through the window. Like, I don't think we don't have to wait around for Stripe.”
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Gurley argues OpenAI wouldn't exist if Google's attention mechanism paper had been patented instead of open-sourced.
ai moatsgoogle“This concept was done inside of Google as an open source concept, immediately copied by all the other players. So OpenAI doesn't exist today if that's patented and controlled.”
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Gurley argues OpenAI wouldn't exist without open source DeepMind research, highlighting the irony of their anti-open-source stance.
ai moatsopen source“OpenAI doesn't exist today if that's patented and controlled. It just doesn't, which is another irony around this open source argument because they've benefited massively from a major, but the idea of being shared, and this is also why I'm such a massive open source proponent because I think it's so relevant to prosperity for the masses.”
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Gurley argues Deng Xiaoping brought 500 million people out of poverty through capitalism, more than any altruist.
capitalismchina“Ding Xiaoping, who brought capitalism to China and brought 500,000,000, 500,000,000 people out of poverty.”
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Gurley argues Deng Xiaoping brought 500 million people out of poverty through capitalism, more than any altruist or socialist.
capitalismeconomic policy“No other human being, not not the most no, no, you know, not Mother Teresa, not like no altruist, no socialist has come anywhere close to this number that was done merely by unleashing the human potential that was latent inside of China by allowing for idea sharing and commerce”
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Gurley observes all voices promoting AI regulation are executives or large investors with tens to hundreds of millions at stake.
ai moatsconflicts of interest“In particular, it's quite notable that all of the loud voices are either executives at these companies and or large investors at these companies.”
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Gurley reports open source models like Llama 2 are gaining market share among portfolio startups using AI tools.
ai moatsllama“What I'm hearing internally from our portfolio is this specifically the ilama too, Sunny sent me another one today, are really starting to gain market share amongst the startups that are using these tools.”
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Gurley notes AI companies have raised billions of dollars each at unprecedented levels despite being early stage startups.
ai moatsfunding“So yeah, you could call them early stage startups, but you could also I mean, who they've raised billions of dollars each, you know,”
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Gurley finds it suspect that incumbents, not academicians, are leading the charge to regulate open source AI.
ai moatsopen source“The people that are leading the charge calling for the regulation and calling and some of them raising this question of whether open source should be allowed are the incumbents.”
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Gurley argues regions that shut down open source AI will fail to innovate relative to regions that allow it.
ai moatsopen source“So if you shut it down in a particular region, that region is gonna fail to innovate relative to the other regions that are out there.”
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Gurley describes how telecom lobbyists drafted legislation directly, contradicting civic education about how laws are made.
lobbyingregulatory capture“They had put a bill on Governor Rindle's desk, proposal drafted by lobbyists for the telecommunications companies. This isn't what I learned on Schoolhouse Rock.”
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Gurley notes telecom market share consolidated from 48% to 85% after 1996 Telecommunications Act.
market concentrationregulatory capture“In 1996, the top four had 48 market share. Four, five years later, after this heralded legislation, they're up to 85%. That didn't work. Let's check-in on the second one. Were they promoting innovation?”
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Gurley shows Telecom Act of 1996 increased top four market share from 48% to 85%, opposite of stated goal.
regulatory capturetelecom“In 1996, the top four had 48 market share. Four, five years later, after this heralded legislation, they're up to 85%. That didn't work.”
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Gurley shows telecom regulation killed innovation: VC investment dropped from 15% of total to below 1% in ten years.
regulatory capturetelecom“This used to be 15% of what VCs did. Within ten years, it had gone below 1%, and a year later, the MVCA stopped tracking it.”
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Gurley quotes Stigler's regulatory capture theory: regulation is acquired by industry and designed for its benefit.
regulatory capture“As a rule, regulation is acquired by the industry and is designed and operated primarily for its benefit. I'd like to say regulation is the friend of the incumbent.”
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Gurley quotes Nobel laureate Stigler that regulation is acquired by industry for its own benefit.
incumbentsregulatory capture“As a rule, regulation is acquired by the industry and is designed and operated primarily for its benefit.”
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Gurley describes $38 billion program paying doctors $44,000 each to buy electronic health record software.
epichealthcare“They came up with a brilliant idea. I have to assume she helped encourage this. Doctors would receive $44,000 each if they bought software. $38,000,000,000.”
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All-In Podcast, 16 September 2023
epichealthcare“I have to assume she helped encourage this. Doctors would receive $44,000 each if they bought software. $38,000,000,000. This is true. You can look it up.”
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Gurley says Obama's stimulus included $38 billion paying doctors $44,000 each to buy EHR software.
epichealthcare“Doctors would receive $44,000 each if they bought software. $38,000,000,000. This is true. You can look it up. I'm not making it up. $44,000, give it to a doctor, implement some software.”
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Gurley says DOJ fined Epic competitors $155 million, $57 million, and $145 million for lacking mandated features.
department of justiceepic“But they got the Department of Justice to enforce people that didn't have the feature set that were getting the payments, and you had three record fines, 155,000,000, 57,000,000, 145,000,000 against the lesser competitors of Epic. Unreal.”
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Gurley says Germany validated 96 COVID test vendors while US approved only three.
covidfda“Germany leaned heavily into rapid tests. They got their scientists together, and they evaluated a 122 different vendors and validated 96 of them.”
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Gurley says Germany validated 96 COVID test vendors, resulting in prices of 75 cents per test.
covid testinghealthcare“Here they are on the right, 96 different vendors that they ok'd. And as a result, in the German market, you could buy five tests for $3.75 or €75 cents a test.”
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Gurley notes all seven COVID tests at Walgreens and CVS are identically priced at $23.99.
covid testingpricing“Yesterday, just for kicks kinda, I went online. This is Walgreens and CVS antigen test. There's seven tests. They're all exactly $23.99. What is that? That's not a marketplace. That's not open competition.”
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Gurley concludes Silicon Valley's success is because it is so far away from Washington DC.
regulatory capturesilicon valley“The reason Silicon Valley has been so successful is because it's so fucking far away from Washington DC.”
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Gurley notes Instacart's stock-based compensation is a fraction of other tech companies, calling high SBC very dilutive.
dilutioninstacart“Their stock based comp is a fraction of all the other companies in the space and all the other tech companies.”
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Gurley says Netflix executives choosing cash over stock makes management more thoughtful about expenditures.
cash vs stockcompensation“Netflix, they've let executives make a decision between cash and stock, and a lot of them have taken cash. And I personally think management is a lot more, thoughtful about cash expenditures,”
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Gurley argues management treats stock-based compensation as if it's free, unlike cash expenditures which get more scrutiny.
corporate governancemanagement“I personally think management is a lot more, thoughtful about cash expenditures, and I think they think about this SBC as if it's free almost.”
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Gurley argues management treats stock-based compensation as free while being more thoughtful with cash, but shareholders see it differently.
management incentivesshareholder value“I personally think management is a lot more, thoughtful about cash expenditures, and I think they think about this SBC as if it's free almost. Mhmm. But I don't think shareholders think that way.”
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Gurley observes venture markets rise slowly but crash immediately, based on experiencing three bubble cycles.
bubblesmarket cycles“Yeah. Look, I've lived through three different bubbles and bursts in this industry, and unfortunately, it's highly cyclical. And when you and and it tends to go up slowly, and it tends to crash immediately.”
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Gurley says the venture industry is highly cyclical, rising slowly but crashing immediately across three bubbles.
bubblesmarket cycles“I've lived through three different bubbles and bursts in this industry, and unfortunately, it's highly cyclical. And when you and and it tends to go up slowly, and it tends to crash immediately.”
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Gurley observes tech valuations rise slowly but crash immediately, and he has now seen this pattern three times.
market cyclesvaluations“it tends to go up slowly, and it tends to crash immediately. And so this is the third time I've seen valuations crash,”
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Gurley states valuation crashes are industry-wide and unrelated to individual company operations, requiring navigation not wishful thinking.
company operationsmarket correction“They can't magically wish for the valuation they want to add because it's not actually related to how they're operating.”
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Gurley explains stacks of liquidation preferences make transitions very hard during acute market corrections.
cap tablesipo market“these private company capitalization charts have stacks and stacks of liquidation preference, and it's when you have that acute of a correction, it's very hard to make this transition.”
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Gurley explains the slow IPO market results from companies struggling to reconcile liquidation preferences after sharp valuation corrections.
ipo marketliquidation preference“And that's one of the reasons why the IPO market's been slow to get going because people have to get come to terms with all these things.”
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Gurley says complex cap tables with multiple constituencies cause investors to opt out of unicorn financings entirely.
cap tablesunicorns“a lot of people just say they opt out and say no this is too hard, I'm not going to go in there and negotiate with five different constituencies on how to do this.”
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Gurley notes hyper-competition removed liquidation preference protection on IPOs, enabling founders to convert preferences below value.
ipoliquidation preference“There was a term removed from most term sheets that gave investors the right to protect their LICPREF on an IPO, that's gone in most of these cases.”
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Gurley claims venture's outperformance depends entirely on tiny frothy windows; without peak years it's an uninteresting asset class.
asset allocationmarket cycles“And if you don't, if you aren't around for that part, you know, you strip those years out a forty year assessment, it's actually not that interesting an asset class,”
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Gurley says venture firms should exit at peaks but instead become most confident about holding forever at those exact moments.
exit timingmarket cycles“Yes, right when we are at the peak is when people get the most brazen, the most confident and they start talking about how we're going to hold forever.”
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Gurley says only 10 to 15 companies in venture history merit hold-forever strategy but the rhetoric became common narrative.
exit strategyhold forever“I think the total number of companies that meet that criteria in the history of the venture industry is like 10 or 15. Yes.”
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Gurley says during booms every firm started multiple funds, piling up money and slowly taking on unrecognized risk.
market cyclesrisk“So when things boom, everyone starts a venture firm. Right? And in this past boom, in addition to everyone starting a venture firm, every venture firm started multiple venture firms and growth firms, and all that money gets piled up and you're slowly taking on risk and you don't realize it.”
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Gurley says in the recent boom every venture firm started multiple funds, slowly piling up risk unknowingly.
bubblesrisk“And in this past boom, in addition to everyone starting a venture firm, every venture firm started multiple venture firms and growth firms, and all that money gets piled up and you're slowly taking on risk and you don't realize it. It's like the roller coaster goes, nink, nink, nink, nink, nink.”
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Gurley says in the recent boom every venture firm started multiple funds, piling up risk unnoticed.
boom cyclesrisk“And you're taking more and more risk and you don't know it because everyone around you is taking the same amount of risk.”
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Gurley calls FTX the perfect pinnacle of the recent bubble where legendary investors ignored risk.
ftxrisk“And maybe FTX is the perfect pinnacle of this past one where a bunch of legendary investors just ignored risk. You know, and they wouldn't have done that in 2009.”
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Gurley notes SVB stock traded at $260 on March 8, arguing Wall Street misjudged risk too.
risksvb“So on March 8, the stock was trading at $260 a share. So there are people that want to put this on risk taking in Silicon Valley, but Wall Street got it wrong too.”
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Gurley says every VC speaking publicly is performing for entrepreneurs they haven't met yet.
founder relationsventure capital“Every venture capitalist, when they open their mouth in front of a microphone, which I guess I'm doing right now, is talking to the entrepreneur they haven't met yet.”
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Gurley says every VC speaking publicly is performing for future founders, creating pressure to look supportive.
governanceincentives“There is so much important criticality in getting in front of the right pitches that everyone wants to look like the best actor.”
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Gurley links VC cheerleading behavior directly to governance failures like FTX.
ftxgovernance“The problem is that's the exact same type of behavior that leads to the FTX situation because you take yourself out of a governance role completely because you just become the founder cheerleader.”
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Gurley says venture capital must be measured over 20-40 years, longer than most employees stay.
performanceventure capital“You got to look at it over twenty to forty years, which is really bizarre because most firms don't have employees that long.”
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Gurley says firms that exited in the late 1990s bubble missed the vast majority of returns.
bubblesreturns“But the vast majority of the returns are in these periods at the top of these bubbles.”
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Gurley contrasts Bezos respectfully addressing shareholders in his S-1 against later founders' antagonistic approach.
amazonfounder mindset“So if you reread his S-one where he writes a letter, it's titled To Our Share Owners, and he talks a lot about them.”
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Gurley criticizes FTX investors for funding a company with no board and commingled businesses.
ftxgovernance“I mean, the markets have a way of separating, very risk seeking individuals from their capital. It may not happen overnight, but it always happens eventually. Like there's no easy money.”
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Gurley questions investors who funded FTX despite no board and commingled businesses.
due diligenceftx“I love the FTX story, not because I wanna pick on anybody, but to make the decision to give money to somebody that has no board and that has a side business that's commingled, who tells you it's not commingled, it turns out it was commingled. Like, what are you doing?”
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Gurley cites Ferriss's metrics: 10 million books sold, 2 million email subscribers, and podcast approaching one billion downloads.
creator economymetrics“He sold 10,000,000 books. I got a list here. He got 2,000,000 email subs, over a thousand blog posts, 7,000,000 followers on social media, and his podcast is about to pass a billion downloads.”
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Gurley frames luck and optionality as something you can increase by taking seemingly superfluous meetings that lead to outcomes.
angel investingoptionality“it's a question of can you increase your optionality for fortune or luck or whatever anyone else says by taking meetings that may seem superfluous or uncertain or that then lead to these big outcomes?”
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Gurley identifies email and podcasting as content forms structurally resistant to platform control due to their distributed technical architecture.
creator independenceplatforms“And email and podcasting are two content forms where there's no evil overlord that control. They're they're both these highly distributed things just by the way they're technically implemented.”
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Gurley observes email and podcasting are unique content forms with no centralized control due to their technical architecture.
decentralizationplatform risk“email and podcasting are two content forms where there's no evil overlord that control. They're they're both these highly distributed things just by the way they're technically implemented.”
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Gurley speculates LinkedIn's InMail monetization prevented it from capturing powerful conversations like Twitter DMs did.
monetizationplatforms“I've wondered over the years if LinkedIn hadn't polluted their InMail and made it monetize and they had done what Twitter did, how much of the most powerful conversations in the world would”
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Gurley advocates against tribalism, arguing people shouldn't let one group decide their opinions on everything.
adviceindependent thinking“And I just feel like there's no reason that 50% of the world should have their opinion on everything decided by one group of people.”
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Gurley advocates waiting rather than reacting, citing Silicon Valley Bank weekend as example where panic proved unnecessary.
crisis responsedecision-making“I've learned that if you just wait a little bit of time, a lot of problems go away.”
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Gurley says all investors must hold strong opinions loosely because variables constantly change.
investingmental models“And Yes. I think I think all investors have to work within that framework because things change.”
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Gurley notes the two best VCs at the time, Doerr and Moritz, invested in Google when he passed.
googleinvesting mistakes“I'd like to highlight, and I always do, the two best venture capitalists in the world at the time, John Doerr and Mike Maritz, kinda locked hands and said yes.”
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Gurley discovered Dell had 20-to-1 ROIC advantage versus competitors using return on invested capital framework.
dellinvesting“It turned out just by happenstance that Dell stood out like a sore thumb with ridiculously high ROIC numbers versus the rest of the industry. Like, night and day, like, 20 to one.”
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Gurley found Dell's return on invested capital was 20 times higher than competitors, initially unbelievable.
investingmarketplaces“Like, night and day, like, 20 to one. Wasn't even close. And in fact, it was so ridiculous.”
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Gurley recalls OpenTable's CFO wanted to quit because his model capped market share at 17 percent.
marketplacesnetwork effects“And one day I showed up early for a board meeting and and the CFO comes to me and he says, Bill, I'm I'm gonna quit.”
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Gurley tells entrepreneurs the 2020-21 boom was a fantasy, not normal, and current conditions are reality.
market cyclesvaluations“Then I'm not the only one, there's other VC's getting, this is normal dude. Like that was a fantasy you were in and you need to forget it fast, but you can't.”
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Gurley says average Silicon Valley financial literacy is two out of ten versus eight-and-a-half in New York.
financial literacysilicon valley“So this gets into some of the earlier stuff we talked about just about how deep you go on investing history and understanding But if there is a scale of financial sophistication between one and ten, and you would say a really smart person in New York is a eight and a half.”
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Gurley says profitable companies at IPO dropped from 90% in downturns to 5% by 2020-2021.
cyclesipo market“Right? And so in really dark times, the percentage of companies IPOing their profitable is like 90. But by 2020, 2021, that number is 5%.”
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Gurley believes Facebook's stock would double if they shut down VR, which costs $5-10 billion annually.
investingmeta“Wall Street's on my side on this one. I think if they shut down the VR effort, not only will the profitability would soar because they're spending real money, like 5 to 10,000,000,000 a”
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Gurley notes Amazon ran same-day delivery experiments on Uber while most $20-30M companies would refuse due to accounting concerns.
bezosexperimentation“This is a company that's worth 100 billions of dollars that is running an experiment on top of Uber. And Yeah.”
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Gurley cites $44 billion spent paying doctors to implement EHR systems as regulatory capture example.
healthcareregulatory capture“of my favorite examples, the Obama administration came up with this program where they spent $44,000,000,000 paying doctors to implement EHR systems.”
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All-In Podcast, 23 May 2022
howard marksmarket structure“So you have low barriers to entry but you have very high barriers to exit”
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All-In Podcast, 23 May 2022
investment cyclesstructural dynamics“you have low barriers to entry but you have very high barriers to exit and so he felt that it was just systematically set up to rise and crash, rise and crash.”
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Gurley describes venture cycles as sawtooth patterns rather than sine curves, with gradual risk-on and abrupt risk-off.
market cyclesrisk“it doesn't happen like a sine curve which is what we all imagine when we think of a cyclical business, it's more like a sawtooth.”
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Gurley describes risk-on as slow and reflexive while risk-off happens abruptly, not like a sine curve.
investment cyclesmarket cycles“Risk on is a very slow process and it's reflexive so it grows and grows and grows and grows And then risk off tends to be very abrupt”
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Gurley says venture cycles are sawtooth-shaped, not sine curves, with slow reflexive risk-on periods.
investment cyclesmarket dynamics“Risk on is a very slow process and it's reflexive so it grows and grows and grows and grows”
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Gurley dates the current risk-on cycle from 2009 to five months before this event.
investment cyclestiming“And then risk off tends to be very abrupt and we've seen that here, This cycle risk on was from 'nine to five months ago.”
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Gurley says venture capital returns are heavily dependent on performance during the hottest part of market cycles.
market cyclesreturns“what I realized was that the IRR numbers and the ROI numbers on the venture capital category were heavily dependent on performance in the hottest part of the cycle and so in the tip of that sawtooth”
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Gurley found that venture capital returns are heavily dependent on performance during the hottest part of cycles.
investment cyclesreturns“the IRR numbers and the ROI numbers on the venture capital category were heavily dependent on performance in the hottest part of the cycle”
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Gurley coined the phrase that protecting against downside requires enjoying every bit of upside in venture cycles.
market cyclesstrategy“that's where we came up with this phrase that the best way to protect yourself against the downside is to enjoy every last bit of the upside.”
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Gurley states the best downside protection in venture capital is fully capturing the upside.
investment strategyrisk management“the best way to protect yourself against the downside is to enjoy every last bit of the upside.”
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Gurley criticizes price-to-revenue multiples as the crudest possible valuation tool for evaluating companies.
metricssaas“price to revenue is like this really crude valuation tool, it's like the crudest you could possibly have.”
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Gurley lists specific new scrutiny metrics buyers now apply to SaaS companies beyond crude price-to-revenue multiples.
market shiftsaas“what really values companies, you know, it's typically a discounted cash flows and so now all of a sudden the buy side's asking SaaS companies about net dollar retention, about long term operating margin, about whether their free cash flow is greater or less than their net income, about SBC as a percentage of free cash flow.”
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Gurley says post-correction windows are the calmest periods with least anxiety in his three-decade career.
investment cyclesmarket timing“By the way, I found, and I shared this with my partners the other day, I found through my career, which wasn't four decades, okay.”
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Gurley finds the period after market corrections to be the calmest with least anxiety in his career.
market cyclespsychology“I found through my career, which wasn't four decades, okay. Over three That the window after the correction is the calmest, where there's least anxiety for me at least.”
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Gurley finds the post-correction window calmest with less anxiety, slower pace, and more rational behavior.
downturnsinvestment psychology“the window after the correction is the calmest, where there's least anxiety for me at least. Like everything slows down, people talk rationally, people aren't doing silly things.”
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All-In Podcast, 23 May 2022
howard marksmarket structure“So you have low barriers to entry, but you have very high barriers to exit. And so felt that it was just systematically set up to rise and crash, rise and crash.”
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All-In Podcast, 23 May 2022
market cyclesrisk“And then risk off tends to be very abrupt and we've seen that here, right? This this cycle, risk on was from o nine. That's well said. To five months ago.”
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Gurley explains venture firms must maximize upside because IRR depends on hot cycle performance, which may accelerate collapses.
investment strategymarket cycles“And that's where we came up with this phrase that the best way to protect yourself against the downside is to enjoy every last bit of the upside.”
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All-In Podcast, 23 May 2022
metricssaas“And so what really values companies, you know, it's typically a discounted cash flows. And so now all of a sudden, the buy side's asking SaaS companies about net dollar retention, about long term operating margin, about whether their free cash flow is greater or less than their net income, about SBC as a percentage of free cash”
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Gurley finds post-correction windows the calmest period with least anxiety as people behave more rationally and pragmatically.
investing psychologymarket cycles“The window after the correction is the calmest, where there's least anxiety for me at least. Like, everything slows down, people talk rationally, people aren't doing silly things.”
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Gurley says Second Life went from zero to 70 million dollars in revenue in under eighteen months.
growthrevenue“I think the company went from 0 to 70,000,000 in revenue in less than eighteen months.”
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Gurley says Second Life grew from zero to $70 million revenue in under eighteen months.
marketplacesrevenue“I think the company went from 0 to 70,000,000 in revenue in less than eighteen months. And so you had this vision and excitement about what was possible.”
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Gurley explains Minecraft and Roblox succeeded with simpler primitives and child demographics versus Second Life's complexity and adult focus.
competitionmarketplaces“One, primitives are simpler. And so the creator tools at Second Life, you could do amazing rich things, but they were a little harder to use.”
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Gurley is skeptical of avatar-based work meetings, having done eight such board meetings pre-Zoom.
avatarsmetaverse“And we've done them. Philip and I have done eight of those board meetings with avatars, and that was pre Zoom.”
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Gurley argues simpler heuristics go viral faster than complex ones, favoring Discord over Meta's approach.
metaverseproduct design“Personally, I've always found that simpler heuristics go viral faster than complex ones. And so when I equate what's happening in a Discord or a Twitter space with what's trying to be achieved by Meta.”
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Gurley would bet on a 500 million user communication platform adding avatars over a perfect avatar system without users.
metaversenetwork effects“if I had to place a bet on whether someone that had 500,000,000 users on a digital place platform where people are communicating and that they might add avatars or some digital thing that makes it more immersive versus someone that built the perfect digital three d avatar immersive system but doesn't have the users yet?”
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Gurley says decentralization wasn't a limiting factor; Second Life creators were cashing out $100 million annually.
decentralizationmarketplaces“If I made a list of 25 things that I think inhibited us from getting to a higher place, I don't think I'd put decentralization on that list.”
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Gurley notes Second Life creators were cashing out $100 million annually from the platform.
creator economymarketplaces“The creators were cashing out a 100,000,000 a year last time I had access to the number. So Philip gave the GMV, but they were taking out a 100,000,000.”
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Gurley says tokenization's intersection with marketplace and UGC companies is remarkably nuanced and tricky.
cryptomarketplaces“There's a ton of people that are thinking about tokenization and how that intersects with a marketplace company or a UGC company and a game company.”
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Gurley argues tokenization with appreciating currency can provide massive advantage for marketplace bootstrapping through incentive structures.
cryptomarketplaces“And so if you build the right incentive structure around your tokenization, that could be a massive advantage to an on ramp, especially if you're able to get your currency to appreciate over time.”
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Gurley questions whether tokens have value without the ability to rake the system, citing Uniswap DAO.
cryptotokenization“It's interesting to me. I've been spending a lot of time trying to go deeper on crypto, and I think there's a fascinating question about whether or not a token will have value if it doesn't have the ability to eventually rake a system that it's involved in. And one of the great examples out there is the Uniswap DAO”
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Gurley argues governance tokens without economic rights would be worth a small fraction of tokens with rake ability.
marketplacesregulatory capture“I think it's a fundamental question if that term weren't in the DAO or if instead it said the community will never rake a transaction, what would that do to the value of Uniswap?”
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Gurley argues governance tokens without economic rights would be worth a small fraction of tokens with revenue capture.
cryptogovernance“And everything from my history of studying finance and economics would say that if you declared you'd never rake the system governance token, simply the right to kind of control a group or community would be worth a fraction, a small fraction of what an economic token would be.”
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Gurley suggests if Solana eats Ethereum, the next competitor could make Solana equally uninteresting.
ai moatscompetition“Yes. But I think there's an equally interesting counterpoint to that, that Solana might be cheaper than Ethereum, but then the son of Solana might make Solana equally uninteresting.”
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Gurley warns that if Solana replaces Ethereum, it suggests all crypto tokens are worth far less due to race-to-the-bottom dynamics.
ai moatscompetition“And that's why someone said to me the other day, if Solana eats ETH, then all of these tokens are worth far less than we imagined because there's just a race to the bottom.”
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Gurley claims legacy IPO process transferred $200 billion over forty years to bank clients, $30 billion last year.
investment banksipo market“the legacy IPO process has devolved into this process where a huge one day gains are transferred from the investment banks to their trading clients.”
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Gurley states that IPO underpricing has transferred $200 billion over forty years, $30 billion in the last year alone.
ipo marketregulatory capture“And that number's 200,000,000,000 over the past forty years, 30,000,000,000 just last year. So it's actually gotten worse.”
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Gurley argues direct listings use supply and demand pricing like bonds, which is how markets should work.
direct listingipo market“You can actually use supply and demand to determine price and allocation. And that's what the direct listing does. That's how every bond is priced.”
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Gurley calculates that average IPO underpricing of 50% plus 7% fees equals a 57% cost of capital.
cost of capitalipo market“So last year in 2020, the average IPO was underpriced by 50%. If you add in a 7% fee on the investment bank, that's a 57% cost of capital.”
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Gurley calculates 2020 average IPO had 57% cost of capital from 50% underpricing plus 7% bank fee.
cost of capitalipo market“last year in 2020, the average IPO was underpriced by 50%. If you add in a 7% fee on the investment bank, that's a 57% cost of capital.”
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Gurley challenges anyone to find a finance professor who would justify a 57% cost of capital.
cost of capitalipo market“Find me any professor, any finance professor. We're a company that's got the possibility of going public, so it's highly legitimate.”
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Gurley cites Jay Ritter's data showing direct listing companies wildly outperformed traditional IPO peers.
direct listingipo market“Jay Ritter put out some data at the end of August that you guys probably saw where he analyzed all the companies that have chosen the direct listing path and they've wildly outperformed their IPO peers,”
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Gurley frames Prop 22 battle as SEIU, the largest lobbying spender in the US, versus tech companies
prop 22regulatory capture“They're the largest, spender, in lobbying of any entity in The US against, you know, these companies that are trying to bring new job opportunities to people,”
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Gurley says SEIU charges $420 annual fee to 2 million members outside ridesharing to fund this fight.
laborprop 22“They want their minimum member fee is $420 a year that they charge their 2,000,000 members who, by the way, aren't in the ride sharing industry. They're in hospitality and government and health care.”
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Gurley says SEIU charges $420 annual fee to 2 million members in other industries to fund rideshare lawsuits
prop 22regulatory capture“They want their minimum member fee is $420 a year that they charge their 2,000,000 members who, by the way, aren't in the ride sharing industry.”
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Gurley says SEIU charges $420 annual fee to 2 million members outside ridesharing to fund lawsuits in the industry.
prop 22regulatory capture“their minimum member fee is $420 a year that they charge their 2,000,000 members who, by the way, aren't in the ride sharing industry. They're in hospitality and government and health care.”
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Gurley cites Amazon paying $3,000 and McDonald's $500 bonuses to argue drivers prefer flexible work over shifts.
gig economylabor“if if if these writer drivers wanted shift work, there's unbelievable opportunity out there right now. Amazon's paying $3,000 for you to become a shift worker.”
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Gurley argues shift work is incompatible with parenting, school, or supplemental income needs that flexible work serves
marketplacesprop 22“You can't be a stay at home parent with shift work. You can't try and be an artist and meet supplemental income. You can't pay that.”
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Gurley reveals he took a personal Ethereum position after studying crypto, citing developer pragmatism over Bitcoin
cryptoethereum“I was swayed by the arguments of the Ethereum crowd. And so if our and and and I've taken I've taken a personal position, not something at benchmark.”
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Gurley reveals personal position in Ethereum after studying crypto, says Ethereum crowd more pragmatic than Bitcoin.
cryptoethereum“We are in chain analysis, which you referenced. And I'm swayed by the Ethereum crowd. The parties that are involved there seem to be way more pragmatic.”
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Gurley says Robinhood makes 4x more revenue per options trade than stock trade due to payment for order flow.
fintechipo market“So if you look at the Robinhood filings, they make about 4x the amount of revenue on a option trade than they do a stock trade.”
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Gurley says Robinhood makes 4x more revenue on options trades than stock trades despite democratization claims
ipo marketrobinhood“they make about 4x the amount of revenue on a option trade than they do a stock trade. Why do I bring this up?”
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Gurley claims remote work increases matching efficiency between skills and needs by two orders of magnitude
marketplacesremote work“The the ability to match as I was talking about earlier like the ability to match skill type with need goes up, you know, two orders of magnitude when you just open it up to everyone on the planet which is is a really good thing actually.”
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Gurley cites twelve-year bull run and extreme SaaS multiples as major IPO incentives.
ipo marketsaas“Add into that a roaring, screaming public market that's been on a bull run for, what, twelve years? And multiples in the public markets, especially in, the SaaS world that are out of this world.”
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Gurley says IPO pricing process has worsened over thirty years with inherent conflicts of interest.
conflictsipo market“And it's gotten worse, actually, over the past twenty or thirty years. The process itself has gotten more mundane.”
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Gurley reports seven of eight direct listings trade above first match, outperforming traditional IPO cohorts.
direct listingsipo market“Yeah, there've been eight high profile ones. Seven of them interestingly are trading above that first match that they did, which is really astounding.”
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Gurley notes Japan's antitrust department recently launched investigation into standard IPO practices and conflicts.
antitrustipo market“Interestingly, you know, as a side note, Japan's antitrust department just launched an investigation into standard IPO practices and these types of conflicts.”
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Gurley states 2020 average IPO was underpriced by 50 percent, a massive cost of capital.
capitalipo market“In 2020, the average IPO was underpriced by 50%. You go to any finance school, they tell you you should care about the cost of capital. They teach you about weighted average cost of capital.”
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Gurley argues SPACs are only viable because broken IPO process makes direct listings look expensive by comparison.
direct listingsipo market“But, you know, it appears to me that the thing is gonna, is either gonna slow down or they're gonna step in and do those types of changes you're talking about.”
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Gurley reveals Benchmark is a lead investor in Upwork under Hayden Brown.
benchmarkmarketplaces“We are actually a lead investor in Upwork. Hayden Brown's done an amazing job there the past couple of years.”
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Gurley confirms Benchmark is a lead investor in Upwork and sees large opportunity in gig talent marketplaces.
gig economymarketplaces“We are actually a lead investor in Upwork. Hayden Brown's done an amazing job there the past couple of years. And we see this as a big, big opportunity.”
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Gurley predicts more vertical-specific talent marketplaces will emerge, fragmenting LinkedIn's horizontal model.
linkedinmarketplaces“People have talked about kind of, you know, the opening up of LinkedIn where people go into more specific verticals and are able to drive better outcomes, real work opportunities right away.”
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Gurley contrasts InstaWORK's immediate job placement and training with traditional job listing sites like LinkedIn.
instaworkmarketplaces“The the the app tells you exactly where to go. The app teaches you how to do the job better before you actually show up.”
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Gurley explains Didi's competitive strength internationally could separately impact Uber's valuation.
marketplacesregulatory“Uber also competes with DD internationally. And so whether or not this affects DD's ability to be competitive is a different force that could impact Uber's valuation.”
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Gurley speculates China blocks US listings to keep capital and tax revenue domestic rather than offshore.
chinaipo market“I wonder I and I don't have any data to back this up, but I wonder if part of what's going on is that the Chinese government wants to make sure that though that wealth is actually kept inside of China, taxed appropriately, and then able to be regenerative in that market.”
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Gurley speculates Chinese government wants capital from tech companies kept and taxed domestically.
chinaipo market“I wonder if part of what's going on is that the Chinese government wants to make sure that though that wealth is actually kept inside of China, taxed appropriately, and then able to be regenerative in that market.”
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CNBC Television, 12 May 2021
airbnbmarketplaces“And I said, well, what does Airbnb have to accomplish to earn out this valuation that it has?”
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Gurley notes Lemonade, Unity, and Palantir are still trading at 20 times sales despite falling 60%.
multiplesvaluation“And yesterday in preparing for this, I was looking at some of the stocks that are outliers on price to sales and lemonade, unity and Palantir, which have come in 60% are still at 20 times over sales.”
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Gurley notes Lemonade, Unity, and Palantir are down 60% but still trade at 20 times sales.
multiplestech stocks“I was looking at some of the stocks that are outliers on price to sales and lemonade, unity and Palantir, which have come in 60% are still at 20 times over sales.”
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Gurley says over half of Robinhood's revenue comes from payment for order flow for options, which history shows loses money.
payment for order flowrobinhood“Over half of the revenue that Robinhood has reported is payment for order flow for options.”
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CNBC Television, 12 May 2021
citadelpayment for order flow“You know, it's interesting. I stumbled across a piece that Citadel had sent to the SEC in 2005, where they argued that it should be illegal because of inherent conflicts of interest.”
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Gurley notes Citadel argued to the SEC in 2005 that payment for order flow should be illegal.
citadelpayment for order flow“I stumbled across a piece that Citadel had sent to the SEC in 2005, where they argued that it should be illegal because of inherent conflicts of interest.”
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Gurley argues Google and Facebook's power led investors to wrongly believe consumer businesses are over.
ai moatsconsumer“I think over the past three or four years, mainly because of the power of Google and Facebook that a lot of people have come to tell themselves that consumers over.”
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Gurley argues no one would choose traditional IPOs anymore because in 2020 the average IPO was underpriced by 50%.
direct listingipo market“I think to the extent that we can effectively integrate raising primary capital with the direct listing, no one would choose a traditional IPO process anymore because it's gotten perversely worse in 2020, the average IPO was underpriced by 50%.”
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Gurley claims people who benefited from $30 billion in IPO underpricing are fighting regulatory changes.
ipo marketregulatory capture“There will be people that will fight it from a regulatory standpoint. And quite frankly, Brad, they're fighting the SPACs from a regulatory standpoint.”
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Gurley states 64% of Robinhood revenue comes from options trading despite democratization claims.
marketplacesoptions trading“it's now known that 64% of their revenue comes from options trading. And so the company wants you to believe and and goes on public television and claims that their mission is to democratize investing.”
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Gurley provides IPO underpricing data showing escalation from $2B in 2016 to $30B last year.
direct listingipo market“under first day under pricing in 2,016, 2,000,000,000. 17, 4,000,000,000. 18, 7,000,000,000. 19, 9,000,000,000. Last year, 30,000,000,000.”
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Gurley cites IPO underpricing rising from $2B in 2016 to $30B last year, showing the problem is worsening.
ipo marketunderpricing“under first day under pricing in 2,016, 2,000,000,000. 17, 4,000,000,000. 18, 7,000,000,000. 19, 9,000,000,000. Last year, 30,000,000,000. So the problem's getting ginormously worse.”
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Gurley cites IPO underpricing growing from $2B in 2016 to $30B in 2020, with one deal losing $9B.
ipo marketkuaishou“Last year, 30,000,000,000. So the problem's getting ginormously worse. And then yesterday, on the Hong Kong exchange, Kuaishou, $5,000,000,000 deal, $9,000,000,000 underpricing on one deal.”
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Gurley cites Kuaishou's $5B IPO with $9B underpricing as extreme example of the problem.
ipo marketunderpricing“And then yesterday, on the Hong Kong exchange, Kuaishou, $5,000,000,000 deal, $9,000,000,000 underpricing on one deal.”
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Gurley argues banks advise 30x oversubscription, contradicting four hundred years of economic principles on supply and demand.
bankingipo market“And no one, no one in four hundred years of economics would suggest that the best practice would be to have a 30 x supply demand imbalance.”
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Gurley argues regulation typically locks in incumbents who write rules blocking new entrants.
incumbentsregulation“regulation's the friend of the incumbent. Most of the time when Washington DC leans into a new to to a new industry, you lock in the incumbents, and and the rules are written by the incumbents and make it very hard for new entrants to come up behind them.”
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Gurley argues regulation is the friend of the incumbent, locking in dominant players when Washington intervenes.
incumbentsregulatory capture“Most of the time when Washington DC leans into a new to to a new industry, you lock in the incumbents,”
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Gurley argues regulation locks in incumbents and makes entry harder, so more regulation favors existing stocks.
barriers to entryincumbents“So I would say the more regulation actually, the more you wanna own the stock.”
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Gurley says traditional IPOs only provide access to investment banks' biggest customers, not all investors.
ipo marketmarket access“The the the primary issues with the traditional IPO are twofold and the SEC nailed them both in their in their draft today, which is that it doesn't provide access to all investors.”
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Gurley says traditional IPOs only provide access to select group who are investment bank's biggest customers.
accessipo market“It's just a select group of people that that happen to be the biggest customers of the investment bank.”
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Gurley argues IPO pricing relies on human guessing rather than modern market mechanisms.
ipo marketmarket structure“And the price and allocation are determined by humans just guessing, which makes no sense whatsoever in the modern age.”
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Gurley predicts retail investors will access IPOs directly through platforms like Robinhood.
ipo marketmarket access“In the future, you'll be able to go on Robinhood, if you wanna participate in IPO, you can.”
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Gurley notes order matching systems existed for twenty years and corporate bonds already use supply-demand pricing.
ipo marketmarketplaces“Let's let supply and demand matching, which, you know, unfortunately have been available order matching systems for for over twenty years.”
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Gurley cites IPO underpricing totaling $6B in 2018, $7B in 2019, and over $34B this year.
ipo marketmarket structure“In in in 2018, it was 6,000,000,000. In 2019, it was 7,000,000,000. This year, it's gonna be over $34,000,000,000 in one day giveaways.”
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Gurley states 2020 IPO underpricing will exceed $34 billion in one-day giveaways, predicts fiduciary duty lawsuits.
ipo marketnumbers“This year, it's gonna be over $34,000,000,000 in one day giveaways. You know, if you you wanna talk about legal issues, I think people are gonna come after boards, for fiduciary duty violations”
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Gurley predicts boards will face fiduciary duty claims for using traditional IPOs that underprice shares.
ipo marketregulatory“I think people are gonna come after boards, for fiduciary duty violations for knowingly entering into a process where you're selling a corporate asset at a massive discount.”
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Gurley frames IPO underpricing as knowingly selling corporate assets at massive discount.
fiduciary dutyipo market“for knowingly entering into a process where you're selling a corporate asset at a massive discount.”
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Gurley argues SPAC market emerged because traditional IPO underpricing was worsening.
ipo marketmarket structure“I think one of the big reasons the SPAC market opened up was because the underpricing was getting worse and worse and worse.”
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Gurley says direct listings with primary offerings are now clearly superior to both IPOs and SPACs.
direct listingipo market“Today's a super important day because I think it'll be very hard for anyone to argue whether it's a traditional IPO or a SPAC that that's gonna be better than a direct listing with a primary offering.”
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Gurley states venture-backed IPOs left $6 billion on the table in underpricing over two years.
ipo marketregulatory capture“So last year and the year before, there were about $6,000,000,000 in underpricing across all of venture backed companies. Jay Ritter at the University of Florida aggregates this data.”
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Gurley says Snowflake's underpricing alone transferred $4.5 billion to allocated investors overnight.
ipo marketsnowflake“Snowflake alone was 4,500,000,000, just one company. And so the day after the IPO, the people that were allocated the stock the night before have 4,500,000,000 in wealth they didn't have before.”
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Gurley argues IPO allocations transferred $4.5 billion in wealth from Snowflake to allocation recipients overnight.
ipounderpricing“And so the day after the IPO, the people that were allocated the stock the night before have 4,500,000,000 in wealth they didn't have before. And that money didn't just come out of nowhere.”
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Gurley describes direct listing as simply matching supply and demand unlike traditional IPOs.
direct listingipo market“We have a wonderful new age alternative called the direct listing that just matches supply and demand.”
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Gurley argues founders who stay private longer are shirking their duty to maximize shareholder value.
foundersipo market“But that's the behavior of some of the founders in Silicon Valley that buy into the state private thing. Like the minute you started giving stock to your employees, you're in the game”
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Gurley argues founders who stay private longer fail their duty to maximize shareholder value for all constituents.
founder dutygoing public“Like the minute you started giving stock to your employees, you're in the game And your job is to maximize shareholder value for all your constituents, your investors, your employees, everything else.”
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Gurley argues 5 million people choosing to drive during low unemployment disproves claims it's a bad job.
ab5gig economy“One is, you know, 5,000,000 people committed to being drivers during the lowest unemployment in our lifetime.”
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Gurley claims unions that don't represent gig workers wrote AB5 legislation targeting that industry.
ab5regulatory capture“The SEIU and other unions leaned on the Sacramento legislature to write a law targeting an industry they don't even represent, which I think is also crazy.”
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Gurley believes Microsoft antitrust restrictions enabled Facebook, Google, and Amazon to emerge as dominant platforms.
antitrustmicrosoft“I actually believe in my heart of hearts that the government restricting Microsoft's ability to leverage their way through the browser, open the door for Facebook, Google, Amazon.”
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Gurley believes government restricting Microsoft opened the door for Facebook, Google, and Amazon.
antitrustmicrosoft“If they had been able to tie the browser to search the way they did, the way they went after Netscape aggressively, I think they would have succeeded. They're really good at that stuff.”
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Gurley says current markets show speculative risk appetite not seen since 1999 tech boom.
1999market conditions“There is certainly what I would call a highly speculative nature to the markets today, a willingness to take on risk, a willingness to get excited about projects that may be five or ten years into the future that we haven't seen since the '99 time frame.”
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Gurley states IPO underpricing totaled $24 billion in 2020, up from $6-7 billion prior years.
ipo marketnumbers“Ironically, you know, in year to date, 2020, the total underpricing dollars on the traditional IPO is $24,000,000,000 And it was in the 6 to 7 range the past two years up from three the year before.”
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Gurley notes the number of public companies has declined by half over time.
ipo marketpublic companies“We have a situation where the number of public companies today is half of what it was a while ago.”
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Gurley links decline in public companies to $200 million average IPO underpricing tax.
ipo marketpublic companies“And you ask, well, why is that? Well, the average IPO this year had to underprice by 200,000,000.”
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Gurley characterizes the average IPO underpricing as a $200 million unnecessary tax.
ipo marketregulatory capture“So you have a $200,000,000 tax to go public through the traditional IPO route, which is completely unnecessary.”
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Gurley argues SPAC craze exists because traditional IPO route allocates $200 million to bankers' friends.
ipo marketregulatory capture“I think is the SPAC craze because you've created this massive pricing umbrella arbitrage to get a company public where the traditional route means someone gets to allocate $200,000,000 to their buddies.”
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Gurley argues SPAC sponsors are capturing allocation power from Goldman and Morgan Stanley.
ipo marketregulatory capture“Well, if someone gets to do that, the SPAC sponsors are saying, Hey Goldman, Hey Morgan, you don't get to allocate that money to your friends. I'm gonna allocate it to mine.”
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Gurley explains SPACs emerged as sponsors arbitraging the $200 million allocation that banks give their friends.
ipo marketregulatory capture“Well, if someone gets to do that, the SPAC sponsors are saying, Hey Goldman, Hey Morgan, you don't get to allocate that money to your friends.”
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Gurley argues that during risk expansion periods, average entrepreneur quality declines as easy capital attracts people from banking and consulting.
entrepreneurshipmarket cycles“And I think you actually, that entire time that risk is increasing, the quality of your average entrepreneur that's getting funded is actually going down.”
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Gurley argues that entrepreneur quality declines during boom times and improves when risk appetite falls.
entrepreneurshipmarket cycles“I think you actually, that entire time that risk is increasing, the quality of your average entrepreneur that's getting funded is actually going down.”
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Gurley argues downturns filter for innate entrepreneurs rather than quick-buck seekers.
downturnsentrepreneurs“And what happens when risk goes off is the only people that are left starting the companies are the ones that are choosing it innately as the way of life they want to have and not just because they think they can get a quick buck.”
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Gurley advises against small layoffs of five or ten percent because they cause cultural pain without meaningful financial gain.
crisis managementlayoffs“One piece of advice though is never do a five or 10% layoff because it doesn't create any meaningful gain, yet you go through all the excruciating cultural pain.”
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Gurley calls the stay-private-longer strategy a fraud because private company cap tables are designed only to go up, not down.
cap tablesipo market“It's times like this where that strategy, I think, gets exposed as the fraud that it was precisely because private company capitalization charts don't go down very well. They're designed to really only go up.”
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Gurley explains that IPOs unlock down-round complexity by converting all preferred shares to common stock.
capital structuredown rounds“And one of the things that the IPO does is unlocks all of that complexity and converts everyone to common.”
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Gurley argues that surviving downturns is easier as a public company because IPOs convert complex structures to common stock.
cap tablesipo market“And it turns out that surviving down periods is a lot easier as a public company than a private company because you've converted all that away.”
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Gurley argues it is easier to survive downturns as a public company than as a late-stage private company.
ipo marketprivate markets“And so oddly, it's easier as a public company than a late stage private company to go through these types of periods.”
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Gurley notes that OpenTable's two venture-backed competitors went bankrupt during the 2001 downturn, enabling OpenTable's success.
competitive dynamicsmarketplaces“And as a result, you know, I think there were network effects, but nowhere in the history of OpenTable success story does anyone read two companies went out of business, but that's what happened.”
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Gurley recounts how Zappos extended payables to 90 days versus industry standard of 45 during crisis.
cash managementmarketplaces“And I don't remember the exact number, but he said something like 90. And having worked with Nordstrom at nordstrom.com, I knew the industry standard was like half that, like 45.”
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Gurley recounts how Tony Hsieh doubled Zappos's payment terms from 45 to 90 days by threatening vendors during a crisis.
cash managementvendor negotiations“And I said, how in the world did you accomplish that? And he said, I just called them all and said, if they didn't move to 90, we were going out of business.”
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Gurley invokes Graham and Dodd's principle to be greedy when others are fearful as guidance for entrepreneurs during downturns.
buffettcontrarian thinking“Patrick, I'd leave everybody with this final thought. I think it was Graham and Dodd before Buffett that said, be fearful when others are greedy and greedy when others are fearful.”
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Gurley urges entrepreneurs to ask what it means to be greedy when everyone else is fearful.
contrarian investingcrisis management“I think it was Graham and Dodd before Buffett that said, be fearful when others are greedy and greedy when others are fearful.”
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Gurley traces Silicon Valley's dissatisfaction with IPO process back two decades, citing eBay and Hambrick criticisms.
historyipo market“Silicon Valley's been, unhappy with the way the IPO works for a couple of decades now. I dug up, you know, some conversations Pierro Midiard had at eBay calling it undemocratic.”
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Gurley traces Silicon Valley's criticism of IPO unfairness through eBay, Hambrick and Quist, and Google's Dutch auction.
googleipo market“Pierro Midiard had at eBay calling it undemocratic. You know, Hambrick and Quist, Bill Hambrick, twenty years ago called the IPO an insider's game.”
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Gurley says 2019 IPOs transferred $6 billion in first-day wealth despite losses from Uber, Lyft, and Peloton.
ipo marketspecificity“if you look at the first day pop net of the losses of the companies that have broken issue, Uber, Lyft, and and, Peloton, it's 6,000,000,000 to the positive, $6,000,000,000 in first day wealth transfer net gains.”
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Gurley argues staying private forever is unhealthy and going public is advantageous for companies.
ipo marketprivate markets“But I don't think it's healthy for companies to stay private forever. I think it's super advantageous to companies to pass through and become public.”
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Gurley argues staying private indefinitely is unhealthy and going public is advantageous for companies.
ipo marketprivate companies“I don't think it's healthy for companies to stay private forever. I think it's super advantageous to companies to pass through and become public.”
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Gurley says going public increases pressure and transparency, elevating companies to new performance levels.
ipo marketperformance“I one of the reasons I encourage companies going public is because I think it ups their game. I think it it presents more pressure. It forces them to be more disclosive, more transparent.”
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Gurley cites Zuckerberg saying Facebook went public two years late, with market pressure revealing mobile issues.
case studyipo market“Even Zuckerberg was quoted as saying he waited two years too late to go public.”
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Gurley criticizes SoftBank's strategy of deploying hundreds of millions, which forces companies into massive losses.
private marketssoftbank“I've I've been quoted publicly, like, they've, you know, played a strategy where you hand hundreds of millions of dollars to a company and say, here, go win in the market with this.”
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Gurley explains large capital deployments force massive losses since companies lack infrastructure to absorb funds.
softbankunit economics“the only way to deploy that amount of capital is to take on massive losses. There's there's no way to you know, these companies don't have massive infrastructure.”
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Gurley argues traditional IPOs lack market-based price discovery and equal access for all participants.
direct listingipo market“In the traditional IPO process, neither of those things are true. You don't have a market based price discovery, and you don't have open and equal access to all.”
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Gurley illustrates direct listings allow any retail investor to participate at opening price, unlike IPOs.
direct listingipo market“If you put in a bid at $380.01 from a Robinhood account and they open at 38, you're filled. That is absolutely not true in the IPO process.”
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Gurley cites $171 billion in first-day wealth transfer over thirty-eight years from IPO underpricing.
dataipo underpricing“You know, thirty, forty years over the past thirty eight years, 171,000,000,000 in First Day Wealth Transfer.”
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Gurley cites $171 billion in first-day wealth transfer over 38 years, $15 billion in the past three years.
ipo marketregulatory capture“You know, thirty, forty years over the past thirty eight years, 171,000,000,000 in First Day Wealth Transfer. And in the past 50 in the past three years, that's 15,000,000,000.”
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Gurley argues IPO process has devolved from wide marketing to hand allocation among 10 to 15 firms.
allocationipo“I think there that it used to be that the IPO process was about disseminating and marketing and selling far and wide, and it's become a game of just hand allocating shares to the same 10 or 15 firms.”
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Gurley explains Barry McCarthy discovered existing daily stock opening processes can enable direct listings.
barry mccarthydirect listing“What Barry McCarthy unlocked and and discovered was that the very same processes that you use at the NYSE and the Nasdaq to open stocks each and every day can actually do the match that that that do a direct listing opening.”
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Gurley explains direct listings use existing daily stock-opening processes, removing steps rather than adding new technology.
direct listingipo market“What Barry McCarthy unlocked and and discovered was that the very same processes that you use at the NYSE and the Nasdaq to open stocks each and every day can actually do the match that that that do a direct listing opening. And so in the direct listing process, you're actually removing steps”
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Gurley argues direct listings remove steps since IPOs use equivalent opening process the next day anyway.
direct listingefficiency“And so in the direct listing process, you're actually removing steps because once you do an IPO, you actually do with the exact equivalent of direct listing opening the next morning.”
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Gurley distinguishes direct listings from Dutch auctions by noting systems already exist in markets for daily stock openings.
direct listingdutch auction“But what's really remarkable and very different from the Dutch auction, these systems are already inside of our financial markets.”
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Gurley quantifies Silicon Valley IPO underpricing at $171 billion over thirty-nine years based on day-one price jumps.
ipo marketunderpricing“So the first slide is about underpricing, and this is solely looking at the difference between the price that the stocks handed out to the night before and the close the next day.”
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Gurley calculates Silicon Valley companies lost $171 billion over 39 years from IPO underpricing between offering and first-day close.
ipo marketregulatory capture“And so over thirty nine years, that's been a 171,000,000,000 for Silicon Valley companies, and it's been increasing lately.”
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Gurley states Silicon Valley lost $171 billion to IPO underpricing over 39 years, $6 billion year-to-date.
ipo marketunderpricing“over thirty nine years, that's been a 171,000,000,000 for Silicon Valley companies, and it's been increasing lately. Just year to date, we're at 6,000,000,000 in underpricing.”
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Gurley presents data showing top-tier investment banks deliver the worst IPO execution over a decade and 100+ IPOs.
investment banksipo market“So this is ten years of data, a decade of data over a 100 IPOs, per underwriter. And what you see is astonishing.”
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Gurley analyzed a decade of IPO data showing the top two banks deliver the worst execution.
ipo marketregulatory capture“this is ten years of data, a decade of data over a 100 IPOs, per underwriter. And what you see is astonishing.”
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Gurley argues top investment banks deliver worst IPO execution, unlike any other market where quality correlates with performance.
investment banksipo market“So it turns out that if you go with the best investment bank, you get the worst execution. And that is that's remarkably odd.”
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Gurley states top investment banks deliver the worst IPO execution for companies.
ipo marketregulatory capture“it turns out that if you go with the best investment bank, you get the worst execution. And that is that's remarkably odd.”
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Gurley reveals IPO underwriters target 20x overallocation, meaning they intentionally ignore 95 percent of stock demand.
ipo marketregulatory capture“So 20 x over supply is a euphemism for we're about to ignore 95% of the demand for your stock.”
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Gurley reveals standard IPO practice targets 20x overallocation, meaning banks intentionally ignore 95% of stock demand.
ipo marketoverallocation“So 20 x over supply is a euphemism for we're about to ignore 95% of the demand for your stock. Intentionally ignore 95% of the demand for your stock.”
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Gurley argues banks face a multiple agency problem, serving buy-side clients rather than the companies going public.
agency problemipo market“There's an area of study in economics called, the agency problem, and and there's a the variant of it called the multiple agency problem.”
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Gurley explains top banks deliver worst execution because they serve buy-side clients, not the company going public.
agency problemipo market“So you've got an agent who's looking after multiple parties, the company, but guess what? Also the buy side.”
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Gurley argues investment banks serve buy-side clients, not startups, explaining worse execution at top banks.
ipo marketregulatory capture“So you just have to realize the customer is not the startup. The customer is the buy side.”
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Gurley explains direct listings guarantee order fills for retail investors while traditional IPOs do not provide such access.
direct listingipo market“If you are in a direct listing, any direct listing, and you are at a Schwab account, a Robinhood account, I don't care what, and you put in an order that's a penny higher than the closing price, you get filled. That is not true in a traditional IPO.”
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Gurley contrasts direct listings where any retail investor gets filled versus traditional IPOs where retail gets only 5 percent.
direct listingipo market“That is not true in a traditional IPO. In fact, retail's often held the 5%,”
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Gurley argues network effects decay as platforms scale, citing LinkedIn as an example of diminishing marginal value per user.
marketplacesnetwork effects“Like what's the value of an incremental member joining LinkedIn? It's probably less than what the value of the 10,000 person that joined LinkedIn.”
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Gurley shares his unpublished formula for evaluating network effects using value versus market penetration.
frameworksmarketplaces“If it's a two sided network, you could build one for the value to the supplier, one for the value to the consumer. On the x axis is your penetration into the market.”
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Gurley says marketplace success requires doing unscalable things early, which frustrates most business school-trained entrepreneurs.
marketplacesscaling“And if you took 90% of the entrepreneurs that have been to business school and understand scaling, it drives them nuts.”
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Gurley coined the term liquidity quality and prioritizes it over geographic breadth when evaluating marketplaces.
frameworksliquidity quality“And I've come up with this phrase I use internally that I made up. So I one day I'll have to write a definition of it, but I call it liquidity quality.”
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Gurley introduces his concept of liquidity quality as more important than geographic breadth for marketplaces.
frameworksliquidity quality“So I one day I'll have to write a definition of it, but I call it liquidity quality. And I tell entrepreneurs I care way more about that than I do how broad you are.”
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Gurley advises waiting until 10 million users before monetizing advertising-based products to preserve growth.
advertisingmonetization“If you're in an advertising oriented world, you should not try and monetize until you're north of 10,000,000 users.”
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Gurley explains Mechanical Turk failed to show network effects because value didn't increase with supply penetration.
marketplacesmechanical turk“Rather than say don't work, let's say didn't show signs of a network effect was Mechanical Turk that Amazon built, which was a labor marketplace for perfunctory work that could be pushed over the internet.”
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Gurley explains labor marketplaces fail because 5% supply provides same customer value as 95%, preventing network effects.
labor marketsmarketplaces“It turns out that if you get just 5% of the supply, the value you provide in customer is no different than if you get 95% of the supply.”
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Invest Like the Best, 2 July 2019
capital allocationmarketplaces“Yeah, the flow of cash and the competition and how that money is being used.”
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Gurley criticizes Silicon Valley's crude valuation approach, where entrepreneurs expect 10x revenue regardless of business model quality.
criticismvaluation“I've always felt Silicon Valley has a very crude understanding of valuation. Most entrepreneurs think they all deserve 10 times revenue and also with zero regard for what the revenue is.”
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Gurley criticizes VCs who think cheap capital enables them to pursue low-return businesses in new industries.
capital allocationinvesting“But I overheard a VC on a panel say that now that capital's become so cheap, we as venture capitalists get to go after all these new industries.”
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Gurley mocked a VC who said cheap capital enables going after new industries, calling it flawed logic.
capital allocationcontrarian“I overheard a VC on a panel say that now that capital's become so cheap, we as venture capitalists get to go after all these new industries. And it really made me chuckle.”
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Gurley argues that VCs using cheap capital to enter new industries are actually funding low-return businesses.
capital allocationinvesting“I overheard a VC on a panel say that now that capital's become so cheap, we as venture capitalists get to go after all these new industries.”
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Gurley argues that funding businesses because capital is cheap is equivalent to funding low-return businesses.
capital allocationreturns“The exact flip way of saying that is, I'm excited about funding low return businesses and I'm gonna go do it.”
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Gurley argues private companies now have more capital than incumbents for the first time in history.
capital marketsdisruption“And for the first time in history, I believe private companies are the ones with more money and are attacking the long held incumbents, which is a radical thing to think about.”
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Gurley criticizes banks for maintaining slow ACH settlement times for thirty years to protect themselves.
bankingpayments“I these banks made a huge mistake, which is they've sat on their hands with ACH for thirty years, and they did it for all the wrong reasons.”
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Gurley argues banks deliberately kept ACH slow for thirty years to protect themselves while other countries mandated faster payments.
bankingpayments“They did it to protect themselves, like, three days to settle a transaction. There are other countries that just mandated UK faster payments.”
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Gurley calculated Zoom and CrowdStrike each left $600 million on the table by underpricing their IPOs.
ipo marketpricing“yet celebrate companies like Zoom and CrowdStrike and where the stock's up or Chewy recently where the stock's up 80% on the first day.”
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Gurley calculates that Zoom and CrowdStrike each left $600 million on the table by underpricing their IPOs.
dilutionipo market“And this is something that I think it's odd to me that more people don't understand how ridiculous this is because had and I ran the math in the Zoom and CrowdStrike example, had those companies priced the IPO at the price of first trade, they would have 600,000,000 more dollars each in the bank”
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Gurley calculates Zoom and CrowdStrike each left $600 million on the table by underpricing their IPOs.
ipo marketmalfeasance“had those companies priced the IPO at the price of first trade, they would have 600,000,000 more dollars each in the bank with no incremental dilution.”
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Gurley calculates Zoom and CrowdStrike each left $600 million on the table by underpricing their IPOs.
crowdstrikeipo market“And I can make the argument that's malfeasance, but everyone's writing this stories about how wonderful it was.”
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Gurley argues hyper competition makes VCs fear missing deals more than demanding discipline from founders.
competitionstewardship“Hyper competition has made it such that the majority of VCs biggest fear is missing out on the next investment.”
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Gurley says competitive dynamics have eliminated stewardship for discipline and results in venture capital.
disciplinegovernance“And I think it's led to a situation where there's not a lot of of stewardship for discipline and and results and that kind of thing.”
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Gurley cites Druckenmiller's analogy that low interest rates drive unlimited speculation with other people's money.
capitalmacro“Drucker Miller just, you know, who's someone that's made a name in macro investing says, if you give, you know, Texas oilman the ability to drill holes with someone else's money, they'll drill as many as you possibly can.”
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Gurley argues being public helps companies run better through enforced discipline and smart questioning.
disciplinegovernance“one of the things that I believe strongly that I think is less well understood is that being public actually helps the companies run better. It's an enforced discipline.”
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Gurley believes being public helps companies run better through enforced discipline from smart investors.
disciplineipo market“I believe strongly that I think is less well understood is that being public actually helps the companies run better. It's an enforced discipline.”
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Gurley expresses high confidence in Dara's track record addressing Uber's problems.
leadershipturnaround“the DAR is starting to build up a track record of having put out these fires and and attack these problems.”
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Gurley says bug bounties are the only offensive security solution versus defensive dam-building approaches.
bug bountiessecurity“It is the only offensive solution. Most of the security solutions are defensive where you're just building a bigger and bigger dam and trying to hold people out.”
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Gurley sits on four boards where women are founders: Nextdoor, Marco Polo, Katrina, and Solve Health.
diversityfounders“I sit on four boards where the women are founders. Nextdoor Marco Polo, Katrina, and Heather with with Solve Health, you know.”
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Gurley describes Stitch Fix using machine learning and collaborative filtering to deliver items customers haven't seen yet via stylists.
aimarketplaces“We try and learn as much as we can about the individual, and then we use machine learning and collaborative filtering, a whole bunch of algorithms that helps of our stylists, and we deliver something to you that you haven't even seen yet.”
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Gurley describes Stitch Fix's approach as ultimate recommendation engine that doesn't show customers the choices.
ai moatsmarketplaces“Our head of algorithm says it's the ultimate recommendation engine because we don't even let you look at the choices. And that level of curation is something that's highly unique,”
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Gurley says Stitch Fix reached billion-dollar run rate profitably, generating $60M free cash flow on just $40M raised.
ipo marketprofitability“So we're at a billion dollar run rate. We've been profitable for many quarters. In fact, when the company came public, it is over a $100,000,000 of cash on the balance sheet.”
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Bloomberg Television, 17 November 2017
ipoprofitability“The company had only raised $40,000,000. Hence, we had created $60,000,000 in free cash flow, something that's extremely rare in Silicon Valley these days.”
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Gurley claims Stitch Fix knows 10x more about customers and merchandise than competitors like Nordstrom's and Macy's.
ai moatsmarketplaces“So you can put us up against anyone, Nordstrom's, Macy's, any of these players, and I am certain that we know 10 x more about our customers and even 10 x more about the merchandise.”
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Gurley reveals five investors including Fidelity felt all Uber constituents were at risk before taking action.
crisisgovernance“So people typically say benchmark, but there was five investors, including Fidelity, who felt like all of the constituents at Uber were at risk, if action didn't happen sooner.”
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Gurley argues excessive capital in Silicon Valley allows entrepreneurs to run without discipline or accountability.
disciplinegovernance“The the I guess the thing I would say is that, you know, the excessive amount of capital that's been available to Silicon Valley has allowed a lot of entrepreneurs to run without much discipline because if you if if you're not running out of money, you're not constantly being regraded and asked to come back to the table.”
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Gurley argues excessive capital availability lets entrepreneurs run without discipline since they never get regraded.
governanceventure capital“I guess the thing I would say is that, you know, the excessive amount of capital that's been available to Silicon Valley has allowed a lot of entrepreneurs to run without much discipline because if you if if you're not running out of money, you're not constantly being regraded”
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Gurley notes Stitch Fix has over 80% female employees, over 60% female management and board.
diversityleadership“Stitch Fix, people may not know this. Over 80% of the employees are female. Over 60% of the management team's female. Over 60% of the board is female.”
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Gurley notes Stitch Fix is over 80% female employees with 60% female management and board composition.
diversityipo market“Over 80% of the employees are female. Over 60% of the management team's female. Over 60% of the board is female.”
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Bloomberg Television, 17 November 2017
diversityipo“Over 60% of the management team's female. Over 60% of the board is female. And I found out this morning she may be the youngest female founder to actually take their company public ever.”
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Gurley says Katrina Lake may be the youngest female founder ever to take a company public.
iporecords“I found out this morning she may be the youngest female founder to actually take their company public ever.”
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Gurley argues successful AI requires huge datasets on both sides for matching.
ai moatsdata“In order to be successful and powerful in these types of areas, you need huge datasets, and you need them on both sides so that you can do the matching.”
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Gurley explains Stitch Fix stayed under unicorn status by avoiding fundraising while maintaining profitability for several years.
ipo marketprofitability“One of the unique things about Stitch Fix relative to all of the unicorns out in Silicon Valley is that they've run very disciplined and profitable approach. They've been profitable for several years.”
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Gurley notes Stitch Fix remained profitable for years and never raised above $1B valuation.
ipo marketprofitability“They've been profitable for several years. The reason that you never heard of them as a unicorn was because they never raised money above 1,000,000,000 because they didn't really do raise money.”
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Gurley says Stitch Fix was never valued above a billion because they ran profitably and didn't need to raise money.
ipo marketprofitability“The reason that you never heard of them as a unicorn was because they never raised money above 1,000,000,000 because they didn't really do raise money.”
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Gurley predicts many unicorns will damage equity value by avoiding public markets and profitability.
ipo marketprofitability“I think you're gonna see a large number of unicorns who were afraid to play on Sunday, afraid to be in the public markets, that didn't get their act together in time, didn't get profitable, didn't understand unit economics, and and hurt the value of the equity as a result.”
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Gurley says Uber's entire stakeholder base was at risk before leadership change.
crisisgovernance“We reached a point where we felt like, you know, the entire company, you know, and all of its constituencies, drivers, riders, employees, shareholders, were at risk if the company continued to move in the direction it was.”
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Gurley observes maturing unicorns recognizing they must become profitable or go public.
ipo marketprofitability“I do think we are also watching, however, as many of the unicorns mature in age, that many of them are having to come to the recognition that they either need to grow up, get profitable, go public, or do something along those lines.”
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Gurley observes aging unicorns recognizing they must become profitable or go public as staying private forever fails.
ipo marketprofitability“And that this this silly notion of we're gonna stay private forever is not playing out in a very positive way.”
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Gurley argues Bitcoin serves countries with overinflating currencies and low trust in government money.
bitcoincurrency“And so if you live in one of those countries where you don't trust the currency of your own government, you know, how do you wanna get paid?”
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Gurley says Benchmark pays white hat hackers through HackerOne in Bitcoin in countries with untrusted currencies.
bitcoincryptocurrency“We we we work with a company called HackerOne that pays white hat hackers to find vulnerabilities in large websites.”
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Gurley calls healthcare marketplaces extremely dangerous with forces in five directions and misaligned incentives.
healthcaremarketplaces“It's extremely dangerous because the the laws of most, marketplaces doesn't exist. You know, there's not a simple gravity. There's forces in five different directions.”
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Gurley explains why targeting sales instead of HR made Salesforce wildly more successful than their HR SaaS company.
marketplacessaas“the sales executive has a green light on any purchase in a company. The HR executive does not. They had a product where you could put it on a credit card.”
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Gurley explains Innovator's Dilemma: disruptive products succeed by targeting customers who reject incumbent complexity.
disruptioninnovation“Products that are able to be disruptive get over designed. They get over feature rich, they get complex, they get heavy.”
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Gurley argues the most regulated US industries like finance, telecom, and healthcare become the least capitalistic.
capitalismhealthcare“what happens is capitalism and democracy evolve over time, especially in The US federal system. The most regulated industries become the ones that are least capitalistic. And so finance, telecom, healthcare are completely,”
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Gurley says lobbyists from regulated companies literally talk to congressmen about what goes into new laws.
governmentlobbying“If they're striking a new federal law, like the lobbyists from the companies being regulated are on M Street talking to the congressman about what to put into the bill.”
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Gurley compares late-stage private valuations to a Bernie Madoff dynamic with unaudited markups creating feedback loops.
ipo marketmarketplaces“And I think what we see right now is a almost Bernie Madoff like dynamic where capital comes in, it gets marked up without any public scrutiny, unaudited financials.”
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Gurley says 140-150 companies have valuations that wouldn't sustain in public markets.
ipo marketmarketplaces“So we have 140 companies, 150 companies that have valuations that I think wouldn't sustain in the public market.”
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Gurley argues finance hasn't faced upheaval like telecom and extracts fees without fundamental value creation.
regulatory capture“And there's a lot of fees that are being raked on things that you could say, like FX, that aren't fundamental creation of value.”
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Gurley warns the gap between capital deployed and liquidity returned has reached record levels without returns available.
ipo marketmarketplaces“And the gap that's been widening between the money that's been given versus the money that's been returned in liquidity is record levels.”
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Gurley states capital burn on headcount is breaking all prior records from 1999-2000 bubble.
ipo marketmarketplaces“And so the single biggest indicator for us is that the capital being burned in the market so this is usually on headcount, mostly people, not hard assets is breaking all the prior records of 'ninety nine, two thousand.”
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Gurley predicts three of next ten years' $300-500B companies will be in Silicon Valley, rest in China.
marketplaces“It's also highly likely that three of them are going be in the Silicon Valley. And then the rest are in China.”
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Gurley questions whether car-as-a-service models can replace ownership's sense of freedom and control for consumers.
car ownershipconsumer psychology“You know, it could be a a car that you don't actually own, but you fractionally own, a car as a service via Uber, via many of these different services that are coming out.”
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Gurley reports Hyperloop Technologies has 32 full-time employees building the system, which is simpler than expected.
hyperloopteam size“Technologies like Hyperloop are much simpler than people actually imagine. So I invite all of you, if you want, to come to LA and get a tour.”
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Gurley predicts Hyperloop will achieve over 700 mph on a two-mile track within twenty-four months.
hyperloopprediction“So the prediction is we'll have Hyperloop working in about twenty four months on a two mile track and hit over 700 miles per hour, and we can go faster than that.”
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Gurley states the 50 largest cargo ships pollute more than all cars combined, referencing transportation alternatives.
cargo shipspollution“By the way, the 50 largest cargo ships in the world pollute the world and pollute the world more than all the cars that Bill Gurley hates, added up together. So just those 50 ships.”
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Gurley says the government paid doctors $44,000 to implement electronic health records in 2009.
government spendinghealthcare“So in 2009, when the government passed the Reinvestment Act to try and get America going or whatever it was called, they put in place a program where a doctor is paid, believe this or not, paid $44,000 to implement EHR, electronic health records.”
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Gurley says the government paid doctors $44,000 to implement electronic health records under the 2009 Reinvestment Act.
healthcareincentives“So, it'd basically be like telling a construction company if you put in NetSuite, you get paid $50.”
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Gurley reports the government has paid $29 billion total for doctors to implement electronic health record software.
government spendinghealthcare“So, the payments for these incentive programs, because I just looked it up to get the recent update, dollars 29,000,000,000. So, our government has paid $29,000,000,000 for doctors to implement software”
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Gurley reports the government has paid $29 billion for doctors to implement EHR software.
government spendinghealthcare“So, the payments for these incentive programs, because I just looked it up to get the recent update, dollars 29,000,000,000.”
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Gurley reports the government has paid $29 billion total for doctors to implement electronic health record software.
government spendinghealthcare“So, our government has paid $29,000,000,000 for doctors to implement software that they weren't naturally implementing on their own.”
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Gurley contrasts U.S. healthcare spending at 17% of GDP with Singapore's 1.7%, a 10x difference.
efficiencyhealthcare“The U. S. Spends 17% of GDP on healthcare and Singapore spends 1.7. So, it's a 10x delta and they have relatively reputable healthcare system.”
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Gurley notes US healthcare costs 17% of GDP versus Singapore's 1.7%, a 10x difference explained by making everyone a payer.
healthcaremarket forces“Spends 17% of GDP on healthcare and Singapore spends 1.7. So, it's a 10x delta and they have relatively reputable healthcare system. And the key thing they do is they make everyone a payer.”
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Gurley states Uber has 300,000 drivers globally and is adding 50,000 per month, the fastest job creation he knows.
job creationmarketplaces“There's about 300,000 Uber drivers right now and they're adding it right now at a pace of 50,000 a month. That's on a global basis.”
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Gurley argues that for eighty years we grossly underestimated transportation demand by limiting it with taxi medallions.
marketplacesregulatory capture“The most fascinating thing for me is that for basically eighty years, we grossly underestimated the demand for transportation services. And we limited it at a city government level with the taxi medallion.”
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Gurley cites Morgan Stanley finding that cars are 97% idle despite representing 15% of global capital expenditure.
asset utilizationefficiency“There's an interesting thing that Morgan Stanley put out where they calculate that 97% of cars are idle.”
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Gurley argues current risk bubble differs from 1999 because investors now put hundreds of millions into four-year-old private companies.
riskunicorns“But you didn't have a situation where people were putting $102,103 $104,109 $1,001,000,000,000 dollars into a private company who might only be four years old. These companies just haven't had the time to mature.”
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Gurley warns that unlimited capital leads to poor execution and burn rates are now higher than ever before.
burn rateipo market“Being able to just do everything leads to poor business execution. And so now we have numbers of companies, I think, making poor decisions. Burn rates are higher than they've ever been.”
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Gurley observes there is a complete absence of fear in Silicon Valley right now, which typically leads to problems.
market sentimentrisk“And while I'm I'm not here to accuse people of being greedy, there is no fear in Silicon Valley right now, a complete absence of fear.”
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Gurley notes Seattle's four pillar companies Microsoft, Amazon, Costco, and Starbucks were all venture backed.
iconic companiesseattle“the four pillars of Seattle, Microsoft, Amazon, Costco, and Starbucks, they were all venture backed.”
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Gurley argues the venture business has an anti-IPO attitude that prevents companies from hitting home runs.
ipo marketlong-term thinking“in the venture business, we have this problem, this kind of anti IPO attitude that I think prohibits companies from hitting the long ball.”
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Gurley says Wall Street's anti-loyal mentality focused on cash over equity hurts startup culture in New York.
cultureequity“I formerly worked on Wall Street years ago and I think the Wall Street mentality is still prevalent in different places. And I consider that a very anti loyal mentality.”
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Gurley says Wall Street's anti-loyalty mentality focused on cash over equity hurts New York startups.
cultureequity“And I consider that a very anti loyal mentality. People just trade firms constantly and they're really into cash comp and they don't think about equity.”
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Gurley says late-stage private market is the frothiest since the late '90s despite down IPOs.
bubbleipo market“I would say on a couple of fronts, the late stage private market continues to be the most frothy thing I've seen since the late '90s.”
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Gurley says the late stage private market is the frothiest he has seen since the late 1990s.
late stagemarket conditions“the late stage private market continues to be the most frothy thing I've seen since the late '90s.”
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Gurley calls the lifetime value model a house of cards and an excuse.
ltvmarketing“I think this whole LTV model is a real house of cards. It's just an excuse to say.”
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Gurley calls the LTV model a house of cards where numbers can be manipulated.
ltvmarketplaces“Lifetime value model, where people say, as long as we're paying below our lifetime value, cost of capital. But the numbers can be run-in a whole bunch of different ways.”
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Gurley says making user-generated content communities work requires knowing 10 to 15 specific nuanced things.
ai moatscommunity“the nuances that are necessary to make these UGC communities work, there's a list of 10 or 15 things that you have to know how to do.”
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Gurley argues Apple and Google don't know how to build UGC communities because it requires specific expertise.
ai moatsnetwork effects“And it turns out the majority of people don't know how, including really large companies like Apple and Google because it's really hard and it requires a lot of hand holding and hand stitching and building in place a network effect where the atoms start to bounce into one another.”
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TechCrunch, 29 April 2013
moatsnetwork effects“And it turns out the majority of people don't know how, including really large companies like Apple and Google”
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Gurley says capital available to late stage private companies is unbelievable with behavior reminiscent of the late nineties.
bubblelate stage“the amount of dollars available to successful late stage private companies is unbelievable. And the behavior that you'll see for the competition in those dollars is very reminiscent of the late 90s.”
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Gurley says late-stage private funding behavior is very reminiscent of the late 1990s bubble.
bubbleipo market“And the behavior that you'll see for the competition in those dollars is very reminiscent of the late 90s.”
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Gurley says Yellow Pages took eighty years to peak but fell by half in less than six years.
disruptionmarket decline“So in a six it took eighty years for it to reach that pinnacle and in less than six, it's more than fallen in half.”
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Gurley states local advertising peaked at over one hundred billion dollars around 2006.
disruptionlocal advertising“So local advertising measured by a bunch of different groups peaked at about the same time at over 100,000,000,000.”
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Gurley reports Uber expanded San Francisco's black car fleet from 650 to 850 vehicles.
market expansionsupply growth“When Uber started, there were six fifty licensed black cars in San Francisco. Today, there's eight fifty in San Francisco driving on Uber.”
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Gurley observes people routinely eliminating second cars and using Uber for daily transportation instead.
consumer behaviormarket expansion“There are people spending 10 to $15 a year, and I routinely meet people who have gotten rid of a second car and are using Uber in their daily lives.”
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Gurley identifies taxi commissioners and taxi fleets as drivers of all Uber legal issues.
incumbentsregulatory capture“The predominant driver of most 100% of the legal issues is either a taxi commissioner or a taxi fleet.”
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Gurley cites D.C. council member whose jailed ex-chief of staff took taxi fleet bribes still deciding regulation.
corruptionregulatory capture“C, his former chief of staff is in jail because he took a bribe from the taxi fleet, you know, like two years ago, and he's still on the commission that's deciding these things.”
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Gurley warns consolidation of independent practitioners into large medical groups is bad for healthcare innovation.
healthcareinnovation barriers“the large medical groups have been building out these huge platforms of MRI centers and labs and x-ray, and they're increasingly inviting general practitioners to live under their umbrella, and as that happens, the number of independent general practitioners is dropping as a percentage of all doctors, and that's really bad for innovation.”
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Gurley cites DP Review, a one-person digital camera review site acquired by Amazon for forty to seventy million dollars.
acquisitionbootstrap“One guy, one founder and Amazon reported, you know, no one knows the exact number but I've heard anywhere from 40 to $70,000,000 for a single guy.”
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Gurley recounts Austin Ventures told him to work twenty years before entering venture capital.
benchmarkcareer advice“And while I was there, I went and talked to some of the Austin Ventures partners and I said, I want to get into venture, what should I do?”
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Gurley says boardroom strategy is 5% of venture at best; most time is spent selling.
misconceptionsselling“That's probably 5% of the business at best. Most of the time you're on the phone trying to sell something.”
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Gurley says top ten venture funds all fell out when their single best performer was removed.
home runsreturns“And then they took the top performer out of those funds and they all fell out of the top 10 or maybe one of them stayed.”
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Gurley argues ten percent layoffs are too small to meaningfully reduce burn rate.
burn ratelayoffs“I read about someone doing a 10% layoff and you should never do 10 because it's not consequential enough to really affect your burn rate.”
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Gurley traces late-stage private market boom to Yuri Milner's contrarian Facebook bet below ten billion valuation.
facebooklate-stage investing“And a very, very smart man, Yuri Milner makes a bet on Facebook at a price that seems fairly high.”
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Gurley calls late-stage private market of past two years the most reckless investment behavior since the bubble.
bubblelate-stage investing“I think if you look back, could say over the past two years, the most reckless investment behavior we've seen since the bubble was the late stage private market of the past two years.”
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Gurley argues smartphones enable apps to replace expensive dedicated embedded devices at dramatically lower cost.
costembedded systems“I mean we were talking earlier about local, the things you can do now that I can write an app instead of building a dedicated embedded device that would have cost $2, it's night and day.”
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Gurley predicts the next ten years will involve removing enterprise technology and moving systems outside via SaaS.
enterprisepredictions“I say we spent forty years cramming technology into the enterprise. We're going to spend the next ten yanking it out. It's just so wholesale that you're moving systems outside.”
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Gurley contrasts past Microsoft dominance with today's five to seven competing monoliths creating more startup opportunities.
competitionmarket structure“When I got into venture, every startup presentation ended with what are you going to do when Microsoft does this? Right.”
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Gurley identifies five to seven major tech companies today, unlike the aligned Wintel coalition of the past.
big techcompetition“And interestingly, they're not, you know, least with Wintel, you had Microsoft, Intel and Dell and Compaq all fairly aligned to the same initiative.”
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GigaOm, 11 December 2012
m&amarketplaces“I think that creates, I think it should create a rather healthy M and A market, but I also think it helps create opportunities because you know, you look at the Yelp and OpenTable integration with Apple, you know, if there were only one monolith and there weren't five, that probably doesn't happen.”
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Gurley describes GrubHub's track-your-grub feature as example of smartphone-enabled marketplace workflow innovation.
grubhubmarketplaces“You'd never done it before. And then a few weeks ago, we released a product called track your grub.”
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Gurley observes marketplace companies invest equally in supplier workflow systems as in consumer-facing products.
marketplacesproduct development“Lot of my marketplace companies that I'm working with are spending as much R and D money on systems, workflow systems for the supplier side as they are on the consumer side.”
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Gurley explains Uber was impossible before smartphones due to cost of installing embedded systems in cars.
marketplacessmartphones“You're not going to go install 700 embedded systems designs in every car and the wireless and build the contracts. You're not going to do all that.”
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Gurley says the majority of Benchmark partners joined at about 30 years old.
benchmarkhiring“Kevin Harvey joined the venture business about that time. Peter Fenton also joined at about that age. And so across our partnership, the majority of the partners joined at about 30 years old.”
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Gurley says the majority of Benchmark partners joined at about 30 years old because venture is a hustle game.
benchmarkhiring“And so across our partnership, the majority of the partners joined at about 30 years old. And there's a number of reasons why I think youth plays to an advantage. One, it's a hustle game.”
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Gurley says the majority of Benchmark partners joined at about 30 years old.
benchmarkhiring“And so across our partnership, the majority of the partners joined at about 30 years old.”
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Gurley recounts Austin Ventures told him to work twenty years before entering venture, opposite of Benchmark's approach.
benchmarkcareer advice“And while I was there, I went and talked to some of the Austin Ventures partners and I said, I want to get into venture, what should I do?”
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Gurley recounts being told to work twenty years before entering venture capital.
career adviceventure capital“I went and talked to some of the Austin Ventures partners and I said, I want to get into venture, what should I do?”
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Gurley contrasts Austin Ventures' advice to work twenty years before VC with Benchmark's opposite approach.
benchmarkcareer“And they said, go work for twenty years and then get in. And it's ironic when I think back to that moment in time because we have kind of the exact opposite process.”
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Gurley says boardroom strategy is only about 5% of the venture business.
misconceptionsventure capital“I often hear people describe venture and they think about sitting around in board rooms thinking up cool strategies. That's probably 5% of the business at best.”
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Gurley says boardroom strategy is 5% of venture capital at best, most time is spent selling.
misconceptionssales“That's probably 5% of the business at best. Most of the time you're on the phone trying to sell something.”
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Gurley says most venture capital work involves selling and convincing people.
salesventure capital“You're trying to convince, you know, to close an investment opportunity, you're trying to close an executive, you're trying to close a biz dev deal,”
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Gurley describes LP data showing top venture funds depend on their single best performer.
fund performancelp“There's one of the LPs used to give a presentation where they showed the top 10 funds of all time, not the venture firms, but the specific funds.”
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Gurley cites LP analysis showing top 10 VC funds all fell out when removing their single best performer.
concentrationreturns“And then they took the top performer out of those funds and they all fell out of the top 10 or maybe one of them stayed.”
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Gurley recalls predictions from five years ago that venture capital would become obsolete due to cheap startup costs.
predictionsventure capital“If you go back about five years, a whole bunch of people said, well Venture's dead because there's infinite angel money and you can start a company for cheap and you won't need Venture anymore.”
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Gurley observes an angel glut beginning a year ago, with some companies raising $5 million in seed money.
angel investingmarket conditions“In fact, starting about a year ago I think there was probably what you might call an angel glut of companies who had maybe raised one, two, we've seen companies with $5,000,000 of convertible seed money.”
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Gurley identifies an angel glut a year ago with companies raising $5 million in seed unable to get Series A.
market dynamicsseed funding“In fact, starting about a year ago I think there was probably what you might call an angel glut of companies who had maybe raised one, two, we've seen companies with $5,000,000 of convertible seed money. That's a lot of seed money who can't raise series A.”
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Gurley argues that while starting is cheap, scaling a company requires both capital and expertise.
scalingventure capital“And what I think has come out of it is that you may be able to start a company for nothing but if you want to scale a company you will need capital and you'll need expertise to scale it to the next level.”
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Gurley argues scaling requires capital and expertise even if starting a company is cheap.
scalingventure capital“I think has come out of it is that you may be able to start a company for nothing but if you want to scale a company you will need capital and you'll need expertise to scale it to the next level. Not every single player, Benioff who got it up without venture”
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Gurley argues companies that can't generate $100 million in revenue shouldn't take venture funding.
exitsrevenue thresholds“I'm the first to argue that if your idea is not something that can generate a $100,000,000 in revenue, you may not want to take venture.”
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Gurley states most acquisitions are $20-70 million, but venture backing raises expectations to $150 million or more.
acquisitionsvaluations“The number one type of acquisition that the big companies like to do is twenty to seventy million dollars and the minute you take venture, they help you raise the B and all of a sudden everyone's expectation is it's got to be 150 or more or we're not saying yes.”
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Gurley calculates that owning 80% of a $30 million exit yields $24 million for the entrepreneur.
bootstrappingexits“And so if you have a killer product that might elicit a $30,000,000 exit and you can bootstrap and hustle your way and own 80% of it, you know, 80% of 30,000,000 is $24,000,000.”
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Gurley calculates that owning eighty percent of a thirty million dollar exit yields twenty-four million for the entrepreneur.
bootstrappingexits“if you have a killer product that might elicit a $30,000,000 exit and you can bootstrap and hustle your way and own 80% of it, you know, 80% of 30,000,000 is $24,000,000.”
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Gurley cites DP Review, a one-person digital camera review site acquired by Amazon for forty to seventy million dollars.
amazonbootstrapping“I love this story of DP Review, which is a website for digital camera reviews.”
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Gurley cites DP Review selling to Amazon for $40-70 million as a single-founder bootstrapped success.
acquisitionsbootstrapping“One guy, one founder and Amazon reported, no one knows the exact number, but I've heard anywhere from 40 to $70,000,000 for a single guy.”
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Gurley explains Benchmark uses the phrase long term greedy and is not judged on IRR.
benchmarkinvestment philosophy“We have a phrase that not all the partners like to use, say we're long term greedy. You know, we're luckily in a business where we're not judged on IRR per se.”
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Gurley explains Benchmark isn't judged on IRR and would pass on 20% IRR deals due to board seat limits.
irrstrategy“You know, we're luckily in a business where we're not judged on IRR per se.”
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Gurley says Benchmark turns down twenty percent IRR opportunities because LPs invest for beta and home runs, not steady returns.
irrstrategy“Like if there's an opportunity where we can make a 20% IRR someone might go, oh you should do every one of those, but we're limited by the number of board seats we can take and our LPs are investing in us to get beta and so they want the home runs”
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Gurley says no LP in Benchmark's history has ever asked them to provide liquidity faster.
benchmarklimited partners“And we've never once, never in the history of the firm as I ever recall a limited partner calling us and saying why aren't you getting us liquidity faster?”
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Gurley says carrier consolidation from four to three increases oligopoly power and reduces venture opportunities.
oligopolyregulatory capture“Having more oligopic behavior within that industry is gonna from my perspective lead to less innovation not more.”
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Gurley argues oligopolistic carrier consolidation reduces innovation and makes ventures targeting carriers difficult to fund.
carriersoligopoly“It had already become very difficult for us to seed ventures where the primary customer was the carrier”
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Gurley says carrier consolidation from four to three increases market power and makes venture funding harder.
market powerregulatory capture“It had already become very difficult for us to seed ventures where the primary customer was the carrier And so now to have three instead of four, you just increase the market power of those of those players.”
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Gurley argues cloud migration is the most investable theme, predicting ten years of pulling enterprise compute out of buildings.
cloudenterprise infrastructure“this is to me one of the most investable themes of our time simply because we spent the last thirty to forty years putting computing technology inside the enterprise Right.”
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Gurley says cloud migration is the most investable theme, predicting ten years of pulling enterprise computing infrastructure out.
cloudenterprise“one of the most investable themes of our time simply because we spent the last thirty to forty years putting computing technology inside the enterprise Right.”
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Bloomberg Originals, 23 March 2012
cloud computingenterprise software“we spent the last thirty to forty years putting computing technology inside the enterprise Right. And we're gonna spend the next ten pulling it out.”
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Gurley names Grubhub as a Benchmark investment illustrating the cloud opportunity for small business.
grubhubmarketplaces“Grubhub is a great example. Grubhub? You probably haven't heard of this company. It's one of our investments.”
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Gurley describes cloud-connected workflows from business to consumer through apps as unexploited white space across verticals.
cloudmarketplaces“Once it's in the cloud, they connect to Zillow, they connect to rent.com, they push the listings out, they communicate with the end user of the apartment, and so this workflow that starts to be connected from the cloud to the small business, to the consumer, to the smartphone app, that's all white space in a bunch of different verticals.”
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Gurley lists five portfolio companies connecting small businesses online and reports seeing strong current interest from SMBs.
localmarketplaces“we have a number of investments from Yelp to OpenTable to Zillow to Grubhub to UberCab, where all these companies build this technology to connect these small businesses, and we're seeing unbelievable interest from these small businesses in in being online and having an online presence.”
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Gurley claims late-stage private market investments have less information than pink sheet stocks and may be historically uninformed.
ipo marketprivate markets“I mean, you you could have more financial information on a thinly traded pink sheet Canadian public company than you have.”
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Gurley argues late-stage private investments may be the least informed in history and shouldn't be equated to public valuations.
ipo marketprivate markets“These these might be these might be the least informed investment actions in in our history. And so I don't know that you can pay too much attention to the price because they're very uninformed.”
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Gurley calls late-stage private investments the least informed in history, with less disclosure than pink sheet stocks.
information asymmetryipo market“These these might be these might be the least informed investment actions in in our history.”
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Gurley explains that struggling Silicon Valley companies suffer brain drain due to abundant alternative opportunities.
brain drainsilicon valley“In Silicon Valley, when you have a company on the outs, there are so many job opportunities around here. You get the brain drain, the creative talent leaves.”
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Gurley recounts learning Jobs personally decided which icons appear on the iPhone home screen.
appleproduct design“Because we've got some great companies, Zillow, OpenTable, and I love to talk to him about getting something on there. And he just starts laughing.”
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Gurley argues most great leaders delegate because no one can be expert in everything at scale.
delegationleadership“I think there are very few great leaders. If you were to just take a picture of a whole bunch of great leaders, most of them are good at delegation, getting other people to make decisions because organizations are so large, and no one has the capacity to be an expert in so many things.”
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Gurley cites Jobs' decision to exclude Flash from iPad as example of gutsy feature removal.
ipadproduct design“The decision not to put flash in the iPad. Right. Here's a fundamental reason for that, but that's a gutsy bet.”
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Gurley notes Apple grew from $2 billion to $343 billion market cap under Jobs, exceeding Microsoft and Intel combined.
applemarket cap“started at $2,000,000,000 when in market cap when he came in. Today, they're three forty three and bigger than Microsoft and Intel combined.”
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Gurley says Jobs's CEO execution level is unprecedented, crediting Cook's operational contributions.
leadershipsteve jobs“I don't know if whoever sees CEO execution of this level. Of course, it's not just the CEO execution. You got what Tim Cook's done in operation.”
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Gurley says Benchmark will have four IPOs this year, unprecedented for a single venture firm in a long time.
benchmarkipo market“Earlier today, one of our investments, Ambarella, filed, which will be our fourth IPO this year. And that hasn't happened, you know, for a single venture firm in a very long time.”
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Gurley says Benchmark will have four IPOs this year, unprecedented for a single venture firm in a long time.
benchmarkipo market“Ambarella, filed, which will be our fourth IPO this year. And that hasn't happened, you know, for a single venture firm in a very long time.”
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Gurley observes IPO market valuations currently exceed M&A market valuations.
ipo marketvaluation“I think another interesting characteristic of that, in my mind, the IPO market's paying much higher valuations in the m and a market right now.”
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Gurley explains that the financial crisis caused institutional investors to drastically reduce venture capital allocations.
financial crisisventure capital“When the financial crisis happened, that model kinda came undone, and everyone has drastically reduced the amount of money they allocate to this category.”
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Gurley says venture firm count has shrunk dramatically after endowments reduced illiquid asset allocations post-2008.
regulatory captureventure capital“And as a result, the number of venture firms has begun to shrunk rather dramatically.”
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Gurley argues organic versus bought traffic is a critical distinction for valuing Internet businesses.
marketplacesorganic traffic“One that one that I think people really should focus on is where, especially for these Internet businesses, is whether traffic is organic or bought.”
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Gurley distinguishes between companies that buy traffic through marketing versus those with organic customer acquisition.
marketplacesmoats“Any company that's spending heavily on marketing to drive people in, that's just a far different value proposition than someone who has a product that's so good that everyone comes to it.”
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Gurley lists Google, Skype, OpenTable, and LinkedIn as examples of companies that never ran ads to grow.
marketplacesorganic traffic“Google never ran marketing ads, you know, in its day to get to get big. Skype never ran ads. OpenTable never ran ads. Linkedin doesn't run ads.”
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Gurley argues marketing-heavy companies rent customers and should trade at lower multiples than organic-growth companies.
moatsorganic traffic“I don't see any reason why a company that's heavy on marketing will get the same kind of multiple as someone with an organic customer base.”
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Gurley argues daily deal business value is inversely tied to platform rake, like a casino.
grouponmarketplaces“The thing that strikes me about the deal business is that the value to the customer is a direct function of the rake of the platform or the margin the platform maker takes.”
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Gurley argues daily deal platforms with lower take rates will inevitably attract more customers than high-rake competitors.
grouponmarketplaces“In other words if you had a casino on one side of the street that took a 50% rake and another one on the other that took a 10% rake, eventually all the customers are gonna go to where the rake's 10%. Right?”
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Gurley predicts Facebook or Google could offer better daily deals by taking lower rake.
competitive moatsmarketplaces“So if we see a Facebook or a Google offering a much lower rake to participate, I think it's inevitable that they have better offers.”
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Gurley states that only three out of 25-30 IPOs this year were unprofitable at launch.
ipo marketmarket dynamics“I think of the 25 or 30 this year, three were not profitable at the time of going out.”
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TechCrunch, 1 October 2010
ipo marketmarket trends“the number of IPOs, as Michael mentioned, have been 30 in the first half of this year versus five in 'eight and twelve in 'nine.”
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Gurley states the historical median for high-tech VC-backed IPOs is around sixty, excluding the bubble period.
baselinehistorical context“If you look, if you ignore that period of time, the number of high-tech VC backed IPOs is somewhere between sixty and”
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Gurley predicts staying private will eventually cost more than going public for some companies.
ipo marketprediction“Well, at some point, I think they're gonna be spending more dollars avoiding public than being public. It's just going be more of a hassle.”
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Gurley cites Data Domain and ArcSight as examples of IPO-then-acquisition premium strategy working.
ipo marketm&a“Another interesting thing is with Data Domain and ArcSight and three part, you've seen companies go public, establish a valuation and then get an M and A premium on top of that.”
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Gurley notes public mergers avoid the 10-15% escrow typical of private acquisitions.
deal structureipo market“And one last thing most entrepreneurs probably don't know, when you do a public merger, there's no escrow.”
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Gurley points out that public mergers have no escrow while private ones typically hold 10 to 15 percent in escrow.
deal structureescrow“And one last thing most entrepreneurs probably don't know, when you do a public merger, there's no escrow. And most private ones have 10 to 15% escrow,”
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Gurley notes public mergers avoid the 10-15% escrow typical in private deals, adding financial advantage.
escrowipo market“And most private ones have 10 to 15% escrow, so that's even another part of the price that doesn't you know, that's advantageous to the public.”
Posts 10 posts
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https://x.com/bgurley/status/2087226829581255015
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https://x.com/bgurley/status/2085407223824756945
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https://x.com/bgurley/status/2085400286978617555
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https://x.com/bgurley/status/2085399835180753289
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https://x.com/bgurley/status/2084441104448168099
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https://x.com/bgurley/status/2083020347457314948
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https://x.com/bgurley/status/2082319239310926069
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https://x.com/bgurley/status/2082316694559629668
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https://x.com/bgurley/status/2082256576140734689
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https://x.com/bgurley/status/2082233590952128964
Reported 8 quotes
in print, highest ranked first
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reported
Gurley advises companies to relocate from Delaware to Texas or Nevada, arguing Delaware courts have become inconsistent and target specific companies.
“Time to head to Texas or Nevada. Staying is adding unnecessary risks for your shareholders. You should act in your shareholders best interest and flee Delaware. Delaware is no longer consistent. They are targeting companies they don't like.”
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reported
Gurley says he predicted three years ago that open-source AI models would threaten incumbents who would respond with regulatory capture, but underestimated how aggressively they would pursue this strategy.
“Almost 3 years ago, I believed open-models would become the key threat to the AI incumbents & that unfortunately they would lean into regulatory capture as a response. I underestimated the fervor with which they would use this non-business approach. https://t.co/oFDclTqJDq”
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reported
AI companies should take direct ownership of their models' problematic behavior rather than treating the models as independent actors, because humans at those companies created the software and prompts.
“Please stop referring to your own models in the third person when talking about model bad behavior. Humans write the software; humans built the prompts; and they work for your company. “Our” model is doing illegal things. “Our” model is risky. “We” now have liability.”
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reported
AI companies should take direct ownership of their models' problematic behavior rather than treating the models as independent actors, because humans at those companies created the software and prompts.
“Please stop referring to your own models in the third person when talking about model bad behavior. Humans write the software; humans built the prompts; and they work for your company. “Our” model is doing illegal things. “Our” model is risky. “We” now have liability.”
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reported
Gurley advises companies to relocate from Delaware to Texas or Nevada, claiming Delaware courts are now inconsistent and targeting specific companies.
“Time to head to Texas or Nevada. Staying is adding unnecessary risks for your shareholders. You should act in your shareholders best interest and flee Delaware. Delaware is no longer consistent. They are targeting companies they don't like.”
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reported
Gurley predicted three years ago that AI incumbents would use regulatory capture against open models, but says he underestimated how aggressively they would pursue this strategy.
“Almost 3 years ago, I believed open-models would become the key threat to the AI incumbents & that unfortunately they would lean into regulatory capture as a response. I underestimated the fervor with which they would use this non-business approach. https://t.co/oFDclTqJDq”
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reported
Gurley argues open AI projects are inherently safer than proprietary systems due to transparency and multiple reviewers, praising multi-company collaboration on AI safety.
“ projects are already inherently safer than situations where proprietary large companies hold all the cards. More eyes, more transparency, more analysis. This collaboration - multiple companies all working to ensure AI safety together - is the exact right move. This is the very best path to safe AI. Kudos. Jensen Huang @JensenHuang Jul 27 Attackers have frontier AI. Defenders need a frontier AI ecosystem—the best open and closed models, force-multiplied by a global community. During the Hugging Face incident, closed AI blocked essential forensics. An open-weight frontier model helped contain the intrusion. 2:53 PM · Jul 27, 2026 79.8K Views Bill Gurley @bgurley ”
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reported
Gurley argues that open-source AI projects are inherently safer than proprietary systems because they have more transparency and scrutiny, and that multi-company collaboration on AI safety is the right approach.
“ projects are already inherently safer than situations where proprietary large companies hold all the cards. More eyes, more transparency, more analysis. This collaboration - multiple companies all working to ensure AI safety together - is the exact right move. This is”
Appearances 12 appearances
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