Gurley cites 800 to 900 venture firms existed before the 2008 financial crisis.
“Some numbers say as high as 800 or 900 venture firms. When the financial crisis happened, though, in o eight and then another thing happened,”
Gurley says venture capital structurally sucks due to low entry barriers and high exit barriers.
“There's high competition. But the big problem, and this is structural, is there's low barriers to entry and high barriers to exit.”
Gurley argues network effects are easier to build when supply is fragmented rather than consolidated like Ticketmaster venues.
“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?”
Gurley recommends reading Porter's Competitive Strategy because selling into consolidated industries is tough versus fragmented ones.
“I always tell people to read the first two chapters of Competitive Strategy by Michael Portner, because like if you're building a product and trying to sell into a consolidated industry, it's really tough.”