The AI Divide: Who Wins and Who Gets Replaced — ft. Bill Gurley

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Megan Rpino here. This week on a touch more, we've got two insiders to help us unpack the WMBA's new CBA. Three-time champion and WMBPA vice president Alicia Clark. A-K-A-A-A-C, and the ESPN basketball analyst Andrea Carter. We're also going to take a look at our NCAA brackets and check out what's next in March

Madness. Check out the latest episode of a touch more wherever you're podcasts and on YouTube. Today's number, a hundred thousand dollars.

“That's how much a German tourist sued New York City chainless tacos number one,”

to the fifth-class tourist from Spiceh's Alza. And how did Hitler rise to power? He brat out the worst in people. I don't know, I find that so funny. Get it brat worst.

He brat out the worst.

He brought out the worst in people of the set of get-a brat first.

The brat worse. Okay, true story, I just told a very funny, but very dirty joke, and the team would let me do it because we have Bill Gurley, a famous venture capital son. So fucking VCs continue to ruin my life anyways. What are you up to?

Just go back from Vegas. Oh, how was that, guys? We can't. Ties, we can batch the party. It was awesome.

We did a lot of gambling, played a lot of blackjack, played a lot of crops, lost a lot of money. Did what we supposed to do was stay at the well.

“We said at the encore, we had dinner at Zuma.”

Let's just pause right there. You entitled spoiled bitch. When I was year-age, then I would go to Vegas. I would stay at the Golden Naga downtown with my friendly lotus. We would make sure we say $5, so we had enough gas to get home.

And there was, and we would eat twice the whole weekend, both times for 999 at the Golden Naga. All you can eat buffet. And then we would bet all night long at these $2 blackjack tables. And that was it.

And by the way, it was amazing.

But no, there was no wind, there was no Zuma. We did it right. We bolt, we bolted out. And yeah. It was a good time.

It's like Jimmy Carr says that people don't realize how fortunate they are today to just be able to take a hot shower. You are literally constantly taking a hot shower, and I'm worried you don't appreciate it enough. Claire.

“Do you think you had really appreciates how fortunate he is?”

No comment. I'm not taking sides on this one. Claire, you're also part of this entitled generation. Right? Claire is a little bit older, you're 28, is that right, Claire?

I am 27, 28 in June. Oh, you're both 27 now. Claire, what did you do this weekend? Slept a lot. And I went to an art fair, made some purchases, bought a couple of photographs, when my favorite

things to spend money on is art. So that was my big event of the weekend. Oh, I had friends over for Shabbat dinner Friday. So that was nice. Oh my god, Claire wins.

Let me get this. Hey, it goes to Vegas. I got it. Hold on. I got it to Lumen by Molly from a woman in the bathroom, and Claire goes and buys photography

and has Shabbat dinner. Okay. Yeah, I, Claire wins. Claire wins. I think we're doing it right.

Should we get out of the show? Let's do it. Let's get into our conversation with Bill Gurley, general partner at Benchron Capital and author of the new book, Running Downetry. Bill, so good to have you on the show.

A lot of people have been interested in having you on. I'm glad we have you on today. You are a legendary investor. But I want to start with your book, Running Downetry. And it was based on a talk that you gave at UT Austin.

And it's essentially your advice to young people, your career advice. Let's just start with what is your career advice to young people. What do you talk about in the book? I hid this moment in my life. Almost 10 years ago where I was reading biographies, a lot of biographies.

capitalist.

I look for patterns and ideas and this thing kind of synthesized for me.

And all of these people started at the bottom wrong and all of these people were working in fields, your parents would probably tell you not to go into.

“And I think at the single thing, the assist of the whole thing, is that if you can find”

something where you have just immense curiosity that you end up in this learning loop that self-reinforcing and almost all the people we profiled have our lifelong learners, like just constantly learning in their field. And when I decided to turn it into a book, a couple of bunch of people noticed the presentation James Clear was one of them that reposted it and that's part of what pushed me to go

to the book.

But we probably studied a hundred more biographies, we went through all the academic literature,

we talked to Angela Duckworth and Adam Grant and Daniel Pink and all the people that are known and the field got a lot of help from all of them. And so there was a lot more work to it. And we also did a study with Warden about people and whether they end up in a job that they're happy with or not.

And so there's a lot more synthesis, a lot more data in the book that relates to that. People should go read it if they want the full story. But if you could tell us what are a few of the main things that you saw across every successful person you profiled, curiosity, it sounds like is the big one, are there any other things that you noticed?

Yeah, I mean identifying something that you have that much curiosity about is difficult and it's not easy. And Angela Duckworth's six years after she wrote "Gritz," said if she were doing it over again, she'd said "Gritz was half-passion, half-person appearance." And she said, "Many kids we've taught to persevere, especially with the state of the kind of resume arms race that goes into the college application, but then they burn out."

And the thing is, if you find something that you have this fascination with and then act that lifelong honing goes forever. And it's just really hard to find. And I have a number of examples in the book that I borrowed mostly from other people that have written books in the career space on trying to identify that thing. But if you do, then you have just this immense kind of learning machine that goes on where I like to say, if you

one way to test if you're really in that lane or not, would you study about your field that night instead of watching Breaking Bad? Like does it compete with what you would consider to be free time activities? Because for most of the people that are really on top of this thing, if a new article pops up, it's something they want to consume right away. And that work, or some people would think of as work, doesn't require energy. In fact,

“I think it emits energy when they're able to think about this thing that they love so much.”

And so that's really the foundational block. After that, I'm a big believer in peer groups, which is something I don't think a lot of other people had really explored as much. And so finding people that are on the journey with you at the same time and embracing them,

and we have some incredible examples in the book of people that did that early on and went

on the whole group went on to success. I think a lot of our learning from how to think about your career climb comes from zero-sum games, comes from athletics, and that kind of thing. And so some people come in sharp elbow and there's no reason to, there's tons and tons of winners in any career path and peers can be super helpful along the way. We added a chapter that wasn't in the presentation about going to the epicenter and probably got in some of the

most positive feedback about that. There's a lot of reasons why human would be afraid, for instance, to go launch their film career in L.A. or to just up and move to Silicon Valley.

“But I really think that I could go into detail. I think there's just tons of reasons why”

that's going to maximize optionality for the individual. And then lastly, the last principle, there's six principles in the book, has to do with having a give-back mindset from the very beginning. And I think that there's a self-reinforcing loop that happens when you do that. What would you say to the people who take your views, take the knowledge, take the lessons? But then they say, well, AI is here now. And if we've got AI leaders telling us that

half of entry-level white-collar work is going to be wiped out in the next one to five years,

The rules of the game have just entirely changed now. If there were things that worked for you

in your career and we know that your career was a massive success, well, maybe it's not going to luck this time round. What would you say to those people? There are a number of people.

“I think there was a Gallup poll survey in 2023 that said 59% of people were, they used this word”

quite quitting, but I would say, you know, ambivalent about their job or indifferent. They're not they're not engaged or passionate about their job. And to me, those are the ones and unfortunately, it's a really big group of people that are most at risk from AI. If you think about it, the wrote best practice of yesterday is exactly what's in the models, right? Like, they've studied the best practice, what's in the textbooks, and it's put it in the models.

The thing that's not in there is the stuff that's on the edge, you know, the creativity, the ideation of trying to understand the nuance in your field and that kind of artisan mindset is, I think, part and parcel with these people that are fascinated by what they do. They're just constantly studying on the edge. 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. There's”

people that you meet where they go, you won't believe what I did today. I got claw bought to do this. You know, I've met a lot of what I might call local entrepreneurs who run businesses like you know, storage facilities and whatnot. And they're like, oh, I needed a third location, and I asked you to map the city and what intersection was best. And they're like bouncing off the walls, you know, hyper excited about how their life's going to be easier with this with this solution.

And so, I think the answer is if you're high agency and super curious, it's an accelerator,

but the unfortunate reality is I'd say the vast majority of people and at least in the US aren't in that place. Which seems to for those people, if you're not curious, if you're not enthusiastic, if you're low agency, it's probably an accelerator to the downside, which seems like it will widen the gap even more. It certainly would seem to me that you'd be more at risk in that case. Like ambivalence becomes a bit of a problem. And the other thing that I would say,

“the which is not something that's necessarily in the book, which is the best way to”

to inoculate yourself against AI risk is to be the most AI-enabled version of yourself you can possibly be. And so to know in your field what it's capable of. And even just you can be more prescriptive. Let's say there are 30 people in your role at your company. Let's say you're the one that knows the most about what AI can do in that functional group. You're the least at risk. Like you're the one that you're going to talk to about how to get leverage. So the worst thing

you could possibly do would be to be skeptical about AI and angry about AI and to have blinders and not even try and play with. Abel, it's good to see you. I have a story about how we actually met and I'll use that as a lead into a question because I don't know if you've

listened to the pod, but it's basically an excuse. Space is going to excuse for me to talk about

me. So from 92 to 2000, I felt like I was at San Hill Road pitching some nice white dude every week, every week. And in 99, I was starting an e-commerce incubator in New York and it was backed by goldmen and JP Morgan and Maveron and I thought I need a Silicon Valley investor. And I met with a guy named Andy Rackliffe and he said it was either late 99 or early 2000. He said I'm watching a meet one of our new partners and I rolled by and I shook your hand and I'll

remember thinking was this guy is taller than me sitting down. And we I didn't we met for like 10 seconds, but that was back and literally late 99 or early 2000. I think you just joined benchmark anyway. I haven't been back to San Hill Road in 26 years. If I were to go back now as an entrepreneur and try to raise money, how has the business changed? How have the entrepreneurs changed? How has the companies that are the winners changed? Like give me a vision of San Hill Road

in the dynamics and the underpinnings in 2000 and then fast forwarded to 2000 and 26? The industry has only systematically gotten more competitive through my entire career and it was

more competitive now as I move away from the venture industry and that competitive dynamic in its and its current form has resulted in really, really big checks going into any company that looks like it's breaking away and most of those rounds now are done preemptively meaning the company

didn't decide to go out and raise money there are investors with billion dollar funds

who may not have that bumper sticker on their car who are calling saying "please, please take my money" and that's just a very different reality from when I started and today you'll read about a $300 million series B. The numbers were very small back in those days. I mean these companies were going public with one or two million a quarter in revenue and not having raised that much money like $20 million or something today every company that is being identified as

a winner is ingesting $4,500 million minimal before they even think about going public if they're

ever going to think about that. So it's institutionalized in a way somewhat similar to what happened

to the P. industry you know private equity industry 10 or 15 years ago. There there are cycles of mania and obviously that time frame you were talking about was a peak cycle in that way and and certainly one could argue things are manic today for a lot of different reasons.

“I think the big theme here is the money has gotten unbelievably big in a way that it wasn't before”

to the point where and this is something that's gotten I have discussed on our show and I believe it's something you've talked about too. Companies don't really need to go public anymore. At least that's not what we're seeing with open AI. That's not what we're seeing with anthropic. We're seeing

these ridiculous rounds. We're seeing series L rounds. We're seeing companies raising it $800 billion

of valuations like these are insane numbers and I try to think about like why has this happen and what are the implications of this. It seems as though the institutions and the most moneyed individuals realize that there are a lot of gains to be had in the venture market and so they poured into that market and it has resulted in going in coming at the expense of say retail investors where the way they would get into a great company like Amazon or Apple as you say who went public

“it for low evaluations I think Amazon like a billion dollars when I went public they had that opportunity”

early but they don't have that anymore that's something that I worry about I wonder if it's something that you worry about too. I do worry about it quite a bit and there's a number of I mean data points 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 partially you could blame that on just of a bureaucratic creep and I would say kind of a legal creep right the the number of like

weird derivative lawsuits that are allowed are part of what causes it to be expensive to be public there was another thing that happened there used to be a shareholder threshold there would force you to go public and there were a number of companies that literally had to file as a result of that mechanism that has been whittled away and taken down and then I'd say more if you're going to point to finger more directly I would say the late stage funds have

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 oligabic kind of way there's there's only a handful these really really big funds then then they get that growth they get to steal that that economic upside maybe steals a strong word but but simultaneously with telling the founder you don't ever need to go public they'll go around to the LP community the endowments

and foundations and say look these companies are no longer going public if you want exposure to those growth years guess you need to get money to you know me and so it becomes self reinforcing

“and that's what's been happening I also one other thing that I think the the venture industry used”

to go through these periods and cycles where would get reset and people would learn that you're taken too much risk and you'd get wiped out from like oh one to oh eight the number of venture

the zirpy years the zir interest rate period and right when it was about to be a correction

this AI wave took off and the money just slowed back in so it's almost like I felt like we missed a bit of a correction and and and there's just risk-seeking dollars everywhere the thing that would cause it to stop is if somehow the money ran out there was fear of a endowment tax

“causing a liquidity crisis at some of the foundations. Harvard and Yale I think got into the”

secondary market last year and so there was you know a sign and oh wait this could cause the liquidity crunch and I think there's a reasonable argument by the way that both the commercial real estate the venture capital and the PE marks are all too high it all of those endowments and foundations but that's a that's a that's a whole another story. We'll be right back off to the break and if you're enjoying the shows so far please send it to a friend and follow us if you haven't already.

Hi I'm Renee Brown and I'm Adam Grant and we're here to invite you to the curiosity shop a podcast that's a place for listening wondering thinking feeling and questioning it's going to be fun

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AI is already part of your organization now's the moment to get control of it head to Leridan.com today and book a demo to start maximizing impact from AI we're back with property markets what do you think would happen I mean how would a correction play out are you worried that we are maybe about to face one in in this market I know there are concerns in the private credit markets there was seemingly concerns about AI that there was a bubble

now that's slightly dissipated we're seeing the value we're seeing these incredible tools what are your thoughts on the possibility of a correction what would it look like

I mean I always get credit to curled a press who wrote this book that says that

bubbles follow waves that are real so I disagree with this idea that it's either a bubble or it's real because that's when you say oh there's a bubble people go oh you don't believe in AI now the fact that it's real causes people to get rich quick and when people get rich quick

happened I don't have any crystal ball to predict like what would cause it to reverse 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 going to make it worse because they won't they won't be sustainable 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 like every single one of the big players is doing it. What would one of those big players say when you make that point to them because this is a point that some people have been making especially

in financial media the circular deals where Nvidia will invest in a company and the company pays them back but your voice holds more weight in those rooms and I'd be interested to hear what they how they respond when you say I explain the type of deals without naming a company or industry I just explain the structure of them to chat GPT and I would encourage anyone to go do this like it's an exercise anyone could do and it immediately started talking about world common

in run like like unprompted by me like I just said what do you think about these types of structures and

you can go back to the very first deal which was Microsoft and open AI and they were credits involved

so you get equity for credits and then those credits are used to run workloads on Azure that is cashless revenue for Microsoft like just just think about it there's zero cash flow whatsoever and they're booking revenue that's just it at the very least it's a very low quality revenue and I don't know why the auditors didn't get in front of it I suspect when and if there is a reset they're all the sudden but come awakened and they'll change the rules and it won't be allowed in the

future but it's bad it's bad accounting like it shouldn't it shouldn't be happening and it's unfortunately happening you know across the spectrum like all the major players are doing it and to push you ask what do they say I mean people of ask them they say well it's not material

“and I say well it's not material you shouldn't do it because it's causing concerns that I think”

it's hurting people want to 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 like like and then you'll be better off but I do think from the very beginning I think Nvidia has been concerned about customer concentration and there's an odd amount of of distrust is a strong word but there's a lack of trust amongst all these big players everyone's working with everyone's competitors

where do you think that comes from because it sounds like what you're describing is a culture in the tech community where this is normalized and it has gradually become more and more normalized the more that we have seen it and I would add to this list these sort of acquisitions that on fake acquisitions where you just you have a contract with a startup and then you

hire the employee it's what Microsoft did with inflection and it's basically an acquisition

and it seems to play into the same dynamic where you're kind of scouting around the rules what

“is driving that I think that second thing is a different dynamic I think that okay has to do”

is getting around regulatory approval and along window that that has but but I agree it once it becomes kind of normal then the competitor you know imagine if you're in you know you work it in AWS or you work in in the Google Cloud business and you see that Microsoft deal and then you see him announce as yours growing 35% you got pressure you know on yourself to compete in that market you're going to go do the same deal and they did go do the same deal that's

exactly what happened they all did the same deals which seems to be like the exact recipe for a bubble where you're all chasing the same fake thing which is fake revenue or is that an unfair way to put it you don't necessarily have to call a fake you could call it like soup up revenue right like you're especially like in in the Nvidia case they are giving money to a lot of nascent startups that and actually the thing that Nvidia did it's probably most questionable

is so they propped up core we've once again expand the the competitors set but then they wrote a contract with core we would said of core we've ever is has extra capacity will buy that capacity

you could sit there and say well oh that's a normal way to do business and if the market so hot why

“do you need to do all this like why what's the point but I do think it's become normalized I think”

you're words perfect and it's going to stay normalized until it's not so let's go back to 2000 early texty as chambers magwitman chipazos they were sort of seen as jobs kind of modern day heroes and it's much different today now I would describe the perception of textyos as there are bond villains minus the charm they're generally seen as having a victim complex not being good for America being so obsessed with shareholder value that they're willing to compromise the well-being of the

commonwealth do you do you believe there's a fundamental change in the character and complexion of textyos now versus say a quarter century ago or is it a perception problem yeah I don't see anything that I would say is wildly different in the personality it's our characteristics of the leaders

I've listened to you guys talk about this fear mongering that comes out of anthropic I've never seen

“anything like that in my entire life 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 and I don't know of another reason for that other than some of the dooms domerism is loudest within the community itself and and that starts another founder yeah and it's starting to have ramifications for the industry you know it's it's a number of data center projects has been stopped you know there's this weird situation where and there was an article yesterday I think we're half of the AI community is

funding like one set of lobbyists do a super pack in the other ones on the other side and they're

like thrashing amongst the regulators it I mean prior to SPF I've never seen a start up worry

about regulation this much you know from the very beginning and now and now we're seeing it again here it's it's it's pretty foreign to what and I I gave a speech a few years back about regulatory capture and I said that the reason Silicon Valley works as well as it's so far away from Washington these guys these guys are rolling around in it so just along the lines of public policy there's many a bunch of new tax proposals and some specific to California specifically the wealth

proposed wealth tax has gotten a lot of attention and then there's a narrative that if these taxes continue to go through there's going to be an enormous exodus out of California do you sense or see personally amongst your peer group and exodus because today I don't think there's a lot of evidence of it that people with the most options in the world sucks moving out that's that's that's that's the Washington but anyways whenever I go to California all I can

all I the only question I have is why did I leave but but when when you're there and you're rolling with these people do you think it's a real issue or do you think it's over inflated well I think Silicon Valley is you know going back to the chapter my book or go where the action is is a incredibly special place to be an entrepreneur and the amount of of learning and mentoring and partnering and like the your ability to jump from one job to the other it's like no other place

on the planet and it'll take a lot to upset that apple court I have a bit of a fresh perspective on the tax issue that comes from spending quite a bit of time in China over the years which is one of the things China has done to kind of reach the level of success they have is the provinces competing with one another and I went back and and read a bit about like you know John Adams and and the federal papers was talking about state versus state competition and and I wonder if

“the the best way to think about this is to shine a spotlight on what policies are working in”

certain states and what policies aren't working in certain states and almost you know amplify the different approaches to see what what is best practice I mean as an example the people not everyone knows this but in in Austin Texas rental rates have fallen for four or five years in a row while it's one of the fastest growing cities in the country and so I happen to know

that appears to be working a lot of people like to talk about housing prices and a concern and

they pass policies where like government builds buildings for five hundred thousand dollars a unit or something and there's no proof that works and so I like this idea of like state versus state competition. It's such an interesting point the way that politics has played into the AI story especially recently in contrast with your previous point which was your view on Silicon Valley and Silicon Valley

“Success is it was very very far away from DC these were very separate worlds and it does”

you bring up this point it's got me thinking like it does seem as though the worlds of Silicon

Valley in Washington are starting to kind of mesh into one another and we're even seeing you know

many tech executives tech investors David Sachs would be an example moving into Washington taking up positions in government and the two are becoming intertwined I just naturally have like an uneasiness I guess about that concept but I'm not exactly sure why so I'd be interested to hear what you make of that why is that happening and what does it mean for the future? I mean I share that uneas with you Ed and but it it comes from a place of there was a there's a phrase

I think and Dreson Horace used a lot called little tech and what they mean is the two-person entrepreneur

“you know and there's this idealism that many of us that have lived in Silicon Valley and practice venture capital”

love to believe that two people on a PowerPoint can create a new idea and and become disruptive and

create this you know huge company and and economic wealth and whatnot if if every new category is immensely regulated it that that kind of goes away right because you need people with connection you need and and part of which driving you know what you're talking about is you know crypto which got started without it but now is heavily dependent on whether or not regulation goes a certain way many venture capitalists have gotten comfortable with funding military equipment companies

which wasn't a thing ever during my careers of venture capitalists that requires connections and and approvals and spending tons of time you know at the Pentagon so so there these new there's these new areas there and now AI where very young companies are begging for regulation which is not anything I've seen you know in my career either so I I agree that it's happening it makes me uneasy because I like to believe in this more idealistic world then then one where you know who you

know matters to get a start-up off the ground and there and there's places in between like

“I think you know the fact that I can earn 4% on my circle stable coin via Coinbase is awesome”

and disruptive to a heavily regulatory captured finance industry that's been that way for 50 years and there's a battle that's you know there's an article out today where the circle stock is down because there's a draft that wants to make it illegal for them to pay that yield so that's one where I've kind of in the middle like I think the the bigger regulatory captures is the actual banks and not crypto I think stable coins could be wildly disruptive

but once those stable coin companies become big will they turn around and use regulatory capture against the next one probably I think regulatory capture in the US is a huge problem unrelated to whether Silicon Valley's a part of it or not yeah it sounds like we probably all agree that what is best is for a market where the disruption is readily available and it's frequent where that can happen you can't have a new guy into the scene burst under the scene and then

create real disruption create real value and when you look at the the most valuable companies in the world today it's like they're all kind of the same handful of companies and they're all acquiring the same talent in the AI space I mean I guess the new players are open AI as an example but then you look at the shelves of open AI Microsoft being one of them who you know owns a significant portion of their profit it's like it all seems to be the same handful of players and I guess the next

question becomes how do you address that like if we want to create a world especially in the venture capital industry where young new talent can succeed and they can take on the big players like Meta like Microsoft how do you actually create that environment a skeptic would push back on

and someone I think could even make the argument that they may have done to their host what

would Microsoft did to IBM you know they these it's not clear to me that owning a piece of the thing protects you against disruption right and and there's a chance that they've already birthed these two companies into a place where they're going to turn around and be disruptive

“to the people that gave them the money and I think that's possible if it's if you separate”

those two things and just look at maybe the mag seven pre AI and look at how big they got I've talked to a few people in the in public policy world that look at that type of problem

and I do kind of think that breaking stuff up is the better alternative to to trying to regulate

them because when they regulate them you know the incumbents help write the regulations I think it just furs are in sconces them there was a period where they broke up AT&T and disqualified their patent portfolio and that birth all kind of innovation I I think that had Microsoft not been under threat in the late 90s you may not have seen Amazon or Google or a lot of companies you may not have seen if they had been allowed to push through the browser the way they had

moved up the app stack and they were certainly capable of it but they got they got there was kind of a ring fence put around the browser so if if we believe network effects or something or making these companies too big and you want to do something and I'm not arguing you have

“to what you want to do something I think the dismantling doing something abrupt in one time”

that changes the field is better than trying to you know say prove to us you're not like the people try this with Google all the time prove to us you're not favoring your own products over the competitors in Google search like there's the ability to enforce that over long run is very difficult what happens when you make that claim in Silicon Valley because I feel like it's been people have pushed for it but it's been shut down because it's it's too much it's

of a barring you can't just come in and break things up like how do people in Silicon Valley the the leaders and the decision makers react when you suggest that that might actually be a good idea. I mean I don't think they talk about a lot the people that that are sitting in the

“positions of power it does big companies are obviously going to push back and tell you how”

competitive their world is and say you know if you're if you're soon are you're going to say look opening eyes competing with search like they just came out of nowhere like this is highly competitive I don't know that you're going to get any unique insight out of them but look the the point of there's a concept in an economic theory called pure competition and there's a Wikipedia page on it you but the idea is that if you have like capitalism thrives when you have

pure competition and marginal you know revenue goes down to marginal cost and if we have companies that are that are extracting excessive rent for extremely long periods of time and have really really high margin it's indicative I would argue this I don't think you're going to get a lot of other people in Silicon Valley it would be willing to say this but it might be indicative of market failure rather than market success. We'll be right back and for even more markets content

sign up for on newsletter at profgmedia.substack dot com this is advertiser content brought to that version of land again a couple weeks back I got you a birthday gift not to pat my self on the back but it was a pretty good one it was indeed you surprised me with a virgin

Atlantic upperclass tickets to London so tell us all about it. It was pretty incredible from the moment

I entered that upperclass cabin I have to tell you I felt like a VIP anything I needed a drink snack assistance with the seat flat seats flat seats exactly had the four course meal got my champagne very delicious and joy the food and the journey home the journey home was great I went to the version Atlantic LHR clubhouse that's the Heathrow clubhouse. Heathrow clubhouse was awesome got myself a coffee headed over to the meditation pod that they called the soma dome kind of felt like

a sort of spaceship where you relax and and think nice thoughts so I did that for a little bit

you could even record a podcast I didn't do that but maybe I should have it was a very enjoyable

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flexible now to the main event of stepstown the e slash all jobs stepstown just the real talent to find for all the jobs this week on net worth and chill it's my birthday and I'm turning 32 so I'm sharing 32 life lessons I've learned that have actually changed my perspective these aren't the picture perfect Instagram infographic versions these are the real hard uncomfortable truths about money career relationships and everything in between I'll explain why choosing a rest day is non-negotiable

“or your body will choose it for you why you should never take advice from anyone you don't want to be”

and why nobody is actually looking at you so you should just go for it plus I'm breaking down why you

should always negotiate your salary why individualism is making you broke and yes why you should try

eating a popsicle in the shower after a bad day listen wherever you get your podcasts or watch on youtube.com/yourrichbf we're back with property markets when you think about an ecosystem like you well I'm going to ask more and more specific question you're not necessarily your best investment but your most famous investment is Uber and autonomous is getting a ton of attention right now and I said on

on pivot that I thought the biggest winner in and I'm talking your book a little bit here the biggest winner in autonomous may not be waymo it may be Uber um I'm curious I would love to just get your recognizing I don't know if you've sold out your shares but recognizing you're going to have a bit of a bias here break down for us who you think is someone who's been early to the game not an autonomous but I'm ride-hailing who you think the winners and losers will be in autonomous

well I think it depends heavily on whether or not there is demonstrable differentiation at at different levels in the stack so all things being equal I would say that the network

“effect of the Uber system which is what I think led to the wild success is would stay intact”

if there were one vendor in autonomous they got so far out in front of everyone else then that person's going to have the ability to disrupt up to a certain level and so the peak from the difference from peak to trough every day is about 4x and so it's pretty easy for a waymo to compete

in the first 25% of a market as you try and go up you'd have to ask yourself questions about

how active you want and utilization rates that you want because you can't you can't really build a fleet to peak if you understand what I'm saying and so you know we'll see I mean obviously what Dar is doing is running out and partnering with every AV vendor possible he can the approach that I had been pushing for which it didn't play out but was one where you would actually embrace open source ideals around the autonomous stack is in many as many places as you can

because if if that if that piece of the stack's more of a commodity then the network will win there's there's just no doubt about it so distinct a professional advice around what industry to go into what what advice would you have your a lot of young people listen to to the show especially young man what advice maybe on a more personal level would you offer to your 25 year old self well I have a hard time not reflecting on on the book that I've been talking so much about

in this window and I just I've come to believe that if you if you if you if you were pointed at something that you just have a remarkable obsession with and other people have made that statement Paul Graham has this statement about disinterested obsession you're you're just going to you're

impossible for some like they just don't have that thing that they're most obsessed with but I think

your your job security is higher being differentiated and being a constant learner in almost any field then you are picking a field because you think the field is safe if you enter that field and you're ambivalent about whether you're making yourself better or not you'll have children yes any thoughts so young or any advice to young doubts I mean I listen to a lot of your stuff Scott and and and I agree with with most of what you say like it's there is a there we've got in

ourselves in this game this Jonathan Hight calls at the resume arms race where starting in six

grade we're so worried about the child getting into a good school that we start overpacking their

schedule with lacrosse lessons and Mandarin lessons and volunteering at the SPCA like we're just the kids today their their schedules are so booked relative to when I grew up and there's there's not a lot of free time and by the time they get to the end of their senior year in college they're so tired they're just tired of grinding that they want to just like take a year off or they just want to relax or they they're like really burnt out and so this is part of why part of the

reason why I tilt towards this fascination thing is it just doesn't feel like a grind like if you can get someone in a lane doing something that they they really get emotional you hear this word

“flow like like if that's part of what they're doing then I think I think they got a better chance”

of being feeling fulfilled than not having anxiety what would be your advice to someone who is trying to seek that flow state like they know that in order to win especially in a world of AI they need to be enthusiastic I have a lot of interest curiosity high energy but they can't locate that what would be your advice to them keep exploring keep looking like don't there's a there's a it Dave Evans has these stats that like five years after college 40% of people are

no longer in their major and like ten years after it's a much higher number and so I think I worry that we we put these children through so much of a grind they have almost a sunk cost fallacy

“that they have to deliver in that lane and it and it's just not true so I think being open minded”

to the notion that you can move around and explore is is useful there's a really cool idea I stole from one of the acquired podcasts there's where he created a side hustle at every job he went to which is pretty pretty unique idea but when he would land he would say if I will in the work extra will you let me do this other thing also so he got two shots on goal if you will at the same time and at Microsoft he helped create Microsoft garage which was differentiating for him and

caused him to meet a bunch of entrepreneurs he wouldn't have met otherwise that got him into a job at a venture capitalist at Maveron and he asked them as a side hustle if he could do a podcast and you can see where that took him there and so that's just one there's many other ideas in the book but like keep exploring keep moving around keep looking for it and even in that movement process I think you can differentiate yourself my final question this is ultimately a market show

where we try to understand markets and try to get rich you are a legendary investor what is the difference between a good investor and a great investor in your view the first thing to pop in my mind it is just like being a student of the game and like studying and this is advice I have in my book for anyone in any field but like there are handful of investors who have read all Buffett's letters and kind of hang on every word when Howard Marks puts out a new letter there's

a ton of information out there about investing and people were rating today one of the most amazing

“things about this AI world is if you want to learn something it's never been easier in the history”

of the world to go learn and study there's podcasts with people like yourselves there's YouTube videos interviews with people like you can go study study study I think I think Toby from Shopify

me that's the thing like the people that are best at it are students of it like constantly

“studying it and and by the way if you have that mindset and you make a wrong investment or”

someone investing a company that you said no to it triggers in your brain oh shit I've got something else to learn and that that creates anxiety oh I got to go understand why that smart investor thought differently than I did so that it all goes back to that like infinite curiosity in your field bill girly has been general partner at benchmark capital since 1999 prior to benchmark bill was a partner with homo winbud venture partners and a top ranked research analyst on Wall Street

before his investment career bill was a design engineer at compact computer bill authors the long running above the crowd blog which focuses on the evolution and economics of high technology businesses his new book running down a dream how to thrive in a career you actually love is available now bill this was a pleasure thank you so much thanks for having me on thanks bill nice to see you Edward you think I'm a big fan of this guy I think he's a legend of the game and I was kind of

I was happy to hear him speak candidly about the problems in the industry that seem to have grown

I just think it's always refreshing when a leader is able to kind of just be unrestrained and say

this is a real problem especially when he talked about the circular deals I think the question increasingly becomes what are we going to do about it maybe it's just going to be that you need a self-correcting mechanism in the same way that it's always been but I appreciate his willingness to just discuss it so openly and I think his advice to young people is also great

“I totally agree with his views on curiosity and how essential that is in an AI era what do you think?”

He's right about the circular deals the the whole community's gotten so strange I think that the community is basically said we're over-invested we can no longer get market returns for LPs by doing what we're supposed to do and that was fine small companies and nurture them along the way and do the hard work so we're going to basically migrate upwards and they have custody the consumer just the same way Uber has custody of the consumer and then can put in front of them whatever autonomous technology that

Uber controls or the same way Apple can extract $20 billion from a search engine because they have

custody of the billion wealthiest consumers in the world VCs recognize they had custody of the relationship with the entrepreneur so what they said is okay if you're scaling instead of handing you over to Goldman Sachs in the public markets we're going to maintain that custody of the relationship and we're going to continue to fund you so we're going to essentially maintain that custody of the relationship and the returns until which point all the returns have been squeezed out of the

shit and then we'll force our our shit on the public markets is a last stop in the financing route so they have migrated upstream in order to do that they now have to and can raise tens of billions of dollars and then put it to work and what traditionally would be the financing ecosystem of the public markets which you have it's spoken a lot about that the downside of that is that the average

“retail investor no longer has access to those returns I mean I think when I think when Google”

wouldn't public it had a valuation of a couple billion dollars I think yeah I mean that's adjusted

yeah if Alpha that started today it would have gone public when it was worth two trillion dollars it would go public now yeah yeah it's it's it's an entirely different ecosystem it's it's also incredible like most industries that as they or a lot of the it's and the genica fish is really high and that is it's not only a small number of firms making all the returns it's a small number of partners at a small number of firms because it's all about deal flow like when I was when I was raising

money there were just two or three VC firms if you got a term sheet from Cleaner Sequoia and then actually benchmark with sort of the emerging Pepsi generation if you got a term sheet from one of those three you took it because what it did was it connoted your ability to raise capital further down the road because of the good house keeping seal of approval whereas when you go public Goldman taking a public gets you a pop but a year later

no one cares for took you public so it and it's now played out in spades if you get a term sheet from general catalyst you know you're going to take you're going to take their money because and so as a result they see everything so the the aggregation and capital of the returns

in private equity and hedge funds and in VCs there's the Titanic iconic brands that are able

“to raise this billions of dollars to get all the deal flow there's the hyper focused funds that do”

high speed frequency trading for you know utility stocks and Spain that are just so focused and and then everyone in the middle isn't the kilzone they're just getting taken out you know

got help you if you're a four hundred million dollar head long short hedge fund or a you know

a one or three billion dollar private equity fund right now that's not very focused it's just everyone wants to be in you know tpg or citadel or or general calluses or quiet and then and there's some tiny niche ones that are super focused and everyone in the middle is just getting

“crushed it's so interesting because part of what he was describing when you asked that question”

to bill about how has this industry changed how a silicon valley changed part of what he was

describing was this transition from a world that was predicated on the underdog the insurgent

versus the big players and the institutions and over time slowly crystallizing into its own form of institutional bureaucracy or of a different kind sort of the transition from little tech to big tech where we all we used to be we want to disrupt we want to disrupt we want to take on the big dogs and suddenly you wake up 20 years later and now we're the big dogs and it's the same dynamic

“when it comes to what he described between dc versus silicon valley in his view was silicon valley”

was a great place because it got away from the regulators it got away from the bureaucracy we were there was the wild west we were the insurgents and now we find them all migrating back into Washington and now they are becoming part of the establishment and so you could almost sense the cognitive dissonance in bill where he knows like this isn't who we are this is not what this was supposed to be but suddenly in 2026 all of these players have become their own form of

institutional bureaucracy they are their own form of of the the big dogs and rural kind of sitting like well what happened to the underdog what happened to all the excitement about that and the disrupt is coming in and he said it himself the people in silicon valley don't want companies to get broken up they don't want to see that disruption because they don't want to be disrupted they all of those companies now it's a very interesting dynamic of power also he the other

interesting point was he said it felt there was a lot of catastrophes on AI I was interesting too yep well good I'm glad you enjoyed it and I just want you to go away as money from adventure

capital it's never down quarter and see how much you think they're great guys yep yep you're right

I should try it I'll bring it out roll with you but you know what this bonus season I'm going to act like a VC I like I like I'm going to impress you I'm going to raise a big old bonus there you go this episode was produced by Claire Miller and Allison Weiss and engineered by Benchman Spencer on video editor is Jorge Carty or research team is dashed on is Bella Kinsel Kristino Donahue and Mia Solverio Jake McPherson is our social producer drew borrowers is our technical director

and Catherine Dylan is our executive producer thank you for listening to the property markets from property media if you like what you heard give us a follow and join us for a fresh take on markets on Monday bye.