It's the live music capital of the world. Home to pulsing festivals, dangerously delicious barbecue, and an emerging tech hub, Bill doesn't escape from the high taxes and lofty ideals of Silicon Valley. It's now also home to one venture capitalist who always stood above the crowd. Bill Girly is famous for his tech investing, betting his reputation on one of the industry's most controversial unicorns yet. Uber. I'm the guy they call. That's how this works.
The real Bill Girly recently relocated. Hey, how are you? Not to escape anything, per se, but to come home. I'm here to find out if this consummate insider has a fresh perspective from the outside looking in. Are you live here now? I do. I do. I moved here about a year ago. How's Austin City living? It's good. It's a lot different from Northern California. A lot different from Silicon Valley. Normally we're sitting when we do interviews and you're like quite tall. I am. Six foot eight. Six foot eight. All right. And I got my cowboy boots on so no heels. Well, you have a hookup here. This is like one of the coolest spots in Austin. Yeah, this is where they film Austin City limits. It's a famous television show on PBS. Some of the best artists in the world have come and played here and continue to do so. Do you play music or are you just a fan? I took up guitar during the pandemic, but I wouldn't suggest that I'm very good. I'm just a massive fan of the of the artistry of others. And I think trying to play actually gives me more perspective on that. It's become one of those venues. There's like a handful of them in the country where people want to play there. The iconic scene you see is the Austin skyline. This is Johnny Cash, obviously.
Is there something that you think super successful musicians and super successful entrepreneurs have in common? I do think there's some of that. So I think they're natural students and what they do. They learn to navigate different format shifts like these people hustle, like harder than anyone that you can possibly imagine. All right. Well, we're going to talk about hustling. Okay. What it takes. How much you have to hustle to be a legendary VC. So thank you. Thanks for hustling on down here.
You are one of the most prolific investors in Silicon Valley history. You worked at Benchmark for a couple of decades. You invested in everything from Zillow to Stitch Fix to Uber. And now you've made this big life change. You're living in Texas, came back to your home state. Truth be told, my wife had kind of made it a part of the marriage acceptance. When we empty nested one day, we'd come home. Her family's here, my family's here. So it's actually been planned for a long time.
You started investing in the dot com boom, saw the carnage of the dot com bust. How is 2023 going to go down in Silicon Valley history? It feels very similar. I mean, we could go through what's similar and what's different because there's some of both. But I had a very, very, like almost an awakening understanding of just how cyclical this venture business is.
The way that the limited partners commit to funds that used to be 10 years and now are 15 and the very low barriers to entry. 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 firm. 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, nah, nah, nah, nah, nah, nah, nah, nah, 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 and maybe FTX is the perfect pinnacle of this past one. We're a bunch of legendary investors just ignore risk, you know, and they wouldn't have done that in 2009. They had to do it after going off that roller coaster.
And unfortunately, because the money flows come in so easily, they're hard to go out. They're committed for 15 years. When that when that bubble finally burst, it's usually ugly. Risk on is slow. Risk off this fast. Silicon Valley Bank collapsed in 24 hours. Yeah. Right. This is the bank to thousands of startups, thousands of firms, thousands of funds. How did we get here?
So on March 8th, 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, right? So the world believed that this bank was okay. I think that it's unquestionably a black swan event that relates to interest rate movements that and you know, just a combination of variables that haven't been in this place before. There's a lot of questions about whether VC should have been calm and supportive versus, you know, and I can see both sides of the story, but maybe because of social media and ability to communicate instantly, the run on the bank can happen a lot more severe, a lot more quickly than it ever could have before.
What did benchmark do? Did you take your money out? Did you tell founders to take money out? We did not and we did not kind of run for the doors either. You had some VCs giving out personal cash to help companies make payroll. Do you think if anything this crisis will show founders who to trust?
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. There is so much important criticality in getting in front of the right pitches that everyone wants to look like the best actor. 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. So it's tricky. It's super tricky. So now that you can say whatever you want, when the dust settles, how bad does this get?
Let's say that the Fed hadn't stepped up and Silicon Valley Bank failed and like a whole bunch of startups lost their venture dollars. That would have been an event that I think would have been way worse than 01. That would have been catastrophic. In 99, every single major Wall Street firm opened an office on Sandhill Road. Everyone was in on 01.02.03. They left. They just kind of moved on and they focused on other things and it got super quiet. I actually love that environment. That's a great environment to work on. I hate the manic stuff.
But we're not there yet and this one's going to be slower because of the amount of money that's out there. Could we be in for a slow spiral or a slow bubble? I think you could be on a slow bursting, right? Like where things like company bankruptcy or shut downs or sales for nothing happened slowly over the next three years rather than all at once. You still may see people just decide that Silicon Valley is a place that's too risky and it gets back to this crazy manic cyclicality that we go through. That's the exact opposite of where everyone was three years ago. Where I was being called a chicken littler with a...
People thought you were like the boy who cried wolf. Right. I was six years too early but I didn't pull my chips off the table but I was worried. But this is what happens. It's really unfortunate. I'd love to think about a way to preventing it from happening because I think the industry would be better off if it were more stable because in these moments people start asking questions like should you be more regulated? Should you behave in a different way? And I don't think that's helpful to the fundamental premise which is let's invest money behind great entrepreneurs and create lots of amazing things.
When you think back do you think you were too conservative or do you feel vindicated right now? Unfortunately and this ties into the cyclicality thing there's a saying which is the best way to protect yourself against the downside is to enjoy every last bit of the upside. Venture capital as an asset category is something you can't measure in a small window. You got to look at it over 20 to 40 years which is really bizarre because most firms don't have employees that long but the vast majority of the returns are in these periods at the top of these bubbles and so I can remember back in 99.95, 96 a couple of firms saying this is too manic. We're getting off the field and then you missed the best performance possible. So no matter what I'm saying about what I'm worried about or my psychosis is dripping out of my mouth you got to keep executing because the returns at that window are too valuable for the category.
Do you think this is going to impact innovation? More uncertainty, tighter funding? I don't see any reason that it will impact innovation. At the end of my career one thing that I'm remarkably aware of is just how rare success is and we tend to fantasize that every startup can be the next Facebook but we know down deep that's not true and actually the odds are much more likely you're going to fail. The road to unicorn land is littered with startups that sparkle brightly for a moment than faded. For more than a decade I covered countless companies some of which no longer exist. Maybe they were heralded as the next big social network or ride sharing competitor or they were part of hype cycles that are lately looking lavishly oversold.
Moving fast and breaking things was possible in the era of easy money but will it be the strategy now? Venture capitalists are always looking for founders with the right stuff, a great idea and the drive to make it happen but this is a whole new world. What's your advice to startups? My advice is pretty simple which is that thing we lived through the last three or four years that was the fantasy. Sometimes I hear an option to go well as soon as things go back to the way they were that's a catastrophically disastrous mindset. Assume this is normal and so unfortunately there are a lot of people that mark themselves to market in their brain at the top of the bubble but it's gone. Even if something like that happens again it's 15 years in the future so you're not going to wait around for it. You've got to recognize what the reality is today what your company really might be worth today.
Well you did have a lot of success navigating the ups and downs. What are the keys to your winning strategy? To be great at it requires a level of hustle that's really hard to explain and the reason is you're trying to maximize the optionality that you get in front of a home run pitch and to do that you have to look under every rock you possibly can and so if you're not studying some new business model or new platform you know AI like if you're not just in every meeting then you're lowering the chance that you're going to be successful. It's an exhausting game and there's some amazing people at other firms doing the exact same thing.
You covered Amazon as an analyst in the 90s before Amazon was you know barely more than a bookstore. You saw Jeff Bezos up close what sticks with you from those days? Because he came from D. Shaw and because he came from Wall Street he understood how to talk to shareholders in a way that no one else did. So if you reread his S1 where he writes a letter it's titled To Our Share Owners and he talks a lot about them. All the entrepreneurs that followed Jeff that wrote that letter were kind of like screw you Wall Street I'm going to run it my own way and it's not actually what Jeff says and he says I'm going to run it for the long term but he says I'm doing that for you which is very different whereas the other people kind of wrote we're going to run it our way and not for you and so he was special like you you you and dear yourself to a community when you talk to them in a respectful way.
So how much is it about the individual versus the team versus the moment? I know it all matters it all matters it all matters about timing and getting the product exactly right. Yeah. That the founder has to want to learn to be a great CEO and that part's hard why in the world would a 22. year old founder be good at managing 10,000 people? So let's talk about that your investment in Uber is legend in part because you made a lot of money and also all the drama.
Well Uber the ride-sharing giant world's most valuable startup has been in the news a lot this week. I lost $97,000 because of you. I banked because of you. Well I'll be the first to admit that I'm not perfect and neither is this company. There've been so many controversies one after another it's hard to remember what actually led to this but it was a blog post by a former Uber engineer who accused a manager at Uber of sexual harassment. Uber's chief executive Travis Kalenick has resigned five of Uber's major investors including benchmark capital demanded that he resigned yesterday. Gurley who was on the board until very recently lets his two partners fly to Chicago meet Travis at the Ritz and hand deliver him this letter that says we and other investors want you to reside. And Gurley was responsible for getting all of these other investors on board correct.
When you look back on that how do you reflect? In a perfectly executed world that doesn't happen like we help the the founder and the team you know navigate their way to a successful company. I won't name any names but I think there are plenty of entrepreneurs from previous generations that are not perfect humans and matured along the way right and became different people and different leaders and you'd like to make that happen. It's not from a lack of effort there were lots and lots of tries but it didn't work out like like whether it was adding board members or the type of governance or all that like we didn't quite get it there and things started to spiral. I think all the stakeholders employees customers drivers it was all at risk.
We need to build companies that change the world the key to being a great coach is you got to love your guys right he has to take this guy in earth wings he has to love this guy those two together knew this was something that's going to hit and boy were they right.
Did you watch it like what did you think of his portrayal this hope has done sound bad every single female that I know came up to me and said exactly what your mom said so they said wow you're so lucky to be playing by Kyle but none of them said and he looks a lot like you.
I was initially nervous about watching it but there was so much that there were a lot of things that weren't true like that were just kind of embellished and that made it easier to watch because it wasn't it wasn't like reliving the whole thing benchmark kind of got an anti-founder narrative out of that first it was uber then it was Adam Newman it we were right and I but when we were working with these four other venture firms and made a decision to try and arrest the situation at uber everyone knew what the consequences of that was we weren't like blind if we do this some class of humans are going to use this against us and point it out and put us in that bucket and this is sounding overly dramatic but you know the thing we told ourselves as we we headed out the door was you know history will be on our side and you know no matter what the cost was if I went back in time I'd do the exact same thing.
the soft bank money there's tiger global there's big money coming from Saudi Arabia all of this money not necessarily smart how do you think this is going to play out I mean there's a lot of great things that I could use at this moment in time I'll just pick one it's like they say there's a fool in every market if you don't know who it is it's probably you 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.
I love the FTX story not because I want to pick on anybody but to make the decision to give money to somebody that has no board and it has a side business that's commingled who tells you it's not comming oh then turns out it was comming like what are you doing what why did so many people fall for FTX and Sam Bagman free we're talking about legitimate legendary venture turnover the numbers were really really big so those are seductive the individual is unique and capable of narrative and FOMO if you're missing out drives a lot of behavior in Silicon Valley a lot and it's classic now I mean that's all I like talking about it because until you get to that moment you don't get the correction like you need excessive risk taking and then you get excessive arbitrage which a lot of crypto writ large may have been just excessive arbitrage taking money from people that want to separate themselves from it and then you get a correction this is classic it's not new.
After all that talk about the fate of venture capital, it's time to dig into another classic Texas barbecue. This place is amazing. I'm so excited. You ever been here before?
All right, I'm ready for my big Austin barbecue. Oh look at this, oh my god, oh my god, this looks amazing. Oh wow, you're gonna eat all this? It's for you. Thank you so much. Let's taste this brisket.
Okay, where would you move if you were going to start a company today? Place can be very impactful and so if I were like a 22-year-old founder starting something, I'd go to Silicon Valley just because it's going to increase your odds of success.
What about like Miami, LA, and Boston? And I think many cities, whether it's Austin or Miami, they have a problem that sounds ironic, but they're a lot of fun. And so I think there's a question as to whether you attract the very most determined founders. Oh, that's a little controversial, which may explain why Seattle's done so, not that it's not a wonderful place, but for two-thirds of the year it's dark out. Exactly.
I do think there are a lot of contagious qualities to successful startups, constantly around other people that are all in the same game. Yep, it's super helpful.
我认为成功的创业公司有许多传染性品质,不断与其他志同道合的人接触,这真的非常有帮助。
So you stepped back from an active role at Benchmark a few years ago. How much are you still investing? What I really did was stop making new investments, so I'm still on 10 boards. The shift in the markets and the bubble bursting kind of increased the workload and the end of time frames. And I think other VCs have hung around past their point of relevance. I don't want to be that person.
You mentioned earlier Benchmark has always stayed super small and lean. Other venture firms like Andreessen Faraway, it's gotten big. And you're often pitched against Mark Andreessen as sort of an opposite. Whose model do you think is going to stand the test of time? How do you think about that?
Well, I do think that there are numerous successful models in venture. I mean, it's not an industry where you can run the table. I think the one reason that Andreessen created some animosity in the valley was when they came in, they made these bold statements like we're going to change everything, we're going to take over. But it doesn't bend to taking over. It's just not structured everywhere. There are a number of VCs that seem to be sort of indulging in the politics of anti-wokism and getting into these various debates. And yeah, it happens on the other side of the aisle too.
You know, what do you think of that trend? I think I understand some of the issues that caused them to adopt that mindset. In the past five years, there have been objective functions injected into startups that aren't solely how well is the company doing or how well is the company stock doing, but it becomes hard to succeed if the employees aren't showing up and saying let's all march in the same direction.
As I understand things at Google, there's just quite a bit of tension between the employee base and the executives there, and it's hard. It makes the job harder to execute the company well. And I wonder what happens to the cultural tension in Silicon Valley when the money's gone, right? The party's over. The money prints are no longer. Goes for or whatever it is. How do you think that's going to change things?
I mean, if it is, it's a good thing given obviously the environment that we're moving into. Like you saw Amazon up close. Where is the next Google or Facebook or Amazon or Apple going to come from? There's always someone that's going to come. You think Jeff Bezos will ever come back with full Steve Jobs? I don't think so. I don't think it's very much fun being a public CEO, especially one of those top five. They invite you to Washington and yell at you in front of people. Yeah, where's Larry Page been the past 10 years? You seen him? I haven't seen him. I did see him once. I did. I haven't seen him. I saw him once, but yes, he must be perfectly happy doing something else.