Adapt to supply shifts
StrategyWhen the barriers to entry for supply are removed, previous profit margins may be competed away, requiring a shift in strategy.
Hall of Masters
Bill Gurley
빌 걸리
Investing and capital allocationBorn 1966
General partner at Benchmark; early investor in Uber; blog Above the Crowd
916 records in all
- Principles 362
- Episodes 227
- Quotes 327
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Principles
54 basic records of 362
Principles are our summary of their public statements.
Accountability over founder friendliness
IntegrityInvestors should prioritize ethical behavior and fiduciary duty over being 'founder friendly' when a leader's conduct becomes toxic.
Leverage Negative Cash Conversion Cycles
CashManaging inventory and payables to ensure the business generates cash even without accounting profits provides a massive cushion during price wars.
3 more supporting quotes are in the member records.
Beware of compliance opportunity costs
ProductRegulatory compliance costs are not just financial; they divert critical engineering resources away from product development and innovation.
1 more supporting quote is in the member records.
Target the instrument not the entity
Capital allocationEffective regulation should focus on risky behaviors like leverage and derivatives rather than broadly taxing all investment entities.
1 more supporting quote is in the member records.
Measure Beyond Impressions
MarketingBusiness owners should look past vanity metrics like impressions and focus on click-throughs, actual sales, and profit margins per customer.
3 more supporting quotes are in the member records.
Respect established governance structures
LeadershipInvestors and founders must abide by the voting rights and control structures established at the time of the initial agreement.
2 more supporting quotes are in the member records.
Transparency justifies future autonomy
ManagementBeing remarkably transparent about maintaining control allows management to make controversial long-term decisions without valid external interference.
2 more supporting quotes are in the member records.
The danger of investment memos
Capital allocationMemos can become crutches that allow investors to fill in blanks with their own biases and egos rather than truly listening to the entrepreneur.
Commitment Over Betting
Capital allocationInvesting should not be viewed as a passive forecast of odds or owning an asset, but as a deep commitment to help founders change those odds.
The Power of Physical Presence
LeadershipCritical emotional decisions in a company should happen in person rather than over Zoom or phone to signal true support and commitment.
Maintain High Availability
ProductivityA partner's primary job is to be available for the next iconic founder; if they are too busy for new meetings, they are no longer effective.
Distrust Absolute Certainty
MindsetThe more complex a system is, the less likely it is that anyone can be 100% certain; those who preach with absolute conviction are often the most misguided.
3 more supporting quotes are in the member records.
Founders Own the Execution
StrategyVenture capitalists should not provide value-added services that replace core founder functions like marketing or PR, as these are essential responsibilities of the leadership team.
Maintain Decorum During Transitions
LeadershipHandling a partner's departure with generosity and discretion preserves the firm's reputation and long-term relationships with investors.
Take high-conviction asymmetric risks
RiskTo establish a premier position, a firm must be willing to take aggressive bets with massive upside, even if they seem risky to others.
Embrace high-risk missionary founders
Capital allocationVenture capital should back founders with massive, missionary-focused dreams rather than seeking risk-mitigated bets. A portfolio approach allows for taking maximum risk on visionary ideas that could be decades ahead of their time.
Seek disruptive consumer-technology marriages
StrategyThe most transformative investments often require combining deep consumer brand knowledge with cutting-edge, disruptive technology. Success comes from finding killer executives who can manage this intersection.
Use secondaries to prevent premature exits
Capital allocationInvestors can offer founders a secondary transaction or equity-backed loans to take some money off the table, reducing the pressure to sell the company too early for a life-changing but suboptimal amount.
Align Incentives to Eliminate Politics
ManagementRemoving hierarchical tiers and equalizing economics prevents internal competition for credit and career advancement, focusing everyone on the company's success.
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