If you can find a group of people that are trying to achieve the same thing you are, you share what's going on. You co-learn together and then you know the cherry on top is that group helps you on bad days.
Welcome to Techno Venture. I'm your host Peter High. My guest today is Bill Gurley. Bill is a general partner at Benchmark, a leading venture capital firm in Silicon Valley. He joined the firm in 1999 and is the longest serving partner of the firm. He invested in and has served on the boards of companies such as Uber, OpenTable, GrubHub, StitchFix, and Zillow. His time in venture capital followed time as an engineer at AMD and at Compaq as well as a time as a sell-side analyst on Wall Street. He was a partner at Hummer Winblad Venture Partners before joining Benchmark. He's a prolific writer through his blog, Above the Crowd. And he's written a new book, a terrific one that I've recently read. It's here, Running Down a Dream: How to Thrive in a Career You Actually Love. Congratulations on that. And Bill, welcome to Technventure. It's such a pleasure to speak with you.
Thank you so much. I'm pleased to be on and I appreciate you having me on.
Oh, it's a great pleasure. Well, this book started as a lecture you gave at your alma mater, the McCombs School at the University of Texas, the business school there, which had the same title. What inspired you to put together the presentation in the first place?
So I started writing when I became a sell-side analyst. So we're going way back to like 1993, 30 years ago. And during that time for a variety of reasons I started a fax newsletter that became an email newsletter that became a blog that was Above the Crowd. And I developed a technique for when ideas would pop in my head, I would start a small document or notes and see if that idea developed over time or not. You know, I would pour stuff in or not. And if it gelled to a point, I would turn it into a blog post. And so that was just a rhythm that I had. And I was reading this biography one day. I was in a period in my life where I was really into biographies. And I've seen other people go through that kind of phase. And I read this biography and it seemed I noticed these through lines with these other two biographies and they were in fields that weren't the type of fields that we all think about as business. And I wrote it down. I wrote it down in a note and I thought about it for a while and penciled out a little structure. And then one day Jay Hartzell who at the time was the dean of the business school there asked me to come speak to the MBA students and I said to him can I try this idea that I have and so that's how it started. That was it. And I knew I think when I jotted it down that it wasn't for the normal audience of Above the Crowd which is tech and VC and investing and technology waves and disruption. It was something different from that, it was more about a life skill for young people as they try and think through their career. So anyway, that happened. They put it on YouTube. It influenced a lot of people that I didn't expect, and I've gotten a lot of inbound over the years about people that have literally pivoted their jobs and gone in different directions and are very thankful for the push. And then the one and only James Clear, who might be the best selling non-fiction author alive today, posted it on his website. And that's when I was like, 'Wait a minute, maybe there's something here.' And then there's a long answer to your question. As I decided that I was ready to declare victory on my career as a venture capitalist, like it unquestionably my dream job. I had a blast the whole way through, but for a variety of reasons felt like it was time to move out of the way and let the younger generation thrive. I read this book, Strength to Strength, by Arthur Brooks. I don't know if you're familiar with it.
Yeah. But it's literally written for people right at that place in their life, right where I was. And it became very clear to me after reading that that publishing this book as opposed to one for VCs or investors or technologists was the thing I wanted to do next, and to go push on. So this project took a while. We invested quite a bit from the video to the book. I hired a co-writer and a co-researcher and we went through probably a hundred biographies. We went through most of the academic literature around career happiness and career success and then we were fortunate to be able to reach out to authors like Angela Duckworth and Adam Grant and Daniel Pink and people that really I think have written the Bibles of this category. And so, invested a lot of time. I hope that investment is recognizable when you read through it. You could tell me maybe because you did. But that's the history story of the book.
Yeah, that's fantastic. And you quote some really interesting and unfortunate data. 59% of people are not engaged in the work that they do with the Gallup poll that you cite for example. You know, what's your own diagnosis of that Bill? Why are there now a majority of people who are engaged in work that doesn't give them passion, doesn't give them fascination? We'll get into that topic in a moment as well.
Here's what I fear has happened and I think there's another piece of data that we can look at which is the path from childhood to adult has become very stressful and very programmed and very systematic and we all as guidance counselors for people that go along that path including parents and teachers and everything. I think we adopt a very well-intentioned mindset that wants to look after the economic stability of the individual and having had three kids go through it myself, it's really an intuitive sense that you want them to be economically stable. Like it's just not... I really want to just reinforce this word, well-intentioned. 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. And so, by the time you're in sixth grade, if you're a kid in a competitive environment with competitive parents, they're like, okay, we got to start building that resume. Jonathan Haidt calls it the resume arms race and lacrosse lessons and cello lessons and chess lessons and volunteering at the SPCA like it's just and the kid's life is highly programmed without much time to play and even Haidt calls that out. I think he has a chapter in The Coddling of the American Mind titled The Lack of Play or something like that and Rick Rubin in his book has a paragraph or two on this. He just says, 'We don't invest in the creativity and imagination of the children anymore because we're so hellbent on this process now.' And so I just think it got super intense and it got industrialized would be my answer to the whole thing. And when you put that much weight on the investment that you make, I think you're highly prone to sunk cost fallacy, which is you come out and oh, I spent K through 12 and then four years in college and I am a computer scientist or I am an accountant and that then causes you to never consider maybe I could jump out of that lane. There's some great data in Dave Evans' book Designing Your Life. We're like 10 years away from graduation like over 50% of people are no longer working in the career that was stated by their major. And I bet that number is getting worse. I mean I bet that number's... well it depends on what you mean by worse, but I bet less people are doing that because they feel so invested. And one of the reasons I mentioned that number in the book and one of the reasons I think it's important to know is so that people don't feel stuck. I think they need to understand that a lot of people move in different ways and different paths and all the work Dave Epstein did for Range shows that the people that move around actually do more interesting things like they're more prone to novel innovation and a whole bunch of other stuff if they've traveled through multiple places. So, I mean, I've been thinking about this for the past 5 years in great detail, and I suspect any parent that hears what I just talked through has this innate knowledge in their head that it's uncomfortable what they're doing. Like, they know it doesn't feel quite right. I could be wrong, but I'm pretty certain that a lot of them feel that way. It feels awkward to be playing this game, you know, oh, get into water polo because that'll get you into Dartmouth. Like it's not... I think some of it's for the wrong reasons. And I think a lot of people probably go through that path and do just fine. And I don't want to cast a shadow on them, but someone said to me like, I think the balance of power has shifted so far to one side that we might think about encouraging a little more play, exploration, creativity, and the confidence and support that it's okay to go do something you love versus something that you just have to do to be economically stable. And I think you're aware most of the studies about money and happiness, there's not much of a correlation. So I think the right thing to think about with your child is are they going to live a fulfilling life.
Well said, very well said. Life is long obviously and there are a lot of potential pivots along the way. A common aspect of the stories you tell in the book are people who pivoted from unfulfilling work or pathways to something that sparks fascination and curiosity. You mentioned fascination borrowing from the words of Seinfeld and then necessity beyond just the typical use of passion. That you need that fascination, you need that curiosity. I mentioned in the intro and you've already alluded to it as well, you've had some of these pivots also and I'd love to have you maybe share in brief a bit about the questions you asked yourself, the insights you drew from in that questioning that led to the pivots you made towards as you point out a dream career for you but not the career you initially saw it.
Yeah, there's some interesting... you know Angela Duckworth gave a... so you mentioned the Seinfeld comment that came from his graduation speech at Duke. Angela Duckworth gave one where she just said she says be like a paramecium. There's a study of parameciums and they only have one objective function which is move towards warmth and nutrients. So they just move in that direction and she gives that advice and I think it's a super cool kind of background idea about what you should do but here's what happened with me and I developed a heuristic I didn't realize I was doing it but I fell in love with computers as a child as many people that end up in Silicon Valley do. I became a computer scientist. Had a computer science degree from the school of engineering at Florida. Went to work at Compaq, which at the time was a very hot startup out of Houston, Texas, that was competing with IBM.
Your hometown, you're from Houston.
Yeah. I went back home and my sister had gone to work there, which was fortunate for me because that's how I knew about it. And anyway about two and a half years in we started the third project since I had arrived and it felt a lot like the second project and a lot like the first project and I don't... when I say the story I'm about to tell I think there are tons of people whose dream job is being an engineer. So I'm not... I'm talking about how I perceived it. And so I had also started to read trade magazines in tech and realized that there wasn't just the PC there was software and there was distribution and there were all these other pieces to the pie than just what we were doing. And then I read One Up on Wall Street by Peter Lynch and I started trading stocks in my spare time at home. I was going home and opening up... I had these Value Line notebooks that had a one pager for each company. This is before the internet. So when Prodigy came along, I opened an account. I started buying and selling stocks. So what... and one thing I tell people in the book and I tell people in person, maybe your hobby can be a job. A lot of the people in the book turn their hobby into jobs. And so there's a hint right there. My spare time I was doing this other thing. But I then had a reflection and this is the heuristic I think people can use. One day I thought to myself, do I see myself doing this 30 years from now? And if you're at a company, there are people that are lifers there and you can go talk to them. You can look at them. It's not that hard to say is that what I want out of my life. And for me at that time the answer was no. And I wasn't unsuccessful as an engineer. I wasn't unsuccessful at the company. I just knew then that it was time to go and so I went and got my MBA. I thought about venture while I was there. I was exposed to it a little bit at Compaq. John Doerr was on the board of Compaq. Two years in they said hey guess what you're doing well. We're going to give you stock options which I didn't know about. I'm like oh wait that's something new. So I was learning about it but the few coffees I tried to get didn't lead anywhere and I became very curious about this role as a sell-side analyst because of the influence they had. I was reading in the magazines I could see sell-side analysts being quoted they were analyzing the strategy of the industry. My favorite class in MBA was the strategic class and those topics were super interesting to me. And so I knocked on doors and begged my way like you read about in books to a job on Wall Street. And three years into that I did the same exercise. I can remember being in the building late at night. When you're young on Wall Street, you work from 7 am to 8 or 9 pm. It's just what everybody does. And the four corners of the office were occupied by the people that had spent a lifetime as a sell-side analyst. And I walked around the floor, poked into each of their office, and just did the mental exercise. Is this what I want? Like, is this what I want 30 years from now to still be doing this? And that night I knew it was no that very night like it was a bit flip. And so I said I got to start finding my way to Silicon Valley. And I didn't walk in and quit the next day. I just started thinking about how that was going to happen. And so that's the heuristic. It's very similar actually to this notion Jeff Bezos came up with. He calls it the regret minimization framework. And it's worth watching. Like you go on YouTube and search for that phrase and it's like three minutes of Bezos talking. But when he was thinking about starting Amazon, he was a very successful investor at D.E. Shaw. And David, who's one of the best, didn't want him to go and tried to talk him out of it. And Bezos said he came up with this idea. What would his 80-year-old self tell him to do? And it's the opposite direction from what I was doing, but I think the same thought process and similar maybe to Stephen Covey's begin with the end in mind ideal. But he said the minute he thought about it that way, it was 99 or 100 like there was no... just like me that night. There was no... Daniel has in his book on regrets talks a lot about regrets of inaction he calls them boldness regrets and he has this great graph where over time... I wish I had it right here but over time as you get older and older and older the things you didn't do the stones unturned are what really eat at you what you ruminate about. Humans are particularly good at forgiving themselves for mistakes. And I always think about this right after I tell that Bezos story because he could have tried to start the online bookstore and it failed and David would have had him back. Like he could have gone... the cost wouldn't have been that high had he failed like in the grand scheme of things. But he didn't want that regret of inaction, and so he went and did it. And I think that's great.
That is really great. And you've talked about how a great venture capitalist has to be great at pattern recognition. And so much of the book exemplifies how a great venture capitalist has identified some of these patterns through lines between athletic directors of major universities, a restaurant or a musician. Yeah, you know, as I hear you talk a little bit about your story, Danny Meyer's story who I've also had the pleasure of spending time with.
He's fantastic. A really great guy in addition to being a very successful one and we've been very successful in another field also a common... not across all your...
It is... no it is several of the people once they thrive in their dream job are able to expand the possibility set of what they do and their curiosity I think leads them to that place.
So Danny in particular I cut you off but I want to tell you this one story and then we come back to it. So I met Danny on the board of OpenTable. He was a board member there and I think some of his exposure to what being a public company is and could be came from that experience. And so when the first Shake Shack... I don't think he built the first Shake Shack going I'm going to found a public company. I think he was trying to do what he had normally done which was co-develop areas of New York and that Madison Square Park was when I was in New York was horrible. And Danny with the conservancy and the original Shake Shack, he was doing what he normally done with the other restaurants, but it looked once it worked like something that could be more replicated than one of his traditional high-end restaurants. And I'd like to think that just his experience of seeing OpenTable from a very early stage move through to be a public company gave him some of that exposure that let him spread his wings and go broader than even his original ideal.
Yeah. And but rewinding a bit further back though he was a successful... I think he sold the technology that prevents people from stealing clothes from retailers etc. I think you said 40 some years ago he was already making $200,000 a tremendous amount of money back then and was thinking about law school as a successful person might and talk a bit about the story one he's also told me but I'd love to have you share it.
Yeah, I mean it's in his book, too. And anyone that's in any business that touches human customers should read Setting the Table. And his protege now has a book on the bestseller list. I think it's called Unreasonable Hospitality.
I just finished that. It's outstanding.
And yeah, so he was out to dinner with his uncle of all people. And this relates to that parent thing. Like I think it's really hard for a parent to do what Danny's uncle did. Let me say what he did and I want to revisit that. But his uncle's hearing him talk. What are you doing tomorrow? I'm taking the LSAT. Why? I want to be a lawyer. Why? And like probing. And his uncle says, 'Danny, all you ever do is travel around to different cities, go to the best restaurants you can, and talk about them all the time. You take notes. He had been journaling since a little kid about restaurants, drawing pictures of the restaurant.' He goes, 'Why don't you go open a restaurant?' Now, this is a crazy idea and it's one that I hope that story embodies everything I hope this book can do for so many different people. But that's a piece of advice an uncle can give that a parent probably wouldn't give, right? I just... although I do have some examples of parents being that bold too which is awesome but like that's a... you're making 200 grand a year. Why don't you drop it all and do something that's really hard to do? Most people that start restaurants fail. And boy I mean what a life his uncle unleashed with that one piece of advice.
Yeah, that's such a great insight. And one thing while we're on the subject of Danny, I was at... I was in your neck of the woods at John Hawkins University and a student asked me the question, 'What if you don't care about your passion? All you care about is purpose.' They were being a little provocative, like poking a little bit and the younger... there is a lot of the younger generation who feel very strongly about purpose. And as she was asking the question, I reflected on Danny a lot because I can't tell you how many times I've met a chef in a different city and a lot of them go through New York and train through New York and how many of them said, 'Oh, and I got to work in a Danny Meyer restaurant.' Like they... he has a... I like to use the boat wake metaphor, but he has a wake of people that he has influenced that's so dramatic. And part of it's his personality as we already discussed, but like people that have been through his orbit feel better for it. They're more confident because of it. And so if purpose is your goal, man, he's touched a lot of lives. Like he just really has touched a lot of lives. And that's true of a lot of people in the book.
Yeah. It's like a coaching tree as a former sports player yourself, a basketball player, something you'd be familiar with as an analogy also. But talk a bit about the importance. You talked about how many chefs go to New York as one of the epicenters, needless to say, for restaurants. Talk about the importance of going to the epicenter of where one's chosen field is practiced.
Yeah. As we worked on developing the book, we added a sixth tenet. If people watch the first video, there's only five. And this the sixth one is go to the epicenter. And the great thing is some of the early people that have read the book like Tim Ferriss got particularly passionate about this principle and he had lived it in his life and it had a profound impact on his life. If you can at all do it. Well, first of all, the first thing I say in the book is the hardest principle by far is the first one, which is figure out what you're curious about. And I don't think that's easy. I think that's really really hard. So the go to the epicenter rule is dependent on having discovered number one and having a high degree of certainty on it. So, if you have a high degree of certainty, you want to be a songwriter, you need to go to Nashville. I'm 100% certain of it. If you care about book publishing, you probably need to be in New York City. Like there's so much happening there. Theater, New York, could be London. Hollywood, if you want to be in the movie business, like go get started there. There's this great book like I forget the title. It's like it started in the mail room or something like David Geffen, Barry Diller, like all these incredible moguls in Hollywood started sorting mail like they first rung... first rung in the ladder. And the reason that this is the right idea, first of all, the reason people don't think it's the right idea and the reason they make a mistake is they think it's going to be too competitive and they have this false confidence that being the biggest fish in a small pond is a victory. And what I would say, especially at the beginning of your career, even if you want to be a big fish in a small pond, I'd say go to the epicenter for 15, 20 years and then go away because the thing that happens in the epicenter is particularly useful for people at the beginning of their career. And it has to do with finding peers and mentors and learning, which are three of the other principles in the book. And all three of those things happen on steroids in the epicenter. It's easier to find peers. It's easier to find mentors. And it's much easier to learn continuously because every coffee shop you step into, that's what people are talking about. I mean, if you spend time in LA, I get a little sick of it all. Like how much they want to talk about the latest TV series or the movie. Like it's so in the water. You know what I'm saying? And if that's what you love, you want to be in the water. You want that stuff rolling over you all the time. Silicon Valley is a very special place in this way. And for reasons that I wish maybe someone would research and write a book one day, I have theories. Reasons I can't fully explain. 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. And I can't... and there's a really cool documentary on Netflix about songwriters in Nashville, and it all sounded very similar. Oh, I just showed up. You have two Emmy-winning songs, but can I get 15 minutes? Sure. And there's something special about both of those places that have that dynamic. And then on top of accelerating those other three principles, the opportunity for optionality is super high. And for people that don't know that word, that's one of my favorite words. Luck and good fortune will be more frequent in the epicenter, because every biography I read and every successful person I talked to, you could ask them, 'What's the most fortunate thing that ever happened to you?' And there's some event where some random person called them or talked to them and they got to step up like they got to go up the slide and shoot some ladder or whatever, because of that one optionality event and the probability of those things happening are much much much higher at the epicenter.
Yeah. One counterpoint to heading to the epicenter that's mentioned in the book is Jimmy Donaldson. He's better known as Mr. Beast, the most successful YouTuber of all time. He offers a great lesson you say is perhaps the most important one. You've just mentioned it, which is the need to develop a peer network with whom you can learn. You note that too many people worry about losing an edge in collaborating with peers that you're going to be giving too much away. But you note that so long as you can find peers that you trust, it's a real force multiplier. Talk a bit further about that. I'd love to have you share a little bit.
It's funny you mention that. He is definitely building a media company in North Carolina, which is unusual. He did go to a virtual epicenter. When he was 17, he got fascinated with YouTube every bit like congruent with the word as Jerry Seinfeld brought it out. Like that's all he wanted to do. And he found three other people that were on that same journey. And I opened the chapter on Embrace Your Peers with this story. And they were doing a Skype call together for he says 16 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. He says they all ended up as millionaires. 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 because there was this new surface area and there were no experts and they were learning how to play the game of YouTube and they all learned it and they went to the front of the line. And his story is particularly interesting on that point. But I think this is probably my favorite of all the principles and mainly because I don't think it's a concept that's been well-developed before. But people...
I think are too sharp-elbowed when it comes to peers. And I think it may come from the fact that we made them all play these competitive sports when they were kids. Finite games have one winner and a bunch of losers. And if you think with that mentality, you hoard information. You try and step on, you know, try and cut off the other person. And not only do I think that will make it harder to be successful, but I think it's kind of a crappy way to go through life. And what we talk about in the chapter, and we have several many many other examples, but if you can find a group of people that are trying to achieve the same thing you are, and they can be inside your company, but I actually think it's way better if they're outside your company because then there's like no risk of... and you engage with them on a frequent basis. Not it doesn't have to be Jimmy Donaldson 16 hours a day, but like you share what's going on. You co-learn together. By the way, the same thing I said about learning and mentors gets accelerated with the peer network because now your mentor graph isn't just the ones you find, but the ones they find. Your network isn't just your network, but their network. You're learning. MrBeast borrowed the Malcolm Gladwell 10,000 hours and said we got 40,000 hours because we had four of us. And I think that's a pretty profound way to say it, right? And so it all gets better and then you know the cherry on top is that group helps you on bad days and everyone has bad days. Someone had said, a couple people have probed, 'How do you know if you're bored with the job or don't like it because of the parameters you're inside of? Maybe you're at a bad company. Maybe you have a bad boss.' And I think the peer network can help with that question because they're trying to get to the same place you are. Maybe three of the four don't have a bad boss and they can help you realize that that's the issue, you know, and so yeah, it's just a great way to go through life. I found a lot of people now in the virtual world, I have like text groups for different topics, you know, with different people that are passionate about different things. And I just think sharing is such a great way to co-evolve with other people.
Yeah. Can you, I want to dive a little bit further into that, how you've leveraged peers. You've just started to note that for example, you've got some text chains on different topics. Who are examples of peers you've kind of maintained that...
The one that may have had the biggest influence on me may have been Michael Mauboussin, who's written five books on investing. He and I were early sell-side analysts. He was a couple years ahead of me, but we've stayed in touch. We were both on the board of the Santa Fe Institute together. We shared books all the way up. Our careers went in different directions. He became one of the most sought-after thinkers on investing and some of the biggest fund managers reach out for him. He worked for Bill Miller for a long time and I became a venture capitalist. So seemingly unrelated but we share ideas and books all the way up. There was one particular time in the Uber case where I couldn't come up with the right strategic framework to think about the problem and I called him and he reads so much. He's such a pervasive reader that he gave me, you know, an idea that was super helpful. Anyway, it's been a relationship that's been very very helpful to me.
