#651: Legendary Investor Bill Gurley on Investing Rules, Finding Outliers, Insights from Jeff Bezos and Howard Marks, Must-Read Books, Creating True Competitive Advantages, Open-Source Strategies, Adapting Mental Models to New Realities, and More

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Bill Gurley (@bgurley) has spent more than 20
years as a general partner at Benchmark. Before entering the
venture capital business, Bill spent four years on Wall Street as
a top-ranked research analyst, including three years at Credit
Suisse First Boston.


Bill also maintains a blog on the evolution and economics of high
technology businesses called Above the Crowd.


Over his venture career, he has worked with such companies as
GrubHub, Nextdoor, OpenTable, Stitch Fix, Uber, and Zillow. 


Bill has a BS in computer science from the University of Florida
and an MBA from the University of Texas. He is also a chartered
financial analyst. Bill is a board trustee at the Santa Fe
Institute, a research and education center focused on the study
and understanding of complex adaptive systems.


Please enjoy!


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[05:51] The book Bill calls "the most efficient short-form MBA
one can find."


[07:31] Sell-side analysts vs. buy-side analysts.


[09:45] Financial models, rules of thumb, and making (sometimes
wrong) decisions.


[17:28] Howard Marks and Stan Druckenmiller.


[19:26] Micro vs. macro investing.


[20:40] Institutional Investor's All-America Research Team.


[24:16] Expanding distribution.


[27:04] Return On Invested Capital (ROIC).


[33:10] Repurposing good ideas for alternative applications.


[37:01] The conviction of network effects.


[38:58] SaaS and open source.


[42:40] Bet sizing.


[44:04] Equal partnership over hierarchy.


[50:08] Lessons learned from partners.


[52:57] Recommended resources.


[58:46] Problems open source can solve.


[1:09:28] Building a better network with the interest graph.


[1:13:42] Dissecting Bill's Twitter thread about risks and sudden
valuation resets.


[1:23:50] The Metaverse.


[1:29:00] Revenue and earnings quality matter.


[1:31:02] Undervalued competitive advantages.


[1:35:02] Jeff Bezos: corporate mad scientist?


[1:40:42] The counterintuitive condemnation of company
camaraderie.


[1:45:37] Tobi Lütke.


[1:48:51] Books Bill has gifted frequently.


[1:52:29] The Santa Fe Institute.


[1:54:35] Bill's board.


[1:56:32] Cultivating anti-tribalism.


[1:58:13] Twitter: what is it good for?


[2:01:14] Newsletters and other resources Bill relies on.


[2:03:05] Bill's book in progress.


[2:04:12] Regulatory capture.


[2:09:10] Predicting what America will look like in 10-20 years.


[2:10:50] Parting thoughts.


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Past guests on The Tim Ferriss
Show include Jerry Seinfeld, Hugh
Jackman, Dr. Jane Goodall, LeBron James, Kevin
Hart, Doris Kearns Goodwin, Jamie Foxx, Matthew
McConaughey, Esther Perel, Elizabeth
Gilbert, Terry Crews, Sia, Yuval Noah
Harari, Malcolm Gladwell, Madeleine
Albright, Cheryl Strayed, Jim Collins, Mary
Karr, Maria Popova, Sam Harris, Michael
Phelps, Bob Iger, Edward Norton, Arnold
Schwarzenegger, Neil Strauss, Ken Burns, Maria
Sharapova, Marc Andreessen, Neil Gaiman, Neil de
Grasse Tyson, Jocko Willink, Daniel Ek, Kelly
Slater, Dr. Peter Attia, Seth Godin, Howard
Marks, Dr. Brené Brown, Eric Schmidt, Michael
Lewis, Joe Gebbia, Michael Pollan, Dr. Jordan
Peterson, Vince Vaughn, Brian Koppelman, Ramit
Sethi, Dax Shepard, Tony Robbins, Jim
Dethmer, Dan Harris, Ray Dalio, Naval
Ravikant, Vitalik Buterin, Elizabeth
Lesser, Amanda Palmer, Katie Haun, Sir Richard
Branson, Chuck Palahniuk, Arianna Huffington, Reid
Hoffman, Bill Burr, Whitney Cummings, Rick
Rubin, Dr. Vivek Murthy, Darren
Aronofsky, Margaret Atwood, Mark Zuckerberg, Peter
Thiel, Dr. Gabor Maté, Anne Lamott, Sarah
Silverman, Dr. Andrew Huberman, and many more.


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