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Chapter 1: What key mental models does Bill Gurley emphasize for understanding the world?
We do live in a world where information is really cut up, but we also live in a world where you can have access to more information than you ever could.
What are the key mental models that you keep coming back to that sort of explain how the world works to you?
I'm a big believer in systems thinking. There's a book called Thinking in Systems that I read. What does that mean to think in systems?
Chapter 2: How does Bill Gurley define the bedrock of an industry?
I'm on the board of the Santa Fe Institute. The Santa Fe Institute studies complexity theory. I would describe complex systems as multivariable nonlinear systems.
Chapter 3: What role does obsessive learning play in successful founders?
And multivariable nonlinear systems are very hard to predict. They can behave one way for a long time and then one variable can switch and they can behave another way.
the weather stock markets all these things there's consequences that can be first second third derivative and you know you can't just think with a linear model or just think one variable because things can can go way off the path being aware that if you make a change here it could change something here which could change something there and it has to be the whole
Chapter 4: How is AI being utilized in various investment strategies?
system how does that help you when you're solving problems or thinking about stuff i think it keeps you out of trouble because you can avoid consequences that you might find out later you know i was talking to a guy that worked at one of the large dating sites they had this this idea making the profile longer would lead to more engagement
simple, you know, heuristic and they tested and it was true. And so they rolled it out.
Chapter 5: What are the implications of global AI regulation on investment?
They found out many, many months later that it it was negative for conversion. Like when people knew more at that level. Oh, interesting. And so but you find that out way later. There's my point about like a second derivative effect.
Chapter 6: What are the potential limitations of training AI models?
And so you just got to you got to be really conscious of the consequence and not get too deterministic about a single metric or a single variable and know what's important and what's on top.
What was the process you took to go about learning the craft of investing and who are the mentors and peers that played a role in that?
So because I started on Wall Street, you know, and not in venture directly, I got caught up in all the people you would expect, you know, around Wall Street and stocks. And so, you know, that starts with Peter Lynch, one up on Wall Street, you know, best selling book, probably the first book I read about investing.
A Random Walk Down Wall Street, Burton McHale, all the Buffett letters, you know, Ben Graham. Once you read Buffett, you have to read Ben Graham. And then Howard Marks, who's just incredible. And you were talking about the purpose of your podcast.
Chapter 7: How does tokenization impact the role of retail investors?
Those people have spent their whole career assembling their thoughts and publishing them along the way. So those were the ones that I read everything. I think it had a very strong kind of bedrock of financial understanding.
It's interesting because as you're saying that, I'm thinking like value investing and then you went into non-value investing in a way, right? Like, how did that translate? How did what Buffett said translate into seed investing and sort of venture investing?
I think having a firm understanding of the bedrock is super valuable. And then when you recognize the need to innovate on top of it, it's just really good to have that foundation. I have an incredible peer in this guy, Mike Mobison. I don't know if you've heard of him, but he's a writer of financial books. We started at First Boston. He had probably been there a year or two ahead of me.
So it's just super fortunate that I landed in the same place as him. And we've been lifelong friends since then. He introduced me to a gentleman named Bill Miller who ran Legg Mason and had this like 15 year run of beating the S&P, one of the most famous investors of all time. And he claimed to be a value investor and he was the largest shareholder of Amazon for a very long period of time.
Chapter 8: What lessons about storytelling does Gurley share from his career?
And what he would say, I'm getting back to your question. He would say that, you know, value just means that the asset is underpriced relative to what you think it will be worth in the future. I spent a lot of time talking with Bill about network effects. And if you believe in that, then Amazon might be able to grow at an unreasonable growth rate for a very long period of time, which he believed.
And so that's how you get there. But yeah, I've often thought that many of the VCs and Silicon Valley would benefit from having a better understanding of finance. And one other answer to your question about how it becomes valuable. I've always thought of Wall Street as the buyer of the product that venture capitalists create because of the eventual liquidity is either an M&A or an IPO.
And now the price is being set by that group and that institution. So if I know what they value, even if we're starting at a very early place, two people and a PowerPoint, you're still thinking about when this thing grows up, is it going to be something they're excited about?
Yeah, the trajectory matters more than the starting place, I think.
Yeah, that's where you're going to end. That's the output at the end of the day.
What does it mean to know the bedrock of the industry? We live in a world where people skim. They want the gist of things. They want, give me the summary. Give me the executive summary.
I'm going to tell you a story. So my partner at Benchmark, Alex Balkansky, would go to this charity auction that I think Andre Agassi would run.
in in vegas and one year he bought a dinner with john lassiter the creative genius behind pixar and we go to john's house and he serves us in his movie studio he serves us in his viewing room a 10-course meal and each piece of the meal is tied to a classic cartoon that he believed was was super important to understanding animation And he would show it and he would talk through it and explain it.
And you see that and you're like, holy crap. Like he knows more about the history, you know? And, and then here's another data point that I just love. There's a, you know, world chess tournament and they take a break and run a trivia contest and Magnus Carlsen wins the trivia contest. And it's all about the history of chess.
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