# A Random Walk Down VC (03) - Benchmark By [sallygu.eth](https://paragraph.com/@sallygu) · 2022-05-04 --- > Billy Gurley > ============ > > Bill Gurley has spent 18 years as a GP at Benchmark. He has invested in and served on the board of such companies as Jamdat, GrubHub, Nextdoor, OpenTable, Stitch Fix, Uber, and Zillow.com. Before entering the VC business, Bill spent four years on Wall Street as a research analyst. His research coverage included such companies as Dell, Compaq, and Microsoft, and he was the lead analyst on the Amazon IPO. ![](https://storage.googleapis.com/papyrus_images/5d9b188fd1725e16310bef1a8a12d408a22649e9ad5cd5326720b58bf4e22a03.png) Who can be VCs ============== The truth is anyone can be a VC because handing out money is one of the lowest barriers to entry jobs.  The real question is - **can you be successful?** Prior to Benchmark, my first venture job was with a firm called Hummer Winblad and one of the co-founders was an athlete playing in the leagues for six years. So athletes can also have a successful career in VC. How to make an investment decision ================================== You need to know how to judge the qualities of a good leader or someone who is a team player. There are many times we made an investment solely because of the following two points: 1. **The power of founders who dares to make a bold move** like business transformation. Discord, Nextdoor, Docker and Slack are all pivots, which means the company stopped doing what they were doing at first and started doing something different.  2. The **GTM capabilities** of founders and this quality is somehow missed by a lot of people. Unit economics really matters. If you look at the most successful companies, they weren’t always the first but they were the ones that **figured out how to get to market fastest.** I recommend five books if you’re gonna be investing: * Michel Porter’s Competitive Strategy * Crossing the Chasm * The Innovator’s Dilemma * Shoe Dog * Jerry Kaplan’s Starup Why invest Uber =============== We had made money on Open Table, and had a belief that an **ordering network** can be put on top of multiple industries.  We were particularly intrigued with black cars and had met with a bunch of taxi startups that were putting this model on taxis. But taxis are usually an oligopoly market and the price is fixed. Thus we felt that would not work well and looked for someone doing this on black car. I actually referenced Travis to Mark Cuban who had invested in his other startup previously. Though the previous one failed, we all thought this time **the product market fit was obvious** and he was not gonna let it fail. Investment Advices ================== My favorite Warren Buffett quote is “**There is a fool in every market and if you don’t know who it is it’s probably you**”. If we see something pop or somebody makes billions of dollars but it was in a category we don’t understand we try not to have anxiety about that because we want to invest where we believe and we have a competitive advantage. Why Benchmark successful ======================== Our founding partners realize that in a lot of professional firms, the senior people take all the economics while the junior people do all the work, so they want to find a way where that wouldn’t be true.  We created a concept of an **equal partnership** where the firm is lean and small, but all the investing professionals make the exact same compensation. We believe that it **generates a phenomenal amount of teamwork** because other firms with differential pay, every time they raise funds their members are holding each other’s throat , competing with each other. And it also allows us to **recruit the very best people** we want to recruit since we’re offering someone an equal seat at the table. We only do early stage, so if you want to write a hundred millions dollar check to mature companies you need a huge set of analysts to pour through all the due diligence. But in the early stage, it’s two people on a PowerPoint, it’s a lot more about the individuals than anything else.  Investment dilemma ================== We are in a remarkably unique time of the history of business where **interest rates have been low for 5-7 years** and it’s never happened before. Some of the best investors in the world like Buffett and Howard Marks, are complaining about this. If you set interest super low it increases the amount of speculation people are willing to do because there’s no yield anywhere else. Stanley Druckenmiller was quoted as saying “I got nothing against Taxens, but if you let them drill holes with other people’s money, they'll drill lots of holes.” The quintessential contribution to this getting more profound was when **Softbank raised the Vision Fund and started writing checks into the billion-dollar sizes** into these private companies and it creates a prison’s dilemma and the hardest problem of all time in making decisions because you have such an ambitious competitor. Also, Wall Street is now asking a lot of questions about unit economics. When Amazon first came public, it was losing money but **eventually it had to get profitable and the street had to be convinced**, so it will be an evolution as you move into being public and being more scrubbed by Wall Street. How you predict the future ========================== One of my partners has a saying that “**We’re not paid to see the future, we’re paid to see the present very clearly**.” It’s very obvious to me that data is gonna be ever more present all the time. But I wonder how much more information is going to be available five years from today and in what ways can we expect that and what business opportunities will that create. The **geofencing, geolocation** tool inside of apps, every week I see an entrepreneur doing something new with that and it’s really interesting. There is still a lot of greenfield space there. The open-source is blowing up, SaaS is blowing up, security spending is blowing up, those seem like never-ending  right now. --- *Originally published on [sallygu.eth](https://paragraph.com/@sallygu/a-random-walk-down-vc-03-benchmark)*