Bill Gurley

Welcome to The Puck, Venture Capital and Beyond, a show that examines the changing landscape of our world. Before we dive in, a quick word about who I am and why we're here. I'm Jim Bier, corporate lawyer and restructuring professional. I've spent the last two decades helping companies navigate their toughest transitions. And about eight years ago, I found myself having fascinating conversations with clients and friends about everything from venture capital to the broader shifts happening in our economy and society.

Those discussions were simply too good, so the puck was born. Now while we started on venture capital, hence the podcast name, the Puck Venture Capital and Beyond, We've naturally evolved to focus more on the and beyond portion of the title. Today, we explore how business intersects with the bigger forces shaping our world. I still run my restructuring practice by day, but now I get to host these conversations by night. It has become one of the most rewarding parts of my life.

Today's guest continues that tradition. In his book, Daniel Pink talks a lot about boldness, regrets. He said the ones that hang heaviest on people are what they didn't try. People actually don't sit around. Humans don't sit around and kind of ruminate on the failures that they made.

In fact, I think the human body and mind are structured so that you try and convince yourself that that, you know, is in the past and behind. But the thing you didn't do just beats at you, which is just boldness for Greg. On this episode of The Puck, we sit down with legendary venture capitalist Bill Gurley for a wide ranging conversation on careers, AI, markets, and the future of The US economy. He discusses why most people regret the risks they never took and how AI is creating both massive opportunity and dangerous speculation. Gurley delivers blunt, battle tested insights from decades at the center of tech's biggest cycles.

This is an absorbing conversation, so let's get to it. Bill Gurley, welcome to the puck. Thanks for having me on. Oh, I was excited to have you. Before we get too much into it, just take a minute and tell our listeners a little bit about yourself.

Okay. My name is Bill Gurley. I I grew up outside of Houston. My father was part of the space program very early on, which was an interesting childhood. Almost half the fathers on my street were NASA, so we went to a lot of launches, which is kinda interesting, you know, in the modern time where that's happening again.

I kinda like you hear in a lot of Silicon Valley stories, I got enamored with computers at a young age, had a Commodore VIC 20 in ninth grade or tenth grade Mhmm. And kinda never could quite get away from that. You know, it was pretty pretty enticing to me. Ended up at the University of Florida where I rode the bench on the basketball team, which was an exciting experience, and I think learned quite a bit of lessons from that as well. Computer engineering degree, went to Compaq as an engineer for two years, business school, Wall Street for four years as a sell side analyst, and then twenty five years in venture capital in Silicon Valley.

So let's let's take a minute and just what, first of all, drew you originally to Silicon Valley, and then what ultimately pulled you back to Austin? Yeah. And and the Austin move is very recent. So there are a couple different things that that kinda pulled me to Silicon Valley. So I ended up working at Compaq, which was, at the time, a pretty hot, you know, tech company and VC backed company, even though it was in Houston.

So I started to get a lens on what that looked like and what disruption looked like. Compaq was disrupting IBM. I interviewed at IBM out of college and the buildings were sleepy. You shared an office. You they had chalkboards.

I was like, really? Wow. And they had dry erase at compact, and it just felt like they were doing something more fun. And then, of course, Dell did the same thing to compact. But anyway, just seeing that energy kinda woke me up a little bit.

I also, started trading stocks at a fairly young age. I read Peter Lynch's book that many people have read. And then I think there's a tiny bit, my friends and I used to go to Vegas and play single deck at the horseshoe and count cards. And I I just think all those things combined, tech, stocks, investing, liking disruption. And I thought about VC in business school.

It's very hard to get into VC and didn't find any open doors, which is when I went to Wall Street. And after four very fortunate years on Wall Street, a door opened for me to enter the venture capital world. That's obviously exciting, and we we we can talk about your venture capital world. But you're now back in Austin. And any big philosophical insights into kind of Austin versus Silicon Valley and kind of what this new chapter looks like compared and why you made that move?

Yeah. A couple of different things. So one, I think it was part of the marriage proposal with my wife. Uh-huh. We're both native Texans even though we met in Manhattan.

She has four sisters here in the state and always wanted to come back. Having been around a lot of different parts of Texas, when we did decide to come back, I had a strong vote for Austin for reasons everyone knows. Right? It's just, it's just an incredibly vivacious town with lots of different things going for it. We're big music fans as well.

And the live music here is crazy, crazy good. I'd also reached a point in my career where I I made a decision to to kind of self select out of the next fund at Benchmark, which meant I was gonna go do something different. And we empty nested all three of those things at the same time, led us here. I would contrast it with Silicon Valley in the following ways. Silicon Valley's weather is way better.

The road bike riding, which I love to do, way better out there. It's incredible. You know, the height if if you want to be in high-tech or participate, it's the epicenter. Like like, I I wouldn't have enjoyed being a venture capitalist somewhere else personally. I think it's the place to be.

Some of the things that we've enjoyed about Austin that are different is, you know, the friends we meet and make are more diverse from broader industries and backgrounds. So you just end up with more diversity of thought and ideas and things that you end up doing. As I mentioned, the music's incredible and all our families here. So it's, and historically, it's also just been a little more chill. I think the food's a little better too.

So all those things. And then on the tech side, things are changing. Elon's made a, I think, a big impact by moving not one, but several companies here. And people like Joe Lonsdale and and, and Michael Dell's investing heavily. Like there's a, there is a renewed enthusiasm in Austin, in the tech scene that I think really wasn't there for the past couple of decades.

And the big question will be whether other founders come here. Many tech companies put stuff in Austin, but it's typically sales or customer support. Those people don't start new companies. And so if you want the evergreen thing to happen, you need founders to follow Elon. The state's doing some incredible things to attract that type of talent.

People that want to be disruptive, data center projects, semiconductor projects, Abbott's really leaning into kind of opening the doors of the state and inviting everyone again and making sure regulation is as low as it can possibly be. And that seems to be working. They also, you may have read in the city of Austin, made a bunch of YIMBY policy changes around housing and rent has fallen for the last three years. So there's a lot of policy stuff happening in Austin that seems to be working. It's very positive.

So that that's encouraging. On a lighter note, though, you you know, you said you love the music scene in Austin and even said that some of the food's better than the Bay Area. Staying with that theme for a second, I mean, what what about the music scene do you just love in Austin? Oh, you can go out just about any night and see something incredible. A couple weeks ago, this is a perfect example.

I think it was like two and a half weeks ago, we're watching a basketball game on TV, and we have a local text group of everyone that loves music. And Marcus King, who's this incredible young blues guitarist from South Carolina. I don't know if you heard about him, but he he's just incredible. Was doing a taping for Austin City Limits at the venue. Wow.

But it's better than than that. We were intentionally watching the game during that taping, but someone in the text group said, we think he's going to show up at C boys at midnight, which is a tiny venue that holds like 150 people. And so we get over there and about 12:15, he joins this band on stage, and by then there's 60 people in there. And he plays till 2AM. Oh.

That kind of stuff in Austin happens a lot, you know, all the time. That's amazing. So it's funny because you wrote a book, Running Down a Dream, How to Thrive in a Career You Actually Love. How do you view your time in venture versus what you're doing now in in terms of love, and and how does that tie into your book? Well, when I wrote the book, I had been reading a lot of biographies, and there were these three particular biographies I read where I noticed these patterns.

And a lot of people say venture capital is pattern matching. So this was that muscle, I guess, being exercised. And in the pattern recognition, and these, these people, one was a restaurant or one was a folk singer, and one was a basketball coach. So not your typical jobs and not venture, but they all, you know, started at the very bottom rung, and then they used many of the same kind of philosophies and processes and ended up at the very top of their field and all ended up, you know, spectacularly well financially. And I noticed that.

And I think in the back of my mind, I felt the same thing was true about my career. I made the decision early on with the project that I didn't want it to be a book about me. I would say 80% of the agents I talked to and 80% of the publishers I talked to couldn't get their head around that. Luckily, I found one of each who fully understood what I wanted to do. But as a favor to them, in the epilogue of the book, I do walk through my story.

And the book's full of stories by the way. So we have we alternate between profiles and principles, and the profiles are stories of success, and the principles are tools of success. I noticed separately from the biographies, a lot of the popular nonfiction writers of our time, the Kracauer's, Gladwell, Lewis are really great at storytelling and building stories into what they're presenting to you. And so I wanted that element in the book. And when we, it originally was a presentation when we adapted it for a book, me and, I had a co writer helping, we did research for like four years to find more of these amazing stories to help it really shine.

But at the end, in the epilogue is my story. And I do believe that my time in venture was my dream job, why I was put on the earth. I had a blast. It was incredible. And now I'm gonna go try and do some other things, including the book, to try and give back.

So it's my next chapter. How do you balance this notion of doing what you love and leading to an obsession that that essentially creates mastery? I mean, there are people that love, for instance, entertainment, but that doesn't mean they can sing, or that doesn't mean if you love basketball, that you can play basketball. Yeah. How do you take that love and turn it into mastery practical way?

What a lot of the there's a lot of stories, many in the book, where exactly that situation you describe is apparent. So there's an individual that has a real affection for a particular industry, but may not have the talent, especially if it's a talent based industry like music or sports or or acting. What I would really encourage people to understand is in most of those industries, the jobs that are not the talent are probably 10 to one, twenty to one, thirty to one. So there's these there's all these support roles in those industries. And if you really love those industries, you can find one of those, and you might, you know, be able to have a a career your entire life around something that you're extremely passionate about.

And so I there are many stories in the book. If people are are thinking that way, there are many stories in the book that reinforce that point. So when you look at the world today, and you look at AI and remote work and these different platforms, I mean, does passion matter more or less when you're coming up in today's world? Jim, I think one of the the big problems that we talk about at the beginning of the book is this John Haidt called it a resume arms race. But starting in about sixth grade, extremely well intentioned parents feel the pressure to start building the college resume of of the child.

And so you get everything from lacrosse lessons to cello lessons to and and their days are just full compared to when you and I grew up. Like the free roam children were allowed to just go do things on their own. That doesn't exist today. And what I fear is we just put them through this pressure cooker, and then it's all happening so fast that they don't ever have a time to really explore and figure out what they what they love, and what makes them happy, and what they might wanna, you know, explore. I I I think there's one test as to whether something, you know, would qualify for your dream job.

And that is, would you do external learning on your own and not consider it work? Like, is this something that you just have so much natural curiosity for? If you have free time, you're you're gonna wanna learn more about it. And I think that's a pretty simple test. And I think for the people that can say yes to something like that, they really should consider having a career.

But but I wanna get back to your question. Like, this pressure is really high. I think every parent that is doing it knows it feels uncomfortable, but they feel like they're supposed to do it. The colleges have changed to where now you have to apply to a major and and many colleges. So you're 17 and someone's like, what do you wanna do with your life?

And it all happens super fast. And most of the kids I talked to, they're like, I don't know. Like, they're being honest. Like, I don't know. They just don't know.

There's a ton of great data, Dave Evans book, Designing Your Life. Like, I I won't get the exact numbers right, but five years after college, like, forty percent of people have left the field that they majored in, and ten years out, it's like 60. So it's not like people end up in those jobs anyway. But I think AI is an interesting challenge because a lot of the jobs we thought were safe, like lawyers and engine cut computer scientists, those are the ones that are being challenged. And so I think I'd highlight it.

If there are no safe jobs or jobs that we I I think that whole notion of a safe job was part of the problem because you you're intentionally telling a young adult, you should do something where you can make money, and you're not encouraging them to have a career that they might have passion about. It's it sounds like it's the balance between the two, and that, you know, again, that I'm assuming your theory is that if you're passionate, the money will follow more so than if you're just kind of doing what your, you know, heart is not driving you towards. I think that's absolutely right. And, you know, there's certainly different industries where, you know, if you're successful in venture capital, you make a lot more money than if you're successful in music producing or something like that. So there is there is a difference, but there's all kind of studies that show money doesn't deliver happiness.

Right. And there's all kind of modern studies that show people are unhappy at work. The the recent Gallup polls are not great. It's like 59% of people say they're not really engaged at work. You know, it's, it's a huge number and it's a third of your life.

Like it's like 80 thousand hours. And if you can have fun at work, I'm just saying you should, you know, and it's not for everybody. Like I was talking to this, career counselor. She said, well, what what about, you know, what if you really love poetry? Or what if you really love gardening?

And I said, there's examples in the book of people like that. And they and I told them to her, you know, that gentleman did this and then he, you know, became a podcaster or started YouTube. And she goes, but that's really hard. And I said, absolutely. Like like, I'm not it's super easy to chase your dream job.

This book is if you want to work in a field that you love every day and be successful, I think I can help you do that. Okay. When you say you can help them do that, what does that mean? Well, this is just drawing from this this pattern recognition of watching other people. And so some of the things that I that I go through, I think there's prior art around, like, I have a a chapter on mentoring.

I talk a little in a lot of detail about how to be successful finding mentors, how to use aspirational mentors that you track and study. Learning is a big one. Most people don't study the history of their field. This is just a single tactical thing. In certain industries like maybe literature, you do, like it's built into the academic curriculum.

But in other fields, you know, no one requires that you go read up on the the historical legends of your field. But if you do that, it's highly differentiated. Imagine walking into an interview and there's 20 people and you're the one where it's obvious, knows the most about the history of the field. How do you think the interviewer is gonna see that? Like, that's just when you're trying to attract a mentor, if you're in a meeting and it's clear, you know, all the legends and their back stories, is that gonna differentiate you?

Absolutely. But no one teaches that particular path. Here's a great anecdote in the book. There's this major chess tournament, and they took a break and did a trivia contest in the middle of it on the history of chess. And of course, Magnus Carlsen won the trivia contest.

Wow. Doing that just would prepare you. You'll learn a lot too, right? In terms of why they're successful, but it just different. And then the other one, especially for young people, know what's current.

Like, if you're trying to break into a field, like, let's say you're trying to break into Hollywood. Okay. Right? Now let's say you understand social media extremely well, you know how TikTok works, you know how YouTube works. Compared to the other people that are inside that org, they don't know it and they probably have anxiety that they don't know it.

So if you know the history and you know what's really current, you become pretty valuable very quickly, and pretty interesting very quickly. So that's that's an example. There's a lot more, but that's an example. Okay. So using that as an example, when you were at Benchmark, I mean, how did you succeed, and what was your secret, and what did you learn?

There were a couple different things. One, when I was on Wall Street, there was a gentleman named David Kouras who was at a competitor. He had a fax newsletter. This is a long time ago. He had a fax newsletter.

And if you think about the job of a sell side analyst, most of the Wall Street Banks wants you to limit the distribution of that to your clients. And here he was faxing it to anyone that would take it. And what I learned in that moment is that that gave him extreme power. Cause he was sending it to the people in the industry. He was sending it to everyone.

And he retired about a year after I started. And like a week after he quit, I started a weekly fax. And that's what became my, my blog above the crowd. I send it to anyone and everybody. I went to this conference called Agenda.

That was the big industry conference at the time. And, like, Bill Gates was there and Larry Ellison was there. And they sold a, Palm Pilot, the precursor to kind of the iPhone. It was loaded with all the attendees contact information. So I bought one and put them all on the fax list and spammed them.

And so in a time based equivalency of maybe social media, you know, I built a reputation by putting my thought, you know, out there for everyone to see. Without that, I don't think I get invited into venture capital. And I would continue to do that blog throughout venture capital. I do it much less now, but I think that was a big part of what differentiated me. That's really cool.

And as you look at the world today, and you look at what people are ignoring or what they're getting right, is there any major misalignment that you're seeing? Well, I mean, I think at a high level, we're not taking the time to let young adults relax and explore. I don't think anyone's telling them, you know, okay, get it. It's fine. You're gonna get a biology major, but if a year or two out, you don't love it, you know, there's plenty of opportunities to move and change, and most humans do.

Like, take the pressure off so that they feel that they have the time to explore. We did an interesting thing. When we were researching the book, we started reading all the academic literature, and we couldn't find any really good work that had been done on career regret. So we did a we did a study with Wharton. I I actually did a survey on SurveyMonkey, and it was so shocking.

I wanted to do it with a proper statistical methodology. But we found that adults that went to college, if you ask them, if you could start your career over again, would you do something different? And 60% of them said yes. Wow. In Daniel Pink's book on regrets, there's this story about Jeff Bezos when he was trying to decide whether to launch Amazon or not.

And he used what he calls I think he calls it a lifetime regret optimization or something like this. But he asked himself, if he was 80, looking back, would he regret having quit D E Shaw or would he regret having not tried to build Amazon? And that's what made him say, well, of course, it's gonna be not trying this. In his book, Daniel Pink talks a lot about, boldness regrets. He said the ones that hang heaviest on people are what they didn't try.

Like people actually don't sit around, Humans don't sit around and kind of ruminate on the failures that they made. In fact, I think the human body and mind are are structured so that you try and convince yourself that that, you know, is in the past and behind you. But the thing you didn't do just eats at you, which is this boldness regret. And one of my big hopes of the book is that, is that people are given the permission to try something old that they may have felt wasn't attainable or wasn't possible for them. And to give them the confidence from the stories and the tools to, you know, the method and the motivation that they can be successful.

So that makes sense. And I love the idea of motivating young people and in a sense mentoring them to have more of a venture capital mentality, which is this willingness to take risk and throw your backpack over the wall. As a society, though, we from a macro perspective and when we talked earlier, you and I had a chance to talk before we did the podcast, we talked a little bit about the macro climate and the the amount of money that's gone into non bank financing and a venture capital. I mean, do you see us in a bubble right now, and is this easy money gonna come come to haunt us at some point? Well, I do think that there is a lot of easy money out there, and I have found that in the venture capital market, there are waves of, you know, it's just highly cyclical, and that it's super healthy when there's a correction so that people aren't out over their skis all the time.

And I think that was happening right around 2022, 2023. And this AI thing happened. I think the correction was preempted by this new wave of technology that got everyone excited again. I also think it's a much longer explanation than we may wanna go into, but the venture industry has evolved. When I first got started, not everyone understood network effects, winner take all.

And what we have seen with companies like Google and Meta and Amazon, like the ones that work, really, really, really, really work. And so now, you know, that that pattern has repeated itself enough, people with large amounts of money are willing to bet on the come much more aggressively, you know, in terms of both the amount of capital and the frequency of their capital than they would have in the past. That's why, you know, I thought when I was on the board of Uber that burning 2,000,000,000 a year was was unprecedented and scary as hell. You know, open AI is burning way, way, way more than that. There's an interesting book that my partner forwarded to me that I reread called Technological Revolutions and Financial Capital by Carlotta Perez.

The book makes an argument, which I think is is really fascinating, Jim, which is that when you have these these technology waves, and the book goes back hundreds and hundreds of years, the fact that it's real is why you end up with the speculation. So there's this big war right now in Silicon Valley. If you call it a bubble, they say you don't believe in AI, And like it's an either or. And what this book argues is, no, precisely because it's real is why you end up with speculation. Both financial speculators come running in because it looks like easy money, fast money.

But also, and we've seen this in Silicon Valley over and over again, speculative entrepreneurs rush in. So people maybe that really don't have a business being there, but they see the money and they wanna do it. And if you look at all the data center projects popping up and the people that are attached to them, they're not, you know, there's a lot of a lot of speculation out there. But I don't think it means the wave's not real. I think it's because the wave is real.

Does that make sense? Absolutely. And so what I hear you saying is that we have to be patient. Meaning, that when the dot coms got ahead of themselves and blew up, that didn't mean there wasn't gonna be room for Amazon down the road. Just like this, it may whether or not it's OpenAI or Perplexity or Grok, we don't know who the winner's gonna be or if it's gonna be a winner take all, but there is gonna be creative destruction to get there.

Yeah. And I unfortunately, I personally think that someone in the value chain, and I I guess I'd have to put it on the auditors at the Mag seven, allowed from the very early days of AI, you know, they allowed this thing where Microsoft invested in OpenAI and then OpenAI, you know, spent back on Microsoft. And I just I think that type of activity has become so prevalent in the game out there. And then there's things like Nvidia, you know, investing in CoreWeave, who buys Nvidia's products, and then Nvidia committed to buying up excess services from CoreWeave. Like these things are undecidedly in the gray zone, but maybe maybe beyond the gray zone.

And if it had all been stopped early on or if the auditors had raised more red flags, I think once, you know, two of them do it, then the other one's telling their auditor, well, you know, they're doing it. We have to do it. You know, that kind of thing, and it becomes pervasive. But when the dust does settle one day, it won't be hard to write the story about why, and they're all gonna point to these practices. Like, I I have, like, 99% certainty on that.

Yeah. That makes sense. So be careful is what I hear you saying that there will be winners. And if you look at your Amazon investment today, it's done fine. But if you look at some of the earlier ones like e toys, not so much.

So diversify, be patient, but there is gonna be some real destruction here because it sounds like what you're saying is from an accounting perspective or otherwise, we are really kind of all in on this insidious kind of you scratch my back, I scratch your back. It's not the same thing as real revenue. And so with the bottlenecks expected because of energy, because of the bottlenecks just in terms of how quickly this really grows, there is gonna be a day of reckoning. Yeah. But it it also accelerates success.

So, like, I wouldn't run out and short any of the big players in the in the market. Right? Because while they're allowed to do it, it causes growth rates to actually be higher. What I would avoid, you know, because we talked about how to track speculative behavior. I would avoid an investor that hasn't been in high-tech or venture that comes to you with an SPV for this sure thing AI thing.

I would avoid that like to play. Right. Like, I would run far away. Right. That makes sense.

You've lived through these multiple boom bust cycles. And so, in terms of timing, if you had to guess, and I you know, we we here at the Puck, we're trying to talk about where where is the Puck going and so forth. I mean, is 2026 gonna be the year that some reality comes back to the markets, or is this gonna go on for a few more years? It's a really hard question to answer, Jim, and I I'd be doing you and your listeners a disservice if I if I pretended to have some amount of precision on that. The fact that these, programs that I just described are allowed to exist makes the question harder.

But a couple of things I would say. One, the major startups, both Anthropic and OpenAI, are publishing five year forward forecast. They're remarkably aggressive. One analyst I know went through a database of all historic companies, and the OpenAI plan would be number one. So they're gonna do better.

In order to meet the investor expectations already on the table, it has to be the highest growth company of all time. Maybe that's good news and bad news, but that's certainly a way to set yourself up to trip, right? When you print those things. Historically, startup companies didn't print five year forecast. I used to tell this to founders all the time, Value valuations represent discounted future expectations.

So you think you wanna raise money at a high price, but you're setting yourself up, right, to disappoint somebody at some point in the future. I also think the data center build out will inherently miss expectations on timing because there's I did this speech many years ago, titled backhoes don't obey Moore's law. And it's really the same thing. Again, instead of fiber in the ground, it's just like building these things and getting the energy attached. Like, doing that on time, having them all do it on time Right.

When there's gravity involved, I don't think that'll happen. Why do you think they're going out with these five year projections? I guess to rationalize the valuation. Once you raise money, I mean, there's something in private company evolution that most people wouldn't have a reason to know, but the the the structures are set up in a way where it's super easy if your next round is always at a higher price. But if it ever has to be at a lower price, you'd much rather be public than private.

They're not very flexible. And they have things that they have ratchets and things that kick in if you start doing down rounds, and then the just the expectation of the community. So if you're constantly trying to engineer an up round and raise more and more money, I think you get caught up in a game where they say, well, if you're gonna be at that valuation, what's gonna happen. And then you start printing these forecasts. Makes sense.

I mean, even public companies don't present five year forward forecast. It's kinda crazy. Yeah. It seems to be as well to me. And, you know, when you're looking at people wanting to create massive wealth, young people, you know, they're not buying homes until they're 40.

There there is this desire, I think, to look for shortcuts. You know, you can be early to a cycle. You can be late to a cycle. Again, you're not saying that this is gonna come down anytime soon. But on the other hand, if you're a young person a day and you wanna kind of participate in the new economy, do you buy any of these AI stocks at this point?

Or how how do you or do you look for the next wave after there's a correction? Well, let's talk about two different things. Your your kinda investment and savings, you know, for your life versus your personal time. If you are a any human out there, I would encourage you heavily to lean into AI and whatever it means in your field. And we evolve with our tools as humans.

You know, there's this great story about I'm blanking on the name, but, oh, this Bjorn Borg, he retired very early and he tried to make a comeback in his late thirties, but he carried his old wooden racket and the whole industry had switched to the big carbon fiber thing. And he got dusted. Like, you don't you don't wanna be carrying around a wooden racket. Like and so AI is a new tool. It has applicability in almost any industry.

And so with your personal time, at least, I'd be, I'd wanna be the person in the office that knows the most about it and has played with it the most. Like, I would just heavily encourage that. From an investing standpoint, I just don't know how anyone could really find edge at this point with the price points on the rounds that are happening in the private companies. And if you own the S and P index, you're already exposed to AI in a pretty major way, and you're up 16% for the year, so you're doing okay. Right.

For sure. So I probably wouldn't try to I personally optimize your investment account for AI. So be patient and maybe buy in when it really does settle down and you start to see the winners are. Yeah. This stuff's real.

If there's a reset I mean, I I think back to those .com days, the big mistake we made was, like, not backing up the truck after the correction. Right. You know? I remember this company, Equinox, was in pitching us for a pipe of private investment in a public company. The stock was, like, at a buck.

You know? And today, that company has worked a 100,000,000,000 or something. Like and we could have done it. Just as when positivity and optimism are contagious and when you have a correction, negativity and fear are contagious. And, you know, Buffett talks about this a lot.

You gotta be an optimist when others are fearful and fearful when others are an optimist. And that's very hard to do psychologically. So if you were to write a chapter for Running Down a Dream, kind of for The US economy, what would your advice be? This is more your field than mine. It'd probably be multiple parts.

You know, one, we have a number of important industries that have been captured from a regulatory standpoint. I gave a talk at the all in conference a few years ago on regulatory capture. It's twenty minutes. If people don't know what that is, they could go watch it. But I think when you look at health care, maybe finance, although stablecoins may be disrupting that finally.

Health care is a big one. Education. We've got problems that we need to kind of figure out how to address at a core level. And I don't it's gonna take some pretty big changes to fix them. And so I I hope that happens.

The second thing is, I think we we've gotta be comfortable with building. Now there appears to be almost a state by state competition on this front, and it looks like Arizona and Texas are winning in terms of getting the red tape out of the way and bringing investment here. And I'm that gives me optimism. I'm hopeful about that. I fear this will be my third part.

I've probably been to China six times, and I know a lot of people over there. I just went recently. I think I have a very kind of pragmatic view of what's happening there. I think vilifying China as a backdrop without much knowledge of what's real is a dangerous mindset for policy. I just think having having as much information as you can, as you adopt policy versus bringing a 50 year old, oh, they're communist, you know, they're evil kind of mindset.

I I just I think you're gonna affect the wrong policy doing that. So what I hear you saying is that when it comes to health care, education, again, even our relation with China, we need more critical thinking. We need more strategy, more venture capital, entrepreneurial thought process because we've really got to attack these large issues in a really, really creative way and and acknowledge that there are challenges, but that there are solutions. Yeah. In health care, it's particularly difficult because it's so insidious as it's set up today.

And I think it's gonna take some big bold change. Like I my favorite one I'd love to see is allowing our employers to get out of the game. We're the only country in the G 20 where the majority of health insurance comes from your employer, And it's a reluctant third party participant. There's no reason your company should have to hire someone to run your health insurance program, but they do. They're not a shopper.

They're not they don't know what they're doing, But I think you probably need three things like that to really shake it up. Does that mean, like, you'd move to, like, a single pay government run big insurance program? The irony is, you know, I'm a capitalist, and, you know, a lot of capitalists would would get horrified by what you just suggested. But in some ways, we're the worst of both. We, you know, we spend more government money on health care than many of our peer countries that have better health outcomes.

I'm talking about just the government part. Right. Not the part that that our employers then spend on top of it. We're like two or three x some of these other countries Right. On a per capita basis, but we're already spending more than they are.

So you say single payer, well, we're kinda already doing it, but no one wants to admit that. Right. There there's some real I hope to, as I move forward, spend more time on these issues. Maybe I can come back and talk to you about them after I do, but, after I get the book launched, I'm hopeful I'm gonna launch a policy institute and think about these problems a little more. Well, we definitely will have you back to do that.

On this policy stuff, I mean, I really do think that our generation and people that have been successful in building companies really do have to tackle these big issues like how do we build more housing and balance the environment? How do we build high speed rail? How do we actually, for the first time in the history of the world, where we've got this real health care expense. How do we balance that, especially when you look at the bell curve and you got a lot of people at the top and not enough young people at the bottom? And so, I mean, I think these are daunting challenges that I'd love to see people like you working on policy and try to institutionalize that and pull people together to work on it.

In addition to what you said, which I agree with, I'm on the board of this think tank called the Santa Fe Institute, and the president there gave this speech about the whole institute focused on complex systems, which I call kind of multi variable nonlinear systems. But the the health care systems one, the financial systems one. He said if you wanna change a big complex system, the only chance you really have is to identify a really small agent that knows how to infect itself in the system and propagate. It's kind of a Occam's razor kind of mindset. And that's really appealing to me.

You know, how do you make and I'll give you a great example, which is, I wish we could back up on the whole EV thing and just double the gas tax. Like, I think it's a much simpler policy. It creates all the same outcomes that a EV subsidization does. It has much less kinda crooked, you know, fraud stuff that happens. And guess what?

It's a revenue creator for the government instead of a revenue sink. So you get all the same outcomes, much less work with a much simpler agent. And so how do you find that kind of equivalency for many other problems and industries? So I love that. So let me give you let me ask you two questions.

So if you took that same approach to health care, for instance, what about if you just said, okay, we're gonna do healthcare, but it has to be actuarially sound, just like life insurance or fire insurance. And so, you forced whatever insurance, whether it was Medicare, Medicaid, Blue Cross, whoever was providing the insurance, that it had to be actuarially sound, and so you had to make the hard choices. Is that consistent with what you're saying? Maybe. I just don't know if it's enough, you know.

And I would get the employers out. I'll give you what I've heard other people suggest their ideas. Some people say we should only have catastrophic and we should make cash pay for everything else. With our car and our home, we don't have universal coverage. You don't call up and say, hey, the drain stopped.

You know, you don't call your home insurance. And so they may make a ton of sense to just think about health insurance as catastrophic Interesting. And not the rest of it. And then you'd have much more competition around cash pay for your everyday, you know, health needs. And there's plenty of entrepreneurs running urgent care facilities that are much more consumer focused than your general prec your average general practitioner is.

That could be one. Apparently, somewhere along the way, they told doctors they couldn't own hospitals, which is just really nutty. And so that would unlock just reversing that change would unlock quite a bit of competition that we've somehow axed off today. And those doctors say, can a lawyer own a law firm? Can a banker own a bank?

Like, where where did this come from? I don't even know where this state come from. There's another problem that's more, I think, really difficult because of who it involves, but the vast majority of the large universities in this country have developed these massive health care institutions. And the way those companies are evolving and expanding is a detriment to the overall system, not a positive. And it's really difficult because everyone in those communities knows the people associated.

The best doctors are associated. If you're older, you want access to those places, and so no one wants to shine a flashlight on them and say that they're part of the problem, but most of them are expanding at a frantic rate. They're buying up practitioners in the region. They immediately put them on their pharma, on their imaging, on their labs and on their price schedule with the insurers, and they raise the cost for everyone as they roll more in. Maybe it's not intentional, maybe it's just self optimization, but you gotta reverse that as well.

California had a hard time has had a hard time building house high speed rail. Young people in these big cities are having a really hard time buying the house. And when you talk about Austin where you're living now, my understanding is there's plenty of housing. Is it simply a matter of land? Is it environmental regulation in sequel?

I mean, what do you see as the biggest difference? And as my wife says, oh, just wait. Texas is gonna have all these problems because they're allowing all this building and stuff, or is that just naive liberal thinking? I mean, what what do you see as somebody that's lived in both places? Well, I think there's plenty of land in Texas, so they might run out of water or energy, but they're not gonna run out of land.

Yeah. I'll tell you that. One thing I'm super excited about, which I think happened from me learning more about China. So Dan Wong wrote this great book, Break Net, if you haven't read it yet. It's a modern book about China and why China is striving and some of the problem.

But one of the reasons it's striving is the provinces are highly competitive with one another. So the public bureau puts out a five year plan and the leaders of each province tries to out execute the other province, and you end up with massive competition. People that think that China's kind of top down state imperialism don't understand this component. There's actually a massive amount of invisible hand competition that happens because of the way these provinces compete with that. And it made me realize one of the things that could really help The United States is to shine a light on state versus state competition.

And, you know, if it's working somewhere and not working somewhere else, there's a lot that can be learned from that. I've certainly tried to amplify this Austin rent thing because there's other parts of the country where they're saying, oh, you you know, there's the housing, homeless, and they all implement these policies that don't end up successful where they're spend, you know, spending, trying to build individual units instead of, like we talked about earlier, creating an agent that allows the the system itself to go build. And so were the builders in Austin happy when they increased the number of, you know, quadruplexes you could put on a half acre lot? No. Because it's gonna mean more competition.

But it didn't mean they stopped building? No. That, you know, you ended up with with more building, not less. So I'm highly interested in this idea of state versus state. And I don't think it's a right left thing.

Like, I I think Shapiro in Pennsylvania has been doing some things to move red tape out of the way as well. But it'll be interesting to see, what if one state can this one just an idea I have in my mind. I don't actually know how it would happen. But what if one state just started paying the best k through 12 teachers 50% more than any other state? Like, that'd be a pretty interesting dynamic.

Yeah. I mean, we have I talked to my brother about this. I mean, we have theoretically 50 incubators, and, you know, a lot of people are moving from New York to Florida. A lot of people are moving from California to Texas or Nevada. I could not agree with you more that, you know, if one of the states gets health care right, one of the states gets water right, one of them gets environmental right, I I haven't really spent any time looking back historically as to whether or not that's happened in the past, but you you would think that it would have happened in the past.

And for a long time, people looked at California and Jerry Brown and Pat Brown in building our universities and our highway systems. I guess I am cautiously optimistic that when Austin and Texas has certain successes or Florida, that New York and California will will look at at the successes and so forth. Yeah. And I think it's possible through mediums such as this to amplify the success and failures in these situations. So maybe this will be something I spent time on in the Policy Institute.

I really, I love the idea. I like how you describe it, 50 incubators, you know, competing with different ideas. That's exactly how you get innovation quickly. Well, I gotta give credit to my my younger brother, but he he's the one that came up with a 50 incubator line. But Idealab had you know, was an incubator.

I do like that idea of that, and and so I encourage you to do your policy institute. Well, Bill, look. This was fabulous. Thoroughly, thoroughly enjoyed this and and certainly understand why you were a successful venture capitalist. And I think people should really read your book and recognize that you're a guy who has has walked the talk, so to speak, and and the valuable lessons you share.

So thank you so much for coming on today. Appreciate it. The POC venture capital beyond is produced by CMG advisors. If you enjoyed the conversation today and haven't yet subscribed to our show, you can find us on iTunes, Apple Podcasts, and SoundCloud. Feel free to leave a review while you are there and maybe even a five star rating.

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