Newcomer's Greatest Hits: Above the Crowd
Revisiting an exclusive interview with Benchmark's Bill Gurley
In celebration of Newcomer’s second anniversary, we’re re-running a few of our best stories that you may have missed.
This interview with Bill Gurley was the first-ever story behind Newcomer’s paywall—it features all the character and gumption you’ll find in one of Silicon Valleys’s most perceptive investors.
At the bottom of the post, I include a few reflections on what Gurley had to say with the benefit of hindsight.
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This story originally ran in January 2021.
Over the years, Bill Gurley has nudged me to pay attention to his various pet crusades in DMs and WhatsApp messages. These days he’s obsessed with the flaws in the IPO process. But he’s always just read something new or is mulling some theory about the world. I remember tearing through Billion Dollar Whale on his recommendation. It was as if he had assigned me a book report. Once I’d finished reading, I sprang back to our message thread to give him my thoughts. We really got to know each other as I covered the Uber beat for Bloomberg. I’ve sat down with him over the years in Benchmark’s offices in San Francisco and in Woodside. When I was thinking about quitting Bloomberg to start this newsletter, he was the first VC I asked for advice.
Still, whenever I want him to talk on the record — maybe this is in my head — he always seems momentarily leery. I imagine him wondering, what annoying moment from the Travis Kalanick saga am I going to dredge up? What crusade of my own am I trying to drag him into? I do think there’s a different persona that emerges when a reporter goes on the record. Suddenly, I’m a conduit for things readers ought to get answers to, not just continuing some running, off-the-books conversation that we’ve been having. (I see this newsletter as an attempt to bridge those two personas.)
Whatever reservations he might have had, when I explained that I needed a killer first post timed to putting up the paywall, he messaged me, “What’s most helpful?”
So, we talked for an hour-and-ten minutes Thursday, plus a few extra minutes spent anxiously figuring out how to download Zoom recordings off the cloud, with Gurley suggesting that he might ping Zoom CEO Eric Yuan to get it figured out. Thankfully, we got it sorted out on our own. Gurley was wearing a t-shirt with an Eagles football team logo, but he made sure I wasn’t publishing the video anywhere. “Someone gave me this shirt. I don’t even like the Eagles,” he said.
The mysterious provenance of his t-shirt is one of the few things we did not cover in our conversation. We talked about his future at Benchmark and whether he’s retired. I asked him if he’d been wrong about Uber’s food delivery business and he gave his perspective on Dara Khosrowshahi’s performance as the turnaround Uber CEO. I asked Gurley about the much-discussed California exodus. He toyed with the possibility that he might move home to Texas. We dug into his direct listing hobbyhorse and I wondered if he’s been a bit too charitable about SPACs. He said he didn’t know whether his friend Chamath Palihapitiya’s run for governor was for real or not, but he hopes it “scares the shit out of these institutional bureaucrats in Sacramento.”
Gurley correctly guessed what my first question would be: What is his take on the whole Robinhood/Wall Street Bets/GameStop fiasco?
“My first emotional reaction has been fascination. Two weeks ago, I grabbed my 18-year-old and said you’ve got to give me a Reddit demo. I need to know everything,” he said. Gurley has logged on to the Wall Street Bets Discord and listened to the live discussions to track the stock market speculation. “Not because I have a stake in it, but because of pure curiosity,” he said. (Benchmark does have a big stake in the technology platform Discord. The company banned and then reinstated Wall Street Bets this week.)
I asked Gurley if he thought there was a clear hero or villain in the saga. He said he didn’t think there was – but that was part of the charm. “All of a sudden Chamath and Elizabeth Warren are on the same page,” he said. “It’s not populist left-right. It’s populist-populist.”
Was Gurley on team populist himself?
“I hate regulatory capture,” he said. He objected to Robinhood’s business model outright. (The company sells its customers trades to market makers like Citadel.) “If that were fixed, Robinhood may not exist and you end up in a place where this may not be happening,” Gurley said. He said that he thought the way the financial markets are structured is deeply flawed. “There’s a ton of crap that no one knows about that’s dark, that’s scary, that shouldn’t exist. And if it didn’t exist, I don’t think we have this episode that we’re having today, so to me it would be great to fix that stuff. So, from that point of view, I’m on the populist side.”
We both agreed that there’s a lot we still don’t know about who is mostly buying GameStop shares. “In my circles, the big whisper the past four or five days is that the other hedgies then just piled on to pick on Melvin,” Gurley said. “The sharks have always killed the minnows in these gambling environments. The minnows rose up and took down a shark and the other sharks started eating the shark as well,” he chuckled.
But Gurley marveled at how it all felt like a work of fiction. “It's so fascinating. This is something Neal Stephenson would have loved to have written. Brian Koppelman, at Billions, would have loved to have done this two years ago,” he said. “It is a version of what everyone got upset about with Facebook and Trump in the election in a different area. It could have maybe been predicted and would have been an amazing novel: The anarchists in Wall Street Bets taking down the hedge fund Melvin – it’s salacious.”
I asked Gurley, “Just to put it very simply are you pro-SPAC: Do you think this whole SPAC thing is a good phenomenon?”