![]() ![]() They weren’t charging enough for the service level.” “When bubbles come along, almost anyone can raise money. It wasn’t that the consumer proposition didn’t work, it was that the economics didn’t work. And I remind entrepreneurs all the time that Webvan had the highest NPS scores of any company I’ve ever known. And if you give consumers more value than you charge them for, they will love you. You can create infinite revenue if you sell dollars for 85 cents. And there’s this old saying about selling dollars for 85 cents. And then what they do is they start selling them heavily discounted. And a lot of times those involve consumer products. One of the things that Silicon Valley does when it gets risk-seeking, which it did in ’99 and now, is they invest in businesses with lower and lower gross margins. And so there’s something about human nature that causes us to be increasingly risk-seeking until someone comes along and really punishes everybody.” “I’ve got an unwritten blog post about unit economics. ![]() Silicon Valley and venture capital have always been cyclical. And so I don’t know that any one person is responsible. So you’re forced into a game of capital warfare that you may have not been ready to play. You might as well lock the door and leave the building. What do you do? You could sit around and say, ‘We’re going to get to profitability,’ but you’re not going to matter. So we’re in this company HortonWorks, it’s a Hadoop company. I like to use the example of Hortonworks and Cloudera. “I think everybody, to a certain extent, has to play the game on the field.In the notes that are always at the bottom of each post I have assembled a collection of other videos of Gurley, including a particularly insightful interview by Om Malik: As part of my effort to make amends, set out below are a few quotes from a fantastic recent ReCode interview of Gurley by Kara Swisher and my usual commentary. I am now up to as much as 4,000 words on some posts since people seem to be actually reading them. So I feel like I owe Gurley and some other people who I wrote about early in this 25IQ series an addendum. When I wrote my first blog post on Gurley for 25IQ I was limiting myself to 1,000 words per post. For example, Gurley was the person who pushed me to start using Twitter and from that came my 25IQ blog (my effort to pass along a little of what I have learned before I am dead). But I have maintained my friendship with Benchmark over the years and have continued to learn from them. Unfortunately, the Internet bubble would eventually pop and that would put everyone into firefighting mode for a few years. Learning from Gurley, Bruce Dunlevie, Andy Rachleff, Kevin Harvey, Bob Kagle, Steve Spurlock and David Beirne was a dream come true. I learned as much from the Benchmark partners during that time as I have from anyone ever. The time I spent co-investing with Benchmark for Eagle River was as much fun as I have ever had in my career. It was the late 1990s, the Internet bubble was in full swing and mobile was thought to be “the next big thing” in Silicon Valley. As fate would have it, I was sent by Craig McCaw to spend time with Benchmark Capital not soon after Gurley arrived as a partner. We kept talking when he moved to Silicon Valley, including the time he spent at Hummer Winblad Venture Partners and then on to Benchmark Capital. Gurley was a sell-side analyst living in New York at that time. I then found a way to for us to start talking by phone and the Internet. I immediately signed up to receive it (by fax!). I started my friendship with Bill Gurley in the mid-1990s soon after Bill Gates forwarded me a copy of Above the Crowd. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |