Bill Gurley & Michael Mauboussin - Putting Theory into Practice - [Invest Like the Best, EP.370]

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Invest Like the Best

Key Takeaways

• The question to consider: Does AI help the strong get stronger, or does AI allow for new businesses to emerge and disrupt the incumbents?
• The top five technology companies are spending 2x on capital expenditure than the top five energy companies
• Companies should strive to increase the consumer’s willingness to pay
• “Regulation is the friend of the incumbent.” – Bill Gurley
• Venture capital is one of the few asset classes that has high persistence: the past winners tend to be future winners
• Develop a framework that allows you to benefit from the group dynamics of pattern recognition, but that does not tie you to one specific type of pattern
• Instead of nit-picking how an investment may fail, make the primary focus of the discussion: “How big could this be?”
• Investors must capture the extreme events if they wish to outperform
• The sharpest minds desire to know where they are wrong about something

Read the full notes @ podcastnotes.org

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My guests today are Bill Gurley and Michael Mauboussin. Bill is a General Partner at Benchmark, and Michael is the Head of Consilient Research for Counterpoint Global. While they are longtime friends with one another, I’d never heard them appear somewhere together so it was a real treat to be able to do this with the two of them. They are two of the leading minds in their fields, and we combined their decades of expertise into one wide-ranging conversation. We discuss the different kinds of increasing returns to scale, the issue of regulatory capture, AI, and hardware. Please enjoy this great conversation with Bill Gurley and Michael Mauboussin.

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For the full show notes, transcript, and links to mentioned content, check out the episode page here.
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Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes.
Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more.
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Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes:
(00:00:00) Welcome to Invest Like the Best
(00:03:38) Dissecting the Dynamics of AI, LLMs, and Market Disruption
(00:05:06) The World of AI Investments and Market Trends
(00:08:13) Integration of New Technologies in Business
(00:15:27) The Power of Increasing Returns and Strategic Investments
(00:22:26) Unpacking the Role of Intangibles in Scaling and Innovation
(00:28:54) Transformative Potential of Open Source and Idea Recombination
(00:34:42) The Complex Landscape of Regulation and Innovation
(00:43:17) Today’s Venture Capital Ecosystem
(00:47:08) Impact of Fewer IPOs and Private Market Dynamics
(00:50:38) Capital Allocation in Zero Interest Rate Environments
(00:54:44) The Evolution of Venture Capital and High-Stakes Investment Games
(00:57:21) Exploring New Frontiers: AI, Energy, and Physical World Innovations
(01:01:14) The Power of Learning by Doing
(01:17:49) Working with Genius
(01:26:47) The Value of Teaching, Writing, and Sharing Knowledge