Audio Of The Week: Kara Swisher Talks To Bill Gurley
Regular readers know that I am a big fan of Bill Gurley. He and I are in the same generation of VCs. We started our careers in the PC era and learned VC in the first generation of the Internet era. Bill and I also bring a “fundamental investor mindset” to our work which is not the only mindset in the VC business. We’ve never worked together on an investment, which is too bad, but I have tremendous respect for Bill and all of the partners at Benchmark.
Kara Swisher got Bill to do her Recode Decode podcast recently and they cover a lot of super interesting territory on it. Here it is:
Good choice of interview! I listened to some parts twice this past week. Bill Gurley is such a great conversationalist. What stuck in my mind:1/ Uber ain’t going public anytime soon. Everybody is gunning for them, not just the regulators. 2/ Idea for Twitter: to allow its users to follow specific interests.Finally, note that the “bubble ” in the title is a link bait. There is just a bit of bubble talk in that interview, but most of it is covers many other topics.
.Uber is a victim of believing its own press clippings. It has gone over from offense to defense. You don’t win on defense though you can win with defense but only if you have a damn good offense.At the end of the day, it’s just a ride. They’ve overplayed their hand.Hubris.In China, they learned a valuable lesson from centuries of coolies.JLMwww.themusingsofthebigredca…
If Uber folded in China, it’s a big lesson for any tech company. If you don’t play by their rules, you don’t play.
.”IF”?They got the chow mein but no egg roll. They got rolled by the Emperor.[Do you think that statement is offensive? Did I manage to offend anyone with that? I am very sensitive to that these days.]JLMwww.themusingsofthebigredca…
As you ask, personally I do not like the ref or centuries of coolies comment, find them crass/derogatory
.Now, THAT’s a load off my mind. I was worried I wouldn’t offend anyone today. It being Saturday and all.There is nothing that guides my fingers on the keyboard more than the notion that somebody might not “like” something I write.Thanks for sharing.Who knew that centuries of coolies were so sensitive?Be well, friend.JLMwww.themusingsofthebigredca…
IMO Its all about mindsets:https://medium.com/@radfagg…
Is that an official Texish term, or just dialectic?
Chow on this, https://uploads.disquscdn.c… – Chinese version of my book. (Your English copy is in the USPS mail, I will send it from Chicago on Monday)
.Don’t worry about the timing. Worry about the inscription. I am headed to Colorado for an indeterminate period of time to reward myself with some cool weather. I deserve it.Be well and congratulations! You are big time and I knew you when.And, of course, thanks for the book. Roanoke.JLMwww.themusingsofthebigredca…
Looks to me like Uber is in the taxi cab business but where, mostly due to smartphones, Uber has some advantages for some customers in some locations.Otherwise the taxi business is old and geographically local and tough to replace with something world wide.That taxis will replace cars? Maybe for a small fraction of people with cars in a small fraction of locations.Otherwise, that taxis will replace privately owned cars is to me just absurd. Main reason: Cost per mile for cars is high, and for taxis, short of self-driving (which I believe will prove to be important only in a niche and otherwise from small down to zero), it’s necessarily much higher. Also huge reason: With a taxi, except in a tiny fraction of situations of cars, have to wait too long from the call to the taxi — from some fundamental issues in scheduling theory, this has to be the case.. There is also the issue of people commuting to work — usually can’t hope to do that with taxis.I suspect and admit that I am at least partly wrong. Where am I wrong?
Also cars serve a storage purpose for many people that ephemeral vehicles can’t. And if cost were the only factor driving people’s decisions they wouldn’t pay to dine in fancy restaurants or spend money to go to live events they’d watch them on TV (only two examples).People do all sorts of things depending on their needs. Fred rides a bike in the city when he could afford to have a car and driver at his disposal. I am sure he’d take the bike even if they car and driver were provided at no charge. My wife wants to make me dinner every night but I often find it fun and relaxing to make my own actually. (Slowly easing her into this especially after she overcooked the scallops the other night..) The wash I have no problem with her doing that. Otoh, with my ex wife I did the wash, simply because she would fold the clothes in the kitchen while she was on the phone and they would smell from the cooking. This was back in the day of landlines.Bottom line: Not everyone is lazy, some people actually like to chop wood and do work. Some people like to be in control of the car. For example I’ve never had a wife or girlfriend ever drive me. The only exception is hopping in the passenger seat to go to the part of the parking lot where my car was parked. Last time might have been my mother when I was 15 I guess.
Ah, scallops! When I was first out on my own, I wanted to be able to cook at least some good food. So, I tried. I got a few good results. One of the best was scallops!So, get some French white Burgundy wine, that is, from near Macon, right, from the Chardonnay grape. Lots of people grow Chardonnay, but the French stuff is dry, that is, with low sugar, crisp, that is, with some acid, and clean, that is, some delicate, good flavors and no off flavors.Get a pot, likely stainless steel. Add the wine and some of the usual suspects — bay leaf, parsley, thyme, garlic, a few pepper corns — and some light fish stock. To cheat on the fish stock, use bottled clam juice.Get that mixture, a court bouillon, up to a simmer, give it a few minutes of simmering, and then poach the scallops until the outsides have changed from glossy and translucent to a flat, opaque white. Also continually test the scallops by cutting one open each few seconds and looking at the centers. When the raw parts in the centers are getting small STOP the cooking! Dump the mixture into a strainer or colander set in a bowl or pot. Right, put the solids in a bowl, pick out and discard the bay leaf, and cover the bowl to keep the scallops from drying out.Strain the poaching liquid and reduce, a LOT. With flour and butter, make a white roux, add the reduced, simmering poaching liquid all at once, and off heat whip. Mixture will be thick. Add simmering milk and whip. Then add whipping cream and whip. With simmering, add egg yolks and whip. Simmer. Add salt and lemon juice to taste. If want more, add soft butter by tablespoons and whip. Combine with the scallops and serve.Usually passes the KFC test!So, the sauce is a hot custard. There are some issues about how to heat to what temperature, etc. such a custard. When my startup works, I may return to that issue!Right, serve with more of the wine and some French bread.My usually highly proper mother used her finger to get the last of the sauce! KFC test and more!Somewhere I have all the amounts.
I’ve often had girlfriends drive us around. It makes them think they’ve in charge, which can be helpful.
It will start with the young and the old. Young people in large numbers aren’t getting drivers licenses. They love tech and the idea of a driver-less car always being available at their beck and call to chauffeur them around will be attractive.How many old people are driving longer than they should because they prize their independence? It will be much easier for their family to convince them to let someone drive them. Importantly here because a lot of the elderly aren’t using smartphones if for Uber to adopt and let them call for their rides.That leaves us boomers, we like driving and prefer it. I can remember my dad telling me that my grandfather grew up on a horse and even after getting a car he never really adopted. He always preferred a horse, was a poor driver and was very hard on his cars which were always in the shop. We are the bubble generation but those following us will laugh at our fondness for such manual labor as driving yourself around.
> It will start with the young and the old.Taxis have been around going way back in the history of cars and even horses. Your claim could have held way back there but mostly didn’t. Mostly the reasons were high costs and low convenience.There are some niches where taxis work much better than elsewhere, but the issues of high cost and low convenience remain show stoppers outside of the niches.Self-driving could help with costs. But I believe that self-driving will work only for a few niches and won’t work well enough to be a game changer for taxi usage. Also, except in dense areas, some fundamental scheduling math says that convenience will always be low except in niche cases where prices will be very high, too high for wide usage.IIRC, Uber is losing a lot of money. I don’t think they will be successful and, instead, will shrink back to basically just another taxi service or just go out of business.Some of the dreams about Uber are from some very old, especially wealthy, dense areas of NYC, bitterness about private cars. Get outside of dense, wealthy areas of Manhattan, and the bitterness fades quickly. Get 100 miles away from NYC, Boston, DC, SF, LA, Chicago, and a few others, and the bitterness is 99 44/100% GONE.Instead, there are many tens of millions of people who very carefully buy private cars and light trucks, take very good care of them, and put 100,000, 200,000, 300,000 miles on them. Taxis as a replacement are a total non-starter.Net, a big company in the taxi business is just moonbeam dreaming. In particular, for making money, Uber will be limited to a special fraction of relatively wealthy people in dense, high cost of living, major cities.
I live on the edge of a small city. Most trips I make are within 8 miles of where I live and work. I don’t want to give up my car just yet but have mused how easy it would be. When I make my twice monthly trip to Detroit I’d easily take mass transit if it existed, in fact it’s in the planning stages for that exact route.I think the winners are more likely to be the Big 3 than Uber and Lyft. Ford’s chairman has stated that they’re in the transportation business going forward, not just in the car manufacture and sales business.What if Ford offered me unlimited rides within fifteen miles of my house for say $300 a month? How would Uber compete unless they started manufacturing cars?FYI I prefer Tim O’Reilly’s term of alpha geek instead of moonbeam dreamer ;<)!
Okay, definitely be a “geek”, that is, a geek with arithmetic and, then, some knowledge of queuing systems.For the arithmetic, a taxi service has to pay for the car, licenses, insurance, maintenance, fuel AND a driver. Add up all that, and you can do the same from a little cheaper to much cheaper. E.g., you can drive your personal car for 200,000 miles, and a taxi service will want you to have a car in better condition. E.g., you put in only mileage for where you are really going, but in all but dense locations with relatively wealthy people, a taxi necessarily has a lot of dead head driving.So, net, taxis cost too darned much: At whatever prices a money making taxi service charges, in nearly all locations you can do it cheaper for yourself. E.g., with a taxi, you are just sitting there while you are paying a driver. You might as well be driving and save the money.Next, a taxi service has customer requests arriving at random times, for trips to random destinations. So, this means there are only two choices: (A) The wait times are short, there is a lot of over capacity with low utilization, and prices are too high or (B) there is high utilization, prices are lower, but wait times are too long. And for the cases in the middle, get both prices too high and also wait times too long. This is a necessary trade off situation straight out of the applied math of queuing theory.That’s why I said that the cost is high and the convenience low. I tried to be brief, but (A) and (B) are rock solid.Sure, with a self-driving vehicle, can save on the cost of the driver. But the vehicle will cost more. And my view is that for too much of the driving a taxi does, self-driving will be too dangerous; then the insurance companies will raise the rates too high and the law makers will pass a lot of highly restrictive laws.Uh, maintenance on a self-driving vehicle is a lot of electronics and computer maintenance, and the US auto maintenance labor supply is very much not up to that work. When the work is done, it will be too darned expensive for just a taxi.Also, for a lot that a taxi does, self-driving will be too slow because the programming will be too cautious.For a truck from PA to IN on an Interstate, in good weather, maybe self-driving has a chance. But, for too much that a taxi has to do, it has to be able to get around road blocks, detours, traffic jams, road construction, do good things in bad weather, etc. For too much of this, self-driving will have to be able to read and understand road signs, including ad hoc, non-standard ones, read traffic directions from human hand signals, understand spoken instructions from a human, etc. That’s far too close to real AI which is way too far away.Uber is moonbeam dreaming.
From my cold dead hands. Chance of prying my 7 speed manual from me is the same as me wearing a burka. Uber definitely serves a purpose for a group of people who don’t or can’t own cars for practical or economic reasons. Many of the people writing about and discussing Uber and hyping it are those people. Ditto for the self driving car nonsense. Possible in a niche situation for sure. Just like there are monorails at Disneyland. Everywhere and anywhere? To many legacy concerns. The same group that can’t fix the spam problem and underestimated Trumps chance of being the nominee isn’t going to solve this one in our lifetime. An example of religious and restrictive conformity especially of women. The same as the bs from all religions, including mine.
Disagree about the self driving car nonsense. I think within a generation it will change everything. Combine that with the uber model and you have something quite amazing. I know very few people my age (28 y/o in Boston) who are in the market to buy a car. May don’t even bother getting their licence. I doubt my kids will ever learn how to drive.
Knowing how to drive is smart. In unforeseeable circumstances it could make the difference in an emergency. Forget the licence though, I agree. I’ ve never owned a car. Dirty things cars
That is certainly true – still definitely a good skill to know.
Why? convenience? cost?
Convenience is definitely one of them – parking a car in the city is a pain. Cost is another big one – if I generalize some, we would rather spend money on a nicer apartment than on a car. I also find it’s just not really needed in this area – if we do need a car to get away, zipcar is quite convenient. To get around the city when biking or public transport isn’t convenient, uber does great. Having everything automated and self driving would just make that system even better.
Back in 2008 or 2009, I interviewed for a role at Twitter focused on monetization. I proposed something pretty similar to what Gurley describes… let users follow interests and sell ads against those interests. Twitter has always been more of an interest graph for me than a social graph even though it’s organized around people. Ev and Biz were opposed to the idea (I didn’t get the job :), but I still think it’s the right model for them, better than chasing biz dev deals for TV streaming rights, which seems expensive and hard to scale.
Interesting. I’ve been wanting better filtering and searching for years. We are not the only ones.
>let users follow interests and sell ads against those interestsSeems like a good idea. In fact, now that you’ve said it, it seems like the ideal approach for Twitter (or at least one such approach). Give people what they want and charge them something for it.
Valuation arrogance will only leave after a major pounding.
Swiisher seems to have encyclopedic memory of fine details of the history of information technology startups in Silicon Valley. Amazing. Fantastic memory.Gurley’s work seems to be some combination of mud wrestling, a rock concert, a bingo game, and drinking from a fire hose, lots of heat, not much light, lots of confusion, lots of superstition and gut feel, sweating over gnats and failing to see or understand elephants.Uh, in simple terms, Gurley’s business is looking only for the exceptional, but (A) his experience and thinking are dominated by the ordinary or worse and (B) he has no real framework or filter to identify the exceptional.Identifying all cases of the exceptional would require understanding luck which is too hard. But there are some good filters and frameworks for the rest. Or if want to cross the river, might be able to walking on the thin ice, but there are much better ways with a boat or a bridge. Don’t have a boat or a bridge? Then cross at a different place where do have one of those — boats and bridges do exist.Most successes are from luck? Maybe: Go to a golf course and look at a par 3 hole and who made the hole in one shots. Weekend duffers or the pros at the annual tournament? Sure, the weekend duffers because there were so many more of them. Still, the good bets, the good ROI, is on the pros, that is, the players who are making at most only a small use of luck. Maybe most of the people who successfully cross the river do it on the thin ice — a LOT of people fell through that thin ice — where they happen to be, but, still, the smart people look for a boat or a bridge.Again, boats and bridges do exist.
The name dropping content was probably a high scoring draw.
“The value of this lunch is 0.18 btc”The most indicative thing she said?
The “try to get a board seat” ‘rule’, which Sacca i think suggests is not a priority at all.
Count the number of times Swisher interrupts Gurley. At one point he has to *remind her* that he needs to ‘move the story along’ because it’s taking too long — if she could only trust that we know she knows everything/everyone (as I believe she does), it’s too bad.
Amen. So annoying.