>> he made his name as a top tech analysts on wall street. made his wayrley to the promised land of silicon valley. capital inchmark 1999. almost right away, the bubble burst. gurley's stock went down and up and down again. and then he was associated with a number of famous names. twitter. uber.

waze. snapchat. .elcome my guest, bill gurley thank you, first of all, i annk risk-taking involves abundant about of capital. there is a push into startups. the problem is, it is much easier to run a company that is losing money than one that is profitable. of companies with high valuations, and they say, hey, these companies are going to make it. i am not going to sure, just because they have not passed that test improving that they have legs over the long-term. there are certain sectors that i think are more prone to arbitrage. i think e-commerce is a

dangerous one. the problem is, no one really gets up. no one says, oh, our numbers aren't working. they just keep hoping it is going to get better. >> what you most worried about? >> bad factors in the ecosystem. companies that don't have long-term economic models that are out there perverting these rents that people pay and the costs that you pay for employees. the market that you may be in against a competitor. >> now i want to talk to you a little about what 1999 looked like. but first we are here. you were born and raised in texas. what kind of kid were you? what did you want to be when you grow up? >> my father grew up on a rural farm in north carolina. error not agot an degree in engineering. he got moved to johnson space center and worked at nasa and half of the fathers on my street were nasa fathers.

when the apollo launches would happen, we would drive 14 hours for a three minute launch and drive back. [laughter] >> did you want to be an astronaut? >> i think i was too tall! >> let's talk about that. you played college basketball. when you think of college sports? >> i struggled to stay on the end of the bench. i was not being a starter and not getting a lot of playing time. it was a humbling experience. when i got to my next place, where i had more of an advantage, a push me to try even harder. >> that was engineering. what did you hope to do? >> i actually, my first job out of college was at compaq were my sister was. we were working on designs for desktop computers. university of the

florida avenue you got your mba at the university of texas. these are not typical schools. so i wonder, is silicon valley ?issing the next bill gurley >> i was an odd duckling against the group. compaq, youcovered have covered microsoft, you have covered dell. tell me about that. >> what of my first experiences was at a gender conference. i remember the very first dinner, walking in. second those days, when you look dell,, there is michael and you could just walk up and talk to him. and i thought, oh my god. >> even back then -- >> oh yeah. oh yeah. i got to go to an analyst meeting in redmond, and someone handed me a card that said, you are going to be at bill's table

tonight. 28?s like, 27, where you'retter coming from? >> it only matters if wall street discusses it. ♪

>> how do you become a top tech analyst? what is that involves? it seems like there is lots of hustling. >> i was experimenting with this free model.rality i was blasting it out. that is when i started above the crowd. it started way back then. >> above the crowd. you are how tall, six foot nine -- 6'9"? >> 6'9". one of thel, and

investors said what he wanted do? i said, i want to become a venture capitalist. shortly thereafter, when i joined frank and got into the competition for who was going to be the lead banker at amazon -- >> what was that like? >> it was exciting. always a getting exposure to simulate jeff bezos was amazingly rewarding. have been able to keep up with him as a large investor. he is one of the smartest, quickest thinkers i have ever been exposed to. >> what has surprised you most about amazon and jeff bezos 20 years later? has convinced wall street that he is plain the super-long-term game. and they let him forgo profits for what is now 20 years. [laughter] a kind of goes back to what we

were talking about with those startups. he gets to play a different game because he has invested. and he has said it is ok. >> is it ok? were multiple periods in amazon's life where people doubted that it had a long-term life, and they forced him to show more profitability. matter if amazon does not turn a significant profit. >> it only matters if wall street comes to doubt that they can. i bet that they will for a long time. iagine when we did the ipo, have been fortunate enough to work with a number of companies that have made it past just being successful, where they just had more than an ipo. it is remarkable. very --they are very, there are very, very few executives. larry has proven -- >> larry page?

>> yes. he does not let the kb defined -- does not let the game be defined by those definitions. qualif fy, he made the ier that i had to trust you in this meeting. but i think there is some truth to that in this case. the nature of search has been changing. if you are going to search for an item to buy from an e-commerce search on amazon, you know what the reviews are, you know what the categories are, you know whether to select prime or not. now google is doing something really interesting. the are taking on this endeavor called google express, or google shopping express. which, i cannot make the math work. i am just waiting for someone in the press to fall around --

follow around one of these vehicles. >> and then they have these drones. >> well, don't get me started on these drones. >> so you are not a fan of those? d the whole drone thing kind of distracting. >> what about self driving cars? >> i am more skeptical than most. using artificial intelligence across a broad array is really hard. we are about 99.9%. is that good enough? the minute that someone is hit and killed, how many nines do you need before these can get out on the street with everyone else? because they are going to be held to a much higher bar than humans are. you are skeptical about some of these suburban cars and

drone deliveries, what you think about the long-term teacher? -- future? >> google has done this one thing which is remarkable, and that is that they probably spent 2 billion dollars or $3 billion to make their development come true. thehave taken over 85% of most critical operating systems in the next 20 years. i think that maybe one of the most ambitious and successful business efforts of all-time. amazon,en google, apple, and facebook, these are companies that have been referred as the four horsemen of today. amazon prime is pretty remarkable. i would put them in the same camp. i think google, with the profitability, and the insane footprint as android, i would put them in the same camp as well. on facebook, i think they are

working towards an interesting challenge. they have lost the trust. when you ask someone, and you'd ask if they have certainty on somebody see their facebook say no. 90% would i think it would create anxiety that would make room for snapchat and companies like nextdoor. these companies trust the limits of what you can move to next. >> and apple? >> i think apple's only problem -- only problem is android. just flat out. if you are going to pay $3 billion for a headphone company, and $2 billion for a map company, it is a no-brainer. i think they should've found another way to find a way to buy that. >> should apple by twitter? >> i don't think they would know what to do with it. that is why i would probably say no.

moster has one of the .mazing modes they have the most import to people of almost any field in the world. the are remarkably committed to their own persona in the simple. one venture capitalist twitter, sayicized that there was a lot of pot smoking going on over there. what you say to that? >> i think he was on a book to her, right? tour, right? >> i think so. >> i just think you lose all credibility yourself. do?hat else could uber you have seen them deliver christmas trees and kittens, but really, what is next? ♪

>> what is the myth of bill

gurley and what is the reality? >> i don't the guy can separate the two. i think over the last five years, people have made a big deal over -- do you have operating experience? in the next five years, if the market plays out like i think it is going to be, people are going to be asking if you have investor index. -- investor experience. 90% of the time when a venture capitalist opens her mouth, they are speaking to the audit for newer that they have not funded yet. there are a lot of marketing messages that are out there. a you have spanned generational shift between the old and the new. would you describe it that way? >> when i came in, john doerr and mike were it's -- mike morit z where the legends of the game.

but i messed that up. >> why do you say you messed that up? hey, let it that, go. >> why is now the time? >> i never said valuations were too high. [laughter] see -- i look at facebook or google, and they are training at -- they have really low pe's actually. my bigger concern has to do with the larger burn rate. >> if the bubble does not pop, is there a downswing? >> one would be some macroeconomic -- it is very hard to predict macroeconomics. the second would be the firms that are doing the late stage investing. i think that is probably the for likely in the near term a catalyst of something like this. the star to ask questions about,

do these companies really have a business model that can go the distance? more cautious. we are still making new investments, but we are more picky, for sure. >> what does more picky mean? inwe see uber in this, uber that. >> so don't invest in the uber in this? bei think the big they might the thing that the big thing does someday. that is another way of saying that to look for things that are universally different. >> we know that you were an early investor. how did you get into the field? >> i met with ryan and travis before they could convince my partners. we watched for 6-9 months. we ran an -- >> and then they were convinced? >> yes. the thing that separates the best firm from the other best

firms is things like google. become?ig can uber >> when we made the investment, we did not know what i'm about to suggest, which is that it , with itsat uber convenient and price points, will be competitive at some -- you know, the first thing is rental cars. now, we are anecdotally meeting lots of writers that say they have no car. nevers something that we had in our original investment plan. aboutns up an opportunity as large a business opportunity could be. -- what is it like to work with travis, the ceo? >> i compare him to people who

have built companies that are $100 million or more. that is pretty audacious. i would say if i looked along a vector, he is most like bezos. i would say the business is most like amazon. it is not like facebook, it is operational. but i find him to be most like jeff. least wellhat is at understood about travis is his insanely good recruitment. going intoways walmart and getting their cio, just going in and getting the best people he possibly could. and that is what travis has done. >> when you think of competitors just got out of the u.s. market, do these companies stand a chance? know, i have often thought about it like this. first of all, a lot of the money goes to the driver. so it is a lower margin business, if you will. i think it is tough to compete.

i think travis is very competitive. >> what else can uber do? we have seen them deliver christmas trees and kittens, but really, what is next? whatever might be next, that is not to say that the company is not interested, they are testing food delivery, they have done flower delivery on isentines, so i think it something that they are watching. i think for the time we, everyone knows that it focuses on critical execution and the great opportunity that is in front of them. >> what about taking on fedex or ups? >> i would say that we are not as well as it you for that type of a thing as we might be for a quick -- i know people who have put objects in uber. >> howdy you know it is not just a fad -- how do you know it is not just a fad? >> i think that there is a true

element that the younger generation wants to be able to communicate and have fun and not worry about whether the permanence that they have may have some kind of weight. so the numbers are staggering. i think they are doing a great job. >> can he mature into a rockstar ceo? >> i think so. he has said -- he has had some issues, but one of the things tot benchmark truly strive differentiate itself from is that we want to be a partner to the entrepreneur for a very long time. i think there is a growing trend in silicon valley which i am not afraid of is that are is a trial by social media. our job is to help these people' through situations. not to abandon them. evan in particular is a very special person. he has a very, very keen sense of product features of that

matter to his constituency. i think it has been a common trait among some of the most successful entrepreneurs. more or less arrogant in silicon valley than there was before? >> there is probably more than 1999. >> back then? >> yeah. lot of the a young on for newer's were not around back then, they are more so. you mentioned that we don't have this huge, large staff. i would say that we are the leanest of anyone out there. we have often had our competitors ask, how do you get so much coverage with so few people? i think the answer is that we are doing it all day long. we have the staff of 100 people, and you have to look after them. we are just out on the field. >> bill gurley, thank you so

much for joining >> welcome to money clip, where

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