Bill Gurley

Quotes are word for word from the source.

• Product market fit

  “Government issued encryption programs will see about as much use as a sauna in the desert.”

  Our noteHe explains why users who value privacy will never use government-monitored tools.

• Ineffective solutions

  “We are only going to spend a lot of money, waste a lot of time, and create a false sense of security.”

  Our noteGurley warns against implementing unrealistic and expensive surveillance technologies.

• Regulatory competition

  “Now companies are going to "prefer" other markets with requirements that are less stringent than the SOX laden U.S. markets.”

  Our noteHe explains why companies choose alternative stock exchanges over US ones.

• Early Sales Strategy

  “Since one must first establish early traction with direct sales, there is no reason not to adopt a "software in a box" model from the beginning.”

  Our noteAdvising startups to focus on direct hardware-software sales before seeking distribution deals.

• Increasing Returns Loop

  “As volumes skyrocket, costs decline. As costs decline, the number of applications the technology can serve increases. As this potential application universe expands, other solutions meet with an untimely early grave.”

  Our noteThe author describes the virtuous cycle that allows one technology to dominate its competitors.

• Deep Customer Analytics

  “These e-merchants can now tell you not only which advertisers produce click-throughs, but also whether those customers actually buy, how much they buy, and what are the margins on the things they buy.”

  Our noteHe describes the evolution of tracking from simple clicks to lifetime value and profitability.

• Investing for liquidity

  “Venture Capitalists look to the public markets for clues on where to go next. There is no point in investing in technologies that don't lead to liquidity events.”

  Our noteBill explains why VCs prioritize platforms that have a track record of producing public companies.

• Evaluate long term profit

  “Investors should increasingly evaluate the potential long-term profitability of Internet businesses before they invest.”

  Our noteAdvising investors to look beyond hype and focus on future earnings potential.

• Low margin strategy

  “First and foremost, as a "retailer" Amazon was comfortable running a low-margin business. This may sound more like a capitulation than a strategy, but think about the competition here.”

  Our noteBill Gurley explains why Amazon's willingness to accept low margins is a competitive advantage against tech giants.

• Easy Money Risks

  “When money is easy in Silicon Valley, it tends to attract short-term opportunists looking to make a fast-buck rather than build a lasting company.”

  Our noteHe contrasts fair-weather founders with those who build during downturns.

• Unusual investment choices

  “At first blush, a web site that allows owners to book a "Dog Vacation" for their esteemed pet may seem like an unusual choice for a venture investment.”

  Our noteBill Gurley explains why a dog-sitting marketplace might seem strange to outsiders at first.

• Marketplace potential analysis

  “However, a more analytical and detailed look at the market uncovers that this is a high potential, high probability online marketplace opportunity.”

  Our noteHe emphasizes that deep analysis reveals opportunities that aren't obvious on the surface.

• Drivers of Change

  “The combination of new technologies, data availability, information transparency, shifts in insurance coverage, regulatory reform, and consumer frustration has set the stage for a new era”

  Our noteGurley explains why the healthcare industry is finally ripe for a customer-centric shift.

• Control the Assets

  “Once you have the assets, all the disruptive things that Silicon Valley types want to do will be easy. The hardest part has been getting access to the funds.”

  Our noteThe strategic importance of holding customer funds rather than just processing their payments.

• Optimization first

  “All companies should prioritize customer optimization ahead of scaling customer acquisition.”

  Our noteHe uses a fuel efficiency metaphor to explain the order of operations for growth.

• Valuing expert judgment

  “I never wanted to be executing a plan that cut against his better judgment.”

  Our noteBill explains why he prioritized aligning his business plans with Dave Goldberg's insights.

• Startup Platform Advantage

  “Startups on the other hand are eager to find a point of leverage or advantage, and rush to new platforms.”

  Our noteBill discusses why startups are better at adopting new technologies than incumbents.

• Infrastructure investment risk

  “the real profits during the gold rush came from selling pick axes, pans, and blue jeans to the miners. The problem with this theory is that it requires that there be at least some gold in the mountain.”

  Our noteWarning that selling tools only works if the underlying market is actually profitable.

• Consumer benefit focus

  “Consumers do not benefit from this language. Let's hope the state legislators in CO have the same sense as those in Texas and Indiana.”

  Our noteHe emphasizes that legislation should prioritize consumer benefits over incumbent protection.