Are Uber drivers entrepreneurs?

Benchmark Capital’s Bill Gurley has been at the eye of the storm called Uber, that included cutting the cord with its lightning rod CEO Travis Kalanick, in a public manner. He also has been the service’s biggest champion. In this Uber-long (no pun intended) piece, he makes a case for Uber as a positive force for the drivers. Gurley, like a great analyst that he once was, makes a case for the positive impact of Uber. This one paragraph sums up the entire thesis: Continue reading "Are Uber drivers entrepreneurs?"

The Thing I Love Most About Uber

In spite of all the ink that journalists, analysts, and pundits have spilled on Uber over the years, no mainstream article has focused on what I consider to be the most elegant feature of this now ubiquitous, high growth global service — no driver-partner is ever told where or when to work. This is quite remarkable — an entire global network miraculously “level loads” on its own. Driver-partners unilaterally decide when they want to work and where they want to work. The flip side is also true — they have unlimited freedom to choose when they do NOT want to work. Despite the complete lack of a “driver-partner schedule” this system delivers pick-up times that are less than 5 minutes (in most US cities (with populations over 25K) and in 412 cities in 55 other countries. The Uber network, along with Mr. Smith’s invisible hand, is able to elegantly match supply and demand, without the “schedules” and “shifts” that are the norm in most every other industry.

Some have raised questions and concerns about the “gig” economy and the rise of these new independent and autonomous work types. Detractors frequently highlight that these work types lack some of the structured benefits that are frequently attached to traditional full time job offerings. However, what they fail to consider is that there is one critical and fundamental feature of the “gig” economy that is completely absent from traditional job types. That feature — worker autonomy of both time and place — simply does not exist in other industries. One cannot show up for work at Starbucks on a Monday and then decide not to work at all on Tuesday, and for only 2 hours on Wednesday. Oh yeah, and then on Thursday let’s just “play it by ear.” One cannot get a job at Walmart or McDonalds or ironically even as a taxi cab driver without agreeing to some sort of shift or schedule. It is unheard of for an employee to say “I want to work 3 hours this week, 45 the next, and then take 2 weeks off.” This autonomy and freedom of the “gig” work type, which is highly valued by millions and millions of people, would be impossible to implement for the overwhelming majority of companies.

In November of 2014, the Morgan Stanley sell-side research team that focuses on the auto industry, headed by Adam Jonas, made a trip to Detroit to visit the big three automakers. In their own words, “the highlight of the trip, however, was three Uber trips we took between meetings.” They chronicled these three trips in a report they published titled, Confessions of an Uber Driver: Rollin in the ‘D.

Continue reading "The Thing I Love Most About Uber"

The Thing I Love Most About Uber

In spite of all the ink that journalists, analysts, and pundits have spilled on Uber over the years, no mainstream article has focused on what I consider to be the most elegant feature of this now ubiquitous, high growth global service — no driver-partner is ever told where or when to work. This is quite remarkable — an entire global network miraculously “level loads” on its own. Driver-partners unilaterally decide when they want to work and where they want to work. The flip side is also true — they have unlimited freedom to choose when they do NOT want to work. Despite the complete lack of a “driver-partner schedule” this system delivers pick-up times that are less than 5 minutes (in most US cities (with populations over 25K) and in 412 cities in 55 other countries. The Uber network, along with Mr. Smith’s invisible hand, is able to elegantly match supply and demand, without the “schedules” and “shifts” that are the norm in most every other industry.

Some have raised questions and concerns about the “gig” economy and the rise of these new independent and autonomous work types. Detractors frequently highlight that these work types lack some of the structured benefits that are frequently attached to traditional full time job offerings. However, what they fail to consider is that there is one critical and fundamental feature of the “gig” economy that is completely absent from traditional job types. That feature — worker autonomy of both time and place — simply does not exist in other industries. One cannot show up for work at Starbucks on a Monday and then decide not to work at all on Tuesday, and for only 2 hours on Wednesday. Oh yeah, and then on Thursday let’s just “play it by ear.” One cannot get a job at Walmart or McDonalds or ironically even as a taxi cab driver without agreeing to some sort of shift or schedule. It is unheard of for an employee to say “I want to work 3 hours this week, 45 the next, and then take 2 weeks off.” This autonomy and freedom of the “gig” work type, which is highly valued by millions and millions of people, would be impossible to implement for the overwhelming majority of companies.

In November of 2014, the Morgan Stanley sell-side research team that focuses on the auto industry, headed by Adam Jonas, made a trip to Detroit to visit the big three automakers. In their own words, “the highlight of the trip, however, was three Uber trips we took between meetings.” They chronicled these three trips in a report they published titled, Confessions of an Uber Driver: Rollin in the ‘D.

Continue reading "The Thing I Love Most About Uber"

Very famous VC Bill Gurley says startup boardrooms are now just filled with *clapping hand noise*

 Fresh off a public spat between Uber investor Benchmark Capital and former Uber CEO Travis Kalanick, Benchmark general partner Bill Gurley took the stage in front of a large room of bankerfolk at the Goldman Sachs Internet and Technology Conference to talk about how startup boardrooms are now filled with a lot of cheerleaders that aren’t holding founders accountable. Read More

“Customer First” Healthcare

The subject of the “consumerization of healthcare” has been around for many years. Most frequently people use this phrase in association with personal technology devices (heart-monitors, exercise accessories, sleep monitors, etc) that allow consumers to take direct control of their health information. There is however, a more important trend that relates alternatively to the consumerization of the “business” of healthcare. While other industries often speak of being “customer centric” or “putting the customer first,” the U.S. healthcare system rarely thinks of the patient as a customer. One could go even farther, and suggest that the U.S. healthcare market is the least customer centric of any customer service industry.

David Goldhill, in his enlightening book Catastrophic Care, declared:

“…a guiding principle of any reform should be to put the consumer, not the insurer or the government, at the center of the system. I believe if the government took on the goal of better supporting consumers-by bringing greater transparency and competition to the health-care industry, and by directly subsidizing those who can’t afford care-we’d find that consumers could buy much more of their care directly than we might initially think, and that over time we’d see better care and better service, at lower cost, as a result.”

David makes a powerful assertion — allowing the patient to rise to the forefront and to be truly be seen as a customer — will lead to not only more satisfied patients, but patients with better medical results and much lower costs. This would be a remarkable three-way victory. The good news is we are already headed down this path. 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 of healthcare service in the U.S. where the patient truly comes first. This powerful trend will gain momentum as it builds, will reshape the current landscape, and will result in the launch of many new and exciting companies.

One overt sign of a lack of traditional market forces is any industry where basic customer service is not a requirement to stay in business. If you asked 100 people to name a place where you frequently wait, even when you are on time for your appointment, how many would say the doctor’s office? The consumer has come to accept waiting at the doctor. We are so numb to the pain, that we rarely object or complain, and the doctor’s indifference to the consumer’s time is so common and widespread, that it is a frequent meme in jokes and cartoons.
Other U.S. industries, once subject to far less competition, have been forced by the market

Continue reading "“Customer First” Healthcare"

“Customer First” Healthcare

The subject of the “consumerization of healthcare” has been around for many years. Most frequently people use this phrase in association with personal technology devices (heart-monitors, exercise accessories, sleep monitors, etc) that allow consumers to take direct control of their health information. There is however, a more important trend that relates alternatively to the consumerization of the “business” of healthcare. While other industries often speak of being “customer centric” or “putting the customer first,” the U.S. healthcare system rarely thinks of the patient as a customer. One could go even farther, and suggest that the U.S. healthcare market is the least customer centric of any customer service industry.

David Goldhill, in his enlightening book Catastrophic Care, declared:

“…a guiding principle of any reform should be to put the consumer, not the insurer or the government, at the center of the system. I believe if the government took on the goal of better supporting consumers-by bringing greater transparency and competition to the health-care industry, and by directly subsidizing those who can’t afford care-we’d find that consumers could buy much more of their care directly than we might initially think, and that over time we’d see better care and better service, at lower cost, as a result.”

David makes a powerful assertion — allowing the patient to rise to the forefront and to be truly be seen as a customer — will lead to not only more satisfied patients, but patients with better medical results and much lower costs. This would be a remarkable three-way victory. The good news is we are already headed down this path. 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 of healthcare service in the U.S. where the patient truly comes first. This powerful trend will gain momentum as it builds, will reshape the current landscape, and will result in the launch of many new and exciting companies.

One overt sign of a lack of traditional market forces is any industry where basic customer service is not a requirement to stay in business. If you asked 100 people to name a place where you frequently wait, even when you are on time for your appointment, how many would say the doctor’s office? The consumer has come to accept waiting at the doctor. We are so numb to the pain, that we rarely object or complain, and the doctor’s indifference to the consumer’s time is so common and widespread, that it is a frequent meme in jokes and cartoons.
Other U.S. industries, once subject to far less competition, have been forced by the market

Continue reading "“Customer First” Healthcare"

“Customer First” Healthcare

The subject of the “consumerization of healthcare” has been around for many years. Most frequently people use this phrase in association with personal technology devices (heart-monitors, exercise accessories, sleep monitors, etc) that allow consumers to take direct control of their health information. There is however, a more important trend that relates alternatively to the consumerization of the “business” of healthcare. While other industries often speak of being “customer centric” or “putting the customer first,” the U.S. healthcare system rarely thinks of the patient as a customer. One could go even farther, and suggest that the U.S. healthcare market is the least customer centric of any customer service industry.

David Goldhill, in his enlightening book Catastrophic Care, declared:

“…a guiding principle of any reform should be to put the consumer, not the insurer or the government, at the center of the system. I believe if the government took on the goal of better supporting consumers-by bringing greater transparency and competition to the health-care industry, and by directly subsidizing those who can’t afford care-we’d find that consumers could buy much more of their care directly than we might initially think, and that over time we’d see better care and better service, at lower cost, as a result.”

David makes a powerful assertion — allowing the patient to rise to the forefront and to be truly be seen as a customer — will lead to not only more satisfied patients, but patients with better medical results and much lower costs. This would be a remarkable three-way victory. The good news is we are already headed down this path. 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 of healthcare service in the U.S. where the patient truly comes first. This powerful trend will gain momentum as it builds, will reshape the current landscape, and will result in the launch of many new and exciting companies.

One overt sign of a lack of traditional market forces is any industry where basic customer service is not a requirement to stay in business. If you asked 100 people to name a place where you frequently wait, even when you are on time for your appointment, how many would say the doctor’s office? The consumer has come to accept waiting at the doctor. We are so numb to the pain, that we rarely object or complain, and the doctor’s indifference to the consumer’s time is so common and widespread, that it is a frequent meme in jokes and cartoons.
Other U.S. industries, once subject to far less competition, have been forced by the market

Continue reading "“Customer First” Healthcare"

The Ezra Klein Show: VC Bill Gurley on Transforming Health Care

In November of 2015, I posted a tweet that declared Benchmark was interested in discovering Internet healthcare investments. Our firm has had the good fortune to invest in many two-sided networks that used information aggregation, supplier aggregation, and user generated content to attract and inform consumers and resultantly disrupt and change different industries. Examples of such companies include Yelp, OpenTable, GrubHub, 1stDibs, DogVacay/Rover, Zillow, and Uber. It only seemed logical to us that the same opportunity should exist in healthcare. Most people are aware that healthcare spending in the U.S. has risen to 17-18% of GDP and is grossly out of line with other comparable nations. Additionally, all of us that have been consumers of the U.S. system are blindingly aware that numerous inefficiencies exist in the system. Simply put, there is amble room for improvement. So if Internet and mobile technologies can be used to change real estate or transportation, why not healthcare?

Over the next two years, I looked at many healthcare IT investment opportunities – I went “all in.” It’s worth noting that our primary focus was on technologies that aided and improved primary care, which is about half of the U.S. market in terms of revenue dollars (there is no question that digital tools will successfully impact specific acute diseases/disorders, but it’s our intuition these are best left to 100% focused HC investors). At first, this deep dive proved frustrating. The more we learned, the more we realized how much we did not really understand. The U.S. healthcare system is confusing and complex. Eventually, however, we gained our footing and developed a mental model for the industry and a framework for where opportunities do exist. We also discovered what we believe is a large and investible trend/theme. In May of this year, Ezra Klien, who is remarkably informed and intelligent on the topic of healthcare, was kind enough to include me on his podcast to discuss and debate my learnings. That podcast is included here along with a transcript.

 

 

Ezra Klein:  Hello and welcome to the Ezra Klein Show, a podcast on Vox Media Podcast Network. I am Ezra Klein and my guest this week is Bill Gurley. Bill is a general partner at Benchmark, one of Silicon Valley’s really legendary venture capital firms. He is one of Silicon Valley’s legendary venture capitalists. He was named the venture capitalist of the year in 2016 at the TechCrunch’s annual Crunchy awards. He’s been an early investor in Grubhub, OpenTable,Uber, and Zillow and all kinds of things. A very, very smart guy, a very thoughtful guy. We’ve been talking recently because he’s been thinking a lot about healthcare.

They’ve recently made Continue reading "The Ezra Klein Show: VC Bill Gurley on Transforming Health Care"

The Ezra Klein Show: VC Bill Gurley on Transforming Health Care

In November of 2015, I posted a tweet that declared Benchmark was interested in discovering Internet healthcare investments. Our firm has had the good fortune to invest in many two-sided networks that used information aggregation, supplier aggregation, and user generated content to attract and inform consumers and resultantly disrupt and change different industries. Examples of such companies include Yelp, OpenTable, GrubHub, 1stDibs, DogVacay/Rover, Zillow, and Uber. It only seemed logical to us that the same opportunity should exist in healthcare. Most people are aware that healthcare spending in the U.S. has risen to 17-18% of GDP and is grossly out of line with other comparable nations. Additionally, all of us that have been consumers of the U.S. system are blindingly aware that numerous inefficiencies exist in the system. Simply put, there is amble room for improvement. So if Internet and mobile technologies can be used to change real estate or transportation, why not healthcare?

Over the next two years, I looked at many healthcare IT investment opportunities – I went “all in.” It’s worth noting that our primary focus was on technologies that aided and improved primary care, which is about half of the U.S. market in terms of revenue dollars (there is no question that digital tools will successfully impact specific acute diseases/disorders, but it’s our intuition these are best left to 100% focused HC investors). At first, this deep dive proved frustrating. The more we learned, the more we realized how much we did not really understand. The U.S. healthcare system is confusing and complex. Eventually, however, we gained our footing and developed a mental model for the industry and a framework for where opportunities do exist. We also discovered what we believe is a large and investible trend/theme. In May of this year, Ezra Klien, who is remarkably informed and intelligent on the topic of healthcare, was kind enough to include me on his podcast to discuss and debate my learnings. That podcast is included here along with a transcript.

 

 

Ezra Klein:  Hello and welcome to the Ezra Klein Show, a podcast on Vox Media Podcast Network. I am Ezra Klein and my guest this week is Bill Gurley. Bill is a general partner at Benchmark, one of Silicon Valley’s really legendary venture capital firms. He is one of Silicon Valley’s legendary venture capitalists. He was named the venture capitalist of the year in 2016 at the TechCrunch’s annual Crunchy awards. He’s been an early investor in Grubhub, OpenTable,Uber, and Zillow and all kinds of things. A very, very smart guy, a very thoughtful guy. We’ve been talking recently because he’s been thinking a lot about healthcare.

They’ve recently made Continue reading "The Ezra Klein Show: VC Bill Gurley on Transforming Health Care"

Thinking of Home: Dickinson, Texas

For those of you who have moved away from the town where you grew up, the few times that you see your hometown in the national news creates an enormous sense of pride. Over the past few weeks, the town I grew up in, Dickinson, Texas, has been front and center in the national news, but for all the wrong reasons. Dickinson, a small town southeast of Houston on Galveston Bay, has been one of the hardest hit communities by Hurricane Harvey.

I became a resident of Dickinson for the same reason many of my childhood friends did. My father, John, was an early NASA employee, and when Johnson Space Center opened in Clear Lake, he and many of his colleagues made Dickinson their home. It seems like half of the fathers on our street worked at NASA. Gene Kranz, the famous NASA Flight Director is a Dickinsonian. I, along with a handful of others in my class, spent my entire K-12 education in the Dickinson public school system and graduated from Dickinson High School in 1984. When people ask me “where did you grow up?” or “where are you from?” there is one easy answer — Dickinson.

That said, our family’s strongest tie to Dickinson is the countless hours my mother, Lucia Gurley, spent in service of the town and community over her 38 years as a resident. She currently lives in Marble Falls, but during her time in Dickinson, my mother’s impact on the local community was quite significant. She was a substitute teacher for over 20 years, she volunteered at the local library, she helped raise grants for the public school system, and was a key contributor to Keep Dickinson Beautiful. In 1992, she was recognized nationally for her leadership in the H.O.S.T.S. program, receiving the Betty Scharff Memorial Award, and in 1994 was recognized by the local Chamber of Commerce as Citizen of the Year. Most significantly, she served as a councilwoman on the city council for 11 years, and upon retiring was recognized for her efforts in the local newspaper.

Although it does not appear that either were as devastating as Harvey, our family lived through two difficult storms while we lived in Dickinson. In the summer of 1979 Tropical Storm Claudette dumped 43 inches of rain on the area in a single day. Our house ended up with 2-3 feet of water inside, and as a result I have a small sense of how painful life will be for many of the residents over the next many months. In 1983, the eye of Hurricane Alicia went directly over Dickinson. My mother spent the entire evening at city hall, Continue reading "Thinking of Home: Dickinson, Texas"

Thinking of Home: Dickinson, Texas

For those of you who have moved away from the town where you grew up, the few times that you see your hometown in the national news creates an enormous sense of pride. Over the past few weeks, the town I grew up in, Dickinson, Texas, has been front and center in the national news, but for all the wrong reasons. Dickinson, a small town southeast of Houston on Galveston Bay, has been one of the hardest hit communities by Hurricane Harvey.

I became a resident of Dickinson for the same reason many of my childhood friends did. My father, John, was an early NASA employee, and when Johnson Space Center opened in Clear Lake, he and many of his colleagues made Dickinson their home. It seems like half of the fathers on our street worked at NASA. Gene Kranz, the famous NASA Flight Director is a Dickinsonian. I, along with a handful of others in my class, spent my entire K-12 education in the Dickinson public school system and graduated from Dickinson High School in 1984. When people ask me “where did you grow up?” or “where are you from?” there is one easy answer — Dickinson.

That said, our family’s strongest tie to Dickinson is the countless hours my mother, Lucia Gurley, spent in service of the town and community over her 38 years as a resident. She currently lives in Marble Falls, but during her time in Dickinson, my mother’s impact on the local community was quite significant. She was a substitute teacher for over 20 years, she volunteered at the local library, she helped raise grants for the public school system, and was a key contributor to Keep Dickinson Beautiful. In 1992, she was recognized nationally for her leadership in the H.O.S.T.S. program, receiving the Betty Scharff Memorial Award, and in 1994 was recognized by the local Chamber of Commerce as Citizen of the Year. Most significantly, she served as a councilwoman on the city council for 11 years, and upon retiring was recognized for her efforts in the local newspaper.

Although it does not appear that either were as devastating as Harvey, our family lived through two difficult storms while we lived in Dickinson. In the summer of 1979 Tropical Storm Claudette dumped 43 inches of rain on the area in a single day. Our house ended up with 2-3 feet of water inside, and as a result I have a small sense of how painful life will be for many of the residents over the next many months. In 1983, the eye of Hurricane Alicia went directly over Dickinson. My mother spent the entire evening at city hall, Continue reading "Thinking of Home: Dickinson, Texas"

Benchmark’s New General Partner Sarah Tavel

The partners at Benchmark are excited to announce that Sarah Tavel has joined the firm as our newest General Partner. We define ourselves by a love for the craft of early stage investing, and Sarah’s career-long desire and commitment to be one of the world’s great venture capitalists make her an ideal addition to a Benchmark team. About a year ago, we asked our venture partner Scott Belsky who he thought had the greatest potential to become one of the best investors of the next decade. He answered quickly and definitively: Sarah Tavel. We’ve gotten to know Sarah over the last year. While we only very recently revealed our interest in having her join us, our interactions with her over the year amplified our instincts. She especially impressed us with the speed and quality of her thinking around disruptive markets, her ability to influence others with her ideas, and the depth of the relationships she has forged. Throughout her career, Sarah has shown a remarkable ability to spot new companies and markets, and to develop deep bonds with extraordinary entrepreneurs. Early on, at Bessemer Venture Partners, she helped source and pursue companies as varied as Pinterest and GitHub well before they were broadly understood. Not only did she identify these phenomena before others, she left long-lasting impressions on the founders of both companies. In fact, Ben Silbermann thought so highly of Sarah that he recruited her to Pinterest to lead core parts of the product and business after the Bessemer investment. The experience of helping scale Pinterest through a period of explosive growth is an incredible resource for the founders on whose boards she will serve in the future. Most recently, Sarah worked as an investing partner at one of the great venture capital firms, Greylock Partners, working with some of the sharpest product minds in the business. Beyond her impeccable resume, from our earliest interactions Sarah demonstrated an investor mindset that just felt consistent with our own. Our small, focused team approach relies on open debate, advocacy, and working together to support the entrepreneurs we serve. Each partner at Benchmark needs to bring a unique perspective while simultaneously enhancing the overall functioning of the team. It is clear that Sarah will get in front of breakout companies early, challenge our thinking on new markets, help us make sharper decisions, and be an incredible partner for the entrepreneurs we back. Adding a new partner is an infrequent event for Benchmark. Our structure – now six equal partners – means Sarah joins with the same authority, responsibility and ownership as the current partners. We have the highest conviction Sarah will excel at the complex craft of early stage venture investing and Continue reading "Benchmark’s New General Partner Sarah Tavel"

Benchmark’s New General Partner Sarah Tavel

The partners at Benchmark are excited to announce that Sarah Tavel has joined the firm as our newest General Partner. We define ourselves by a love for the craft of early stage investing, and Sarah’s career-long desire and commitment to be one of the world’s great venture capitalists make her an ideal addition to the Benchmark team.

About a year ago, we asked our venture partner Scott Belsky who he thought had the greatest potential to become one of the best investors of the next decade. He answered quickly and definitively: Sarah Tavel. We’ve gotten to know Sarah over the last year. While we only very recently revealed our interest in having her join us, our interactions with her over the year amplified our instincts. She especially impressed us with the speed and quality of her thinking around disruptive markets, her ability to influence others with her ideas, and the depth of the relationships she has forged.

Throughout her career, Sarah has shown a remarkable ability to spot new companies and markets, and to develop deep bonds with extraordinary entrepreneurs. Early on, at Bessemer Venture Partners, she helped source and pursue companies as varied as Pinterest and GitHub well before they were broadly understood. Not only did she identify these phenomena before others, she left long-lasting impressions on the founders of both companies. In fact, Ben Silbermann thought so highly of Sarah that he recruited her to Pinterest to lead core parts of the product and business after the Bessemer investment. The experience of helping scale Pinterest through a period of explosive growth is an incredible resource for the founders on whose boards she will serve in the future.

Most recently, Sarah worked as an investing partner at one of the great venture capital firms, Greylock Partners, working with some of the sharpest product minds in the business.

Beyond her impeccable resume, from our earliest interactions Sarah demonstrated an investor mindset that just felt consistent with our own. Our small, focused team approach relies on open debate, advocacy, and working together to support the entrepreneurs we serve. Each partner at Benchmark needs to bring a unique perspective while simultaneously enhancing the overall functioning of the team. It is clear that Sarah will get in front of breakout companies early, challenge our thinking on new markets, help us make sharper decisions, and be an incredible partner for the entrepreneurs we back.

Adding a new partner is an infrequent event for Benchmark. Our structure – now six equal partners – means Sarah joins with the same authority, responsibility and ownership as the current partners. We have the highest conviction Sarah will excel at the complex craft of early stage venture investing and Continue reading "Benchmark’s New General Partner Sarah Tavel"

Benchmark’s New General Partner Sarah Tavel

The partners at Benchmark are excited to announce that Sarah Tavel has joined the firm as our newest General Partner. We define ourselves by a love for the craft of early stage investing, and Sarah’s career-long desire and commitment to be one of the world’s great venture capitalists make her an ideal addition to a Benchmark team. About a year ago, we asked our venture partner Scott Belsky who he thought had the greatest potential to become one of the best investors of the next decade. He answered quickly and definitively: Sarah Tavel. We’ve gotten to know Sarah over the last year. While we only very recently revealed our interest in having her join us, our interactions with her over the year amplified our instincts. She especially impressed us with the speed and quality of her thinking around disruptive markets, her ability to influence others with her ideas, and the depth of the relationships she has forged. Throughout her career, Sarah has shown a remarkable ability to spot new companies and markets, and to develop deep bonds with extraordinary entrepreneurs. Early on, at Bessemer Venture Partners, she helped source and pursue companies as varied as Pinterest and GitHub well before they were broadly understood. Not only did she identify these phenomena before others, she left long-lasting impressions on the founders of both companies. In fact, Ben Silbermann thought so highly of Sarah that he recruited her to Pinterest to lead core parts of the product and business after the Bessemer investment. The experience of helping scale Pinterest through a period of explosive growth is an incredible resource for the founders on whose boards she will serve in the future. Most recently, Sarah worked as an investing partner at one of the great venture capital firms, Greylock Partners, working with some of the sharpest product minds in the business. Beyond her impeccable resume, from our earliest interactions Sarah demonstrated an investor mindset that just felt consistent with our own. Our small, focused team approach relies on open debate, advocacy, and working together to support the entrepreneurs we serve. Each partner at Benchmark needs to bring a unique perspective while simultaneously enhancing the overall functioning of the team. It is clear that Sarah will get in front of breakout companies early, challenge our thinking on new markets, help us make sharper decisions, and be an incredible partner for the entrepreneurs we back. Adding a new partner is an infrequent event for Benchmark. Our structure – now six equal partners – means Sarah joins with the same authority, responsibility and ownership as the current partners. We have the highest conviction Sarah will excel at the complex craft of early stage venture investing and Continue reading "Benchmark’s New General Partner Sarah Tavel"

Is the new normal really new?

hello-normal I’ve been hearing a lot lately about “The New Normal” for VC-backed technology companies. It’s not just in the popular press headlines. Nearly every conversation I have with co-investors, founders and LPs these days involves some discussion of current “new normal” market conditions and what they mean. There’s clearly change in the air. Read More

On the Road to Recap:

Why the Unicorn Financing Market Just Became Dangerous…For All Involved

In February of last year, Fortune magazine writers Erin Griffith and Dan Primack declared 2015 “The Age of the Unicorns” noting — “Fortune counts more than 80 startups that have been valued at $1 billion or more by venture capitalists.” By January of 2016, that number had ballooned to 229. One key to this population growth has been the remarkable ease of the Unicorn fundraising process: Pick a new valuation well above your last one, put together a presentation deck, solicit offers, and watch the hundreds of million of dollars flow into your bank account. Twelve to eighteen months later, you hit the road and do it again — super simple.

While not obvious on the surface, there has been a fundamental sea-change in the investment community that has made the incremental Unicorn investment a substantially more dangerous and complicated practice. All Unicorn participants — founders, company employees, venture investors and their limited partners (LPs) — are seeing their fortunes put at risk from the very nature of the Unicorn phenomenon itself. The pressures of lofty paper valuations, massive burn rates (and the subsequent need for more cash), and unprecedented low levels of IPOs and M&A, have created a complex and unique circumstance which many Unicorn CEOs and investors are ill-prepared to navigate.

Many have noted that the aggregate shareholder value created by all of the Unicorns will vastly overshadow the losses from the inevitable failed unicorns. This likely truism is driven by the clear success of this generation’s transformational companies (AirBNB, Slack, Snapchat, Uber, etc). While this could provide some sense of comfort, most are not exposed to a Unicorn basket, and there is no index you can buy. Rather, most participants in the ecosystem have exposure to and responsibility for specific company performance, which is exactly why the changing landscape is important to understand.

Perhaps the seminal bubble-popping event was John Carreyrou’s October 16th investigative analysis of Theranos in the Wall Street Journal. John was the first to uncover that just because a company can raise money from a handful of investors at a very high price, it does not guarantee (i) everything is going well at the company, or (ii) those shares are permanently worth the last round valuation. Ironically, Carreyou is not a Silicon Valley-focused reporter, and the success of the piece served as a wake-up call for other journalists who may have been struck by Unicorn fever. Next came Rolfe Winkler’s deep dive “Highly Valued Startup Zenefits Runs Into Turbulence.” We should expect more of these in the future.

In late 2015, many public technology companies saw a significant retrenchment Continue reading "On the Road to Recap:"

Benchmark’s New General Partner: Scott Belsky

The partners at Benchmark are delighted to announce that Scott Belsky has joined the firm as our newest general partner. It is rare for us to encounter a partner candidate who has so much experience as an operator, investor, and advisor at such a young age. We have confidence that Scott can be one of the best investors of his generation, and we are excited by the opportunity to have him as a member of our team. Scott came to our attention through his work as an early-stage investor and active advisor to important companies like Uber, Warby Parker, Pinterest and most recently Periscope. Being in front of such big, transformative ideas at an early stage shows tremendous investment judgment. His work with the Periscope team exemplifies his character as an investor. We learned from Periscope’s founder, Kayvon Beykpour, about Scott’s role as a trusted advisor and confidant in the company’s earliest stages, culminating in Periscope’s acquisition by Twitter and subsequent integration. Scott’s relationships with founders like Kayvon embody Benchmark’s approach of working shoulder-to-shoulder in support of the entrepreneurs we back. Scott never sought credit, fame, or anything that would put him in front of his clear purpose to help the entrepreneur. Scott is also known as the founder and CEO of Behance, an online design community that became the essential showcase for design work around the world. He bootstrapped the company in New York for five years before raising venture capital from high-quality investors like Jeff Bezos and Union Square Ventures, then managed the business to a successful sale to Adobe in 2012. Scott remained at Adobe, managing the deep integration of Behance into the Adobe Creative Cloud and leading Adobe’s innovative mobile product efforts. Scott is incredibly passionate about the craft and theory of design, and has helped drive the central role of design in modern digital products. In 2007 he founded 99U, an annual conference attended by thousands of design leaders and creative professionals. He is also a prolific writer on the subject of product design and managing creativity, both online and in his book, Making Ideas Happen. At Benchmark we have witnessed the increasing influence of design in startups, and we see Scott’s pivotal role in the design community as a key competitive advantage for our current and future portfolio companies. Adding a new partner is a significant event for Benchmark. Our equal partnership structure, which is the foundation of our firm, means Scott enters with the same platform to work with entrepreneurs as the current partners. We are convinced that Scott’s character, dynamic curiosity, and passion for entrepreneurship will take Benchmark to a higher level of success. – Bill Gurley, Eric Vishria, Matt Cohler, Mitch Continue reading "Benchmark’s New General Partner: Scott Belsky"

The Daily Startup: Videoconferencing Provider Lifesize Spins Out of Logitech

dailystartup_D_20090806101628.jpgArt by Mike Lucas
Logitech International SA has spun off its videoconferencing division as Lifesize Inc.The new private company has raised $17.5 million in funding from Meritech Capital Partners, Redpoint Ventures and Sutter Hill Ventures. Lifesize was founded in 2003 under the name KMV Technologies. Its early board members included Jeff Brody of Redpoint Ventures, Vab Goel of Norwest Venture Partners and Venu Shamapant, then of Austin Ventures, according to regulatory filings. ALSO IN TODAY’S VENTUREWIRE (subscription required): Buddy Platform, an Internet-of-Things analytics company that was backed by Microsoft Ventures, has listed on the Australian Securities Exchange through a reverse takeover of struggling public Australian mining company Potash Minerals Ltd. Bill Gurley is stepping down from the board of Zillow Group Inc., according to a regulatory filing. The resignation from the publicly traded company is effective Thursday, according to the filing. Mr. Continue reading "The Daily Startup: Videoconferencing Provider Lifesize Spins Out of Logitech"

Bill Gurley Surprises With A Positive Note On Seed Stage Startups

Bill Gurley Benchmark Capital’s Bill Gurley may be Silicon Valley’s best-known tech bubble doomsayer, but he took a positive view of the early stage investments in an onstage interview at the Wall Street Journal Live conference Tuesday. “Earliest stage is probably the most insulated from this,” he told the audience of his belief we are in an impending bubble pop. Read More