I was fortunate enough to have Bill Gurley in our boardroom for 10 years. Bill led Zillow’s Series A funding round way back in 2006 when we were just a PowerPoint deck and a couple of Expedia alums trying to revolutionize real estate. Dubbed theworld’s top venture capitalist, Bill’s backed some of today’s most transformative companies, from Twitter and Snapchat to OpenTable, TripAdvisor, Yelp, Uber and Glassdoor.
The companies within Bill’s investment portfolio have some clear similarities: great user-generated content, a reliance on the network effect and a “power to the people” mentality, meaning they put consumers first. But companies don’t succeed solely because of their business model or mission – they also need strong leadership.
According to Bill, great leaders tend to be unafraid, innately curious and bold. He looks for these qualities in the founder pitching the investment opportunity because – while the idea is important – it’s the person who is going to execute it.
When Zillow was just getting off the ground, Bill gave me some great (and seemingly counterintuitive) advice: “We shouldn’t be afraid to do unscalable things,” he said. He reiterated this advice recently, citing Yelp as an example. When PayPal alumni Russel Simmons and Jeremy Stoppelman founded Yelp, they were laser-focused on gaining traction in San Francisco versus lighting a fire nationally.
Undoubtedly, this had some venture capitalists running for the hills; a service that’s only up and running in one city isn’t exactly appealing from a venture perspective, at least on paper. There is the issue of the size of any one market, but more importantly, only being in one city leaves a company exposed to a competitor racing to expand nationally (and internationally), gaining first-mover advantage.
But to hear Bill tell it, Yelp succeeded partly because its leaders weren’t afraid of doing something unscalable. They built an intensely loyal following in a single city, and then they expanded to other cities. Today, Yelp is global, from Germany to Malaysia. They “kick-started a flywheel,” Bill says.
“I’ve tried and failed to convince many entrepreneurs that I care more about flaming intensity in a very small pocket than that you’ve launched in 40 cities… If you have something that looks fantastic and repeatable, then we can put venture capital behind it and scale like crazy,” Bill says. In other words, leaders should be more afraid of creating myriad bad experiences than doing one thing really well on a smaller scale. Scale will come later.
In addition to being unafraid, the best leaders are born curious. “If you’re remarkably curious, you’re constantly learning new ways you could win,” says Bill. “You’re less likely to fall into the trap of thinking that yesterday’s rules are the ones you need for tomorrow.”
I totally agree with Bill’s perspective. Vertical and technical expertise matter, but insatiable curiosity is what drives innovation. At Zillow Group, we try to bring on people who love to learn because that usually translates to tremendous growth on the job. We also cultivate curiosity through regular Hack Weeks, where teams across the company – from engineering to design – spend the entire week exploring new ideas and projects of their choosing. When you allow people to pursue something they’re curious about, great things can happen. As Bill says, “Curious companies constantly push forward.”
Lastly, Bill argues that the most transformative companies have bold leaders at the helm who don’t cling to particular business models or overly focus on short-term results. They’re willing to “shoot their cash cow,” he says, which is a bold move, especially when you’re a public company with shareholders.
Thanks to Bill for sharing his unparalleled insights, and be sure to check out the full episode below, or read the transcript here. In addition to discussing leadership, we talked about Benchmark’s unique approach to partnership and the creation of the Zestimate.'
Originally published on Linkedin Pulse.
About Spencer Rascoff