Innovative Strategies and Competitive Advantage | 23min snip from The Tim Ferriss Show

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#651: Legendary Investor Bill Gurley on Investing Rules, Finding Outliers, Insights from Jeff Bezos and Howard Marks, Must-Read Books, Creating True Competitive Advantages, Open-Source Strategies, Adapting Mental Models to New Realities, and More

The Tim Ferriss Show

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CHAPTER

Innovative Strategies and Competitive Advantage

This chapter discusses competitive advantages in business, emphasizing lesser-known factors that contribute to success, such as network effects and switching costs. It highlights the thought processes of influential leaders like Jeff Bezos, their innovative approaches in large organizations, and the balance between employee happiness and performance. Additionally, the chapter explores the future of e-commerce and the importance of challenging the status quo to foster creativity and adaptation in rapidly changing environments.

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Bill Gurley (@bgurley) has spent more than 20 years as a general partner at Benchmark. Before entering the venture capital business, Bill spent four years on Wall Street as a top-ranked research analyst, including three years at Credit Suisse First Boston.

Bill also maintains a blog on the evolution and economics of high technology businesses called Above the Crowd.

Over his venture career, he has worked with such companies as GrubHub, Nextdoor, OpenTable, Stitch Fix, Uber, and Zillow.

Bill has a BS in computer science from the University of Florida and an MBA from the University of Texas. He is also a chartered financial analyst. Bill is a board trustee at the Santa Fe Institute, a research and education center focused on the study and understanding of complex adaptive systems.

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[05:51] The book Bill calls "the most efficient short-form MBA one can find."

[07:31] Sell-side analysts vs. buy-side analysts.

[09:45] Financial models, rules of thumb, and making (sometimes wrong) decisions.

[17:28] Howard Marks and Stan Druckenmiller.

[19:26] Micro vs. macro investing.

[20:40] Institutional Investor's All-America Research Team.

[24:16] Expanding distribution.

[27:04] Return On Invested Capital (ROIC).

[33:10] Repurposing good ideas for alternative applications.

[37:01] The conviction of network effects.

[38:58] SaaS and open source.

[42:40] Bet sizing.