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Bill Gurley on what he learned from his mistake of not investing in Google’s Series A

January 30, 2025

“The biggest mistake I ever made is I met Larry [Page] and Sergey [Brin] when they had 25 employees at Google and had them present to my partnership, and we didn’t follow through and try to invest.”

Bill reflects on what he learned from this:

“A lot of people talk about this in venture, but you have asymmetric returns — you can lose 1x your money, but when you miss on [a Google], you can miss out on 10,000x your money. So we had a saying internally, ‘What could go right?’ We never sweated a zero… But when we miss big winners, we talk about that frequently…. And one interesting thing about venture is it’s a complex system and there are no rules… I’ve often thought about it as: You develop a set of pattern recognition, which is enhanced if you’re working with a partnership because everybody has their own. And then you have like 10 loose rules that you apply when you see a company. But a lot of the times when you make a great investment, it’s because decide to relax one or two of those rules.”

He emphasizes that Google wasn’t an obvious winner at the time:

“Yahoo had fallen from $82 to $10 as a public company. Excite was in bankruptcy. These were the other search companies at the time. Larry and Sergey both wanted to be CEO and they were PhD students at Stanford. Co-CEO PhD students is not on the checklist. And they wanted a really high price.”

But what Bill finds most interesting is that two of the all-time great venture capitalists were able to look past these problems:

“Two of the very best venture capitalists of all time — John Doerr and Mike Moritz — did the deal. So they had a superior mental framework in that situation and broke a lot of the rules. Another thing was they split the deal at a really high price so their ownership was much lower than they traditionally get. But they knew to break that rule at the time.”

Bill gives Tesla as another example of an investment that “likely violated most people’s entire rule set” but being contrarian is what made the return so high.