BG2 with Bill Gurley, Brad Gerstner & Aaron Levie | Software Valuations, Earnings, AI, Immigration & More | E02

**Brad Gerstner** (0:00)
I can absolutely see sometime over the next four quarters, we're going to hit a zone of disillusionment because everybody's pig piled in here. They think it's all happening now. It's going to take a little bit longer, just like the Internet did, just like Cloud did.
Bill, we made it to episode two.

**Bill Gurley** (0:28)
We did. Aaron, I'm super excited you decided to join us.
I've known you for a while and I've heard other people talk about you, and there's two things I just really love. One, you always have an independent point of view and you're not afraid to state it, which is not true for everyone, especially people in the CEO slot. But more importantly, people refer to you as an old soul. Now, I looked that word up. It's actually, it's not derogatory at all.
It doesn't even mean you're old. It means you're wise beyond your years. Now, I know you're not 40 yet, so you're two decades short of me. So I'm not calling you old, but I do think people look up to you, respect you, think of you as a mentor in the valley. And so we'd love to hear what's on your mind and what you're thinking about.

**Aaron Levie** (1:15)
I appreciate that. I think actually I have more gray hair than either of you guys.
So I think I'm going to take...

**Brad Gerstner** (1:22)
That's what happens when you're in the software company through Zurb.

**Aaron Levie** (1:27)
They did not tell me this when I got started. So I wish this would have been on the label.
But yeah, no, I'm super excited to be here. Obviously, you know, a ton of stuff happening in the industry right now. And I'm excited to dive into whatever you guys want to talk about.

**Brad Gerstner** (1:41)
We have to kick off with software, right? Yeah.
You're one of the thought leaders in the space.
And certainly, we know you well, and most people in Silicon Valley know you well. But maybe just level set, you know, quick reminder for everybody. What does Box do? What inspired you to get it started? And then how it's evolving, you know, as you guys exit Zerp?

**Aaron Levie** (2:02)
Actually, the Zerp thing, I mean, you know, I know there's a lot of Zerp stuff going on, but we actually never really even had that much of a Zerp benefit. I can certainly get into the different eras.
There was about a three-year period where we raised a ton of capital and we burned it, and we did have a little bit of Zerp benefit, but it was actually, like, on paper, exactly the right thing to do at that point. I got diluted a ton in the process as a result, but it was actually, like, strategically the most important thing to be doing. But history of the company super quickly and kind of what we do, so we built a platform that helps companies manage their most important data, their financial documents, their marketing materials, their contracts, their strategy, you know, content, anything that can turn into a piece of content we manage and store and secure. We have about 115,000 customers, 70% of the Fortune 500 And we started the company with a really simple premise. This was in 2004, 2005, when we got the idea. It was, like, right at the start where, like, you could put data in the cloud. It wasn't called the cloud then. And we did, like, crazy bridge rounds and all this stuff. I think we pitched Bill, like, four times at that point.
Handle it, got rejected, you know, probably appropriately. Or maybe it was Peter Fenton.
So, but we can blame it on him. And then pivoted to the enterprise and then just got super lucky, which was there was this hyper wave of cloud with AWS, iPhone, and then iPad. And what happened was everybody's legacy technology no longer worked in this era of mobility and cloud computing for managing their content. And so we were able to kind of ride that wave where we just had a better, cheaper, faster, more secure platform than what else was on the market. And then that was sort of the period where we just poured the fuel on the fire on hiring sales reps, hiring engineers, building out a platform, and then scaling up to basically where we are today. So that, you know, 15 years of history in a couple seconds.

**Bill Gurley** (3:59)
One thing I'd love to talk about, especially with you here, Aaron, is software multiples. And so you've lived through, you know, a lot of different, you know, spots on the curve. And, you know, I've always said that Silicon Valley has the crudest kind of least intelligent view of valuation. They always rush to price to revenue because it's easy and because quite frankly, it's easier to be optimistic. And so, and then the other thing that happens in Silicon Valley, all founders kind of tie themselves to a single number. So 10 times revenue or something.