Bill Gurley and Philip Rosedale - Back to the Future

**Patrick O'Shaughnessy** (0:00)
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Hello and welcome everyone. I'm Patrick O'Shaughnessy and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, stories and strategies that will help you better invest both your time and your money. Invest Like the Best is part of the Colossus family of podcasts and you can access all our podcasts, including edited transcripts, show notes and other resources to keep learning at joincolossus.com.

**SPEAKER_2** (2:10)
Patrick O'Shaughnessy is the CEO of O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaughnessy Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.
Clients of O'Shaughnessy Asset Management may maintain positions in the securities discussed in this podcast.

**Patrick O'Shaughnessy** (2:35)
My guests today are Phillip Rosedale and Bill Gurley. Philip created Second Life in the early 2000s and helped build it into the largest virtual 3D world. Frequent listeners will recognize Bill, who was an investor in Second Life by a Benchmark Capital. During the conversation, we cover the fascinating story of Second Life and the billion-dollar economy that persists through to this day. Bill and Phillip share their key learnings from the experience, including the importance of usability, their views of the current metaverse opportunity, and what excites them most about the current focus on virtual realities.
If you're curious about what the metaverse might become, these two experts have seen much of this already and are kind to share their lessons with us. Please enjoy my conversation with Philip and Bill.
So Phillip, thanks for joining us.
The metaverse has become this insanely massive topic overnight. Everyone's writing about it. Facebook changed their name to meta. It seems like the next big trend in technology and consumer behavior. And we're very lucky to be able to discuss with you today, probably the person that has most built a version of the metaverse in the past, at huge scale with lots of interaction and tons of lessons. The motivation for this conversation today with you and Bill is really to explore not just what you learned, but also how those lessons might be applied to this very exciting, but yet to be proven future of the metaverse. And I think the right place to begin is with an overview of what Second Life was itself. So maybe just give us the origin story of why you sought out to build it in the first place when you did that. And we'll get into some of the bona fides of this world that you created.

**Philip Rosedale** (4:06)
Thank you. Thanks for having me. Well, first, as people have talked about Second Life, the origin story of it wasn't motivated as much by computer gaming as it was building and Lego kits.
I was fascinated by the question of what would happen if people could build things together in a space starting in darkness, starting with nothing. The thought that I had was, what if we could build a Lego set that was the rules of physics? Of course, things like Minecraft today, fast forward, look a lot like that question in ways. What if we could make some basic rules and some basic building blocks that would let people make things and then also let them do that together in the same space and also built an economy on top of it so that they could, if they chose to, they could trade those things with each other. That was really the core idea of Second Life and this was way before the idea of the VR headset or anything like that or even really fancy 3D graphics. The enabling technology that I had to actually wait to start with was really broadband and just basic 3D on computers. 3D came to computers in a way that was generalized right at about 1999