Ep5. Stock Comp, AI Cold War, Valuations for LLM | BG2 with Bill Gurley, Brad Gerstner, & Bob Mylod

**Brad Gerstner** (0:00)
We even have a court criticizing Elon for taking an options package where he made no money unless he saved the company from bankruptcy. Meanwhile, the CEO of his arch rival, who created no shareholder value over a period of five years, is making tens of millions of dollars a year in our issues.
Hey, man, great to see you.

**Bill Gurley** (0:33)
Good to see you.

**Brad Gerstner** (0:34)
Good to have you back.

**Bill Gurley** (0:35)
Glad to be here.

**Brad Gerstner** (0:36)
Man, I raced up here from NVIDIA GTC.

**Bill Gurley** (0:39)
How was that?

**Brad Gerstner** (0:40)
I mean, it's a, you know, I texted Lincoln yesterday when I was down there for the keynote. And he said, you know, I said, how'd your day go at school? And he said, good. He's like, hey, pops, what are you up to? And I said, you know, I'm just watching the future. And he said, he asked a great question. He said, well, why is this any different than all the other computers in the world?
And I said, you know, like we've talked about before, we're going from this era where computers were highly efficient calculators. And I said, you know, we're not far off from it. Be computers being able to reason and think and being smarter than every human who's ever lived on the planet. So it's, I mean, it's an exciting time, disruptive time. We're gonna talk about that more later in the show.
But we thought for episode five, we'd mix it up a little bit. I mean, one of the things you and I talked about when we started the pod was not only do we wanna talk about the topics of the day, but we also wanted to do some deep dives on topics that you and I've talked about over the years. You know, I think about the topics that you've covered on Above the Crowd, whether it's network effects or whether it's a rake too far. And so, you know, one of those things we're gonna talk about today, after that, we're gonna get into some of these Google Apple rumors. We're gonna talk a little bit more about the TikTok fallout, et cetera. But we've been pretty passionate and argued a lot over the years about stock-based compensation. And it's so important to Silicon Valley because it's all about incentives and alignment.
It's such a special part of what makes this place great, but it also has been a source of a lot of consternation from Warren Buffett down the line.
So we knew we wanted to talk about this, but in order to talk about it, we had to invite one of our old friends. Correct. Who may be the best expert on the topic, the legendary CFO of Priceline, Bob Mylod, who's served on tons of VC boards. And he truly gets this from both the startup perspective and the public company perspective. So Bob, thanks for joining us.

**Bob Mylod** (2:46)
Gentlemen, thanks for having me. It's great to be here.

**Bill Gurley** (2:49)
Yeah, if any of my CEOs or CFOs are of the mindset, they want to get this right. There's no one on the planet I'd rather introduce them to and have them talk to them, Bob.

**Brad Gerstner** (3:01)
Bob, I think you joined Priceline in 1999
We must have met around 2000 or 2001 You were the CFO of the company from when I believe it was a billion dollar company all the way to it being worth upwards of 100 billion, certainly on the board for that entire period of time. You're still on the board of booking and it's become extremely valuable in the public market.

**Bob Mylod** (3:28)
There was a big roller coaster along that way, but that's generally the math. And I wasn't CFO the entire time, but yes, that's the general math of it.

**Brad Gerstner** (3:38)
Bill, why don't you frame for us, why is this topic so important? And importantly, a little bit about how we got here with stock-based compensation.

**Bill Gurley** (3:50)
Yeah, and I think everyone in Silicon Valley knows that equity participation is part of the model, always has been, right? And I think in general, when it was started, venture capitalists felt strongly that it created alignment, right? You wanted managers and shareholders owning the same equity and having the same interest. And if you create one of these monster outsize wins, everyone's a winner. And so it just made sense, right? And I think it's been, certainly since I got here, but way before I got to Silicon Valley, I think it's been a part of what people do.
In the late 90s, we went through the.com boom and bust.