Ben Gilbert: evaluation

Transcript context

…Yes. Now let's talk about some of the second order benefits or effects. Everything is about trade offs. It's the benefit that comes with the problem. It creates a culture of unbelievable trust. I think this was some of the surprise upside of the model. When nobody has any incentive to claim credit for anything because everyone already has the best job at the best firm, then it forces even the most competitive people of which they all were unbelievably competitive people to have a sense of teamwork, that just wouldn't have happened otherwise. As we know, from Buffett and everyone else who has said it over the years, incentives drive behavior. If you truly create the incentive for this group of people to be this team-oriented, then all you're left with is this culture of teamwork and this culture of trust, where you're all in bed with each other. You have signed up to be, for better or for worse, a part of this person's success or failure. Let's unpack those incentives, because I think there are several layers to this. There's the obvious economic incentive. David Beirne made as much money on eBay as Bob Kagle made on eBay, as Bruce Dunlevie, as Kevin Harvey, as Andy Rachleff, made on eBay. They all made the same. If one of them could help give a boost that would add an incremental couple of billion to that market cap, it was well worth it to all of them. That's the most baseline obvious one, but I actually think that's the less salient one on a day-to-day basis. Having lived myself as part of firms, we all have too, obviously, the money is the scoreboard. Your job is to provide outsized returns for your limited partners and it matters to you. But on a day-to-day basis, that is not part of your mind every day. What is much more salient to most people who are working as investors within a venture capital firm, is the impact of what they are doing on their own career trajectories. In any other structure, that is either the foremost thing on your mind or the foremost thing at the back of your mind. You may profess otherwise, but it is there. It is there every day in what you're doing. Just one small example that the older generation and some of the current generation Benchmark partners like to talk about. The older folks are thinking back to their previous firms. Say a senior partner has a portfolio company that they're on the board of, that they're responsible for that investment, and there's an executive hire that would really help. You know a candidate who could be the perfect candidate for that firm. Is it in your best interest to send that candidate to that firm or to wait until one of your portfolio companies has a spot open for that candidate? There's economics. But even more than that, making that senior partner’s track record better not only does you no good, it does you net negative good because it widens the gap between them and you.…

Stored transcript either side of the excerpt. The highlighted words are the published quote; the surrounding text is unedited source, never generated.