With Silicon Valley's culture under the microscope, one of
"One of the traits that you will see in successful entrepreneurs is an incredible storyteller," Benchmark's Bill Gurley said on Thursday, from the LAUNCH Festival in San Francisco. "If you want to recruit, if you want to close partnerships, if you want to raise money — all these things require the ability to sell people on your idea. That same type of salesmanship gone too far can get you into trouble."
The LAUNCH Festival aims to help start-ups scale, and Gurley has become an evangelist of responsible start-up growth through his closely followed blog, Above the Crowd. Most recently, Gurley famously warned that global tech valuations would compress quickly, as more and more companies reached valuations of $1 billion or more, irrespective of volatility in public markets.
Gurley spoke with angel investor Jason Calacanis, a fellow investor in Uber. Gurley has been helping the high-flying company find a new chief operating officer, as the ride-hailing unicorn tries to recover from a series of highly publicized missteps.
While they couldn't get into specifics, the pair discussed Airbnb and Uber's "hard-driving" and "aggressive" founders that are willing to "reinterpret local regulations." The sharing economy start-ups have been caught in the cross hairs of laws that govern employees of taxi companies or hotels.
Calacanis also asked Gurley what he thought about start-ups like Theranos, where business soured with regulators and shareholders after its blood-testing technology was called into question. Calacanis also pointed to Zenefits, which has been overhauled after accusations of skirting insurance industry regulations.
Gurley said problems can arise when founders start to fool themselves with their sales pitch.
"Some people are capable of self-delusion, and it's a powerful tool," Gurley said. "But it can go awry. I think at the end of the day, you have to hold yourself accountable for knowing what's real, what's true, and not crossing that line."