This week's Commonplace post is about a career pattern that I've long been interested in: "person finds an idea at the right level of abstraction, and then chases all the implication of said idea for the length of their career."
Conversation
In 1993-1996, Gurley became friends with Michael Mauboussin, who turned him onto the work of Brian Arthur. The paper was 'On Competing Technologies and Historical Small Events: The Dynamics of Choice under Increasing Returns', 1983. tuvalu.santafe.edu/~wbarthur/Pape
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It was the first paper to describe network effects in business. Shortly after reading that, and reading about Arthur in Waldrop's book Complexity, Gurley became the lead analyst for the Amazon IPO.
His appreciation for 'increasing returns' probably had something to do with it.
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If you read Gurley's thoughts on marketplaces, or if you listen to him speak on podcasts and in interviews, there's usually a level of nuance to his understanding of marketplace network-driven businesses that you don't see anywhere else.
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The foil I'm using for my piece is Bill Gurley; but there are notable other versions of the same pattern amongst other people. For instance, I quite enjoyed listening to Mike Milken on how he came up with the idea for high-yield bonds ('junk' bonds):
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In Milken's case it was W. Braddock Hickman's Corporate Bond Quality Investor Experience, nber.org/books-and-chap, which Milken studied as a Wharton MBA. He worked out the implications of those finding for the rest of his finance career.
Replying to
You can't really copy this as a career pattern, however. I just thought these stories were pretty cool. They give new colour to Pasteur's old saying, "In the fields of observation, chance favours only the prepared mind."
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Update: I wrote a post linking the latest essay with 'Seek Ideas at the Right Level of Abstraction'; it's in the members forum here — forum.commoncog.com/t/what-bill-gu