#413 How To Run Down A Dream

0:00Sam was born in the Netherlands, where his father was working at the time, but he grew up mostly in Marlowe, Oklahoma, a town with a population just under 5 ,000. Sam's dad worked for an oil and gas company. Sam was gifted with intelligence and was his high school's valedictorian. From an early age, he loved numbers. He loved math. He was fascinated by the power of exponential growth. At the University of Oklahoma, he majored in finance. He loved sports. He briefly considered becoming a coach, but if you'd asked him at the time, Sam probably would have told you he wanted to become the CEO of an industrials company or something like that.

0:36After his freshman year, he applied for an internship at Conoco. He was invited in for an interview, and it was all going well until the interviewer asked Sam where he imagined he would be in five years. Sam was honest. He said he figured he would go to business school. The interviewer was like, what? You don't want to work at Conoco in five years? And Sam said, no, definitely not. I'm not interested in that. Instead, he interned in the accounting group of Ersten Young, which happened to be the world leader in providing third-party opinions on the purchase of professional sports teams, giving Sam some early exposure to the world of sports business.

1:11After he graduated, Sam was offered a job at Bain Capital. He was the first University of Oklahoma student ever hired by Bain. He enjoyed the work at Bain. It was long hours of rigorous analytical work. He liked to bring large amounts of data to important decisions. About 18 months into his time at Bain, Sam was at lunch with some other young analysts and two men he considered mentors. The two older men went around the room asking the young analysts, if you could do anything, any job in the world, what would you do? Most of the answers were something along the lines of private equity or CEO. When they got to Sam, he just said, sports GM.

1:50It was the first time he verbalized this idea, but it had been forming in his mind for a while. I remember they laughed at me. It made me so mad, Sam said. At the time Sam said this, almost nobody was bringing the tools of data analytics into the world of professional sports. Then in 2002, the Boston Red Sox hired Theo Epstein, an espoused fan of advanced data analytics, as the team's general manager. making the 28-year-old Epstein the youngest GM in baseball history. As Sam was thinking about all of this, the author Michael Lewis published the book Moneyball, which is a look inside the innovative approach of Oakland Athletics general manager Billy Bean to assemble a competitive baseball team on a small budget.

2:33Sam read Moneyball in two days. He loved everything about it. He could not stop thinking about it. Sam decided he was going to quit his lucrative job at Bain and start working towards his dream of becoming a general manager. When he told his parents, they confessed that they thought he was crazy.

2:50Bill Gurley:At this time, in every meeting Sam had, he would give his one-minute spiel about wanting to disrupt professional sports by using data to make better decisions. In all these meetings, you could just see their eyes roll, Sam said. And so at this time, Sam starts going to business school at Stanford. At Stanford Graduate School of Business, Sam was able to take a sports management class for the first time. He also reached out to Perug Marathoth, the former Bain analyst who was already working with the 49ers. Sam had never met him before, but told him in an email that he had heard of him, that he thought his path was interesting, and that he'd been thinking a lot about this and would love to ask him some questions.

3:24Parag agreed to meet. We went and ate burritos across the street from Stanford, Sam told me. And I didn't ask him 20 questions. I asked him 200. While attending Stanford, Sam also met with Billy Bean, the A's general manager at the center of Moneyball. He spent time with Michael Lewis. During his first year at Stanford, Sam also sent both emails and physical letters to NFL franchises all over the country, offering to work as an unpaid intern in the front office. He suggested that he could bring a new way of thinking about value in the salary cap era. His pitch was simple. I can help you. You have a limited pile of chips, and you need to turn it into as many wins as you can.

4:01I can help you reduce risk and boost return, or both. I'll be in your town. We should talk. When spring break came around, most of his fellow students went to places like Aruba or Cancun. But Sam was focused on his goal. Instead of a trip to the beach, he went on what he calls a road show on Southwest Airlines. He visited five or six different football teams that week, mostly to introduce himself. I was just trying to get a foot in the door, Sam said. One of those teams was the Houston Texans. Sam was invited to intern at the team's front office. The initial internship lasted eight weeks, but the team asked Sam to stick around during his second year of business school, which meant Sam had to fly back and forth from Palo Alto to Houston several times a week.

4:44But Sam was willing to take every chance to be in the building. He asked questions as often as he could without burdening anyone. In most meetings, he didn't say anything at all. I've had a few meetings, a few conversations with him that were like that. He spent most—I'm talking about Sam Hinckley, by the way, which I'll get you in one second.

5:01Bill Gurley:He spent most of his time building a software tool for the draft that could help the team evaluate each player's relative value in an effort to maximize return on draft day. With ample data, Sam could explain why a mid-second round draft pick is often half as valuable as a first round pick, but at 10 % of the cost. But the coaches were all set in their ways and resisted any new approach to personnel, especially from a baby-faced 26-year-old kid from Stanford. Sam realized that succeeding in this career would involve not just analysis, but also earning the right to influence these stakeholders in the team.

5:35This is what he said. Earning the right to get them to listen, to make good arguments, to realize the facts are on the side, and that it is in your best interest to do this for this particular goal. After he graduated Stanford, Sam had a two-hour conversation with Les Alexander, who owned the Houston Rockets NBA franchise at the time. They talked about how data could be used to make better basketball decisions. Les was a bond trader in the 1980s, so when Sam talked about reducing risk and boosting returns, Les understood immediately. At just 27 years old, he was hired as a special assistant to the general manager.

6:08Sam and his wife moved to Houston and slept on an inflatable mattress while Sam worked from 6 a.m. until midnight every day. Within a year, Les Alexander hired Daryl Morey as the team's assistant GM. Daryl shared Sam's analytical philosophy. A year later, Daryl was promoted to general manager, making the Rockets the first NBA franchise to hire a GM dedicated to integrating advanced statistical analysis. Sam was promoted to vice president, making him the youngest VP in the league. Together, Daryl and Sam built the best basketball sports analytics department in the country.

6:39Bill Gurley:A few years later, Sam was invited to interview for the general manager job of the Philadelphia 76ers. The conversation did not go well. We could not get on the same page in a bunch of ways, Sam told me, and I was aggressive about it in a bunch of ways that surprised them. And so I told them I couldn't come and I didn't. Sam decided to stay in Houston for another year, but he made a few predictions for what would happen that year in Philadelphia, most of which came true. Impressed, the owners of the 76ers came knocking again. So in 2013, at the age of 35, almost exactly 10 years from the moment he told his parents he wanted to be a GM, Sam Hinckley was hired as the general manager of the Philadelphia 76ers.

7:21Bill Gurley:Sam's tenure in Philadelphia was complicated. Sam's time in his dream job was covered extensively in the media. He eventually left. So what do you do if you finally have your dream job and then lose it? Sam knew when he started his journey that a job as a general manager of a sports franchise could be tenuous. He knew that there was some personal risk involved with his rebuilding plan, and he knew that he needed to take some time to think about what he wanted to do next. He moved his family back to the Bay Area and started teaching a few courses at Stanford. He tells his students, you have two ears and one mouth.

7:50Use them in that proportion. That is the most hinky thing to say. And I'm sure he has said that to me multiple times.

7:56Bill Gurley:Sam also used this time to start his pathway towards a second dream job. And knowing Sam pretty well, this job is way more suited for who he is as a person. In 2020, Sam launched his own VC firm called 87 Capital. The The name comes from a key moment in Robert Caro's Means of Ascent, which recounts Lyndon Johnson's 1948 Senate election victory, which he won by a margin of only 87 votes. I'm going to put the book down for one second. A few years ago, Sam was interviewed by my friend Patrick on his podcast, Invest Like the Best. And in that, he gave a great description of why he named his business 87 Capital.

8:31Bill Gurley:The description is only two sentences, but it's very deep. The name 87 Capital is from Means of Ascent, The Years of Lyndon Johnson by Robert Caro. These are the two sentences. One candidate wins by 87 votes and gets the presidency. The other candidate lost by 87 votes, but effectively wins back his life's work and his family. Back to the book. I've had the pleasure of knowing Sam for almost a decade now. He is one of the smartest people I know. Sam has been thoughtful and methodical at every stage. Yes, for sure. That's exactly how he is. He's earnest and direct. Yes, he is. He gives back. Yes.

9:05Bill Gurley:He teaches. He mentors. Yes, he's played this role in my life. He wants to help fellow dreamers, and he has never stopped learning. He is a voracious reader. He loves working with the people he works with now. This is a quote from Sam. I'm investing money on behalf of other people. I like them. I like them a lot, and that is meaningful in ways that I wouldn't have guessed. If one of them calls me, I'm excited to talk. I know our conversations will be fun and generative, and I didn't always have that with the people I worked for before. This is why I said this is actually his true dream job. Sam belongs in a world with infinite wins.

9:39Bill Gurley:I am surrounded by people that are really bright and really curious, and I'm curious about them. That is an excerpt from the book and the talk I'm going to talk to you about today, which is Running Down a Dream, How to Thrive in a Career You Actually Love. It is written by Bill Gurley. If you've been listening to Founders for a long time, you know I haven't shut up for many years. Probably like half a decade ago, I randomly discovered this talk on YouTube. The title of the talk is slightly different than the book. It's Running Down a Dream, How to Succeed and Thrive in a Career You Love. It's this talk from 2018 that Bill Gurley was giving to a bunch of MBA students.

10:09Bill Gurley:I've said it multiple times. I think it's one of the best talks on YouTube. The reason I want to start there is because I literally have personally used ideas that I discovered in this talk to build this podcast. It is amazing how things can come full circle in your life. In the talk and in the book, Bill Gurley profiles a bunch of people. One of them is Sam Hinckley, who, as I am using the ideas from this talk to build the podcast and to make it more valuable for people to listen to, Sam discovers the podcast. And we've built a relationship over the last several years. I consider him a close friend and kind of like an older brother to me.

10:43And so when I was thinking about starting this episode, I was like, I have to start here because it's all connected. And so what I want to do is I want to run down my notes.

10:49Bill Gurley:Most of the notes I'm going to read to you now are actually from the talk. The book is an expansion of that. And there's some people added to the book that are not in the talk. So I'd recommend buying the book and watching the video. And I think Bill does a great job of really bucketing everything in five main ideas. So I want to cover three people first. So Bill Gurley is studying three people that get to the top of their profession in vastly different domains at different points in history. And he says, I was inspired after studying the stories of three people that you might call luminaries.

11:15Bill Gurley:And I noticed an overlap pattern amongst them. And so then he breaks down who these people are and what they did to run down a dream. And first he talks about why this is important. A dream job means you should chase a career where you have an immense passion. Immense passion is one of the most important phrases that Bill uses over and over again. His friend and partner says life is a use it or lose it proposition. Most people only take one career path, but if you've got only one shot, why not do what makes you happy? And so then he starts running through this list of three people. The first one is a legendary college basketball coach, Bobby Knight.

11:48Bill Gurley:And really what sticks out is just how bad do you want it? Like how bad do you actually want to do this and what lengths are you willing to do and are you willing to go to to actually build a life and career that you love? Before we get back into the story, I want to tell you one of my favorite quotes I've ever read in any biography. It says, surround yourself with the smartest people you can find. When you see such a person, do all you can to get them on board. That extends your reach and terrific people are usually fun to work with. That reminded me of Jeff Bezos. From day one in his very first shareholder letter, Jeff would emphasize the importance of having the very best team.

12:18Bill Gurley:He said, setting the bar high in our approach to hiring has been and will continue to be the single most important element of Amazon's success. Jeff would tell you that you have to build a team that pursues the A players, and that is exactly what Ramp did. Ramp is a presenting sponsor of this podcast, and Ramp has the most talented technical team in their industry. That means when you use Ramp, you now have top-tier technical talent and some of the best AI engineers working on your behalf 24-7 to automate and improve all of your business's financial operations. and they do this on a single platform.

12:49Bill Gurley:Ramp gives your business easy-to-use corporate cards for your entire team, automated expense reporting, and cost control. Ramp's corporate cards are fully programmable. The longer you use Ramp, the more efficient your company becomes. This is important because as Sam Walton said in his autobiography, you can make a lot of different mistakes and still recover if you run an efficient operation, or you can be brilliant and still go out of business if you're too inefficient. Ramp helps you run an efficient organization. As one customer review said, Ramp was like having a teammate who you never need to check in on because they have it handled.

13:17Bill Gurley:Make history's greatest entrepreneurs proud by going to ramp.com to learn how they can help your business save time and money today. That is ramp.com. And so in Bobby Knight's case, he becomes an assistant coach, basketball coach, after he graduates college. But this is what Bill says. From my point of view, it isn't what happened inside the four walls of the gym where they practiced every day. That was most important. Instead, it's what he did outside. In the first five years of his coaching career, he befriended five of the top basketball minds. And here's just one example of how he was building relationships.

13:48Bill Gurley:For two of these coaches, he went to a coach's luncheon where they knew, where he knew they were going to be and begged them to let him sit next to him. He would then keep following up and spending time with both of these coaches. He didn't stop there. Then he starts building a relationship with one of the greatest basketball minds at the time, a guy named Pete Newell. He also intentionally built relationships with other coaches, not just basketball coaches. He became friends with the University of Michigan football coach. He meets a young Bill Parcells and studies him. He becomes friends with and studies the swimming coach at Indiana University.

14:22At age 31, Bobby Knight becomes the head coach at Indiana University.

14:25Bill Gurley:Five years later, they went undefeated both in the regular season and postseason and won the national championship. That has never been repeated since in over four decades. His career in Indiana, he accomplished a lot. Three national championships, four Coach of the Year awards, 11 Big Ten titles. When he retired, he had 902 victories. He had the most wins of any coach at the time. Pete Newell, who he sought out as a mentor and somebody to learn from, would later induct Bobby Knight into the Hall of Fame. So as a brief overview, we're going to get to how they do this. I'm just giving you a brief overview of the first three people, and then we'll dive into what I think is the most interesting part of the talk in the book, which is essentially like this blueprint almost of like how to run down a dream.

15:03Bill Gurley:So the next person is Bob Dylan. Bob loves music from an early age. He gets his first guitar when he's 10 years old. When he's a little older, he falls in love with folk music. Over the course of eight or nine months, he studied every folk album he could. He didn't have any money, so at the time he'd walk into the record store and listen in a booth. He would do that for hours and hours and hours. He became friends with other people that also liked folk music, but that had money. He would go to their house and listen to their entire record collection. And then he does something, which Bill says is probably the most ambitious action he's ever heard of somebody that was trying to pursue their dream job.

15:38Bill Gurley:He hitchhiked from Minneapolis to New York City. He had a guitar, a suitcase, and$10. That is a 1 ,200-mile trip. If you ask him today why he did it, he would say he was chasing the performers. He was listening to them in Minnesota, but the performers he was listening to were in New York City, and he wanted to see them. And there was really one person he wanted to see, which is Woody Guthrie. Woody Guthrie had become his hero. I read Bob Dylan's autobiography, which is excellent. I did an episode on it. It's episode 259, if you ever want to listen to it. Bob Dylan talks about in that book that he devoured Woody Guthrie's biography.

16:11Bill Gurley:So he finds Woody, he builds a relationship with him, and then Bob Dylan is hanging out at the epicenter for what he wants to do at the time. I think this is in Greenwich Village, if I'm not mistaken, in New York City. It was the epicenter of folk music at the time. So he would sit in all these venues for hours upon hours and just study what other artists were doing. Years later, one of the artists would say, he could perform any one of our songs like us. He was able to make a complete accurate copy. He was studying, studying, studying. He eventually gets signed. He releases his first album. it does okay but it's his second album that really makes him a star in 1963 he released a free will in bob dylan since he started he sold over 100 million records he's won 11 grammys he won an oscar and an emmy he's inducted into the rock and roll hall of fame he won a medal freedom award and he won a noble prize in literature and then the third person that bill was studying was danny meyer actually did an episode on danny's fantastic autobiography it's like probably nine years ago it's episode 20 so danny grew up loving food loving restaurants he was a complete obsessive but it took him a while to make the connection that he should just work in the field that he was intensely interested in.

17:10Bill Gurley:And so at the time he's working for this company called Checkpoint. They would manufacture those things. If you ever go in like a store and they have the things they attach to clothes, you can't steal them. And he was making incredible amounts of money. I think at the time it was like 125 ,000 a year. I think inflation adjusted would be like, you know,$400 ,000 a year. And he has this idea that he's going to go to law school, even though he's not interested in it at all. And the night before he's going to take the LSAT, he goes out to eat with his uncle, his aunt, and his grandmother. And he's talking about this.

17:37Bill Gurley:He said, I'm going to take the LSAT, become a lawyer. And his uncle replied, well, you just stop it. Why don't you go open a restaurant? You know that's what you're supposed to do. Danny says this comment by his uncle caught him off guard, but it woke him up. He wakes up the next day, takes the LSAT, but never applies to a single school. He then quits his job as a salesman where he's making all this money and then goes works in a restaurant for one-tenth of the salary. He'd work in the restaurant during the day, and then at night he starts taking classes. So he takes a wine class. He makes a list of 12 icons that he respects in the restaurant industry.

18:08Bill Gurley:He starts studying them. He creates a notebook for each and every one of them. What makes them special? What do they do that's unique? He studies their recipes. Then he goes to Europe and works in a restaurant there for free. And one of the restaurants he worked at, he actually had to pay$500 a month to work there. So he goes from making$125 ,000 a year all the way down to$12 ,000 a year to now negative$25 ,000. He's burning through his savings. But at every place he goes, he studies and watches every single thing that's going on. He watches the chef. He watches the recipes. He goes with them on sourcing trips to see how they pick out their food.

18:42Bill Gurley:He takes tons of notes. He studies the decor inside the restaurant. He studies the wine list inside the restaurant. He gets back to the United States and spends another six or seven months searching over 100 locations to find the very best location to launch his first restaurant. He is 27 years old when he opens Union Square Cafe in New York City. And Bill says, I love this quote from Danny. I spent nearly two years doing the best work ever as a student. Think about what he's saying. Danny's most proud of the studying he did on his own, not the studying he did in college. He viewed this as the best work he had ever done as a student.

19:19Bill Gurley:Danny would go on to launch 16 high-end restaurants in New York City. Four have won Michelin stars. Several years after that, he found Shake Shack, which is now a multi-billion dollar public company. And so now Bill does an incredible job of essentially tying everything together over these five guidelines. This is really the heart of what I want to talk to you about. And real quick, before we get back into this incredible book, this incredible talk, I need to tell you about Vanta. Vanta, Vanta, Vanta. Vanta helps your company prove you're secure so more customers will use your product or service.

19:48Bill Gurley:You can think of Vanta as your always-on AI-powered security expert who scales with you. The more your business grows, the more complex your security needs get. And that complexity can turn into chaos, and Vanta helps tame that chaos. Vanta automates compliance, continuously monitors your controls, and gives you a single source of truth for compliance and risk. So whether you're a fast-growing startup like Cursor or an enterprise company like Snowflake, Vanta fits easily into your existing workflows. This allows you to keep growing a company that your customers can trust. Many companies won't sign contracts unless you're certified, and this is causing you to lose out on sales.

20:20Bill Gurley:That is why the average Vanta customer reports a 526 % return on investment after becoming a Vanta customer. Automate your compliance, security, and trust with Vanta. Vanta will help you win trust, close deals, and stay secure faster and with less effort. Go to vanta.com forward slash founders, and you will get$1 ,000 off. That is vanta.com forward slash founders. So he says, I'd read all these stories independently and noticed there was a similar strain that was running through each and every one of the stories. There are five major strains. Number one, find your passion. My first piece of advice would be to find your passion.