Tag Archives: Jason Calacanis

Takeaways from AngelList Radio’s Podcast with Tyler Willis and Jason Calacanis

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Yesterday I listened to Tyler Willis have Jason Calacanis on the AngelList Radio podcast. Despite the fact that the episode was recorded a couple of months ago, I couldn’t stop listening to it. In fact, I was about halfway through it the second time when it occurred to me that I should take a few notes on it to summarize the incredible amount of information that Tyler and Jason discussed (it is an hour and a half long, after all).

Jason Calacanis; image courtesy of the AngelList Radio podcast

Jason Calacanis; image courtesy of the AngelList Radio podcast

The sheer amount of important information covered makes summarizing all of it challenging, but I’ll give it a try. I should note, though, before delving in, that some of the most poignant things covered were in the form of life stories and philosophies from Jason, a summarized transcription of which does not do them justice. To really soak up the underlying meaning of what’s listed below, you really need to listen to it for yourself. Possibly multiple times.

Moving along though. The points which Tyler and Jason hit can most aptly be placed within a number of areas of thought and consideration.  

These are:

  • People
  • Mentalities
  • Entrepreneurs and Founders
  • (Angel) Investing
  • Democratization

I’ll do my best to tackle each one of these, but keep in mind that these are just a few of the points which struck me as the most powerful. I will discuss some in more depth than others, as a number of them are self-explanatory.

People

Jason’s view of people in my mind basically splits into three main veins: human calculation, relationships, and arguably the most important one, empathy.

Human Calculation

This goes to “Jason’s Law of Angel Investing,” which according to Jason is: “I don’t need to know if the idea’s going to win, I [just] need to know if the person’s a winner.”

Jason looks for and reads the things that other people might miss: body language, personality, and interactive cues. As he mentions, he will talk about the [founder’s] idea through the lens of trying to figure out if [s/he’s] a winner or not. This sort of human calculation sets Jason up for the long game, something which he discusses as being a part of his overall strategy.

Relationships

Jason is extremely bullish on his relationships, wanting to be the first call a founder makes when things are going wrong, when the situation looks dire, or just when founders are having a hard time. He discusses understanding that being a founder is lonely, and sometimes all one needs is an ear to vent to; someone to “shoot the shit” with. Perhaps this goes back to Jason’s major in psychology; certainly his ability to read people and situations benefits from such a thought process. 

Life is relationships, pure and simple. Everything else is secondary, and Jason aspires to (almost obsessively) cultivate his relationships. (That’s a good thing, by the way).

This however, leads into what I consider to be one of the central theses of the discussion: empathy.

Empathy

Startups are hard. Actually, that’s a lie; startups are fucking hard. And sometimes the best thing is when someone will just sit and listen while you vent and fume for a little while. Loneliness kills, and having a friendly ear can make all the difference on those tough nights.

One quote seems to capture what Jason’s mentality would be during those nights on the phone with a founder having a hard time: “When I invested in you, I knew the odds were against you, and I still believed in you.” That pretty much sums up all that needs to be said.

Jason’s philosophy of accomplishing close relationships simply by being a nice human being—“buying [the founder] a cup of coffee, buying them dinner, or just saying ‘I believe in you’”—is exactly how I see the world as well. Cultivating relationships means doing what you can for other people because you can do it, not because you see some reward at the end of the tunnel. In the long run, good relationships do tend to reward people in often unexpected ways, but that should never be the crux of the relationships. Relationships are empathy and positivity. It’s about being magnetic.

Mentalities

Within the context of mentalities, Jason hits on a number of notions, though the one that sticks out to me the most is his focus on the “journalistic mentality.” Clearly a holdover from his time as a journalist, Jason discusses how he looks for people who exhibit great journalistic skills: an inquisitive mind, good communication skills, and being able to read situations well. In many ways, this connects with a lot of his poker metaphors. (There are lots of poker metaphors).

As he points out: “What happens when you interview [people] for a long time is you start to understand when they’re full of shit and you start to tell…who’s full of greatness…” Bluntly put, this is very true. I experienced it a lot during my time as a music journalist, speaking with artists and other industry professionals. Being a journalist is one of the best ways you can get to know the industry you want to be in.

“[A journalist] equals an inquisitive person who can communicate well.”

Entrepreneurs and Founders

Jason spends a lot of time talking about how he identifies great founders and what anyone should be doing and/or thinking about if they want to be an entrepreneur.

Know “Why”

First and foremost, know “why.” Why are you doing this, what is the underlying reason?

For Jason, answers like “the market seems open” or “I wanted to try being a founder” don’t cut it. It speaks to the authenticity if a founder is doing it for a larger reason than just trying to take advantage of a particular market situation. There needs to be a certain inevitability to what they’re doing, and how they see the world (something which Chris Sacca has also touched on).

As Jason sees it, there needs to be a real sense of purpose in the founder(s), a mission: “The world needs to evolve in this way, and we have the solution, and we NEED to implement our solution to change the way the world works.”

Jason: “Really talented people tell you where the world is going, and then you get to be part of it. And then you get to help them launch the rocket.”

Don’t Screw Your Supporters

They need to have the integrity not to screw the people who supported them early on. This is exactly in line with a well-known adage in the music industry which I always quote: “For those who forget us on the way up, we’ll see you on the way down.” Don’t forget the people who made your rise possible.

Be a Punk

Founders need to be punks.

Ok so Jason didn’t actually use this word, but as I explained in my post here, that’s really the type of mentality he is describing when he articulates what he looks for in people.

Additionally founders need:

  • To have an armor; a relentless drive, and be relentlessly resourceful
  • Have maniacal execution skills
  • Unstoppable determination

(Angel) Investing

Jason relayed a lot of information about investing and investment strategy. He discussed a lot of his personal strategy as well as how new investors can get in the game and start to learn the ropes.

For the sake of time (and because a lot of this is fairly self-explanatory), here’s a rundown of what he discussed:

  • Tips (for Angel Investing)
    • Spread your bets
    • Start by making investments slowly over a year
    • Even if you lose money, you’ll learn something
    • Always try to learn before diving in head first
    • Join syndicates
    • Get in the game and start
    • Double and triple down on your best bets
    • Meet with founders as much as you possibly can
    • Play the cars of the best investor at the table if you’re new to investing
    • Do the work, be proactive
    • Play the long game
    • Be patient and learn
    • Financial performance will come; focus on a portfolio strategy
    • Investing is a fight/struggle
    • Don’t ever discount anybody
    • Make a 5-year plan
    • Pro-rata rights
    • You want the “difficult” people; these people “mix it up”
    • Focus on being the most valuable and helpful person to the founder
  • Need to Have
    • A comfort losing a lot of your money (which you invested)
    • A comfort with the “shitshow” realities of investing
  • Don’t Be an Investor If
    • You’re annoying
    • You’re a control freak/obsessive person
    • You can’t remain cool and calm
    • You can’t remain classy in the face of defeat
    • You can’t deal with bad news
    • You can’t be a mensch

As Jason articulated: “I have to be the most valuable [person] to the founders. [I ask myself,] ‘Am I doing the most for that person?’”

How did Jason get to this thought process? When he started investing he made a list of all the things he could do for founders to provide value to them. Then he did them.

Democratization

The last major point which Jason discusses is democratization. In this case, he’s referring to the democratization of knowledge and power, and how dynamics have totally shifted in the last 10 years, allowing for entrance into entrepreneurship for tons of people who previously had very little recourse.

Interestingly enough, as he’s discussing the democratization of knowledge which can be used for growth, development of new skills sets, and other such things, I’m just reminded of an article I wrote a few months ago on the democratization of music. True, Jason is describing a different type of democratization process, but the parallel works. In the same way that scarcity has become an obsolete mentality for music, so too has scarcity of startup and entrepreneurial knowledge become obsolete in the worlds of business and tech.

I said it once and I’ll say it again: scarcity is obsolete; democratization wins.

“[Entrepreneurship is] stumbling around in the dark room, fumbling around, until your hand hits the wall, and flicks on the light switch.” – Jason 

Jason also briefly touched on the differences he sees between his LAUNCH incubator and Y Combinator, but that’s a whole other discussion for another time.

All in all, the podcast was intriguing enough for me to listen to it twice all the way through, and then take notes on it for a post. I give it up to Tyler Willis for conducting a great interview, and look forward to a hopeful follow-up with Jason again.

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Support Systems Make Long Odds Targets to Hit, Not Walls to Avoid

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In another post this week, Hunter Walk wrote that the prospect (and indeed reality) of starting a company is hard. He referenced previous posts by Jason Calacanis and Paul Smith, both of whom wrote good posts on the kind of spine and drive you need to have in order to tough it out in this business. Both pieces were on point; Calacanis’ in particular struck a chord with me as it reminded me of how DIY punk you need to be in to work in the startup world.

Walk, however, brings something different to the table in his new post; he postulates how people from different backgrounds might have read the previous set of posts differently, and how they might have understood the points which Smith and Calacanis were making. Indeed, Walk strikes on this towards the end of his own piece, when he declares that something has been “gnawing” at him:

Starting a company—deciding to absorb that risk—should attract a self-selecting group of founders[,] but I also suspect stressing nothing but the long odds, the sacrifices, creates a barrier to entry for entrepreneurs who don’t have role models or a support system around them.

 

And in an instant, Walk seizes on something that is as palpable as it is subtle: those startup entrepreneurs who have a positive role model and/or support system from which to draw confidence are inherently better prepared for the slog than those who do not. However, it’s worth noting that many successful entrepreneurs didn’t come from families of entrepreneurs. Rather, they had to make the jump themselves—into instability, increasing pressure, constant rejection—in order to see their drive and vision fulfilled.   

I got lucky; the support system I needed was already in place. I wasn’t aware that my road towards the startup world started long before I ever thought to explore such a path. As such, the long odds are almost normal for me, and the DIY punk attitude is something which has always been underscored in my life.

For others, though, Walk makes an astute point: those who come from different backgrounds—the people who might be the first entrepreneurs in their families, or who have had to surmount obstacles that some of us might not have had to contend with (race, gender, economics, etc.)—need to be aware that they may be able to draw upon support systems outside their personal experiences and upbringing. Such an awareness can change their perception of the long odds although the odds themselves do not change. Walk:

How do we help potential entrepreneurs understand the long road ahead of them while letting them know there’s a support system to help them? Frankly…it’s better that 1% too many people start companies than 1% too few because you never know…And maybe that first time doesn’t work but the second time does…

Walk’s point is palpable; the view that success might be only one failure away is something that becomes ingrained in an entrepreneur who has a support system to fall back on. That support system makes one resolute in the face of the long odd; something to be confronted and overcome, circumstances permitting.

Successful entrepreneurs understand that the long odds are just numbers on a screen that tell you all the reasons something isn’t possible. With the right kind of role model(s) and support system, the long odds become less a wall to avoid than a target to aim at. Perception is a powerful thing, and is a key factor in the spine and drive which one needs to embody to forge ahead.    

Why Isn’t the Music Business Fully Crowdfunded?

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Last week, I posted an article detailing VC Fred Wilson’s thoughts on investing, in which I drew on a few things he’d stated during his interview with Jason Calacanis at LAUNCH. This time around I want to explore another statement Wilson made during his time on stage which I thought received way too little attention at the time. In fact, I’m quite shocked that more people haven’t really latched onto this sooner.

At one point during the conversation, Wilson mused, “I don’t understand why the music business isn’t fully on Kickstarter,” to which there was some murmuring (I heard sitting in the audience), but no real discussion thereafter of that particular comment. While I was just as interested in the next point that Wilson discussed with Calacanis (the subject of my previous post), I couldn’t (still can’t) get my arms around how something so stark to many people seems to fly under the radar. But before I get too incoherent, let me back up and explain my exasperation.

The wonderful thing about Kickstarter (or any of the other crowdfunding platforms) is the freedom that they give to artists. In the case of the music industry, the freedom I’m referring to is the ability to not have to sign to a major record label in order to have money to finance an album, tour, video, etc. Instead, artists can go directly to their own fanbases and raise the required capital from them, thereby side-stepping the very real consequence of having to sign away some amount of creative control (ever hear of master tapes?) to the major label. As a result of this, artists consequently side-step the dynamic of accruing a similar sort of debt with the label itself. (I will explain the deeper economics at play here in a later post).

The dynamic of crowdfunding has changed the entire paradigm of the music industry. Wilson’s comments struck me so much because of how true they really are. He doesn’t need to be a guitarist in a band to understand that the freedom that services like Kickstarter give content-producing artists is invaluable (clearly the reason he invested in Kickstarter in the first place). His own “I don’t understand why” comment exhibits his understanding of the services that used to be out of reach of artists, which are now readily available thanks to crowdfunding dynamics.

Of course, crowdfunding alone can’t and won’t control an entire vertical like, say, the music industry. It’s one part of a larger mechanism. But it’s nonetheless a shift in the paradigm of music production, distribution and consumption that was previously unavailable. Where crowdfunding really comes into play is when it totally disrupts the age-old adage “live won’t save music” (but that’s an argument for a later post).

Here’s the real point: Fred Wilson is an investor, not a guitarist or aspiring singer. Yet he sees the value of crowdfunding so much (investment interest aside) that he doesn’t understand why any artist would forgo the opportunities presented by these new services. And I’m inclined to agree with him (and I’ve been in the music industry now for years). So here’s the real question: if he gets it, and I get it, don’t you think that all the new artists out there get it too?

It just might be a very short time until the music business is fully (or mostly) crowdfunded.

Fred Wilson Believes in Things That Everyone Else Thinks Are Wrong (But Are Actually Right)

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A couple of weeks ago I attended the LAUNCH Festival in San Francisco, where I saw a number of amazing speakers over a three-day period. Needless to say the cross-country trip from Atlanta was worth it. However, despite the fact that there were numerous speakers whose points have stuck in my head since then (particular favorites of mine were Yancey Strickler (Kickstarter), Jeff Weiner (LinkedIn), Chris Sacca (VC) and Tony Hawk (yes I’m a huge fan of skating and the Brown Brigade)), the speaker whose comments were most easily accessible to me was Fred Wilson (Union Square Ventures).

Since the wrap-up of the festival, Jason Calacanis has published a couple of posts and tweets noting the fact that his fireside chat with Wilson was one of the most popular interviews of the whole event. This I readily believe, as I sat with rapt attention as Wilson discussed a number of topics. Actually, Wilson made so many good points during his chat that I need to dissect it through a number of posts rather than in just one.

Of particular interest to me though was one thing that Wilson said. It clearly demonstrated to me his line of thinking when it came to identifying new companies that he liked to become (or was likely to become) involved in: “Believe in something that everyone thinks is wrong (but actually turns out to be right).”

That terse statement, which Wilson actually attributes as something Bill Gurley once wrote, underscored his thinking when it comes to herd-mentality and how he identifies opportunities. While I’m sure there are certainly other factors at play, the qualifier word “wrong” is an interesting choice for his (Gurley’s) adage; it implies quite clearly that he identifies opportunities not only in areas or with companies that might be viewed as rare or unconventional, but ones which may be entirely against the grain of “logical” thinking at the time. This by extension highlights the fact that one can expect Wilson’s current and future investments to be in areas or companies wherein others might not dare even entertain the notion of involvement. He benefits from the fear factor that clears the road in front of him to make it an open highway while others see the words “do not enter.” [1]

Though I’ve followed Wilson’s blog for some time now, since LAUNCH I’ve been reading his posts with this new thought in mind. With each new post I read, there’s now that nagging question in the back of my mind: “what’s the thing in this post that Wilson has identified that others think is flat-out wrong (but is actually right)?” There isn’t always a phrase with a blinking sign screaming “it’s me!” but the point remains that with each subsequent post comes a learning opportunity to go back and reexamine a possibility that I might have dismissed earlier as a “do not enter” sign.

I’m interested to see Wilson’s posts over the next month or so. I’m curious to see what piques his interest enough to blog about it that others may have already dismissed or avoided. I suspect that Wilson’s thought process might very well be as alternative as his Egon Schiele-esque Twitter profile pic (by the way Fred, kudos on that; art-history nerds like me rejoice in the fact that so many within the tech industry use so much modern art imagery). I believe that’s precisely how he’s able to identify opportunities that others miss, or dismiss altogether.

 

Thanks to Dad for reading drafts of this.

 

Notes


[1] Wilson also stated that he had been on the board of a non-profit called DonorsChoose for a few years, which, as he put it, “does exactly, exactly what Kickstarter does” for teachers and public schools. As a result of his involvement with this previous venture, which was raising between $30-40M at the time, Wilson notes that he had a bit of an inside look at the very sort of mechanism upon which Kickstarter was building.