This content was created by Tim Draper. This content was uploaded by Tim Draper. This is a YouTube video titled "Investing in the Market | Jason Calacanis" (uploaded 2017-09-01) containing an interview/talk-style transcript featuring Jason Calacanis and an unnamed interviewer (labeled SPEAKER B). Jason offers advice on angel and venture investing—emphasizing evaluating founders over products, the need for founders to stand their ground against investors, anecdotes about passing on companies like Twitter, Airbnb, Zynga and Eventbrite, and the idea of investing in the "arc" of a founder’s career. The excerpt is focused on founder behavior, signals investors read, and Jason’s investing philosophy and personal stories.
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I look back on it like, wow, that was not the right way to handle it. But I do think, in my own defense, that as a founder, you can be abused.
Mm-hmm.
And you have to have a certain amount of pride, and you have to hold your ground when people try to bully you or push you around. And you have to have a sense that you are worthy.
Mm-hmm.
No matter if you're— and I was an outsider at the time. I'd never raised venture capital before. But I do think you have to have pride in what you do, and you have to stand your ground and not be willing to be bullied by people who, just because they write a check, think they have some dominance over you.
Right.
You have to be able to look people in the eye and say, you know what, Jason, I think you're a great investor. You're not the right investor for me. I don't like your approach to this. You have to have that ability to be strong and confident and have your own North Star and not be pushed around even after you take money. I see a lot of invest— I see a lot of investors start telling founders what to do after they've invested. And I say to the founder, is that the right idea? Why are you doing this? And they're like, well, because this person told me to do it. And I'm like, is that really the right reason to do it? Do you in your heart believe this is a good idea? They're like, no, but this investor told me to do it. And I'm like, let me give you a piece of advice. Don't listen to your investors, including me. Take all their information in, write it down, and then be your own true North Star. You know this business better than anybody. Make your own decision. I call that founder pinball. A lot of founders get money from 5 or 6 investors and they just start banging them all over the place.
Right.
It's really, you have to, you know, your business better than the investors. The investors will be able to tell you where the pitfalls are and how you'll screw up and, you know, where the landmines are and what you need to get to the next phase. But, you know, you really have to be willing to pursue your own vision.
So talking about these brutal stories, now that I'm thinking about it, Twitter was brutal.
Yeah, that was self-inflicted.
That was self-inflicted brutal.
So I passed on investing in Twitter.
So if there was something that—
And Zynga. Yeah. And Eventbrite. $50 million, $25 million, $10 million mistakes.
Right.
Don't feel bad. I had 6 unicorns.
Yeah. But since Twitter made it into the book and your conversation with them also made it into the book, was there anything that they could have said differently in retrospect that would have maybe made you change your mind?
At that point in time, I believe that the job of an investor was to figure out if this was a good idea.
Okay.
I don't believe it's the job of the investor to figure out if your idea is going to succeed. The, the job of an angel investor or a venture capitalist is to understand if you're going to succeed. Right. So I have divorced myself from my ability to pick the winning ideas or the winning products. I pick the winners, not the products. Not the markets. Airbnb, I didn't have an opportunity to invest, but I thought Airbnb was the stupidest thing I'd ever heard. I'm going to let a stranger sleep on my couch. Who's going to get up in the middle of the night and light this place on fire? Or I'm going to sleep on somebody's couch who, when I'm asleep, is going to murder me. This is insane. How many people in this room have stayed in Airbnb? Raise your hand if you've ever stayed in Airbnb. It's 85% of the room. And we said before that most of these people are under 30. They have no fear of serial killers killing themselves. These— any— how many people in the room have hitchhiked? It's about 20%. You people are fucking crazy. I can't get my head around people who would ever hitchhike or stay in an Airbnb. That being said, I am not the market, right?
Right.
And I have plenty of friends who passed on Snapchat because they didn't understand the utility of it. Right. And so you have to say to yourself, I do not have perfect vision into a market. And you have to be willing to say, I'm going to just know if this person's a winner. What I am an expert at, at this point in my life, is looking somebody in the eyes and seeing into their soul and knowing if they're gonna give up or not. And if the idea— when they're answering questions—
It does.
I just look in their eyes. I can see, I have all the tells if this is a meaningful business to them or not. And if it's not a meaningful business, they're probably gonna quit when it gets hard. And it always gets hard.
Mm-hmm.
That's all I have to do. I just have to figure out if you're indefatigably in love with this idea, if you are going to be dogged. Because if you pick the wrong idea, you will pivot. You will learn something and then keep executing and find the gold. And if you don't do it on this business, you'll do it on the next. So now I've invested in a number of founders twice. Raul from Reportive is doing Superhuman. I told him after he sold Reportive, and I made 2 or 3 times my money, and I was very pissed off that they didn't keep going, but he had partners and they sold to LinkedIn. And I was like, this is crazy, we should keep going. He was like, I agree, but my partners want to sell. I said, I'm fine with you selling, Raul, as long as when you have your next company, I am your first phone call.
Right.
First phone call, put $1 million in, join the board. Same thing happened with Rob May, who did Backupify. He sold. I made 7 times my money. I was like, 7 times, not bad, but I think you have a, you know, 700x in you. I said, I'm fine with selling. I want to be the first phone call next company. Tala, he came up with this AI company. I'm the first investor.
Right.
And Josh Williams, Gowalla, same thing. Last Guide, I was the first investor, and he failed that Last Guide. It didn't work out. His partner left. He had some personal family problems. And I actually emailed him, or DM'd him actually, on Twitter today and invited him to come to my Angel Summit, even though he doesn't have a company, to come to the founder portion, because I know on his third company he's gonna hit a huge billion-dollar idea. So I'm gonna invest 3 times in Josh Williams, right? I'm investing in the arc of the person.
Right.
I believe in people. Their individual products, their individual ideas and markets, They matter, but the person matters more.
Right.
That's the magic. Is this person indefatigable? Will this person give up? Does this person acquire new skills at a rapid pace? Is this person fucking around doing stupid shit with their life, or are they focused on what matters? So when you are thinking about how people perceive you, ask yourself, do I look like an idiot on social media? Am I taking pictures of myself in the club every weekend? At Coachella and nonsense. This guy's like, I'm on your, Jason, I'm on your social media. I saw you in the club last weekend. That's true, but the Warriors won the championship and I was hanging out with Draymond in the club. That's a totally different story. However, you wanna make sure people believe, it's a little name drop, I'm entitled, right?
Yeah.
Hold on, let me pick that name up, put it over here, boom. You have to be willing to put yourself in the bucket of people, and you have to be strategic about it, that you look like a murderer, a killer, somebody who is just going to crush it and never give up.
Right.
And you, you are giving out signals constantly that investors are trying to read in your follow-up and your progress. You know, like Mark Suster says, he does the lines, not the dots, but the dots make up the line. You want to be that person who A person says, God, they've been at it for 18 months and look, they made progress. They figured something out. Now I'm ready to invest. I knew Travis for 15, maybe 10 years before I invested in Uber. I knew him at Scour and I knew him at Red Sushi. You know, I knew Evan through Blogger, Twitter, Odeo, and I invested in Medium. You have a career arc. Act with a deliberate plan for investors to invest in the arc of your 20 or 30 or 40-year career.
Right.
That's what you're going for. You want people to think this person does the work, right? Send out the signals of people who do the work. I did that my whole life. People looked at me and said, that's a hard worker. He's not that smart. He's kind of like the, you know, that kid. Some people thought I was kind of dopey. To be honest, they were like, he's kind of like dopey and he's kind of like unabashedly like aggressive and like trying to be something. It's kind of like a running joke maybe in New York in the beginning. But then things started to click for me and the little kid with the magazines on the rack suddenly had a $12 million company and a 300-page glossy magazine with 75 employees.
Right.
And oh no, they did not underestimate me then. because I put them on the COVID or didn't. I had power, right? And then people will all of a sudden— the little kid with the 16-page photocopy became the impresario who picked the 100 top people and ranked them in a list.
Right.
And people were begging me to meet with them and have toured Knicks games with them. It just turns like that based on your performance.
