Special Episode Jason Calacanis

In this episode of Acquired, hosts Ben Gilbert and David Rosenthal, along with guest Jason Calacanis, delve into the art of angel investing and the strategy behind building influential media platforms. Calacanis shares his journey from the inception of Silicon Alley Reporter to the sale of Weblogs, Inc. to AOL, and the subsequent pivot of Mahalo to Inside.com following Google's Panda update. He discusses his approach to angel investing, emphasizing the importance of taking risks on outliers, learning from early-stage bets, and scaling up investments in winning companies through his Launch Accelerator and syndicate, TheSyndicate.com. Calacanis also recounts the founding of This Week in Startups and his role in popularizing podcasting as a medium, as well as his experiences with influential figures in tech and media.

• Acquired FM is a platform targeted at founders, aspiring founders, investors, and aspiring investors.
• Jason Calacanis promotes the LP program at Acquired FM, describing it as a competitive edge.
• The LP program is marketed as a source of valuable insights that are worth more than the $100 annual fee.
• Calacanis emphasizes that the content provided should be seen not just as information, but as a strategic advantage in business.

"For $100 a year, you're going to get hours of content that's not available to everybody else. That's also known as an edge."

This quote from Jason Calacanis highlights the exclusive nature of the content offered by Acquired FM's LP program, framing it as a competitive advantage for subscribers.

• Ben Gilbert and David Rosenthal introduce themselves as hosts of the Acquired podcast.
• The podcast focuses on stories about technology companies, leaders, and significant adaptations in the industry.

"Welcome to this special episode of Acquired, the podcast about great technology companies and the stories behind them. I'm Ben Gilbert." "I'm David Rosenthal. And we are your hosts."

Ben Gilbert and David Rosenthal set the stage for their podcast, emphasizing their focus on narratives within the tech industry and introducing themselves to the audience.

• Jason Calacanis has founded four companies: Silicon Alley Reporter, Weblogs, Mahalo, and Inside.
• He has been involved in three conferences and three podcasts: Angel, All In, and This Week in Startups.
• Calacanis was the first Sequoia Scout and claims to have the greatest return among Sequoia Scouts.
• He has made over 200 angel investments, is a blogger, author, newsletter writer, and has started the Launch Accelerator and a venture fund.
• Calacanis considers himself one of the top angel investors, alongside Chris Sacca and Ron Conway.

"Jason has founded four companies, by our account, Silicon Alley reporter, weblogs, Mahalo and inside." "You were the first sequoia scout. You were literally the prototype of the Sequoia scout."

These quotes summarize Jason Calacanis's entrepreneurial achievements and his pioneering role as a Sequoia Scout, highlighting his significant impact on the startup ecosystem.

• Jason Calacanis is known for his anthology of stories across various categories.
• The Acquired podcast aims to discuss how Calacanis has built his empire and how it all ties together in his mind.
• The LP show will explore Jason's broader vision and potential disruption of the startup ecosystem.

"Today we are telling the story of someone who doesn't just have one story. He has a whole anthology across all of those categories, the one and only Jason Calicanus."

This quote encapsulates the multifaceted nature of Jason Calacanis's career and his diverse contributions to the fields of technology and entrepreneurship.

• The LP show is considered the premium content of the podcast, likened to the ribeye or New York strip of the platform.
• Calacanis endorses the LP show, suggesting that paying for quality content is essential for its existence.

"The LP show is like the best parts. It's like you cut the nice like the ribeye, and that's like the best part. It's like the New York strip of the podcast."

Jason Calacanis praises the LP show of Acquired FM, comparing it to the prime cuts of meat, implying that it contains the most valuable content for subscribers.

• Calacanis grew up in Bay Ridge, Brooklyn, in a working-class environment during the 1970s.
• His father owned a bar and was a well-known figure in the community, while his mother was a nurse with multiple graduate degrees.
• Jason was exposed to various forms of commerce and power dynamics from an early age, working in his father's bar and interacting with diverse patrons.
• His early life experiences instilled in him a deep interest in power, money, and entrepreneurship.

"My dad owned a bar. He was essentially the mayor of Bay Ridge in a way. Like, people loved my dad, John the beard, and they loved his bar, and I worked at his bar."

This quote provides insight into Jason Calacanis's upbringing, the influential role of his father in the local community, and the environment that shaped his entrepreneurial spirit.

• Calacanis's first job involved selling illicit copies of "The Empire Strikes Back."
• His early exposure to commerce included various small-scale ventures, some of which were legally questionable.
• These experiences contributed to his understanding of business and the importance of seizing opportunities.

"My first job was Jason's hot tapes. I would make copies of the Empire strikes back and sell them for $20."

This quote reveals one of Jason Calacanis's initial forays into entrepreneurship, showcasing his willingness to capitalize on market demands, even in unconventional ways.

• Calacanis was drawn to media and technology from a young age, subscribing to various magazines and gaining early Internet exposure.
• He started a zine called "Cyber Surfer" and later founded the "Silicon Alley Reporter."
• His hands-on approach to distributing his publications garnered attention and admiration from industry figures.

"I would go to parties with a stack of them in my hands and I'd be handing them out to anybody who would take them, because I just wanted to be famous. I just wanted to be powerful. I just wanted people to know my name."

Jason Calacanis's quote reflects his drive for recognition and influence, which fueled his relentless self-promotion and distribution efforts in the early stages of his media career.

• Jason Calacanis (Speaker A) realized he never wanted to be number two in his career.
• His ambition was fueled by the desire for fame, power, and money.
• He experienced a rapid rise to prominence in New York with his Internet magazine, which grew to 75 full-time people and $12 million in revenue.
• Jason created a list ranking the top 100 people in the industry to assert his influence and power.

"Or it was all that fame, power, money. Fame, power, money. That's all I wanted. I just wanted to have fame, power, our money, all of those things."

This quote emphasizes Jason's primary motivations in his career. He sought recognition, influence, and financial success and did not want to be second to anyone.

• Jason organized an event called "Ready, Set, Pitch" in 1995, where people pitched startup ideas.
• The event was covered by the New York Times and featured a keynote by Ted Leonsis.

"And I did my first event in 1995 called ready, set, pitch. And you can look it up in the New York Times. There's an article about it, ready, set, pitch."

This quote refers to Jason's early foray into the startup ecosystem, demonstrating his initiative in creating platforms for entrepreneurs to showcase their ideas.

• Jason aspired to be a media mogul like Eisner, Iger, or Ovitz.
• He was driven by the power that media executives held at the time, as tech companies were not the main focus.

"I wanted to be the next media mogul. I wanted to be Eisner. I wanted to be like Iger. I wanted to be Ovitz."

This quote reveals Jason's desire to reach the pinnacle of success in the media industry, aspiring to emulate the most influential figures of the time.

• Jason's Silicon Alley Reporter collapsed due to the dot-com crash and the impact of 9/11.
• He faced a difficult time, having missed an opportunity to sell his company for $20 million.
• The experience was humbling and made him angry, but also motivated him to prove he was not a fraud.

"So it was like, one of the most difficult times of my life because I had my chance to be rich, and then I was poor again."

This quote conveys the emotional and financial turmoil Jason faced when his business collapsed, and he missed a lucrative exit opportunity.

• Jason observed the success of blogs by former employees and recognized the potential of the medium.
• He likened blogging to MTV Unplugged for journalism, seeing it as a raw and authentic form of expression.
• This insight led him to explore opportunities in the blogging space.

"This is MTV unplugged for journalism blogs."

The analogy draws a parallel between the stripped-down, authentic performances of musicians on MTV Unplugged and the unfiltered voice of bloggers, which Jason saw as a powerful new form of media.

• Jason saw Nick Denton and Gawker as competitors and aimed to outdo them.
• He aggressively pursued talent from Denton's team and launched his own competing blog network.
• The rivalry between Jason and Denton became well-known and pushed both to improve their platforms.

"I said, I have to destroy Nick Denton. How am I going to do this?"

This quote highlights Jason's competitive nature and his strategic approach to outmaneuvering a competitor in the blogging industry.

• Weblogs, Inc., Jason's company, was sold to AOL for $30 million after only 18 months.
• The sale provided Jason with the financial means to pursue further ventures and become "dangerous" in the industry.

"That gave me the money to become dangerous."

The quote signifies the turning point in Jason's career where the sale of his company provided him with the resources to take greater risks and pursue larger ambitions.

• Jason adopted a philosophy of not looking back and continuously moving forward.
• He disconnected his identity from his brands, focusing on the future rather than past achievements.
• This mindset was inspired by artists like Bob Dylan, who constantly reinvented themselves.

"Don't look back, only forward. Next brand. Next brand, next brand."

Jason's mantra of always looking forward and not dwelling on past successes or failures is a guiding principle in his career progression.

• After achieving initial success, Jason's focus shifted from fame to building and creating new ventures.
• He stressed the importance of resilience and the inevitability of success for persistent entrepreneurs.

"No, fame wasn't. I really wanted to build things."

This quote reflects the evolution of Jason's motivations, from seeking fame to deriving satisfaction from the process of building and creating.

• Jason became an early investor in Uber through the Scout program, which was a partnership with Sequoia Capital.
• He also made early investments in other successful startups like Thumbtack and DataStax.
• The Scout program allowed him to invest in startups using Sequoia's funds, splitting the profits.

"I think it was the third. I think I had in the first seven, there were three unicorns."

This quote indicates Jason's early success as an investor, identifying and investing in startups that would later become highly valuable companies.

• Jason Calacanis raised a Series B for Mahalo at a $100 million valuation before product launch, a significant jump from an $11 million valuation at Series A.
• The rapid valuation growth occurred within a six-month period in 2006, which was questioned by his peers, Mark Pinkus and Evan, who were at lower valuations despite having launched products.
• Calacanis credits part of his success to his relationship with Fred Wilson and Joanne Wilson, highlighting Joanne's impact as a salesperson and her subsequent success as an angel investor.

"I raised my series B for Mahalo before launching the product, six months after I had raised my series a and I went from an $11 million valuation to 100 million dollar valuation."

"And Mark Pinkis and Evan were like, how did you go from 11 million to 100 million before the product launched in six months?"

The quotes indicate the remarkable and unusual growth in valuation for Calacanis's venture, Mahalo, before the product even launched. The jump from $11 million to $100 million valuation is highlighted as an extraordinary achievement.

• Calacanis's credibility with Sequoia Capital was bolstered by his ability to send them great deals and his collaboration with Michael Arrington for TechCrunch 50.
• The Sequoia Scouts program was initiated to allow individuals to make smaller investments without the pressure of signaling in the industry.
• Calacanis discusses the negative signaling effect in the venture capital industry, where a lack of follow-on funding from a prestigious fund could mark a company as damaged goods.
• He started the Open Angel Forum to counteract practices like the Koretsu Forum, which charged founders to meet investors.

"I think that gave me the credibility with Sequoia that they said, jason keeps sending us these great deals."

"There was this issue of signaling in the industry back then where if Sequoia gave you money and they didn't give you the next round. Your company was dead."

The quotes discuss the concept of "signaling" in venture capital, where the actions of prominent VC firms like Sequoia can significantly influence the perception of a startup. Calacanis's actions and the introduction of the Scouts program aimed to mitigate the negative effects of this phenomenon.

• Calacanis was involved in early investments in companies like Thumbtack, DataStax, Signpost, and notably, Uber.
• He introduced investors like Cyan Bannister to Thumbtack and Uber, and she credited him for these introductions.
• Calacanis reflects on the success of the Sequoia Scouts fund, which he believes may be one of the best in terms of return on investment, highlighting the importance of early-stage investing.

"And Uber came and Uber came on the spot myself. Sokka was there. But saka knew Travis before, and Siam Bannister invested in them."

"I mean, that fund is the greatest fund in Sequoia's history on a percentage return basis, I believe."

The quotes emphasize Calacanis's role in the early investment rounds of now-prominent companies, particularly Uber. He highlights the success of the Sequoia Scouts program, which allowed him to make these early investments and achieve a significant return on investment.

• Calacanis discusses the rise and fall of Mahalo, which was affected by Google's Panda update that targeted content farms.
• He recounts the conflict with Google over the sudden loss of traffic and revenue, which led to layoffs at Mahalo.
• Calacanis believes Google's actions against competitive content platforms like Mahalo may lead to antitrust action, similar to Yelp's situation.

"And then Matt cuts felt like we were getting too big, and Ehau was getting too big."

"They literally took everybody who would eventually become competitive with them, and they just neutered us."

These quotes describe the challenges Mahalo faced due to changes in Google's search algorithm, which Calacanis views as a strategic move by Google to eliminate potential competition. The impact on Mahalo was significant, leading to a pivot of the business model.

• Calacanis was initially skeptical of online investing platforms like AngelList, but he became one of the first to use and popularize the platform's syndicate feature.
• He acknowledges Naval Ravikant's vision for AngelList and the potential of SPVs (Special Purpose Vehicles) and syndicates for angel investing.
• Calacanis's syndicate quickly gained traction, attracting high-profile investors and leading to significant investments.

"And he said, listen, I'm going to start this thing angelist. And it's kind of competitive. And I was like, no, you're doing online. Online is dumb."

"Anyway, a bunch of people join. Tim Ferriss launches his."

The quotes highlight Calacanis's initial reluctance to invest in online platforms, but his eventual embrace of AngelList's syndicate model, which he then successfully leveraged. His early involvement and promotion of syndicates contributed to the growth of the platform.

• Calacanis attributes much of his success to his enthusiasm, willingness to make introductions, and generosity in social settings.
• He shares anecdotes about connecting influential individuals, such as Elon Musk and Larry Page, with others in his network.
• Calacanis believes that extracting little from one's network and giving back can lead to greater success.

"I think enthusiasm is contagious, so I've always been very enthusiastic."

"I always picked up the check and I always set up dinners with a lot of people, and I always introduce people to other people with no intent of capitalizing on that."

These quotes reflect Calacanis's philosophy on networking: enthusiasm is key, and generosity without immediate expectation of return can build strong, beneficial relationships. His approach to networking has been a significant factor in his ability to connect with influential figures and facilitate successful collaborations.

• Calacanis explains his decision to remain independent rather than join a traditional venture capital firm, citing a desire for autonomy and the ability to make his own decisions.
• He compares himself to a solo artist who prefers to work independently rather than as part of a band, emphasizing his entrepreneurial spirit.

"It's called a venture partnership, and that's not what I do. Right. I like to make my own decision, and I'm like, the solo, like, you put somebody like me in a band, the band will break up."

The quote captures Calacanis's self-awareness and preference for independence in his professional pursuits. His comparison to a solo artist underscores his desire to maintain control over his investments and entrepreneurial endeavors.

• Jason Calacanis describes his initial involvement in podcasting before it was a recognized medium for advertising.
• He was approached by Microsoft to advertise Bing on his podcast, marking one of the first instances of podcast advertising.
• Calacanis took a proactive approach to new mediums, assuming they would work and dedicating himself fully to them, as he did with blogging and Twitter.

"There was no advertising in podcast. It was just blogs. It was just a thing." "Whenever something comes out, I just assume it is going to reach critical mass and I behave as such."

These quotes highlight Calacanis's early recognition of podcasting as a potential platform for advertising and his general strategy of fully embracing new technologies with the assumption that they will succeed.

• Calacanis discusses his philosophy of embracing new technologies and platforms with the expectation of success.
• He acknowledges that this approach has led to both hits and misses, but the successes have been significant due to asymmetric returns.
• His strategy is to get in early and establish a presence before a new platform becomes widely recognized.

"Whenever something comes out, I just assume it is going to reach critical mass and I behave as such." "If you get in early and you're baking in whatever that service is and you got there early, you're going to have a head start on everybody else."

Calacanis emphasizes the importance of early adoption in technology and media, suggesting that early involvement can provide a significant advantage as platforms grow.

• Calacanis's podcast, "This Week in Startups," experienced significant growth, reaching over 200,000 listeners per episode.
• He attributes the success to a niche focus and a refusal to dilute content for broader appeal, similar to the approach of Joe Rogan and Howard Stern.
• The podcast is monetized through ad slots, which are sold out annually, supporting a dedicated team.

"It's a niche podcast by design. Like, I could make it get bigger by dumbing it down or going shorter or having post production on it, but I just told everybody I'm not interested in." "We have three ad slots and we sell them out every year, and it does a couple of million bucks."

Calacanis shares insights into the business model and growth strategy of his podcast, highlighting a commitment to maintaining the integrity of the content and its niche appeal.

• Calacanis discusses how his podcast has played a role in his angel investing activities.
• He shares a story about investing in Calm.com during a podcast episode, leading to significant returns.
• His involvement with AngelList and the concept of syndicates has allowed him to leverage his podcast audience for investment opportunities.

"Well, it's very simple. Yeah, I mean, I would say on the, you know, here's a company I invested in. I'm having them on the podcast." "I put 50k in for my fund, and this AngelList thing had just come out, and I made it the first deal on AngelList."

Calacanis explains the synergy between his podcast and his angel investing, using the platform to discover and promote investment opportunities, which has contributed to his success as an investor.

• Calacanis shares his investment philosophy, which is influenced by his experience in poker and the concept of asymmetric returns.
• He advocates for investing in startups that have shipped a product and acquired some customers to minimize risk.
• He describes his approach to early-stage investing as "outlier obsessed," focusing on potential high returns rather than the fear of losses.

"Consensus equals death in the early stage." "You have to have the brain chemistry change from being risk averse and outlier averse to outlier obsessed."

These quotes reveal Calacanis's contrarian approach to early-stage investing, where he seeks out unique, high-risk opportunities that have the potential for outsized returns, rather than playing it safe with consensus-driven investments.

• Calacanis advises new angel investors to make small bets and view investments as experiments.
• He discusses the importance of learning and gradually increasing stakes as one gains experience.
• Calacanis also explains the strategy of securing pro-rata rights to maintain or increase stake in successful startups.

"Imagine a poker table existed in the world where you would buy in for $10,000, and there were ten players. It's $100,000 on the table, but every 100 hands, you could win a million dollars or $10 million." "Only invest in companies, startups that have gotten their product to market and have some customers."

Calacanis likens angel investing to a unique poker game with the potential for huge payouts, and he emphasizes the importance of focusing on startups with market-validated products to reduce risk.

• Calacanis founded the Launch Accelerator, which invests in startups and provides them with a platform to raise further funding.
• He has integrated his syndicate strategy with the accelerator, allowing him to make multiple investments in a company over time.
• Calacanis aims to build significant ownership in companies through this approach, combining elements of Y Combinator, AngelList, and seed funds.

"I started saying to people, I'll put in 50k for the original deal was like, 50k for 5%, I'll put in twenty five k. K for 5% that. I'll put twenty five k at whatever your recent round is, and then I'll syndicate it." "We don't have a proper series a because we don't need to, because the fund plus syndicate kind of hits the one $2 million number."

These quotes outline Calacanis's strategy for building his investment portfolio through the Launch Accelerator and syndicates, aiming to secure significant ownership and influence in promising startups.

• The transcript includes an advertisement for Crusoe Cloud, a clean compute cloud provider for AI workloads.
• Crusoe Cloud is highlighted for its environmental benefits and cost savings due to its use of stranded energy sources.

"Crusoe's data centers are nothing but racks and racks of a. Because Crusoe's cloud is purpose built for AI and run on wasted, stranded, or clean energy, they can provide significantly better performance per dollar than traditional cloud providers."

This quote provides information about Crusoe Cloud's unique selling points, focusing on its specialized infrastructure for AI workloads and its environmentally friendly energy use.

• The transcript concludes with a teaser for the LP (Limited Partner) show, where Calacanis will discuss his investment strategies in more detail.
• The conversation touches upon the deconstruction of traditional VC firm roles and the creation of a unique investment funnel.

"I think we're going to do is we're going to dive into your investing the way that you're sort of frankly deconstructing the jobs of a VC firm, sourcing, evaluating, winning the deal, helping and then future access to capital."

This quote sets up the anticipation for a more in-depth discussion on Calacanis's innovative approach to venture capital and angel investing, to be covered in the LP show.