“Usage is more important than users”, and “failure is a warmup” — pizza with genius angel VC Jason Calacanis
Meeting angel investor Jason Calacanis
Was lucky enough to have pizza and beer with @JasonCalacanis and about 50 entrepreneurs and wantrepreneurs recently at Angelo’s Pizza (117 w. 57 in Manhattan) — good pizza, but during a Yankee playoff win, was tough for me and for Jason not be in front of a TV
Jason is just amazing. So respectful to the ten or so mostly pre-funding founders who got 20 seconds to pitch and then a few minutes to answer his pointed thoughtful questions. Tough, supportive, generous, sincere. I really hope he runs for mayor of SF (for starters).
Spent alot of time counseling us to listen to users and iterate in response to observations and interviews. “(Lots of) usage is more important than (lots of) users” and “own the small metrics”, meaning you can learn alot from those first few users who spend alot of time on your site. Jason’s variation of the idea that I’ve heard @AirBnb co-Founder and CEO @BrianChesky attribute to @PaulGraham “It is better to have 1000 people love you than a million people kinda like you.” Graham is founder of accelerator Y Combinator.
Jason also pushed the ideas in his book Angel, including Chapter 27 (I think) which focuses on the importance of regular periodic reports sent to your investors but also to your prospective investors and other stakeholders — what did I do last quarter, metrics for next quarter, how’d I do against those metrics?, up and to the right, up and to the right, or over and out (of business).
Counseled to bounce back from failure — it is just a warmup, a learning experience, and may result from bad luck. Uber was @TravisKalakanick’s third company, he said. The first two were forgettable.
An early Jason boss/mentor attended to bask in pride over his protege, and Jason was long on praise and respect. That good man is one clue why Jason is so generous with us. (he says he wrote the book to boost his deal flow, and that may be true, but I also think basic decency is pretty high on the ingredients list.) If you have an interest in startups watch one of the 750+ episodes of his twice a week online show “this week in startups”.
At one point he lashed into (imaginary, not present) entitled recent college grads who aren’t willing to “do the work”, won’t commit to “996” (9am to 9pm six days a week), and just think everything should be handed to them. Emphasized that you should have a skill and if you don’t have one get on Lynda or Treehouse, learn, and then do the work. Also, admonished those just starting out to “know more than anybody about the thing that’s new”. If you know his tough early bio and inspiring story, you’d understand his passion on the topic.
In response to a question, he ranted against factory farming and endorsed artificial meat (or whatever the branding word will be). “Why does it have to be an inferior substitute? Maybe it’s better?” And he speculated that in 100 years people will look back at our “factory farming” and judge us harshly. Then he lightened up and praised the softball-sized meatballs we’d been served on manhole-sized platters.
Interesting that Jason and Warren Buffett are both great investors and both like to teach. Otherwise, two very different men.
For me, the company of the night was FTSY — uses facial recognition AI to help (mostly) women buy shoes online that fit. Solves HUGE problem of returns which cost manufacturers, distributors, and retailers a ton; FTSY’s customers are the manufacturers, distributors, and retailers. Just download the app, photograph your feet, and FTSY tells you what shoes will FEEL GOOD right now, and then next season you get an email “these new shoes are coming on the market, they WILL FIT, do you want to BUY NOW?” And now manufacturers know how many to make. I asked two waitresses at Angelo’s and they loved the idea… “I buy two pairs in different sizes every time I buy shoes, and then I send one back and keep the one that fits”, one of them told me. Jason didn’t like it! He felt it was alot of AI fire-power to solve a “small problem” — I think Jason walks on water, but his miss here (IMHO) is exhibit A why we need more lady VCs (a cause that Jason is championing across his businesses). FTSY CEO Ryan Smith is a great guy and sits inside the Grand Central Tech accelerator run by NY’s Milstein family. He’s a Canadian and beneficiary of some kind of Canadian government prize to give hyper-educated white males a bit of a leg up. But if the product works, he deserves it.
Jason feels strongly that everyone should invest in venture, possibly through syndicates, including his. Thinks it should be 1-5% of your net worth. Probably not crazy — $25g-125g for every $2.5 million for example. Why not?
Joseph Stecher is Founder and CEO of Candlewood Investors. Raises equity for real estate entrepreneurs who have financed their business with HNW in the past and now want to graduate to institutions and UHNW, also advisor to a couple of CRE Tech startups, including RealtyShares. Opinions are my own, quotes are approximate.