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Howie Liu, Co-Founder  CEO of Airtable

https://launch.us2.list-manage.com/track/click?u=baefb9fcb23d26e0308254e5c&id=975914d806&e=4af57d5954play episode download
25 April, by Jacqui[ —]

Howie Liu, Co-Founder & CEO of Airtable: a spreadsheet-inspired collaboration platform that enables users to create their own workflows and functionalities, joins us on episode 814 of This Week In Startups. Airtable recently raised $52m of Series B funding and introduced “Blocks” – apps that run on top of Airtable – add access to third-party APIs (such as Google’s Cloud Vision API) and a variety of additional features. Ultimately, the company plans to open its app store to third-party developers and split revenue.

Join us to learn about a fascinating, functional product that has found its place as an essential tool in diverse industries.

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Timestamps:

02:15 – Jason introduces Howie Liu, co-founder & CEO of Airtable. Howie says his team doesn’t think of Airtable as a productivity company but as a platform that powers creators. Jason lists some of the investors that have contributed $62M to date.

04:34 – Howie describes how different users employ Airtable, as he finds this more useful for prospective users than any single-sentence pitch. The platform includes a database, task management, pipeline visualization, more. It’s used by farmers to manage livestock, by media companies to manage their content-planning workflows, more.

07:11 – Howie explains that Airtable inherits the best aspects of spreadsheets, which are optimized for number crunching, but enables users to build custom solutions depending on applications. They can attach files, integrate tasks with calendars, more.

10:33 – Howie covers competition, noting there is no direct equivalent to Airtable. Google Sheets and Excel are the most obvious competitors, but they don’t really compare when it comes to features. Howie says Airtable’s solution is 10 times better for many use cases. In some cases, Airtable provides control and customizations that custom software solutions do not.

12:48 – Jason thanks sponsor WordPress, which powers Jason’s blog and the This Week in Startupswebsite. TWiST listeners can get 15 percent off any new plan at wordpress.com/twist.

15:03 – Jason asks how Howie became so interested in spreadsheets and improving them. Howie says he’s not excited by the spreadsheet itself, but by what people can do with them, including building custom workflows.

17:28 – Howie demonstrates Airtable, explaining the layout and detailing the features not found in other spreadsheet apps. His demonstration table is an events management project by a music festival company. He explains how Airtable can share and pull data so projects always access a canonical source of, for example, current staff (all projects referencing the staff Airtable stay up to date).

22:34 – Howie breaks down pricing: for self-serve: $10 per user per month for the Plus plan, $20 per user per month for the Pro plan (both tiers paid a year in advance); for enterprise: $60 per user per month. The enterprise plan adds expanded usage limits, additional administrative control, the ability to use the company’s authentication system so IT can provision users without creating new accounts, etc.

23:36 – Jason laments missing the chance to invest in Airtable’s early rounds. Howie describes the simple state of the app at the time of Series A. He says the team has been unhappy with the company’s valuation at each funding stage and still feels Airtable is undervalued due to the total addressable market and the company’s path to reach it.

28:08 – Jason thanks sponsor LinkedIn. TWiST listeners can get $100 in advertising credits by visiting https://linkedin.com/thisweekinstartups.

31:28 – Jason speaks about investors who spend too much time away from work and Jason and Howie recall their working vacations.

34:32 – Howie explains nonprofit Samasource, which works to create jobs in areas that need economic development. Samasource will, for example, outsource American digitization projects to computer labs in Uganda.

35:57 – Howie talks about the importance of the free version of Airtable in terms of educating the public on the product.

37:49 – Howie explains Blocks, which are apps that run on top of Airtable. Currently, only Blocks developed by Airtable are available. Eventually, the platform will be open to third-party developers. Howie demonstrates a Maps Block, which uses data from Airtable to auto-generate maps (can display locations of events, more). Blocks are embeddable and display up-to-date data.

44:29 – Howie covers a Block for designing custom print layouts that use database information and a Block that uses Google’s Cloud Vision API to label and describe images. He confirms Zappier and IFTTT integration. Users cannot email data directly to Airtable yet, but Zappier integration makes that possible.

53:17 – Howie explains Blocks that will enable Airtable to automatically send emails and SMS. For example, to remind an employee of the next day’s work schedule.

54:12 – Jason asks about the marketing strategy for a product that can be difficult to grasp for the uninitiated. Howie says word of mouth has been significant in Airtable’s success. Users who are enthusiastic about practical applications ultimately draw contacts and coworkers in.

57:16 – Howie explains why the Airtable app store is currently limited to Airtable-built apps: in part to establish a standard of quality. Ultimately plans to split revenue with third-party developers.

1:00:12 – Howie describes Airtable Universe: a GitHub-like public repository where users can share workflow templates. The layout encourages submitters to explain their use cases.

1:00:42 – Howie tells the origin story of his first company, Etacts, a personal relationship manager. The team saw a lot of acquisition interest early on. While the company had a vision for a big outcome, the team wasn’t seasoned and didn’t see a strong path to get there. So selling to Salesforce made sense.

1:06:08 – Jason asks Howie how he feels about founding teams selling stock for fundraising rounds. Howie says it depends on the motivations. When a company is definitely overvalued, it makes sense to partially cash out as insurance. When the company is undervalued, the seller just gets a bad deal. Notes that allowing the sale of common stock is bad for future employees.

1:09:21 – Howie says Airtable has an inbound sales team and probably won’t need an outbound sales team for some time. The company is confident in its projected cash flow.

1:12:05 – Jason talks about selling company shares too soon. He provides examples: someone selling Uber shares in the midst of rapid growth, someone who sold Facebook stock before the company went public.


Answering Question’s about The OpenBook Challenge

25 April, by Jacqui[ —]

The team at The Guardian asked me a couple of questions about the OpenBookChallenge.com, our competition to fund seven social networks with $100,000 each.

The Guardian’s story: https://t.co/9T08M2nKaC

Best, @Jason

jason@calacanis.com  

openbook@launch.co

==============

Here are the answers:

Why have other attempts at FB replacements (Mastodon etc) not taken off?

There are two reasons why Facebook hasn’t been displaced.

First, Zuckerberg has done an exceptional job of buying competitors. Instagram and WhatsApp were well on their way to disrupting Facebook when Zuck masterfully bought them out, sealing his monopoly position. The data they have across these three platforms builds an unprecedented moat.

Second, Zuckerberg has been unmatched in his ability to quickly steal innovative features from startups that refuse to sell to him, like Snapchat. Zuck’s “sell or die” threat has put a paralysis into the venture and entrepreneurial communities, making both scared to challenge him.

If you look at Snapchat’s three amazing innovations, ephemeral messages, filters and stories, Zuckerberg has copied each one down to the pixel in his arsenal of apps. So, not only does a founder have to face Facebook copying them, they now have to face Messenger, Instagram and WhatsApp trying to kill them.

What are the key obstacles for companies looking to replace Facebook?

The key is Facebook’s ability to copy features, and make unethical decisions around their deployment. We already talked about Zuckerberg’s completely abhorrent copying of every innovation Evan Spiegel has made, but there are many, many more examples.

Another example of these unethical decisions was the rollout of Facebook Groups. The average founder would never consider allowing a group manager to add someone to a group without getting their permission.

Of course, Zuck had no problem allowing folks to add people to groups without their consent, which resulted in gay men being outed. A person with an ethical compass would easily come to the conclusion that you shouldn’t let people invade other people’s privacy, but Zuck’s religion is removing friction.

This amoral approach, combined with Facebook’s monopoly, gives Zuckerberg his insane advantage.

https://www.advocate.com/youth/2012/10/15/two-queer-college-students-outed-facebook

To what extent does the network effect make it extremely difficult for a startup to compete?

See above.

I read a blog post from 2010 where you described a load of companies and people who had been “Zucked” (including Foursquare, Twitter, ConnectU). Who else has been Zucked recently, in your opinion?

How much time do you have?! There is a long list of startups the Zuckerberg has convinced his team to copy, including Periscope, Timehop, Meetup, Houseparty, Path and Snapchat.

What’s particularly nefarious is that Facebook can use their data from the Like button, their ad network and Facebook Connect (“login with Facebook!”), to study which competitors are getting traction and kill them before they hit scale.

Additionally, the WSJ reported on a really dirty trick Zuckerberg pulled: he bought a mobile data company, Onavo, and figured out which startups that weren’t in Facebook’s ecosystem he should kill next.

Candidly, I’m surprised no group of impacted companies has gotten together and sued Facebook collectively. I’m no lawyer, but it certainly feels like this might go beyond just dirty tricks, it might be actionable.

https://www.onavo.com/

https://www.wsj.com/articles/the-new-copycats-how-facebook-squashes-competition-from-startups-1502293444

https://www.wsj.com/articles/facebooks-onavo-gives-social-media-firm-inside-peek-at-rivals-users-1502622003

What do you think of the way that Facebook has handled the fallout from the Cambridge Analytica scandal?

It’s clear that Zuckerberg was able to charm Washington DC and that Facebook will, in all likelihood, not only get away with nothing more than a slap on the wrist, but they will also be getting an even deeper monopolistic position if new regulations are created.

New regulations will only solidify Facebook as the only place with enough scale and data to matter to advertisers. Zuck understands this, which is why he’s been saying “sure, regulate us!” He knows it only cements his position.

What do you see as the worst thing about Facebook/most egregious thing the company has done?

I think if discovery is done on Facebook’s behavior toward partners and competitors, the cut-throat nature of their approach would be 10x more troubling than what we already know.  

What about the positives — what’s the best thing the company has done?

Social networks are amazing at letting families and friends stay in touch with each other, and the filters on instagram make our photos look 100% more beautiful—these are wonderful innovations.

What impact has Facebook had on the “open web”?

Facebook is actively trying to shut down the open web, and that’s an opportunity for clever founders to double down on solutions that Facebook, and Google, do not control. SMS, email, the web, podcasting, RSS and distributed crypto and blockchain solutions, are all amazing examples of platforms that Google and Facebook can’t stop — and they’re actively trying.  

Google wants to kill the open web and email, with AMP pages and Gmail smart folders. Zuckerberg wants to kill SMS with WhatsApp, Messenger and Instagram messenger.

Smart founders should understand that the achilles heals of Google and Facebook are open platforms, and triple down on them. Google and Facebook can’t beat Wikipedia, nor control email and SMS, despite their attempts. We must fight corporate bad actors trying to shut down the open web, an open web that paradoxically created Google and Facebook.

What kind of support will you offer the 7 startups during the 12-week incubation?

The LAUNCH Incubator provides $100,000, 100 hours of my team’s time and the ability to pitch 150 top VCs in silicon valley and the 2,400 angel investors in http://www.jasonssyndicate.com. This gives a startup the ability get known, build a network, refine their skills and get money.

Money, skills, network and attention build startups as best I can tell after 150 investments — and six unicorns.

In 2010 you described Zuckerberg on your blog as “an amoral, Aspergers-like entrepreneur”  and that “Zuckerberg is clearly the worst thing that’s happened to our industry since, well, spam.” Given what’s happened since 2010, how has your opinion of him evolved, if at all?

Zuck is a much better public speaker, but the truth is, his superpower is his amoral approach to stealing innovations and relentlessly removing friction makes him the Borg — he will be unstoppable until he another founder builds a better product and refuses to sell out to him.

It could happen.

Also, I probably shouldn’t have used the “aspergers-like” term, as I’m not a doctor and that’s a too personal jab to make in hindsight. I wouldn’t say that again, even if Saturday Night Live did an entire skit based on that exact observation this month.   

https://www.youtube.com/watch?v=GqRo9xYKnfA

You say you will pick 20 finalists and “communicate with them regularly for 90 days” — can you please elaborate on what you mean by that? Is this to monitor how their business is developing? Will this involve mentorship? Or just a prolonged interview process?

Our plan is to tell folks they’ve made it to the next round, and if they have we will talk to them over email and do a regular video conference, to talk about their progress. Our hope is we can get to know founders during this process, so we can increase our investment from $100,000 to $1,000,000 if they’re crushing it.

A couple more questions. Given the obstacles to displacing Facebook (identified in your responses), what makes you think the Openbook Challenge might deliver a true competitor? What’s different now?

No matter how strong a big company is, there is always a chance that an indefatigable founder with a clever idea and a kick-ass team will be able beat them.

And what happens if Facebook seeks to acquire one of your incubated startups?!

If Facebook wants to buy your company you should do what Evan did: raise lots of money, go public and fight the great fight!

My job as an angel is to give the founder advice, money and options, but ultimately it’s the founder’s decision if they go to the dark side.


Andy Rachleff – CEO of Wealthfront  Co-Founder of Benchmark

https://launch.us2.list-manage.com/track/click?u=baefb9fcb23d26e0308254e5c&id=43dcacaafb&e=4af57d5954play episode download
23 April, by Jacqui[ —]

E813Andy Rachleff, Founder & CEO of Wealthfront and Co-Founder of Benchmark joins us on episode 813 of This Week in Startups. Much of the conversation focuses on investment strategies, including long-term goals versus short-term gains, stocks versus bonds, and resisting the urge to sell when a stock drops. We also cover Wealthfront’s growth (managing $10b+ assets), features, success, mission, and future plans, which include banking services and an IPO.

Andy shares lessons from decades in Venture Capital, serving on the board of Reed Hasting’s (Netflix Founder & CEO) first company, Pure Software, and from studying academic research and expert advice on investment strategies.

Join us for more than an hour of insights on private companies, public markets, and personal finance.

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Timestamps:

00:54 – Jason introduces Andy Rachleff, CEO of Wealthfront and co-founder of Benchmark. They discuss Benchmark’s success and status as one of the best firms in the world. Andy talks about how the founding team came together, their motivations, establishing equal economics for all partners to attract the best talent, more.

06:19 – Jason asks Andy if he misses being a VC. Andy says that, due to Benchmark’s structure, there was no way for him to continue in the firm’s equal economics when he couldn’t dedicate himself fully to VC work. He can still invest in the funds.

08:38 – Andy covers Wealthfront’s progress. A little over six years after founding, the automated financial advising company manages more than $10B. Andy thinks that’s the shortest time any investment vehicle has reached that milestone. Sees a rate of adoption unmatched in the investment business.

Andy says what most attracts people to Wealthfront is that everything is handled by software – more so than the fee structure. Wealthfront focuses on users under 40 with less than $1M. Those clients prefer not to regularly interact with advisors. Competitors try to marry traditional advising and planning with software.

12:24 – Jason thanks sponsor delivered tuxedo rental company The Black Tux. TWiST listeners get $20 off their first purchase.

14:59 – Jason asks Andy about Wealthfront’s take on cryptocurrency. Andy says Wealthfront’s target demographic is very interested in crypto, but Wealthfront focuses on academically proven investment strategies, not speculations. Crypto doesn’t fit into that philosophy. Those interested in crypto should limit their investment to about 10 percent of their portfolios.

18:12 – Andy discusses Wealthfront’s retirement planning, college planning, homebuyer planning. The company’s banking services include portfolio credit lines – a user can withdraw up to 30 percent of account value.

21:09 – Andy explains how Wealthfront uses data from various sources, including connected accounts, to determine the best plan for each user and to provide better financial outcomes than a traditional planner could conceive.

25:54 – Andy talks about human nature regarding investments: people want to sell when the market drops and buy when it goes up. That’s the exact opposite of what people should do. Wealthfront publishes blog posts encouraging clients to resist counterproductive urges.

28:24 – Andy covers Wealthfront’s value-added services, a suite known as Passive Plus. Includes Tax-Loss Harvesting, which enables Wealthfront to sell a losing investment and replace it with an equivalent investment, then apply the loss to income and gains to reduce tax liability.

30:54 – Jason thanks sponsor Squarespace, which powers LAUNCH’s events sites. Use offer code twistto get 10 percent off your first purchase.

33:34 – Andy continues explaining Wealthfront’s Passive Plus features: Stock-Level Tax-Loss Harvesting:  If a stock drops 10 percent, Wealthfront will sell it and buy a highly correlated stock, hold it for 30 days, then sell and return to the original stock.

36:38 – Andy discusses Passive Plus feature Risk Parity, which uses leverage to increase volatility in a stock-and-bond-balanced portfolio to increase returns without increasing risk.

39:48 – Jason asks about the near-record bull market run and whether it indicates a coming crash. Andy says no one can predict the stock market, but every downdraft recovers. On average the market recovers from corrections in 89 days. So people are better off when they just maintain their investment strategy and pace without trying to predict the market.

43:26 – Jason asks about ETFs. Andy says there isn’t any academic research indicating ETFs have had a negative effect on the market. People who advocate actively-managed funds spread FUD about ETFs.

45:05 – Jason asks about Trump’s corporate tax cuts, tax cuts on repatriated cash, etc. Andy says these decisions are driving the stock market, but not necessarily the economy. The question is what companies will do with the additional earnings.

48:41 – Andy notes that there are 50 percent fewer public companies than there were about 10 years ago. Andy thinks it would be healthier for the economy if there were more public companies. Jason says there is a flurry of IPO activity in Silicon Valley.

50:44 – Andy talks about how some of the biggest tech companies have reinvented themselves numerous times – usually through acquisitions. He’s worried that too many companies are staying private for too long. They wait until their growth rate slows and then it’s a hard stock to sell or take public.

Jason attributes the problem to a founder-friendly investing environment, where there is a great deal of late-stage capital available. Public funds are dipping into earlier-stage companies that might not go public.

Andy says Facebook was a prime example of why tech companies shouldn’t go public and Zuckerberg now regrets not going public sooner. Most companies would have to go public to make the types of acquisitions Facebook has.

52:57 – Jason and Andy discuss Wealthfront’s growth rate, fundraising, revenues, and assets. Andy hopes the company will file to go public in about two years. It’s time to file when a company can reasonably predict its business. Newly public companies should see stable or increasing growth rates and increasing margins.

56:23 – Jason asks if too many people want to own equities because there’s a lack of public stocks (which increases demand and prices). Andy says that’s one of the reasons price-earnings ratios are at a historic high. Bond and treasury bill investments can’t keep up with the rate of inflation.

Wealthfront establishes a client’s risk level and the client can then adjust. Changing too frequently is a bad idea because changing risk settings results in incurring taxes. Long-term strategies are usually the best.

59:50 – Andy hopes Wealthfront will eventually operate as a bank. The company ultimately wants to provide all financial services at a lower cost than all competitors. Aims to optimize and automate all of a client’s personal finances.

1:03:11 – Andy, who previously served on the board of Reed Hasting’s Pure Software, said he thinks more about Reed than anyone else when making decisions about running Wealthfront – specifically in regards to making competitors’ greatest strengths into their greatest weaknesses.

Andy says Reed keeps things simple, focuses on the most important areas, and makes bets with asymmetric risks (massive upsides, nothing that can kill the company). With Netflix, he bet on streaming and on original content. One of few companies reinvented through internal development.

1:06:07 – On accredited versus non-accredited investors: Andy doesn’t think income is indicative of sophistication, but the vast majority of people should not invest in startups. In the professional investing world, a very small percentage represents the vast majority of realized gains.

1:09:04 – Jason asks what makes a great manager in venture capital. Andy says success is the differentiator, but success is easier when achieved in consensus. To make the right bets without consensus is the challenge. A great manager has to know which leaps of faith to take. It can’t be done without risk. People learn how to choose based on previous success. Jason says Those who have been rewarded for taking risks are emboldened and can focus on the upside.


Can Facebook be replaced? Let’s invest $100,000 in seven teams and find out!

21 April, by Jacqui[ —]

I could write another long email filled with criticisms about Zuckerberg’s horrific track record running Facebook, but instead, I thought I would seize the opportunity created by Mark’s self-inflicted crisis and announce the “Openbook Challenge.”

The “Openbook Challenge,” a competition with seven, $100,000 investment prizes.  

All community and social products on the internet have had their era, from AOL to MySpace, and typically they’re not shut down by the government — they’re slowly replaced by better products.

So, let’s start the process of replacing Facebook.

LAUNCH is going to fund seven, purpose-driven teams that want to build a billion-user social network to replace Facebook.

We are hoping to invest in a social network that is actually good for society. This means the new social network would:

  1. Respect and protect consumer’s privacy
  2. Respect and protect our democracy from bad actors
  3. Respect and protect the truth, by stopping the spread of misinformation
  4. Not try and manipulate people by making them addicted to the service
  5. Protect freedom of speech, while curbing abuse (not easy!)

We already have two dozen quality teams cranking on projects and we hope to get to 100.  

The timeline and frequently asked questions are below.

Best,

Jason Calacanis

Founder, LAUNCH

——————————————–

How will the competition work?

This is not an idea or business plan competition. We’re looking for teams that can actually build a better social network, and we’ll be judging teams primarily based upon their ability to execute.

The competition will occur in three stages:

  1. Apply to the competition with your video tour, MVP or full blown product with traction stats.
  2. We will pick 20 teams as finalists and communicate with them regularly for 90 days.
  3. At the end of 90 days, we will offer seven teams to join our incubator, invest $100,000 in each and host them for our 12 week incubator, which will start on October 12.

What are you looking for?

We don’t want to tell you what to build, we want you to come up with your own ideas. Keep in mind, that while ideas really matter, Zuckerberg has shown us, execution matters more.

“Don’t be too proud to copy.” — Mark Zuckerberg

Is this a competition to see who can simply copy Facebook’s current product or a competition to come up with a new, novel way to beat Facebook in the market?

No one knows exactly how Facebook will be replaced. In order to beat Facebook, many believe the winning team will have to not only build a base functionality that is familiar to users looking to switch, but also provide new experiences that will make users passionate about the new product. Other’s believe it will be a completely new paradigm. The reason we want to fund seven teams, is because we think many different paths could lead to the promised land. It’s not going to be easy, but startups never are.  

Who will make the investment?

Angel investor Jason Calacanis will be making the investment from the LAUNCH Incubator Fund. We will also syndicate the best projects to JasonsSyndicate.com (2300+ members).

What will the terms of the investment be?

Our incubator terms are at the industry standard of $100,000 for six percent.

How will you pick the 20 finalists?

Ability to execute.

How will you pick the seven winners?

Ability to execute. (I would also add something like Founder alignment with core mission, values)

How can we stay up to date on the project?

You can email openbook@launch.co anytime with your questions, join the email list at https://www.openbookchallenge.com/updates, and sign-up for the discussion group on… Facebook!

Timeline

Next 60 days (today through June 15): Rolling review of submissions. The LAUNCH team will review submitted video tours and/or link to your full-blown product/MVP and give candid feedback.

July 1st: We will pick the top 20 projects and review them on a special episode of This Week in Startups with two social media experts.

September 30th: We offer the final seven startups, plus three alternates, the opportunity to join our incubator class starting in September.

October 12th-January 15th: Openbook Challenge, LAUNCH Incubator class runs for 12 weeks.


Startup Tuneup: Pitches from 6 Australian Startups

http://www.addtoany.com/add_to/email?linkurl=http%3A%2F%2Fcalacanis.com%2F2018%2F04%2F18%2Ftwist812%2F&linkname=Startup%20Tuneup%3A%20Pitches%20from%206%20Australian%20Startupsplay episode download
18 April, by Jacqui[ —]

E812: Startup Tuneup, Down Under! 6 Australian startups pitch me on VR therapy, food scrap collection, tree-planting robots, entrepreneurialism for kids, vets-pet owner platform, & homeowner all-in-one custom building

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Timestamps:

01:06 – Jason explains the Startup Tuneup: Six companies from Australia will pitch to Jason and he will provide honest feedback about their chances of raising money, the challenges they face, more.

Pitch: Neuromersive – VR-based brain rehabilitation

02:30 – Aims to reduce the boring and repetitive nature of brain rehabilitation programs through VR, with sensory feedback and electrical stimulation. Targets three-fold improvement in outcomes. Automated system measures and tracks progress. Hopes to capture 30 percent of the 300k US rehab centers.

06:06 – Jason compares the pitch to what investors look for: Founder is passionate about the idea but perhaps too understated. Work on monotonous speech. The persistent character is evident, strong team.

VR products are getting better, but are still too expensive. Plus side is that Neuromersive is targeting a niche market that buys high-ticket items. Customer acquisition cost is high at $1.5k. Jason requests clarification on neuroplasticity and how dopamine enhances it.  Also discusses its role in staying sharp and optimizing intellect.

12:24 – Cost to consumer is the same as more traditional treatments, but with much better results. Jason notes that citing huge, potentially addressable markets and working from the top down can make a startup seem less credible. Better to work from the bottom up: cite realistic numbers for an immediately addressable market.

14:10 – Jason asks about trials, medical device/service status, and regulatory concerns. He questions the flat rate model and the income per clinic.

16:20 – Jason asks about money invested to reach MVP ($75k, still working on MVP) and how much more is required to acquire paying customers ($950k).

16:54 – Jason thanks sponsor Walker Corporate Law, which specializes in startups.

Pitch: Kooda – Tech-enabled food scrap collection and composting

19:41 – Provides two apps: one for consumers, one for “Gatherers.” Provides homeowners, restaurateurs, etc with buckets for food scraps. Gatherers use their app for collections and are incentivized to perform quick, early pickups. Gatherers take the food to local composting centers, reducing the amount of methane generated by landfills. Produces soil conditioner.

23:36 – Jason asks about profitability, unit economics. Collectors get $1.50 per bucket base, $3 with speed incentives. The front-end collection service is break-even: customers cover collection. Subscription averages $20 per month. Revenue comes from product sales.

26:03 – Can the company reach venture scale or is it a boutique business? Response has been strong. People are asking about franchising. The company is working on numerous patents, is considering connected buckets, and is investigating blockchain integration.

28:52 – Jason likes that the idea is not obvious. The fact that people will question scalability means there’s an opportunity. People may be encouraging, but less likely to invest. Once the company figures out profitability, investors will come back looking to write checks. For now, the company has to prove there’s a real business. Jason also likes the positive impact on society.

Pitch: Sky Grow – Autonomous tree-planting robots

32:09 – Problem: Humans aren’t planting trees fast enough to compensate for deforestation. Solution: GrowBots plant trees 10 times faster than traditional methods and at 48 percent of the cost. Safer, easier. Can plant most tree species and add nutrients to the soil. Has contracted to serve its first customers, local governments, by the end of June.

34:44 – Jason asks for details on economics: The company charges $10-$15 per tree. Australian governments have targets for planting trees and isn’t meeting them. Sky Grow sells its services, not robots. Has considered growing trees and delivering and planting them.

38:06 – Jason says it’s exciting that the robots are out in the real world performing a job, but he isn’t sure how venture-fundable the company is in its early stages. Government grants might be a better starting point.

39:28 – Jason asks about the closest competition, which is a company using aerial drones to fire seeds into the ground.

40:58 – Jason thanks sponsor Athletic Greens, which makes superfood shakes. TWiST listeners get 20 free travel packs with first purchase.

Pitch: Kiddsbay – A platform enabling children to create and launch online businesses

43:42 – Provides a step-by-step wizard for creating a business, educational resources (including tutorials and quizzes), business templates, more. Kids can generate real money as well as virtual currency, which can be used for unlocking additional site features, adding features to their stores, more.

46:09 – Jason loves the idea of getting children involved with entrepreneurship. He asks about real-world sales, revenue, scalability. Notes the idea hasn’t really existed before in the world.

49:03 – Jason says there might be a bit too much going on. A sim system (no real-world sales) could be the best idea to pursue. Depends on early feedback. Jason says to stay open-minded about which features resonate and which should be abandoned.

Pitch: VetChat – Connects pet owners with vets for video consultations and chat

52:44 – Has served 2k pet owners. Not currently looking for funding but for introductions to marketplaces, pet-tech companies, etc, to learn about acquisition and growth strategies.

56:02 – Jason says the idea is brilliant: Nobody wants to take a pet to the vet when it isn’t necessary. Asks about pricing: $39 consultation works out to about $2 per minute. Cheaper than going to the vet, but gives vets the ability to earn at their convenience. Currently doesn’t support prescriptions and Jason says that’s key to everything – but the idea has legs.

Jason notes the pitch included specific numbers, the founder has passion, and she understands what investors want to know. She anticipated questions. This makes follow-ups more likely. Jason says to stay focused on metrics and margins until it’s time to raise.

Pitch: Udrew – DIY building plans and permit approvals

1:00:37 – Simplifies the process for home improvement projects: generating designs, ensuring compliance, listing materials, more. The system recognizes pipes, trees, etc. and enables the user to perfect a design before contracting. Piloting with fences will support more structures.

1:03:08 –  Jason says the idea is very innovative but it’s a complex area. He compares it to LegalZoom in that there are some legal difficulties when issuing permits. Udrew is a software company. The system recalculates strength, etc., as materials are changed to ensure everything is up to code. They have an in-house chief structural engineer. So far, the software has been more accurate than existing human-generated submissions.

1:07:44 – Cost: 70 percent cheaper than current standard price with an architect. Jason notes to be specific about numbers – it increases credibility. Regarding the product, Jason says mistakes could have a high cost, so it’s best to add support for new structures slowly and carefully. Jason says Udrew is super impressive.

Jason picks his Top Three:

  1. Udrew provides unbelievable value proposition and massive cost savings.

  2. Kooda is a wildcard that’s fascinating due to the concept and early traction.

  3. Neuromersive is interesting, has good timing. Efficacy is the question.

Jason speaks a bit about LAUNCH Festival Sydney


News Roundtable: Zuckerberg, Facebook, USPS, Youtube, Self-Driving

14 April, by Jacqui[ —]

This Week In Startups

E811: News Roundtable! Iain Thomson, The Register & Brian Alvey, Clipisode: Zuck testifies to Congress, Facebook’s data dilemma, Trump orders USPS review, YouTube demonetization fallout, self-driving car accidents & the dangers of human distraction.

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Timestamps

00:30 – Jason introduces his guests: Clipisode founder Brian Alvey and The Register journalist, Iain Thomson.

Mark Zuckerberg’s testimony before Congress:

03:09 – Brian says Facebook users should be savvy and expect their data is for sale. Notes that Facebook and others charge per API call: it makes technical and financial sense for companies to retain user data once acquired. Jason expects Facebook to reduce its data gathering. Iain agrees and says the company will have to launch a paid service to make up for lost data revenue.

08:19 – Brian notes the brilliance of Zuckerberg’s response to questions about ad-targeting: with reduced targeting, the company would charge small businesses more to run campaigns – an implied threat.

10:51 – Brian says regulation is likely and it will inhibit competition because Facebook was able to achieve its position without those restrictions.

11:48 – Thanks ZipRecruiter for supporting This Week In Startups. Visit http://ZipRecruiter.com/twist to hire the perfect candidate for your business.

13:08 – Jason says Zuckerberg’s performance was very good and the questions he faced were not challenging. Jason does not expect new regulations. He challenges listeners to prove Facebook is lying about not being able to target individual users.

16:31 – Iain believes regulation is coming in the US, but it won’t be as intensive as the EU’s GDPR. Jason argues companies should be required to ask users if they want to see their stored data every 90 days, and to delete data regularly. Brian argues companies should show users how ads will suffer without targeting, then give them the option to opt in/out. Brian says service bundles would increase subscriptions for ad-free services.

Trump versus Amazon

22:12 – Regarding Trump’s accusation that Amazon is costing the USPS money, Brian says delivering letters is a dying business, while delivering packages is a growing business for the USPS. Iain says Amazon has been a savior for the USPS, but potentially resold bulk-purchased delivery services. Jason says the USPS needs to be significantly downsized.

28:54 – Thanks Squarespace for supporting This Week In Startup – Use offer code “Twist” for a 10-percent off your first purchase.

YouTube Shooting:

30:42 – Jason says while gun control, office security, and mental illness are obvious relevant topics, there is an important discussion to be had about YouTube and others changing terms and monetization opportunities. Brian notes such companies have a difficult responsibility because these decisions affect the livelihoods and potential earning power for some users. Jason says YouTube’s willingness to accept strange content and to monetize it is what made the company so powerful. Now, they’re shedding the bottom rung of creators. Iain says that bottom rung is where the next generation of superstars will emerge. The lesson for creators is to diversify.

NTSB removes Tesla from the investigation into fatal Model X accident:

39:01 – Brian says everything will be automated and self-driving vehicles will absolutely be safer than human drivers. Lain agrees but says the tech isn’t ready for full deployment. Jason accepts Tesla’s arguments that “Autopilot crashes” have been due to driver error.

46:11 – Jason asks if Autopilot should be paused. Brian says the tech should not be paused across the board – only for companies not ready for prime time. Speaking about the recent fatal accident involving a self-driving Uber, Jason says boredom is a problem. Brian notes that distraction is a huge problem for human-controlled vehicles so self-driving cars are a definite improvement. Jason argues for speed governors and stiffer punishments for distracted drivers.

51:05 – Iain says the trouble with implementing harsher laws for distracted drivers (car and phone impounded) is that voters would hate any politician who backed such an initiative. Says Finland has an interesting approach: Fining drivers a percentage of their annual salaries. Iain argues impounding distracted drivers’ vehicles could cause them to lose their jobs.

Sinclair Broadcast Group – Video shows various news stations reading the same script

53:56 – Brian notes similar videos have been circulating for years. Content services have been doing this in Radio and TV for decades: it’s the political agenda that has angered people. FCC will not take action.

Iain says next week will be big for security news.

Brian explains how Clipisode works.

Jason talks about LAUNCH Festival Sydney.


Abra Founder Bill Barhydt shares insights on ICOs (the good, bad  ugly), bitcoin’s euphoric rollercoaster, liquidity, mining, the IRS  crypto’s immutable fate to transform the world

http://www.addtoany.com/add_to/email?linkurl=http%3A%2F%2Fcalacanis.com%2F2018%2F04%2F06%2Fbill-barhydt-abra%2F&linkname=Abra%20Founder%20Bill%20Barhydt%20shares%20insights%20on%20ICOs%20%28the%20good%2C%20bad%20%26%20ugly%29%2C%20bitcoin%E2%80%99s%20euphoric%20rollercoaster%2C%20liquidity%2C%20mining%2C%20the%20IRS%20%26%20crypto%E2%80%99s%20immutable%20fate%20to%20transform%20the%20worldplay episode download
7 April, by Jacqui[ —]

This Week In Startups

E809: Abra Founder Bill Barhydt built the 1st global wallet to buy, store & invest 20 crypto- & 50 fiat currencies. In this episode, he shares insights on ICOs (the good, bad & ugly), bitcoin’s euphoric rollercoaster, liquidity, mining, the IRS & crypto’s immutable fate to transform the world.

Listen on iTunes



Timestamps:

2:22 Jason explains how he first met today’s guest, Bill Barhydt, Founder & CEO of Abra. Bill shares the fundamental vision behind Abra.

4:13 Jason asks Bill if his original idea for Abra is still in play, and how much his investment (from 3yrs ago) is worth now. Bill explains what worked & didn’t work.

5:43 What does the term digital gold mean?

6:32 Bill explains how Abra is using bitcoin as programmable money to create global financial inclusion.

10:45 Thanks to Walker Corporate Law for supporting the show. Call (415) 979-9998 to talk with Scott Walker directly, or visit http://walkercorporatelaw.com for more information about getting legal work done for your startup.

13:33 Bill explains his view on the current state of ICOs. (the good, the bad, the ugly). And why many ICOs are forbidding U.S. investors.

17:24 Bill & Jason explain the fundamental difference between ICO investors and Angel Investors.

18:42 Jason challenges Bill to list the companies (crypto projects) that have a product being used in the market, and how tokens are being used within those products.

23:18 Is the trading volume for cryptocurrencies inaccurate/fake? Bill explains the manipulation that occurred in China, and how it caused massive trade volume.

24:50 Jason & Bill talk about why bitcoin skyrocketed to over $19,000 within a short period.

27:57 Thanks to Asana for supporting this podcast. Visit http://asana.com/twist to try it out for free!

34:03 Will bitcoin become the ultimate winner in cryptocurrency? Jason believes that bitcoin will go to zero, and Bill explains why he thinks it will continue to be “digital gold.”

35:22 Why hasn’t anyone been able to hack bitcoin? Bill explains the complexity of which bitcoin was created with, which makes it 100% immutable.

37:28 Bill explains what Litecoin is, why Abra uses it in their smart contracts, and how Abra makes money.

40:34 Can the entire crypto ecosystem be ruined if something happened to Coinbase? Bill explains why this theory is false.

43:01 Where is crypto world headed? Bill explains what he wants to see, and what the market cap for cryptocurrency will be in 10 years.

50:25 How anonymous is cryptocurrency today? Bill explains the varying degrees anonymity associated with different cryptocurrencies.

53:27 Is the U.S being too conservative with cryptocurrency?

58:19 Bill explains why the IRS is not equipped to crack down on taxing all cryptocurrency gains.

1:01:03 Bill explains why he’s setting up a non-profit arm of Abra in Switzerland.

1:03:07 Will Abra do an ICO? Bill explains why he’s not interested.

1:06:02 Jason reveals his big plan for launching “J-coin”

1:08:04 Jason and Bill discuss the $1.7b Telegram ICO. Bill shares that Telegram will only need $50-$100m to follow through with their whitepaper. What will they do with the remaining $1.6b???

1:11:32 Jason ask Bill to come to http://launchfestivalsydney.com in June and present a keynote on Crypto. Bill accepts! (P.S.: we have 100 free tickets left for founders)

1:12:19 Bill explains why his career jump from Goldman Sachs to Netscape was one of his best career decisions.


Defending self-driving cars in the face of tragedy

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6 April, by Jason Calacanis[ —]

Last month we reached the tragic, and long-dreaded, moment in the history of self-driving cars: the death of an individual who didn’t opt into using self-driving technology. (In this case, it was a pedestrian, but it could have been passengers in a non-self driving car).

[ Click to Tweet (can edit before sending): https://ctt.ec/A29R8 ]

This follows the May 7, 2016 Florida death of a driver using Tesla’s driving-assist technologies (“autopilot”), which are often confused with self-driving technology.

Since that time, two other deaths have occurred while autopilot was engaged, including a driver in China on January 20, 2016, and the recent crash here in the Bay Area on March 23rd.

Four tragic deaths, in four separate instances, using two different flavors of self-driving tech (driver assist & fully automated), but one common thread which we must, as a society and industry, address candidly: user error and — most confoundingly — the abuse or misuse of this technology.

I’m a strong believer, and investor, in self-driving technologies.

I’m a shareholder in all three of the major players in self-driving: Tesla, Uber and Alphabet (aka Google), which owns Waymo. Two of those names, I own blindly via my Wealthfront “robo-portfolio” (i.e., I don’t actively trade them and don’t know how much I own of each). I invested in Uber, which is still a private company, during their seed round.

I also own two Teslas with self-driving technology, the Model X and the Model 3, and I’ve logged over 20,000 miles on autopilot.

I use autopilot almost every day on the 101 freeway, the same road where the most recent death with autopilot engaged occurred. It’s important to note that I’m not saying “autopilot death” here, but rather a death that occurred with autopilot engaged.

This is an important distinction, because in all three autopilot cases — and I want to be careful to not blame the victims here — the users appear to have potentially misused — or perhaps even abused — the technology.

The Frustrating Truth

The most disturbing and frustrating trend, in all four deaths, is that the human drivers played a significant role in them. From all of these crashes, we have a massive amount of data; in two, we have dashcam video, and in the tragic death of the pedestrian, we have video of the driver (which I believe is a first).

The unprecedented amount of information we are getting from these accidents is steering our collective discussion toward logic over emotion — which is a nice thing to see.

Here is what we know about each of the four crashes.

Florida (Autopilot): The driver was going nine miles above the speed limit with autopilot engaged and had seven seconds to brake as a truck passed in front of him. The brake pedal was never touched. This means the driver was either incapacitated at the time or chose to look away for seven full seconds. There were various reports that a DVD player was found in the car, and the driver of the truck claimed that Harry Potter was still playing after the crash.

China (Autopilot): You can watch the dashcam video of this tragic accident ( https://youtu.be/fc0yYJ8-Dyo ), in which a Tesla on autopilot crashes into the back of a stationary road sweeping truck. Based on the video the driver had ample time to avoid the sweeper if autopilot was on. Also, no self-driving technology can be perfect when dealing with stationary objects on the road (i.e., a boulder rolls down a hill onto a highway). Finally, why on earth is a road sweeping car sitting in the passing lane with no lights, flares or safety vehicle behind it to alert drivers to the fact that it’s stationary or moving slowly?

Mountain View (Autopilot): In this case, Tesla quickly released the tragic news that the driver of the Model X had ignored warnings to keep their hands on the wheel while autopilot was engaged. Additionally, the driver was speeding and had the distance setting at one-car length, when it should have been set to the max, which is seven. The driver had, according to Tesla, five long seconds to avoid the concrete divider, but again, no action was taken.

Arizona (Self-driving): It’s too early to know what failed with this tragic death, but based on the video of the driver, they were looking down — most likely at a smartphone — for most of the ~10 seconds of video that has been released.

We won’t know for a while, but there is a chance that if the driver — who was being paid to drive the car — had not been blatantly and knowingly breaking the law, they might have been able to apply the brakes in time. There is a chance that the self-driving technology failed in this situation, as well. If the technology did fail (and that’s a big if), this would wind up being a serious edge case: the technology AND the safety driver failed.  

The thread we must address in all of these cases is that all four drivers (three primary drivers using autopilot and one safety driver using fully autonomous) were confirmed to have ignored what was happening on the road for many seconds.

If you look away from the road for five seconds at 65 MPH, which is what happened in three of these four accidents, you would have traveled a distance of well over a football field — without looking (65 MPH=95.3 feet per second; 95.3 feet x five seconds=~477 feet).

How We Should Address Autopilot

Autopilot, as currently designed by Tesla, consists of two primary technologies that are available in many cars: adaptive cruise control and lane assist. As such, it’s clear Tesla is being held to a higher standard than other players who have been deploying this technology.

Some people have blamed the word “autopilot,” claiming that it’s giving naive users a false sense of security. Owning two cars with autopilot, I can tell you that the system makes it absurdly clear that you can’t take your hands off the road, and in fact, it disables itself for the entire ride if you ignore it completely.

The fact is, smart people can take risks they shouldn’t, and sometimes smart people can make inconceivably bad decisions, like watching a movie while driving or taking the eyes off the road for five seconds.  

The only fixes I can think of with autopilot are window dressing. We could require everyone to take an hour-long course and sign even more waivers, but I don’t see either of those measures stopping someone from deliberately misusing the technology.

Just like Honda is never going to get motorcycle riders to stop splitting traffic, popping wheelies and (back to smart people doing incomprehensibly inadvisable things) standing on the seats of their bikes. In fact, there is an entire genre of YouTube compilations around motorcycle riders doing very stupid things: https://youtu.be/QeKFc3BNtU4

How We Should Address Fully Autonomous, Self-Driving Trials

In order to install massive confidence in self-driving, and in order to conservatively manage edge cases, we should require two “pilots” — one in the left seat and the other in the right seat — for all self-driving trials.

This will help with the boredom issues that solo test drivers have reported, and that peer interactions with audits will (hopefully) eliminate.

Airplanes are designed to be run by one pilot, but the benefits of two pilots running checklists (read the awesome “The Checklist Manifesto” if you haven’t), and having a backup, are well worth the expense.

We don’t need to save money in these trials, we need to refine the edge cases of the technology while inspiring massive confidence in it. The drivers in this scenario should swap pilot/co-pilot roles every hour, in order to keep people fresh and engaged.

If we do this, we will have a massive advantage over non-autonomous cars: two drivers AND an array of sensors backing them up.

This is an easy concession for the industry to make, in order to avoid a complete shutdown of self-driving trials — which is what most savvy people believe will happen if we have another tragic death.  

What about other causes of road fatalities?

The leading causes of death in cars are speed, lack of seatbelts and distracted driving. All are behaviors that people choose to do and that could easily be solved with a combination of technology and enforcement — but as a society we choose to take a very light hand with these.

Speed limiters have existed for decades, yet we do not require them despite the technology being cheap, available and speed being a top contributor to deaths.

When Ontario, Canada added speed regulators to trucks, crashes dropped dramatically — between 25-73% according to research I’ve read. (Sources: http://bit.ly/2uObH5J, http://bit.ly/2qaS0PL)

We allow consumers to decide if they want to speed every day, and have done so for almost a century.

If we want to reduce road deaths, the quickest path to that would be to put regulators on all cars this year with a maximum speed of whatever the highest speed limit is in your state/region.

Putting aside the ease at which speed regulator technology could be put in cars, our laws around speeding could be instantly changed to be so punitive that they would seriously dissuade people from speeding.  

Imagine if you get tagged doing 20 miles or 30% above the speed limit, with or without speed regulator, and your car is impounded for a month. What if, on the second time you’re caught speeding at this level, your car was sold and the proceeds given to victims of car accidents?

The same highly-punitive process could be deployed for distracted driving, which people don’t take very seriously.

Behavior would change quickly if you lose your car for a month — or indefinitely. Sure, this is an extreme measure, but that’s why I’m making it: we have the power as a society to change laws and reexamine our approach to long-standing traditions, like speeding.

So far, I’m very impressed with the press and public’s reaction to these tragic deaths. We’re not overreacting (yet), and hopefully we’ll take a moment to consider the big picture when it comes to road fatalities–taking a fresh look at all aspects of how we might get to “zero road deaths.”  

All the best, Jason


“Why do you hate crypto, Jason?” (I don’t, but… )

29 January, by Jason Calacanis[ —]

“If you are right, that 90% of crypto projects are scams or incompetent, what do you gain by taking that position publicly?” asked a close friend.

I took a moment to think it through.

[ Click to Tweet (can edit before sending): https://ctt.ec/3a1P0 ]

Why was I sounding the alarm on Twitter, my podcast, and CNBC, that civilians should be very careful investing in virtual currencies that are unregulated, anonymous, easily manipulated, phenomenally hackable, global, and often run by bad actors or the incompetent?  

“To protect people from losing their money?” I answered.

I’ve got a complicated relationship with crypto, having monitored early projects like Bitcoin with enthusiasm.

Six years ago I wrote a piece called “The Most Dangerous Project We’ve Ever Seen,” that introduced many in the investment community to Bitcoin.
http://www.launch.co/blog/l019-bitcoin-p2p-currency-the-most-dangerous-project-weve-ev.html

Full disclosure, while I don’t trade cryptocurrencies, I have a lot of exposure to it by investments in startups like Robinhood, Abra, and Talla.com (to name a few notable projects).

Here are five important points I would like to state for the record:

  1. This Will End Badly For Most

It would take me ten articles to catalogue all the risks and scams in this emerging space, but to give you the broad strokes here are the critical issues that most savvy people — including those with large positions in crypto — all agree on.

Billions of dollars in crypto have already been stolen, and *most* of the ICOs I see are horrible ideas run by people who have no track record or ability to execute.

Bitconnect is an instructive example that you can read about here:
http://nymag.com/selectall/2018/01/ponzi-scheme-bitcoin-site-bitconnect-shuts-down.html

Most importantly, you should watch this hilarious video:
https://youtu.be/lCcwn6bGUtU

And read about these pump and dump chat rooms, where thousands of people (it seems) are buying crypto coins before marketing them to the next group of suckers.
https://theoutline.com/post/3074/inside-the-group-chats-where-people-pump-and-dump-cryptocurrency?zd=1

Now, it is *possible* that while most projects fail, most of the money in crypto could wind up going to a smaller number of higher quality projects that become long-term successes — but that is obviously not guaranteed.

In fact, it’s possible that Bitcoin could go to zero (which I talk about below).   

  1. ICOs are insanely speculative investments/donations

ICOs are initial coin offerings and they are the black eye of the crypto industry for a number of reasons. Most of them have untested teams, but that doesn’t mean that those teams won’t eventually build very successful companies, but it does mean that you are taking serious risk.

When you look at an ICO, understand that there are multiple levels of significant risks stacked on top of each other. Most ICOs share most of these risks:

a. Untested teams — some are scam artists, others are just wildly naive.
b. Top projects are raising far too much money before they hit any milestones — overfunding is a very dangerous thing.
c. A large number of bad or derivative ideas with crypto slapped on them (“Uber with tokens!” and “a decentralized Twitter!”).
d. You’re not buying stock in these companies, you’re buying tokens or, even worse, tokens that might show up, some day (i.e., the SAFT: “a simple agreement for future tokens.”)
e. You’re investing in a white paper, which is a fancy way of saying “a bunch of ideas described in a PDF.”
f. There is little legal framework for these offerings, and the SEC is a very serious organization — and they have started to sound the alarm.
g. You have zero rights with your tokens — because they’re not equity!

If you compare this stack of risks to a startup, here is what I do for a living in terms of taking risk:

i. We typically invest in startups when they have built their MVP or a product in market with some early traction (as opposed to white papers, which are typically no more sophisticated than the back-of-a-napkin idea).
ii. We get equity in the companies (as opposed to Chuck E. Cheese’s tokens that have never even been actually used).
iii. We have protective provisions in our investor agreements that keep us from being diluted, give us information rights, pro-rata, anti-dilution, and other important legal concepts that keep bad actors from absconding with our money.
iv. We have five decades of legal and regulatory stress testing of the system.
v. We meet with the founders of these projects multiple times and do due diligence (as opposed to shipping Bitcoins to their wallets).

Now, I’m not saying I will never buy tokens, but it’s very clear to me that tokens are most often either a Kickstarter contribution (you know, without the product being sent two years late), a donation, a gift to incompetent people, or a scam.

There are probably 10% — a guess on my part — of these projects that are going to see the light of day and have a similar chance of success as an angel investment.

So, of that small number — which I put at 10% — maybe 10-20% will succeed.

This leads me to believe that 98% of these projects will result in people losing their money.

That means you have to make ~50x your money on one of 50 token purchases to break even. That might happen; I had a 3,000x+ investment, and a handful of 20-50x investments as an angel (which I talk about in angelthebook.com).

  1. Bitcoin itself could go to zero

The Bitcoin HODL crowd (a play on words for “hold,” as in hold your coins, never sell them), think this is insane, but we’ve watched many times as the early projects in a promising vertical go to zero and the 10th goes to the moon.

Many of us used Ask Jeeves, Lycos, and LookSmart before seeing Google show up in 1998.
https://en.wikipedia.org/wiki/Timeline_of_web_search_engines

Many of us used SixDegrees, Friendster, LiveJournel, and MySpace before Facebook in 2004.

Bitcoin is facing massive challenges around speed of transactions, the size of the blockchain, transaction costs and governance.

Governance could be the thing that takes it down. If you want to jump down that rabbit hole, you can watch this video: https://www.oii.ox.ac.uk/blog/the-blockchain-paradox-why-distributed-ledger-technologies-may-do-little-to-transform-the-economy/

The majority case in my mind, is that Bitcoin will, as the first technology out of the gate, be supplanted by a much better technology. This could be a fork of Bitcoin or simply a new, much better product.

As time moves on, consumers get savvier, and that means they recognize a better product quicker and move to it faster and faster. We’ve seen this with people jumping from Hotmail to GMAIL, BlackBerries to iPhones, and dialup to broadband internet.

Consumers will not have the loyalty to Bitcoin that they have to their email account and BlackBerries, because they don’t actually use Bitcoin for anything other than speculation. The switching cost will be zero, as opposed to switching your phone, which requires backing up your data, moving your phone number, and setting up your new iPhone and selling your BlackBerry.

We could see a run on Bitcoin that happens in days or hours, not years like the decline of RIM (BlackBerry’s parent company) and AOL.

  1. There will be an Amazon and Google in the Crypto space

I’m guessing we will see an Amazon, Google or Netflix-like company come out of the crypto space. When we do, there will be a ten-year window to buy their stock and be rewarded. As such, if you are in love with the crypto space, my advice to you is:

a. Spend 50% of your time learning.
b. Invest no more than 5% of your net worth in a basket of projects.
c. Be prepared to lose 100% of your investment in this basket of projects.
d. If you do hit a massive winner, say a 50x investment, make sure to sell some along the way as “idiot insurance.”

That last part is the critical one. I’ve had to have a heart to heart with a number of friends who bought Bitcoin early and who are “crypto rich and cash poor.”

If 90% of your wealth is in any one currency that is a very bad idea — unless you control that currency, i.e., if you were Jeff Bezos, owning a lot of Amazon stock isn’t a huge problem because you control the company and have massive insight into it.

  1. Founders should be very careful doing ICOs

If you take people’s money for a token that you hope will someday have utility, understand that the person buying it believes — 99% of the time — that this is a security.

If people buy your token to make money it is no longer a utility token, even if those buyers signed a document that says, “I’m buying a utility token not a security.”

Why? Because some percentage of our legal system and regulators will side with retail investors. You will get dragged into court and be forced to explain why you did a countdown clock to sell your utility tokens and why you hired promoters to sell them around the world.

Even if you win, it will be a horrible victory. Just ask the people who were sued after the dotcom implosion. It took the brutal part of a decade for most the them to clear their names even if they were in the right — others got lifetime bans.

Also, as Rob May from Talla points out, there can be additional costs to ICOs that founders might not consider:
https://www.coindesk.com/hidden-trade-offs-icos-entrepreneurs/

Summary
  1. I don’t hate crypto, but I do hate seeing people get scammed out of their money.
  2. The space is now driven by scams, FOMO, and FOCO, which means it’s going to end very badly for a lot of people. (FOCO is the fear of cashing out.)
  3. Feel free to invest a lot of your time, if so inclined, but be very careful with your money.

Best @jason

PS – We are giving 1,000 founders a free ticket to LAUNCH Festival Sydney, June 19 and 20. http://launchfestivalsydney.com Please spread the word!

PPS – We are hosting the next LAUNCH Incubator class starting on March 8. If you know of a company in our “Goldilocks Zone” (GLZ) please hit reply and introduce me to them. The GLZ means not too hot and not too cold, which for us means the startup doesn’t have a Series A yet, but does have a product in market with some traction (even modest traction, like $10,000/month in revenue or 10,000 daily users).  http://www.launchincubator.co/

PPPS — We are just wrapping Season 2 of my podcast ANGEL. It’s free and you can listen here: angelpodcast.com & http://bit.ly/angelpodcast

PPPPS — If you’re an accredited investor and you want to see what I’m investing in, and possibly invest alongside me, you can apply at jasonssyndicate.com.

PPPPPS — The book is doing great. If you’ve read and loved it, please consider posting a review, which I understand really helps!
https://bit.ly/5starangel
https://www.angelthebook.com/audible
https://www.angelthebook.com/goodreads

 


ANGEL in Miami 1/29-1/30/18

19 January, by Jason Calacanis[ —]

Friends,

I’ll be in Miami, FL, in a couple of weeks to talk about my book, “ANGEL.”

I hope you will join me at Refresh Miami on Tuesday 1/30 for a fireside chat and raffle. Raffle winners will join me for brunch the following day, Wednesday 1/31. Agenda & book tour itinerary are below.

Hope to see you there.

Best,

@jason

MIAMI ITINERARY: 1/30 & 1/31

TUESDAY 1/30:

12PM-2PM Private Lunch with Gramercy

6:30-8:30PM Public event: Refresh Miami fireside chat & raffle. Raffle winners to join Jason for brunch following day.
Purchase tickets HERE.  AGENDA:

6:30pm – 7:15pm: Networking, drinks and light bites
7:15pm – 8:30pm: Fireside Chat and audience Q&A. Jason will be interviewed by Melissa Krinzman, Managing Partner of Krillion Ventures

WEDNESDAY 1/31:

10:00AM: Brunch with raffle winners.

ANGEL Book Tour Dates (frequently updated)


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