Episode Summary
Executive Summary: In this episode of This Week in Startups, Jason Calacanis answers questions from listeners on topics including combating foreign interference in the 2020 election, starting a podcast, choosing between business ideas, the impact of the COVID-19 downturn on startups, traits of successful founders and investors, timing equity in startups, and how early-stage VC firms can differentiate. He emphasizes identifying a niche, being helpful, and focusing on execution.
Main Topics: Combating Foreign Interference on Social Media (Priority: 5/5): Discussion on Twitter vs. Facebook's approach to political ads, proposing that all ads should be tied to an individual's identity (like driver's license) to increase accountability. Also touches on bots, financial incentives for platform growth, and potential paid subscription models for social networks. Tips for Starting a Successful Podcast (Priority: 4/5): Advice includes using quality microphones, booking great guests, maintaining consistency, focusing on perfect audio, asking short questions, and being present to follow up on interesting points. Emphasizes that 100% of podcasting is showing up and doing 100 episodes. Choosing Between Business Ideas: App vs. Supplement (Priority: 3/5): Guidance on prioritizing a high-margin supplement business (money printing) over developing a complex app that faces well-funded competitors. The supplement profits can fund the app later, and the app can be used as a marketing tool. Opportunities from the Economic Downturn (COVID-19) (Priority: 5/5): Analysis that talent coalesces behind the best ideas during downturns, and founders can build great companies. Mentions acceleration of remote work, potential changes in food chain regulation, and reduction in handshaking/hugging. Traits of Successful Founders and Investors (Priority: 4/5): Founders should be self-possessed, resilient, and voracious learners. Investors need high EQ, the ability to work with strong personalities, and must be able to engage people deeply. Also stresses metacognition and awareness of biases. Timing Employee Equity in Startups (Priority: 4/5): Advice on joining startups at the right stage: after product-market fit but before massive growth (revenue between $500k and $5 million). Also notes looking at investors as signals, negotiating for more equity, and being willing to switch to a faster-growing company. Differentiating an Early-Stage VC Firm (Priority: 3/5): Strategy to differentiate by being helpful: produce free tools, courses, or seminars tailored to founders. Avoid being arrogant; remember that money is the primary reason founders seek VCs. Use your core skills to create value.
Key Arguments: Social media ads should require the real identity of the person placing the ad to deter abuse, similar to licensing for professionals. To succeed in podcasting, prioritize audio quality, consistently publish, interview great guests, and be present enough to follow up on interesting tangents. When choosing between business ideas, prioritize the one that generates cash flow first, then use that to fund riskier ventures. Downturns can be favorable for startups because talent consolidates around the best ideas, and marketing becomes cheaper. The three key traits of successful founders are being self-possessed, resilient, and voracious learners; investors benefit from high EQ and being able to work with strong personalities. Employee equity is most valuable when joining a startup after it shows traction (revenue between $500K and $5M) and before it's a huge success; joining earlier is riskier but offers more equity. VC firms should focus on being helpful to founders through productized services (like free tools or courses) rather than just broadcasting content. Founders primarily want investors' money, not their friendship; the check is 80-90% of the value, support is the rest. For employees, if you find a faster-growing startup ('express train'), do not hesitate to leave your current company ('local train') even if you haven't been there long. Remote work trends accelerated by COVID-19 may lead to more efficient work habits, but it's not a completely new trend.
Data Points: Podcast success threshold: 100 episodes - Most podcasters never reach 100 episodes; reaching that milestone puts you in the top 5%. Startup failure rate: 70-80% - Most startups fail, especially before achieving product-market fit. Probability of equity being worthless: 80-90% - Joining a startup before product launch gives an 80-90% chance options are worth nothing. Optimal revenue range for joining a startup: $500,000 to $5,000,000 per year - Joining a startup within this range offers a good equity package and higher chances of success. Revenue doubling time metric: Every 6 months - A startup with revenue doubling every six months is considered a great company to join. Team size: 12-person team - Launch/Twist has a small team, making hiring very selective. Number of startups a founder might do in a career: 5 startups of 6 years each - Over 30 years as a founder, one might do about 5 startups, with one lasting longer as the big winner. Margin for error in investing vs. entrepreneurship: Lose 25-30 bets out of 30 - Investors can win the war by being right just once; entrepreneurs only get 3-4 swings.
Pivotal Quotes: "Fortunes are made in the down market, they're collected in the up market." — Jason Calacanis: Discussing the potential for building great companies during the economic downturn caused by the coronavirus. "100% of podcasting is showing up. That's job one. You have to show up and do 100 episodes." — Jason Calacanis: Advice for new podcasters on consistency and reaching a milestone that puts them in the top 5%. "We are in a competition to see who can be the most helpful, and we're being the most helpful." — Naval (quoted by Jason Calacanis): On how successful investors differentiate themselves by genuinely helping founders.
Implications: Listeners can apply practical advice for podcasting, startup timing, and business ideation. The discussion underscores the value of downturns for building companies and the need for accountability in social media advertising, which may influence public discourse and regulation. Founders should prioritize high-margin, cash-flow-positive ventures first. Aspiring VC firms should focus on being irreplaceably helpful, not just broadcasting content.
About This Week in Startups
Jason Calacanis covers startups, tech, markets, media, and all the hottest topics in business and technology. He also interviews the world’s greatest founders, operators, investors, and innovators.