Episode Summary
Executive Summary: In this Ask Jason episode, Jason Calacanis answers twelve founder questions covering topics from pitching investors and book recommendations to customer research and market timing during the pandemic. He emphasizes the power of traction, customer-centric pitches, and being a 'sniper' over a 'machine gunner.' Jason also shares his experience writing checks without in-person meetings, notes that his deal flow has risen dramatically, and offers tactical advice on subscription pricing, domain names, and product focus.
Main Topics: Pitching Investors: Customer-First Approach (Priority: 5/5): Jason argues that the most overlooked element in pitches is real customer stories and traction, not just the team or product. He advises leading with a narrative about actual users to engage investors. Deal Flow & Market Timing During COVID (Priority: 4/5): Jason reveals his deal flow has increased because he remains active while many VCs paused. He sees a buying opportunity when others are scared, echoing Buffett's 'be greedy when others are fearful' philosophy. Founder Traits: Learning to Learn & Focus (Priority: 4/5): Jason outlines key traits of successful founders: the ability to acquire new skills quickly, fearlessness ('how hard could it be?'), and intense focus on a single product rather than 'founder ADD.' Cold Email Strategy for Angel Investors (Priority: 4/5): Subject lines should highlight traction (e.g., 'X paid subscribers') and investor fit (why this investor specifically). Without traction, founders should get back to work instead of emailing investors. Pricing & Retention Tactics (Priority: 3/5): To reduce churn, Jason recommends annual subscriptions at a lower price point rather than monthly billing. He also suggests creative multi-year offers to lock in cash flow and reduce customer decision fatigue. Evaluating Founders Over Zoom: Data Over Charisma (Priority: 3/5): Without in-person cues, Jason now relies 100% on diligence—customer testimonials, revenue growth, cohort data—rather than his usual 50/50 split between data and personal read. Product-Market Fit: Focus vs. Pivot (Priority: 3/5): Jason warns against 'feature death marches' and 'founder ADD,' using examples like Facebook, Airbnb, and Uber to show that relentless focus on a core product that shows traction is usually better than prematurely adding new features.
Key Arguments: Lead with customer stories, not just product features—they are the 'true North' for investors. Traction trumps everything; investors open emails with concrete metrics like paid subscribers or revenue. Founders should be snipers (targeted outreach) not machine gunners (spray and pray) when acquiring customers or investors. In a pandemic market, aggressive investing can yield outsized returns; two-thirds of VCs are sidelined. Annual subscriptions at lower prices reduce churn more than monthly plans. Over Zoom, investors must rely on clean data rooms and customer testimonials, not charisma. Focus on one core product that shows traction; premature feature expansion often kills startups. Domain names signal brand seriousness; securing a premium .com can boost investor confidence. Retention can be improved by extending subscription duration and lowering price (e.g., multi-year deals).
Data Points: Slack community size: 25,000 - Members of the This Week in Startups Slack instance Accelerator investments during pandemic: 7 companies - Each received a $100k check from Launch Accelerator without any in-person meetings Percentage of VCs not investing in 2020: ~33% - According to Jason's observation of the market Percentage of VCs hyperactive: ~33% - Those viewing the downturn as an opportunity Suggested annual price for Disney+: $60/year - Example of how annual pricing reduces churn; Jason proposes a 10-year $600 plan Estimated Slack cost for 25k users: $30,000/month - If paying per user at $6/month for active members Jason's portfolio companies mentioned: Uber, Thumbtack, DataStacks, Robinhood - Investments made during low market points
Pivotal Quotes: "When people are scared, we're going to be greedy. I think that's Warren Buffett's quote: When other people are scared, you want to be greedy." — Jason Calacanis: Explaining his increased deal flow and aggressive investment strategy during the COVID-19 market downturn "If there is a sign of life in this feature, double it and see if the usage doubles." — Jason Calacanis: Advice on deciding whether to focus on an existing feature or pivot to something new "You need to learn to learn. Just say to yourself, 'How hard could it be?' That's what I always did." — Jason Calacanis: Describing the most crucial trait for founders: the ability to acquire new skills fearlessly
Implications: Founders should prioritize traction and customer data over charisma in remote fundraising. The current downturn is a window for aggressive investing and customer acquisition via cheaper ads. Subscription businesses can reduce churn by shifting to annual pricing. Focus remains the key to achieving product-market fit.
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.