Episode Summary
Executive Summary: In this crossover episode, Jason Calacanis and Anthony Pompliano discuss the aftermath of ICOs, the evolution of Bitcoin, and the state of startups. They explore why many ICOs failed to deliver products, the regulatory stance on Ethereum, and the importance of traction over ideas. The conversation also covers the rise of retail speculation, the role of content in building audiences, and the need for better leadership in times of crisis.
Main Topics: ICO Aftermath and Regulatory Landscape (Priority: 5/5): Analysis of why most ICOs failed to produce viable products, with Ethereum being a notable exception due to its decentralization. Discussion of SEC's approach and the concept of a security transitioning to a non-security. Bitcoin as a Store of Value and Investment (Priority: 5/5): Pomp argues Bitcoin is the 'fastest horse' in a world of central bank printing, with a 1-5% allocation recommended. Jason considers increasing his exposure after being impressed by Bitcoin's resilience and lack of hacking. Startup Fundraising and Traction (Priority: 4/5): Jason emphasizes the importance of building a product and gaining users before seeking funding, criticizing founders who seek validation through investment rather than demonstrating traction. Retail Speculation and Market Dynamics (Priority: 4/5): Discussion of Robinhood, WallStreetBets, and Dave Portnoy's foray into day trading as forms of entertainment and gambling, with parallels to ICO speculation. Content Creation as a Business Strategy (Priority: 3/5): Both hosts view their podcasts as deal flow generators and strategy sessions, noting that building an audience is a powerful asset that can be monetized in multiple ways. Leadership and Societal Issues (Priority: 3/5): Jason delivers a passionate critique of political leadership during the pandemic and protests, calling for common sense and humanity in addressing complex issues.
Key Arguments: Most ICOs failed because they raised too much money pre-product, leading to entitlement and loss of focus; constraint drives better outcomes. Bitcoin is a one-shot attempt to separate state and money; if it fails, no replacement will gain traction due to loss of trust. Founders should build a product and gain users before seeking funding; traction is the only thing that cannot be faked. Retail speculation in stocks and crypto is primarily entertainment and gambling, not investing. Building an audience is more valuable than building a product first; audience can be monetized through various products. Leadership in crisis requires clear, empathetic communication and a focus on common humanity.
Data Points: ICO funds raised by Telegram: $1.7 billion - Mentioned as an example of large ICOs that have not yet produced a product. ICO funds raised by EOS: $4 billion - Largest ICO; paid $20-25 million SEC fine. Bitcoin price range over last two years: $3,500 - $10,000 - Jason notes this tight range as a sign of stability and confidence. Pomp's Bitcoin allocation: Over 50% - Pomp reveals his personal allocation, advising 1-5% for most high-net-worth individuals. Robinhood users during pandemic: 3 million new users - Jason mentions this as evidence of retail speculation surge. Barstool Sports valuation at Chernin investment: $15 million - Jason predicted it would become a billion-dollar company.
Pivotal Quotes: "We get one shot to separate state and money. That is Bitcoin. If it happens, tens of trillions, if not hundreds of trillions of dollars in value. If it doesn't happen, Bitcoin goes to zero and there will not be a replacement because it has too much momentum and too much buy-in at this point." — Anthony Pompliano: Explaining why Bitcoin is a unique opportunity and why it cannot be replaced if it fails. "He who holds the audience has all the power now." — Jason Calacanis: Discussing the power of content creators like Dave Portnoy and Elon Musk who can bypass traditional media. "We're all on the same rock, planet Earth. We're all in the same country, America. We're supposed to have some common decency and some common threat amongst us to get through these problems together." — Jason Calacanis: Passionate plea for leadership and unity during the pandemic and protests.
Implications: Listeners should consider a small Bitcoin allocation as a hedge against inflation and central bank policies. Founders must focus on building traction before fundraising. The line between investing and entertainment is blurring, requiring caution. Building an audience is a powerful business strategy. Leadership in crisis demands clear, empathetic communication.
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.