1:17:00 What do you think of Sergey?
1:22:30 Why doesn’t Twitter own Instagram?
1:25:15 Are you investor in Klout?
1:36:00 Do you trust Mark Zuckerberg with your data?
1:39:30 Is Zuckerberg, at his core, a great product guy?
1:42:15 Is CEO of Yahoo the hardest job in Silicon Valley right now?
1:43:45 Chris explains what Facebook did wrong with their IPO.

1:50:15 What do you think about the prospects for American employment?
1:58:45 What’s Obama really like?
2:06:15 Was choosing Sarah Palin the moment when the Republican party jumped the shark?
2:10:30 Chris: There are people who are great at being second fiddle. Companies don’t succeed if there are a lot of chiefs and no indians.
2:12:15 Chris: The number one problem in Silicon Valley right now is people taking credit when they shouldn’t.
2:20:45 What do you think of Angellist?
2:27:15 Question from the viewers: Where does the name Lowercase Capital come from?
2:29:00 I think this is the longest episode ever.
2:30:25 Thank you to Hiscox and to Stamps.com.
2:30:45 Thank you so much for joining us, Chris. We’ll see you all next time.

NARRATOR: Distribution provided by CloudSigma. The cloud that adapts to you. Visit http://cloudsigma.com/thisweekin/ for a free $200 credit. Today’s episode of “This Week in Startups” is brought to you by Hiscox. Go to http://www.hiscoxusa.com/smallbiz/ for your business insurance needs. And, by “Stamps.com.” Why go to the post office? Use “Stamps.com” instead. For a no-risk trial, and a $110 bonus offer, use the promo code TWIST.
HISCOX: You know what’s right for your small business. “I pick the right tools to click with my clients. When it’s game time, I have the right answer, no matter the playing field.” Your small business is unique, so is our coverage. Hiscox, get the right insurance, right now.
NARRATOR: The conversation between Jason and Chris was too amazing for just one episode. Here is a highly anticipated part 2, today, on “This Week in Startups.”

JASON: It’s unbelievable.
CHRIS: So here is the thing. If you just go by that stuff, that is called “lowercase,” you are never going to find it.

JASON: Yeah. Now you know how to do this stuff. We understand that you have Larry. But what’s Larry Page like? What’s Sergey Brin like? I mean, we just had Google hit an all-time high in the seven hundreds, I believe. Or, maybe, it hit eight hundred. And this company was supposed to be killed by Facebook.
CHRIS: If you plug it right now, it’ll hit eight hundred. I’ve no doubt. If you put a “buy” rating on Google, it’ll go up!

JASON: I want to go ahead and put a “buy” rating officially, on Google, and set a target of eight hundred and twenty-five dollars by the end of this broadcast.
CHRIS: Did you just pull a “Blodget” [from Henry Blodget]?

JASON: I think I did. When I think I make people money, and then, I just insist that you sell and profit-take.
CHRIS: If somebody goes back and, actually, looks, if that ticker is going up about that stock.

JASON: I think the market is closed.
CHRIS: You move markets.

JASON: The market is closed.
CHRIS: I’ve been here for a while. That’s a good point.

JASON: Yeah.
CHRIS: There’s after-hours trading.

JASON: There is after-hours trading. Yes. Whatever happens after this, it stays on this broadcast.

JASON’S AD: Hey, everybody. This amazing interview with mister Chris Sacca is just fucking unbelievable. It’s just such a fucking great episode and the swear jar is just really (bleep). It’s exploding with all the curse words and the goodness of the “charity: water”. You’re enjoying this great episode, because of my friends at “Stamps.com.” They produced a really great product, that I’ve been using for years sincerely. And the only way to be an advertiser on this very sold-out program, that’s sold-out three, four, five months in advance, is to make a product that I, Jason Calacanis, actually love and use. That is how you become a partner of the program, and “Stamps.com” is one of our great partners. Going to the post office is a waste of time, but the post office provides great service. And “Stamps.com” is the place, where you can buy and print official US postage for any letter or package. If you want to get a great deal, you just go to “Stamps.com.” You click on the microphone up here on the top right end of the screen. Boom! I want you click on that. You put in the code TWIST. T-W-I-S-T. And you will get a no-risk four-week trial. That’s right. No-risk, four weeks, great trial, and you get a free digital scale, and up to fifty-five dollars in free postage. If you’re running a small business, this is a no-brainer. You have to have to have “Stamps.com” in your arsenal of small business tools. I do! You should as well. And again, it’s a four-week trial and no-risk. Use the promo code TWIST. And I can tell you, the U.S. Postal Service has a lot of really great services like, Priority Mail, Overnight/Express Mail, Media Mail, Bulk Mail. It just has tons of really innovative products, and they compete really well against some of those higher price, fancier services. That really is just a waste of money, and you’ve got to save your money. You’ve got to conserve your capital as a startup, and put it into your product. Just like “Stamps.com” does. They make a great product. OK. Listen. Thank you “stamps.com.” I love you, guys, first of all, for making a great product, and I love you even more for supporting this program and amazing interviews like this one. If you’re really enjoyed this interview, just, please, stop what you’re doing. If you’re driving on 405, just keep driving, and then, I want you to tweet, while you’re driving on 405, say thanks “Stamps.com” @stampscom on Twitter. Don’t do that, while you’re driving, don’t be silly. You do that, when you get home. All right, thanks again “Stamps.com.” Let’s get back to Chris Sacca. It’s fucking unbelievable.

JASON: Larry Page.
CHRIS: Larry has been sent to us from the future. He is some alien being, who has been to the future, was sent here. He is subtly trying to tell us. I think he was sent into the future, but he has a pact, that he can’t explicitly tell us about it. He has to subtly guide us there. He has a preternatural ability to know how things are going to turn out on the biggest questions, so I don’t think he ever gave a shit about social. People make fun of Google for failing in social, and I think they did. I think they continue to. I think he cares about real science. I think that’s one of the reasons why Google was never really taking Twitter seriously, as it should. That’s why they didn’t take Blogger seriously. You’ve been friends with Evan Williams, Biz Stone, and those guys for a long time. They were like the red-headed step children of Google, right?

JASON: They didn’t really give them enough love.
CHRIS: On their own footing, they were the ninth largest site in the world, and they couldn’t get an engineer, any machines, any allocation process.

JASON: It makes no sense.
CHRIS: We struggle without that for a long time, trying to figure out why. When I sit down with them, I asked, “Is it because you are hipsters and live in the city? Is it because not all of you went to college? What is it?”

JASON: Yeah, you, guys, aren’t engineers.
CHRIS: And one day Eric Schmidt goes on stage at a banker conference in San Francisco, and calls Twitter the poor man’s email. And a light bulb went off in my head, and I called up Evan. I was, “I get it; I get it. I get what just happened.” Twitter and Blogger aren’t hard science problems. They are human problems.

JASON: Communication problems.
CHRIS: And what happens is, Eric sees Blogger as a front-end on FTP. An artist, a humanist sees Blogger as a canvas, that lowered the barrier to a self-expression to level never before seen on the planet. You start from stone tablets to papyrus, to Gutenberg, to newspapers and books, where you still needed a big access to a lot of technology. Now, back then, if you had an inexpensive laptop and Internet connection, you were suddenly a publisher. You’re an author, you can write.

JASON: A revolution, based on creativity.
CHRIS: Twitter lowered the bar even more. I mean, between Jack Dorsey, and Ev Williams, and Biz Stone, and Jason Goldman, and all these guys, who put it. They lowered the bar even more. All you needed to do is to have the cell phone. If you could type T9, or if you had a full keyboard, and had an SMS coverage, you were suddenly an author. You were a publisher. “Even the weakest signals are amplified,” as Biz Stone likes to say. Both of those are so simple, that it’s hard to take them seriously.

JASON: Right. It’s not a big algorithmic problem. And so when they look at something like that, they’re just immediately dismissed it, because it wasn’t hard to do, to execute on, but, in fact, those simple ideas are very hard to execute on.
CHRIS: Yeah. In fact, I think, for instance, those were the reasons. There were two companies called Aardvark and the Ben Finkel’s company, called Fluther. So two companies are both trying to do crowd-sourced Question Answering. So Aardvark was ex-Google guys, who had an amazing science background. And they built the platform, that Google ultimately bought and paid handsomely for it. And the guys, who built that, were friends of mine, I was not an investor, but they’ve built an amazing engine for finding the person, who probably has the right answer for your question, right? But it was predicated on a lot of science, that somebody out there has the one right answer. That was attractive to Google. Fluther was built by this guy, Ben Finkel, now he works for Twitter, and another guy, I forget his name, but it used to be on cast of Veronica Mars. He’s not a massive computer scientist.

JASON: There’s no algorithm.
CHRIS: That was a little bit of technology, but their premise was mostly like, surface to the right people. There are a lot of people, who have an answer for this question. The right answer might be a bunch of answers. So if you type-in: “Where should I go in Napa this weekend?” You don’t necessarily just want one person to say, “Go to Calistoga.” You know, “Go visit Cartograph Wines up in Healdsburg.” What you may want is what people say with a bunch of answers, and you say, “Oh! These are occurred more than once, maybe, I should check those places out.” Right?

JASON: A range of opinions.
CHRIS: Yes. That was what was unique about. So Fluther, actually, was acquired by Twitter at the end. Aardvark was acquired by Google. I think it showed the difference in that approach. Google was really good at finding the right answer. Twitter is good at servicing a bunch of stuff.

JASON: Yeah, letting the thousand flowers bloom.
CHRIS: Yeah, I’ll never forget in the early days of the search deal, that Google did with Twitter. So I was negotiating that deal, even I wasn’t an employee.

JASON: For Twitter!
CHRIS: I was negotiating that deal for Twitter, even I wasn’t an employee at Twitter, but I was a shareholder.

JASON: I hear that bill is like five or ten million dollars a year for a couple of years.
CHRIS: We don’t talk about it.

JASON: It was tens of millions of dollars. That was the money that funded Twitter early on.
CHRIS: It was real money. Yeah. When Marissa Mayer came in, and first talked about why she wanted to do that deal, she provided one of the first insights, that I think was obvious. It hadn’t necessarily occurred to me or, maybe, some other folks. Everything at Google is about trying to get the right answer up in that first top three results, right?

JASON: Yeah.
CHRIS: On Twitter, everything is about seeing more and more answers, just more and more responses, because you want a diversity of replies, you want a diversity of insights. You want a diversity of expressions.

JASON: It’s not about efficiency. It’s about experience, right?
CHRIS: I want to see how everybody reacted to last Monday night football game. Not just one person.

JASON: Not just the most important person’s opinion.
CHRIS: Right. And some of the best opinions came from fans, not ESPN. And it’s fun that Marissa had that insight early on. And that’s why she was always a person pushing to do more Twitter. I think that Larry has an amazing ability to see the future of energy, to see the future of hard science, the future of infrastructure. That kind of stuff, but I think, generally, it’s hard for that company to wrap their head around social, because it’s just a different problem set. It’s a humanist, artistic problem set, and they’re not here for it.

JASON: Interesting. And Sergey?
CHRIS: Sergey is one of the quickest wits. One of the best storytellers of salespeople ever.

JASON: A funny guy.
CHRIS: What the two of them do, is they play off each other very well. I think one of the greatest skills, which they have, is to see the questions that you, and I, and other people skip over, that we assume in the model, as well as play devil’s advocate. So we were a big force for net neutrality, while I worked at Google, right? And I ran a group that mess around wireless spectrum, to try to create more openness on phones.

JASON: You, guys, made that huge spectrum bid.
CHRIS: Yeah. That’s the biggest hand of poker I’ve ever played. 4.7 billion dollars.

JASON: 4.7 billion dollars for spectrum, and everybody said, Google doesn’t want that spectrum. They’ll take it, if they get it, but they don’t actually want it. They want to influence the auction.
CHRIS: We were ready to build it out, if we won it.

JASON: And what would that spectrum have been? What would you have done?
CHRIS: Anything we wanted to be it. Verizon’s using for LTE now, which is why you get your phone unlocked. [Sic! http://www.theverge.com/2012/9/25/3405610/verizon-iphone-5-unlocked-open-access-fcc ] And so they’re stuck with these openness rules.

JASON: Explain that.
CHRIS: Well, carriers buy this spectrum to operate their services. They buy slices of digital frequency airwaves in order to operate their services. These are virtual real estate rights to operate within specific frequencies. There is an oligopoly of carriers. AT&T and Verizon have all this money to gobble up all the spectrum and keep it out of the hands of Sprint, and T-Mobile USA, and Leap Wireless International, and all these guys down the way. We were worried that these guys can collude to keep the phone environment lockdown, to keep the mobile desktop, the mobile deck lockdown, and not accessible to independent developers.

JASON: And this is 2008, or 2007, or 2006?
CHRIS: 2006 and 2007. Actually, the closest I ever came to be fired, which was probably about six times at Google.

JASON: Six times in two years?
CHRIS: I was there for four years, but the closest I ever came to be fired was, when I was doing Q&A once, and somebody said, “Hey, why I can’t download Google’s maps to my phone?” And I said, “Because your carrier won’t let you. We get letters from guys, like you, all the time, who want to download an app and your carrier is in between us and you, and I think that it has very dangerous consequences.” And the head of the mobile business at that time called Larry and Sergey, “I need to serve up Sacca’s head on a platter to the entire mobile industry, or we’ll never do another deal again.” And folks let me know I should start looking for work outside of the company, et cetera. Luckily, Larry Page, when I was called in, basically, to be sacrificed in this meeting, Larry Page said, “Actually, what Sacca said is true. We all know it, and we needed not to back away from this. We need to be truthful.” And so, I, actually, came out of that meeting with a new job. I would go make this happen. He said, “And we might have to tie you to the axle of the bus at some point, but go shake this space up. And let’s be realistic about it.”

JASON: So you make the bid, but you force the winner to adopt these rules.
CHRIS: We said to FCC, “You need to attach rules to that spectrum, to make it open, to make sure that anybody with a handset, with a device has access to the spectrum.”

JASON: This is before Julius Genachowski was in charge.
CHRIS: No, Julius was in charge, I think. He came in the 2008 election, didn’t he?

JASON: Right after.
CHRIS: Sorry, it was before Julius, sorry. I lost track, because I was working as an adviser on the Obama campaign on these issues and stuff, but this was before then. The FCC is definitely very political body. There’s no doubt about it. I mean, everybody, who works at the FCC, ultimately, ends up working for the big telecoms, for the big TV stations. What we’re saying is, “Tie openness restrictions on whoever buys that spectrum.” And Verizon, AT&T, and incumbents were saying, “Here, you’ve got the Silicon Valley company, pain in the ass, which is here trying to tell us how to do our business. Building out the spectrum is really expensive. This is not a child’s play. They shouldn’t have the ability to interfere with the actions, et cetera.” There’s a guy in our office, named Rick Whitt, who’s having a posse, who came up with the idea, that I’m often given credit for, but he came up with the idea of saying, “Fuck. Why we not just tell them, we’ll bid on it then.” And we had been ready to partner with other people to bid on it. We had been modeling a network. We had a bunch of engineers working on this stuff. He came up with that idea, and I and a bunch of other folks on our team, including Rick, convinced Larry to do it. I mean, multibillion-dollar bets get Larry to smile, right?

JASON: Yeah. I’d get a sense he likes to fuck with people a little bit. He’s got a little bit of that, he likes to put a dent in the universe, to use a job, to fuck with the people, who are on the wrong side of the history.
CHRIS: To fuck with the right people. I mean, it’s the same thing. Travis Kalanick likes up to fuck with the right people, treachÂrous, corrupt people, like politicians in pockets of taxi drivers, that kind of stuff.

JASON: Taxi. Let’s fuck with them.
CHRIS: So, Larry Page, you know, he doesn’t want to fuck with Facebook, right?

JASON: No. Who cares?
CHRIS: He doesn’t get excited about fucking with Apple. He wants to deal with these industries, which make no sense. Where people are pocketing money at the expense of users. He loves breaking that (bleep) up, and so.

JASON: Why Twitter doesn’t own Instagram right now? When you talk to people about Facebook, you ask any ten kids, any ten people under the age of twenty, you say,” What do you think about Facebook?” Their faces get torn, as if they ate a lemon. And they are saying, “I hate Facebook, I love Instagram, or I love Twitter.” They just hate it. It seems to everybody that the better home for Instagram, which you were an investor in, I guess?
CHRIS: Yeah, I was an investor in Instagram.

JASON: Instagram, it feels like it belongs in the Twitter ecosystem, not the Facebook ecosystem. Twitter just not willing to pay that price. Why they don’t own it? And I’ve heard from people, that think that’s the biggest mistake, they made.
CHRIS: I mean, I can’t speak for Dick Costolo.

JASON: I know you can’t. I’m just putting that information out there.
CHRIS: There’s no way Dick Costolo said that.

JASON: Somebody told me! I wouldn’t make it up, you know. CEO-kind-of-guy said that Dick really wanted that, and he thought it was a mistake, that they couldn’t get. And I don’t know why they didn’t get it. But why is it there? It should have been there.
CHRIS: Look, here’s the thing. If Twitter did that deal, it’s playing offense. Facebook had to do that deal out of defense.

JASON: It was desperate.
CHRIS: Well, why do even people use Facebook? Because of pictures, man.

JASON: Yeah, it about a third of the traffic.
CHRIS: You’ve gotten this company that is taking off in pictures, blowing up. Right? Look what Kevin Systrom and Mike Krieger achieved over there with few employees. I think at the time, they were acquired, they have nine employees, maybe.

JASON: Yeah, absurd. I think, it was like twenty at the time. Yes.
CHRIS: I don’t think they have twenty employees.

JASON: It was definitely over 15. He had fifteen when he was on the program.
CHRIS: Yeah?

JASON: Yeah. I think he has to hire an android team.
CHRIS: Someone, go look at the picture of them all starting at Facebook on the starting day, there aren’t twenty people on that picture.

JASON: Let’s say it fifteen. Cut the difference. Fifteen people and forty-five million users means three million users per employee. It’s insane.
CHRIS: It’s outrageous. Right?

JASON: It’s demented.
CHRIS: And so you see that, at Facebook, you’re like, “This is the reason people use our company still.” We can’t let somebody else win photos.

JASON: I got it.
CHRIS: Again, as an outside investor, it would have been great to have Kevin Systrom and the team working over at Twitter, and having that photos, integrating in that product. Yeah, but they’re still going to have that. They are going to have video experience, which is done by other companies. They’re going to have media experiences, and news, et cetera, and it’s all going to happen by the people, who were most qualified to do that. That’s a platform thing by the way. As developers are talking about, “Hey, why not you let me build a client.” Today’s developers on the Twitter platform are a lot of the media creators. The platform, they’re building that media, and the content creators are building that, right? I mean, the platforms, the developers are the New York Times, who are building symbiotic relationships with Twitter. The platforms are the Emmys, who are building symbiotic relationships to co-broadcasting.

JASON: Yeah. I mean, they’re integrating Twitter into the broadcast.
CHRIS: There are a lot of developers. And the developers are Crimson Hexagon, who are building the ways to understand that data. The platforms are FanBridge, who are realizing all that data on multi platform basis.

JASON’S AD: Hey, everybody. It’s Jason, again. What a great interview this is turning out to be. Everybody says that this Chris Sacca two-part interview is, and you are listening second part of two, is the best interview ever in the history of “This Week in Startups” 295 episodes, or so. And I can’t disagree with them. It’s definitely in the top five for me. What an amazing interview with Chris Sacca, and it’s brought to you by my friends at Hiscox. They provide small business insurance. And if you want to buy a small-business insurance quickly and easily, you just buy it directly from Hiscox. And you go right to www.hiscoxusa.com/smallbiz. That’s it www.hiscoxusa.com/smallbiz. And you will get tailored coverage. That means all the coverage is tailored to your specific business needs, whether you’re selling a physical product or digital product, et cetera. And it’s a simple process. You get a quote online or with a simple call. And there’s no need to wait a week to get a quote back. Hiscox emails you the documents within fifteen minutes. They send that to you. Fifteen! What an amazing company! Hiscox is great, tailored coverage. It’s just a dead simple process, and, in fact, after this program Chris Sacca himself, the legendary Chris Sacca bought Hiscox small business insurance after the program, and he sent me the receipt, I have it in my inbox. And he thanked me, because Hiscox is just such a great, simple, fast, immediate service. You need to have small business insurance. I’ve been through a ton of you-know-what in my career, just lots of ups and downs. Lots of times, I’ve had to have people write me legal letters. All kinds of things can happen. You need to have insurance, to back you up and give you the confidence to go out and build that great startup, that is going to change the world. And Hiscox is the company, that’s going to give you that confidence. I use it. You use it. Chris Sacca uses it. It has tailored coverage, simple process. And the documents are emailed to you immediately. And the coverage is really affordable. And we’re talking about tens of dollars a month, 10-20-30-40-50 bucks. It’s very affordable, very, very, very affordable, and very, very, very necessary. Please, go to hiscoxusa.com, and, please, protect your business. hiscoxusa.com/smallbiz Thanks so much to my friends at Hiscox for making a great product and for supporting “This Week in Startups.” Independent media, like this, is not easy to produce. Well, unless you have a great guest, and that is pretty easy, actually. Push the button and let Chris Sacca talk. So let’s get back to that. Thank you Hiscox.

JASON: What about Klout? Are you an investor in that?
CHRIS: No.

JASON: You opted out, didn’t you?
CHRIS: Yeah. I don’t have a Klout profile. Neither my ten month-old daughter, who they built a profile on one day. It pissed me off.

JASON: Oh, she has a Twitter account.
CHRIS: Yes.

JASON: And they made it Klout for her. And was her Klout high or low?
CHRIS: It was extremely high, because I think her first tweet got retweeted by Lance Armstrong. So on per tweet basis, she has a really high Klout.

JASON: So, basically, that means she’s going to get a Volvo for a week, and then, a Windows Mobile phone.
CHRIS: Here’s what I worry about Klout, and I’ve talked to Joe Fernandez, and I think he is an amazing person, I think he’s a very genuine person. I like a lot of the investors they have there. I think Klout means well. Unfortunately, I think Klout leads to a very strange Heisenberg behavior.

JASON: What does that mean Heisenberg? I do not know the reference.
CHRIS: Heisenberg principle is that, basically, the results of an experiment in Quantum Mechanics change, when people, electrons actually, know they’re being watched.

JASON: All right, I do know that. [http://simple.wikipedia.org/wiki/Uncertainty_principle#Uncertainty_principle_versus_observer_effect]
CHRIS: And so what happens in this case, is that people start tweeting for their score.

JASON: Yes.
CHRIS: They tweet out aphorisms, because they know, they got retweets, something like that.

JASON: A Winston Churchill’s quote will give you a couple of points on your Klout.
CHRIS: They’ll be much more engaging, than what’s really on their minds.

JASON: So maybe having Klout score would be fine, if people just could not see them. And Twitter has that.
CHRIS: I’ve actually said, if Klout scores were private, and available only to the people, who wanted some insight into who to work with, the influencers, to help them reach the audience, they want to reach, which I think is actually a value-add to their business. If you want to know, “Hey! Is Gary V. for real? Can Gary V. actually get me in front of some people? Will they react to the message, he says?” I just need a real personality, “Should I talk to Jason about reaching this audience?” The insights that drive that, I think, are valuable information. And if that company comes to you and does a partnership, and you tweet on a promoted basis, transparently, and impact the audience, that they came to you for, I think, that everybody wins there. The advertiser wins, you win, and so do the people, who saw that tweet from you, because we have the data, to show they are the people giving a shit about the tweet, you sent them. And so everybody wins.

JASON: I suppose Twitter got that themselves and is giving that to the advertisers already.
CHRIS: In the roughest sense, yes.

JASON: Maybe Klout is a little further along.
CHRIS: I mean, we’ve never, in the history of advertising, had this engagement happen on a platform before. What’s happening on Twitter is just off-scale. And the ability to actually watch that stuff impact real-life is amazing. I had a small team of engineers, I backed, called BackType, that Twitter acquired. And those guys could actually track the impact of a tweet not only on Facebook, blogs, et cetera, but they can actually track the impact of that tweet on Foursquare check-ins. So they could watch the entire stream of commerce, all the way through to a sale-point.

JASON: So you check-in at whatever sushi bar. They could see that, “Hey, a couple of your friends then checked in a month later.”
CHRIS: They could actually see that a tweet from the Gap store led to a bunch of Foursquare check-ins at the Gap. And we can actually draw relationship there. If somebody was exposed to a tweet from Audi, it created a check-in at an Audi dealership. They track that chain in commerce. If you want to know my grand theory on the continuum of advertising?

JASON: Yes, I do.
CHRIS: Draw this line, I forget how your audience uses now, let’s go from this side to this side, up here, we have the worst ads, here, we have the best. Right? Up here, it’s not targeted billboards on the side of the road. So going up and down on I-405 or US-101 up there, and, literally, somebody, like CBS Outdoor, and these companies, hire people to stand underneath of those billboards and look to see, how many eyeballs of drivers look up. And that’s the only metric they have on how many people actually look at that stuff, right?

JASON: Disaster.
CHRIS: So that stuff is just bought out of inertia, out of history, like, “We would probably need some billboards.”

JASON: Yeah, 10% to billboards, go get it!
CHRIS: The same is with the bus ads, stuff like that. You move down the continuum into TV, radio, print, and, now, you got some semblance of measure, I know what the circulation is on that newspaper, or that magazine. I don’t know how many people actually got to page seventeen, but I have a general sense of how many people get exposed to that kind of thing. With radio, we’ve got Arbitron data, which is worthless. As a data scientist myself, it’s worthless, right? You know, for our world. And yet, so many dollars are still spent with this shitty data.

JASON: The same with television.
CHRIS: I remember seeing somebody at the D Conference years ago, talking. She was there one of the women, who led Nielsen-online at the time, and she admitted, that they didn’t have any Nielsen nodes on college campuses anywhere in the country. How the hell do you measure the impact of “One Tree Hill” [TV series] without a single box anywhere on a college campus? That’s insane, right?

JASON: Right. That’s important group of people.
CHRIS: It has crappy data. So you’ve got people take a flyer on the stuff, because they know, there’s some impact of being in front of that audience, but these things are built on momentum and hand waving bullshit, not math. As you get into digital CPM [Cost per mille], now, at least, we have a more concrete measure of exposure. The denominator is more concrete. This is the number of how many people actually got exposed to that page. It’s for the first time we know that number. We don’t know whether they cared about the ad, we can make guesses about whether their eyes went over to that side, whether they scroll.

JASON: Eye-tracker, whatever.
CHRIS: Yeah, we can do that, but at least, we have a firm denominator. This is the number of how many people are exposed.

JASON: Yeah, it maybe has a 5-10 percent failed track-record, but it’s pretty cool.
CHRIS: Keep moving down on the imaginary scale, finally, we get to CPE, actually. That’s hybrid cost per engagement. Somebody saw your ad, maybe, mouthed it over, some crazy shit happened.

JASON: He/she went to the domain later.
CHRIS: Yeah, but we don’t necessarily know. We realize, that if someone mouthed over your ad, it’s more valuable than CPM, but we don’t know how to really measure that. So that’s kind of surreal, still hand waving for the guys, who sell that stuff. When you finally get to CPC, …

JASON: Cost per click.
CHRIS: …this is the first time, that ads are sold on a math basis.

JASON: This is a Google innovation.
CHRIS: Yeah, this is the first time, where you really get a sense of, “Is this actually driving people to a site.”At that point, you’re handing it over to the advertisers to say, “Hey, do you have good analytics, to cover where that click goes for a cross-reference site. When I got to Google in 2003, we, Google, dropped you off at the front door. If you were looking for Zappos, we’d drop you off at “Zappos.com” and said, “Good luck,” right?

JASON: Right.
CHRIS: And Zappos says, “We’ll take it from here.”

JASON: Whatever happens happens.
CHRIS: That goes inside. As we bought Urchin Software, the company, that became Google Analytics, finally, we can tie that click through the rest of your site. We could just see, “Hey, that actually was a worthwhile click.”

JASON: Yeah, they converted it.
CHRIS: Eric Schmidt once brought me to solve a guy’s problem. He was an executive from a satellite television company. He was pissed off, because he was spending too much money, actually. So Eric was like, “Hey, will you just talk to this guy and figure out what we can do, and so?” I sat down. We pull up his Adword’s account, we look at all the prices for all the keywords, and they were all even numbers. Dollars, fifty cents, ten cents for this keyword. And it was as if somebody just randomly assembled all of those numbers, instead of putting any math behind it. And they had a very concrete online conversion event. They were selling satellite television subscriptions.

JASON: They got their dish, and they were done.
CHRIS: So we said, give us thirty days to track conversions for all your words. I will find out what these words are actually worth. He came back in thirty days.

JASON: That was 10x.
CHRIS: He was actually wining some money on the table, because, on the one hand, they were advertising word “sports.” It converted one per gazillion times, and they should have not been advertising that word, because it didn’t perform. On the other hand, there was a word “high-definition satellite sport.” It was a bit infrequent query, but it was a query, that converted one in four times.

JASON: Exactly, yeah.
CHRIS: I remember asking him “What the customer is worth to you, guys?” He was like, “We pay our affiliates a $160 spiff, when they bring us a new customer.” OK, if we plug in 160 and we work backwards through the math, on word “sports,” it is not even worth a penny for you to advertise, so don’t advertise on that word. “Satellite,” “sports,” converts to X, but on “high-definition satellite sports,” you can convert on in four times. 160 divide by 4 equals 40. You should be paying us up to forty dollars for that click. He wasn’t an idiot at all. He looks at the math and he is, “Son, if you come in here and try to convince me to pay forty dollars for doing this clicking, I would punch you in your mouth.” But the math made sense. And so the company transformed itself into a math company. As you continue to move down, we get to ad formats like CPA [Cost Per Action or Cost Per Acquisition], where the math is even clear.

JASON: That’s Cost Per Acquisition.
CHRIS: Yeah, not just when somebody clicked on that ad, but, now, somebody clicked and bought some shit, right?

JASON: Right.
CHRIS: So, when you say, “Hey, type-in TWIST,” as the referred code, they can actually see the impact of your advertising on their real business. And that stuff converts, and that’s real. So instead of you have to convince people, “Oh, man, a lot of guys watch our show.” This is exactly how much revenue I generated. That is really how much you are going to fucking pay me, right?

JASON: Yeah.
CHRIS: As we keep moving down the chain, we see stuff like Cost per Location. The door swing ad. That’s what Foursquare is doing, right?

JASON: Really?
CHRIS: Foursquare is like, “I’m getting people to your location. I don’t know what they’re spending, once they get there. You know what they are spending, once they get there.”

JASON: It’s Groupon, sort of but not quite yet.
CHRIS: I have a company called Pathintelligence, that watches how cell phones move around a mall. And they can show, actually, here’s the traffic that a store normally gets at a normal day, let’s say it gets a thousand people. They can show, if an ad goes up in this corner of a mall, telling you to go over here, they can actually see that on the day that ad shows, there’s this much more traffic.

JASON: These people with the cell phones move from one side to another. Are you concerned about privacy on that? Or is it all anonymous? How does that work? I got a pitch on the company like that.
CHRIS: It’s very anonymous. I mean, they are in the UK, where the privacy restrictions are even tougher.

JASON: What’s the name of that one?
CHRIS: It’s called Pathintelligence.

JASON: I got a pitch on that, I passed, because of the privacy issue, but it couldn’t get me over like, I don’t know if that data should be recorded.
CHRIS: It’s not recorded. They can just show the trend, right?

JASON: It just made me nervous about that, because it felt to me like, the EU would stop something like that, because they are so crazy over there with the privacy.
CHRIS: They are copacetic with the EU. I mean, that’s the tough place to do privacy, so when a company starts there natively and has been working, operating well, for years, and years, and years.

JASON: Do you trust Mark Zuckerberg? I’m bringing privacy and stuff into conversation. You see the train of lawsuits, and the settlement with the SEC [U.S. Securities and Exchange Commission] government. It’s already getting into privacy. Do you trust Mark Zuckerberg with your data? Do you trust that company with your data? I would like an honest answer.
CHRIS: Did you see that? Did you see the new revelations? A new guy came out and posted conversations that he had with Mark back in the day.

JASON: Unbelievable.
CHRIS: Yet another founder kind of guy.

JASON: A founder guy, who was just absolutely decimated and destroyed. The behaviors of a nineteen or twenty-year-old do they represent the behavior of twenty-six or twenty-seven-year-old in your mind? Because you said before about loyalty, how you grow up, and how you behave. For you, it does seem to be consistent to call back to how we started the conversation.
CHRIS: I don’t want to be held accountable for everything I did in my twenties. I don’t want to be held accountable for everything I did last year. I think there’s a different attitude about users at that company. And there are a lot of companies, we consider great. I’ve got the impression sometimes, that Facebook operates with the motto, “Hey, get over, you learn to love it.” And that the user impact isn’t a big part of their equation there. And I think they play short-term ball, instead of the long-term ball. And you see it in the turnover of their employees, you see it in the turnover of their management, you see it in the turnover of their users.

JASON: Is that what we’re seeing in their stock? You have their shares.
CHRIS: I have a lot of shares, I have a nine figure position in that stock.

JASON: Nine figure position? Over a hundred million dollar position in Facebook.
CHRIS: Well, I should actually say, maybe it’s not, anymore.

JASON: That’s kind of brutal.
CHRIS: Not personal money, but it was a bucket of one of the things I did.

JASON: Yeah, clearly, Instagram or other things. Yes, Gowalla, a lot of things.
CHRIS: Gowalla did not produce nine figures worth of Facebook stock.

JASON: No, he didn’t, but Josh Williams, what a great entrepreneur!
CHRIS: He is the great guy. You know what, you have to remember about Facebook, that they didn’t want to go public, ever. Zuckerberg never wanted to do this thing. He was forced to.

JASON: Because of SEC.
CHRIS: They lost control of their cap table. And so they were forced to file IPO. And so, what happens, they were forced to file so late, that their growth curve is flat, right? And they hadn’t actually done enough innovation yet on what’s going to ramp and accelerate their growth. They are stuck.

JASON: Like a tweener.
CHRIS: They are a tweener right now. They are stuck on display ads, which are underperforming. It’s hard to grow that stuff without crushing user experience. They are copying Twitter’s model by “Sponsored Stories.” And they haven’t done enough on commerce, and coins, and all that stuff yet to make up for it.

JASON: So they try to find the revenue model.
CHRIS: I think, yes. That’s the funny thing, everyone’s looking at Twitter, “How are you going to make money?” And Twitter has got a very healthy, obvious way to make money, that’s user-friendly, advertiser-friendly, that leaves everybody feeling very confident and trustworthy. But Facebook, I think, is struggling with a shift from display ads, that they turned all out, they could. And it’s a big business, a five-billion-dollar business, but it’s not big enough, and it’s not growing fast enough. And so I think you have to wait for chapter two there.

JASON: And chapter two, in the history of these things, could take five years to emerge.
CHRIS: It might. I mean, they’ve got a huge loyal audience. It’s very engaged.

JASON: 500 million monthly active users.
CHRIS: 500 million. It’s something like that. Facebook is a tab, that people leave open, all-day, right?

JASON: Yeah, it’s an operating system.
CHRIS: And they’ve earned that. You got to give them credit for that. The monetization moves have just been a disappointment, and, I think, they try to rely upon what is always work for everybody, and it was easy money, but it’s not the big money, and it’s not the innovative money.

JASON: Zuckerberg, at his core, is a great product developer, or is he a great copier and executors of other people’s ideas?
CHRIS: I don’t know the answer to that.

JASON: I mean, it does seem like they build a better Facebook, a better Friendster, a tighter version of it, but the social network was not their innovation. It is a long history of almost every feature they have, which is just iterated on version of somebody else’s idea, with the exception of the platform, I guess, which seems like, it was a unique idea. I don’t want to mean a beat up on Facebook, but it is interesting that the company, that everybody thought would kill Google. That was unstoppable. And that was going to take over the universe. Now, everybody believes, it is stalled, and is potentially going drop from the sky. And it has peaked! People believe it peaked.
CHRIS: I mean, look! We are in a perception business. I had lunch recently with the head of one of the big town agencies, here in town, like a big super agent, a household name in Hollywood kind of guy.

JASON: Like a William Morris Endeavor type.
CHRIS: He said that we were in the perception business. If people get the perception, that we are weak, all of our clients go away. It’s funny, because Silicon Valley is the same way. If people get the perception that a company is weak, it’s not going in right direction, then talent doesn’t show up. And that’s the thing. If Facebook is going to enter this next phase, and really drive this evolution of the next phase of advertising, the next phase of monetization, it needs the talent. And right now, they lost their mojo. That’s why Marissa Mayer is smart. Marissa knows, that, at Yahoo, she’s got to bring the mojo back. So how you bring the mojo back? I mean, she’s probably giving a presentation to employees about it right now, but first step is to paint over the graffiti and repair the broken windows, like Leone did to the city, get everyone iPhone, get everyone some food, make it a nice place to be again. Restore some mojo that way.

JASON: Clean the piss out of the subway stations.
CHRIS: I expected her probably to do some good acquisitions of, not huge, but bring in some nice, driven, exciting entrepreneurs to bring back that some of that energy. And rediscover that energy that’s in the existing employee base. There are really smart people, who work there, have been beaten up on for a long time. I think she understands that mojo drive so much of this, and she has such a huge audience, that I’m actually a believer. I own the stock. I’m long on that stock.

JASON: You were in at 14-15 dollars. When did you get into? What’s your entry?
CHRIS: I bought the day after she took the job.

JASON: So 16, 15-16. Is that the most challenging jobs of Silicon Valley right now?
CHRIS: Yeah.

JASON: You’re laughing.
CHRIS: That’s the hard job, man.

JASON: Why is it hard?
CHRIS: Because they’ve been going nowhere for so long. Just multiple CEOs. They’re not MySpace. Users are still like them. Users still use them as a homepage. Their email product is awesome. It might be better than Gmail. They have a leg up in media, and audience, and that kind of stuff.

JASON: They have a great content business. You’ve just said, “sucks.” It goes back to the mojo.
CHRIS: I think a lot of the dynamic, awesome, entrepreneurial people left that company long time ago. And I think Marissa has the ability get those people back there.

JASON: Do you think she’s the real deal, and you put your money behind it?
CHRIS: Yeah, I’ve been a believer in Marissa. And to be clear, Marissa can be difficult sometimes, I bumped heads with her, I’m a friend of hers. She can be really tough, but I also think, one other thing, she was known for, rightly, at Google, was, that she invested in her people, in her team, more than anybody did. She would take her young product managers, tour them around the world, so they can understand, how Koreans use technology, and what was going on in Israel and Russia, et cetera. Invest in their skills development, show them a lot of responsibility. It took a lot of energy to work in her group, but she groomed a lot of amazing people over there, and I think she will do the same thing at Yahoo.

JASON: Interesting,
CHRIS: I’m bullish on her.

JASON: If you were her, who would you buy?
CHRIS: Well, you’re going to ask, “Who would you buy if I were her?”

JASON: Yeah, but I want to hear, what you were going to go for first.
CHRIS: I’m going to say that the Zuckerberg thing is real. I wrote down a list of thirteen things, that I thought they did wrong with their IPO. I don’t know where that list is.

JASON: Thirteen! Give me a couple.
CHRIS: The first, they let every one of the world buy their stock before it could go public. So when they went on the road show, which they didn’t really participate in actively, Zuckerberg did not show up for a lot of them, when they were on the road show, who were they selling to? Everybody who wanted already owned it.

JASON: At forty dollars on second market!
CHRIS: So all they were doing is updating the existing shareholders, rather than selling it to a new crowd of buyers.

JASON: So that was the secondary market was working against them in a way.
CHRIS: Yeah. I think, that raising the pricing, when you know there are just a lot of sellers, letting the insiders sell that much more, like doubling the size of the offering within a couple of days. I mean, here’s a funny thing, Larry and Sergey, and Zuckerberg both learn the same lesson, which is, you can’t talk down to Wall Street. There is room to innovate on Wall Street, there is room to change the way the business done there, but you can’t disrespect those guys.

JASON: And he was disrespectful, somebody said on CNBC, he didn’t wear a tie, he didn’t show up, he did spend time with them, they felt jest.
CHRIS: I think you can get past the wearing a tie, if you show, that you care about that audience.

JASON: So if he could be more present, and more active, and engaging, and, maybe, even charming.
CHRIS: Yeah, I don’t doubt that. I think he could have had a real impact on buying interest.

JASON: Then the hoodie would have been immaterial.
CHRIS: Yeah, I think it just the attitude, “Hey. Our investor is our partner.” Kevin Systrom at Instagram had always made me feel like a partner in the business. He would make me earn that spot by doing work, right?

JASON: Right.
CHRIS: I mean, he was, “Help us hire this person, help us figure this out, help us keep these people away, so we can focus on doing work, help me think through this thing, help manage this celebrity, or see how to get them to use the product better”. That kind of thing. Each entrepreneur, you work with, will treat you like a partner. That’s how the guys at Twitter think about the folks who invested up to this point, Bijan Sabet at Spark Capital, Fred Wilson at Union Square Ventures, and Peter Fenton at Benchmark. All these guys feel like partners there, right? And so they, and the founders, and the management of that team, of that company show the respect to those investors. When you just show up, and you say, “Hey, everybody. Consider a privilege, that we decided to let you into this game at all.” It just sends the wrong message, right?

JASON: Yeah.
CHRIS: It doesn’t say, “Hey, this is a stock you should buy and get on with for the long run, because we are going to build something great.”

JASON: Hold it forever. It’s going to be Disney, it’s going to be Google, it’s going to be FedEx, and we are going to crush this together. It did not feel “together.” It felt like, he was using Wall Street in a way. They were just a tool.
CHRIS: That might have been the case. And I think that was the perception.

JASON: That was the perception, and also the reality.
CHRIS: I think, ultimately, some of the biggest fuck-ups in history are the results of underestimating people, right?

JASON: Explain.
CHRIS: I think Mitt Romney underestimates voters, right? They know that the swing voters are generally low-information voters. And I think the Romney campaign is equated that with low-intelligence voters, but voters aren’t stupid really. I mean, it’s funny, as much as we see, how they sometimes reacted to this statement or the other statement, they’re not actually that stupid. They’re smart people, even if they are low-information ones. And they don’t want to talk down to.

JASON: Certainly, that forty-seven-percent comment.
CHRIS: It’s (bleep) unbelievable.

JASON: It’s just unreal.
CHRIS: Yeah. I think sometimes guys, like Mark, might underestimate their users. Users might be moms in the Midwest, et cetera, but they’re not stupid, and you can’t talk down to them, and you can’t take advantage of them.

JASON: Right, and they will take the business to other places.
CHRIS: And the guys on Wall Street might be like rough-and-tumble guys from Long Island, who have strong accents, and, at the end of the day, they are traders, but they’re not idiots, and you can’t talk down to them. And there are a lot of people from whom we can learn a lot, and I think, the one piece of advice is, “Don’t underestimate anyone you come across ever.” Whether they’re a blue-collar worker waiting for the bus, or they’re helping you at your bar, the server bartender at the restaurant, or they’re a lower-ranking employee. The smartest leaders, I’ve ever seen, have always gone around a room and ask everybody’s opinion. Our President Barack Obama will go around the room and ask for the opinion directly from the aids, who were sitting behind Joe Biden, and Hillary Clinton, et cetera, the Secretary of Defense will be, “What do you think? What should we do?” I mean, they are shitting their pants, because the President just asks them, what they should do about Osama bin-Laden, or something like that, but, at the same time, he asks! I think really smart leaders do that. They ask for their opinion by people who might otherwise be underestimated. I think Zuckerberg and team underestimated Wall Street. They may not be coders, the same kind of people, who get hired at Facebook, but they’re smart, and they are good in doing what they do, and they have to be a partner. And if you want to influence with them, if you want to change the way, they do business, influence the way they do business, you have to be at the table with them. You can’t just do it by dropping them over the head and tell them, “There’s a better way to do it. Hey, I don’t have time to spend with you.” I think it’s even a larger lesson for life, which is just to engage with those kinds of folks. On the one hand, I’m glad what happened at Facebook’s offering, because I think it’s bringing valuations back down to reasonable levels, and it’s reminding us all, that there’s an ecosystem, where we mutually depend upon each other, and let’s not get ahead of ourselves, but, at the same time, I worry that it’s giving tech industry a black-eye. We don’t all operate like that. That we have real businesses out here, that went off.

JASON: And Facebook is a real business. They didn’t have to take that approach.
CHRIS: They didn’t have to, at all. It’s a real business, they should be generally proud of. I don’t like the way they do with privacy. I don’t like the way they reset all your defaults to show all your shit all over again. But, generally, it’s a big business. They created a lot of joy in the world. I think they should be proud of it. I think there is a second chapter of that company, where they are going to monetize in a smarter way. If you’re looking for a five-year investment, I think it’s a good five-year investment. If you are looking over one-year investment, I don’t think it is.

JASON: Since we tipped over into politics, what do you think about the prospects for America, employment? And we see, the Democrats have their spin on employment, and you see the Republicans with their spin on employment, is there something that a Democrat or a Republican can do to change the deleveraging of jobs to other places in the world, and the efficiency, that is making small companies, like Instagram, produce a product for fifty million or a hundred million people with just fifteen employees, or are we going to be in a permanent employment reset? How do you view that?
CHRIS: I think the last administration fed this country a ton of laxative, until it shit all over itself. Then, they handed it over to Obama and complain, that the diaper stinks.

JASON: I’m taking this home in writing.
CHRIS: This administration inherited the worst of the worst. Massive unemployment, housing was a disaster, and the economy was coming to complete halt.

JASON: Like depression level.
CHRIS: Watch any documentary, and you understand, that we were about to go to zero. No liquidity in the economy left, whatsoever. And drastic measures need to be taking to keep any heart beat back in this economy, right?

JASON: Right.
CHRIS: I’m glad that we had the President, who was willing to do that. I’m glad that he had advisors around, who are willing to do that. Do I wish that we had more controls on the bankers, who got bonuses after all that shit happened? Yes. It drives me crazy, that we got bankers, who are now tea-partiers, who talk about no government interventions, but their banks were actually given TARP [Troubled Asset Relief Program] money, and stuff like that. I think only JPMorgan has the right to bitch, I think everybody else needed that money. I’m very glad, that we have the President, who was willing to save the auto manufacturers, right?

JASON: Yeah.
CHRIS: It’s very easy for us to academically say, “Hey, look, it’s Darwinism, let strong companies survive.” But there are just so many actual people, who depend upon not just working on those plants, but everything else.

JASON: Darwin could be a bitch.
CHRIS: And here’s what I come out. I mean, let’s be clear, I make shit load of money, I will pay ungodly amount more in taxes, if the Democrats get their way. I stand to benefit a lot from the Republicans being elected, on self-interest viewpoint. And yet, I’m a very active campaigner for the President.

JASON: One of the top campaigners.
CHRIS: I’m a big fundraiser for the President.

JASON: You are in the top 50 fundraisers, 100 fundraisers. And this is pretty well-documented online, and you have been a fundraiser for a while.
CHRIS: And so, why do I do that?

JASON: Why do you pay more taxes and support the guy, who is taxing the rich? Whether it’s appropriate taxation of the rich or inappropriate, we can debate, but his platform is a little bit redistribution, and the tax, and the rich need to pay even more taxes.
CHRIS: I deeply believe, that if we don’t go for it together as a country, we don’t go forward. And I worry about the polarization that’s happening here. I worry about the blue state — red state, coastal polarization. In 2009, I rode my bike across the country starting in California, ending in South Carolina. And I saw real people, who I met along the way, people, who no longer own their home, no longer own their farm. Their small businesses boarded up and have gone away. Their downtowns have been deserted. I mean, I literally saw a place in Oklahoma, where the city hall front had collapsed in the street, and they put two columns to be, “Don’t drive over the bricks.” And yet, in each of those towns, I saw a Walmart on the edge of town. I’d ask kids, “Where you hang out?” They answer, “Walmart.” I ask, “No, no, where do you go on Friday night to be with your friends?” They answer, “We go to Walmart.” And it was, Walmart, Family Dollar, Dollar General, Holiday Inn Express had wiped out the actual town itself. And I realize that, these people didn’t actually, have any control over their own lives anymore. They didn’t have any control over their destiny. Our parents’ generation, our grandparents’ generation felt like, they had some input in what they would be in life. They felt like, there was a correlation between how hard they worked and what the outcome would be. This generation right now has lost those levers. They don’t own homes, businesses, et cetera, so the only “local business,” that’s thriving inside of those communities, is the local evangelical church. It’s the only one still locally owned. You see the rise of these churches, and it makes sense to me, and then, you start to understand the frustration, and I understand why there are so many angry voters in this country. These people don’t own their destiny anymore. Working at Walmart is not a career. Working at Walmart might possibly help you make ends meet. There is an interesting book called “Nickel and Dimed,” where a woman tried to work at jobs like that, and actually sustained a lifestyle, and she could not pull together. That’s not really a substitute. Since, we obliterate life, as we know it, replace it with big-box stores, retailers go away, and we change the finance game, when it comes to home, so it’s predatory. And we let the mega farms takeover, and block the little farms, and so, everybody’s a unit, now, in this big equation. Nobody actually owns his/her outcome. It’s funny to me, that we haven’t had a revolution.

JASON: It sounds pretty dystopian, when you say it.
CHRIS: That the thing is, I don’t like that America, and I don’t think any of us really does.

JASON: No.
CHRIS: I think that America, that we all would like to see, is America, where people own their future again, where people say, if I’m going to get up and do some work, I can own a home, I can put my kid in college, that, if one of us get sick, it’s not going to wipe my family off the map, we will have some insurance to cover the catastrophe there. That’s not the America I grew up in. I grew up in a town, Lockport, New York, where the biggest employer was General Motors. They build radiators and air conditioners for GM cars. Most of my buddies’ dads worked on the assembly line, and were union employees. Most of my buddies’ dads, and most of my buddies grew up in reasonably sized houses, and they could take a vacation for a couple of weeks a year, and they showed to work every day, and they had reasonable lives, they could leave work and go see their kids play baseball, that kind of stuff. It was idyllic. It was American.

JASON: It seems idyllic now, and, at the time, we were bitching and moaning about, “Oh! We work so hard.” Now you look back, and that people would kill to have that 18-25 dollar-an-hour salary, and to have security, career, pensions.
CHRIS: We just don’t have the career jobs anymore, right?

JASON: No.
CHRIS: We have been fluid, moving pieces around, and people as factors of production are wiped out like that. And I just believe fundamentally, the President believes in the vision of what America could be. I don’t actually even blame Mitt Romney, because I think he’s just looked at so many spreadsheets, and so many companies, that he just doesn’t get any more. I think he’s been so isolated from real people, and I was hoping that all these bus trips, et cetera, would soften him up by exposing real people. I think he’s so single-mindedly, opportunistically focused on being the President. Did you look at his taxes the other day? He releases taxes, and when he did them, he actually didn’t take as much charitable contribution deduction as he could, because it would have put him below the thirteen percent tax rate, and he didn’t want to go back on his promise, or look like he paid too little on taxes. That’s obsessive. That’s not being charitable to the country, that’s obsessively saying, “Jesus, my tax rates are going to be 10-11%, and that’s going to make me look like a douche. I’d better not claim these deductions, I’m totally entitled to, because I don’t want to look like a douche, because it might get in my way of holding the highest office in the land.” I think about that obsession.

JASON: And also having all those offshore accounts. I mean, I don’t understand, how you have a quarter billion dollars, or he may be worth a billion dollars, and he might be hiding it. But if he’s worth all that, and I don’t begrudge anybody who makes the money, but I’ve never considered putting my money offshore. That to me seems low.
CHRIS: I think the guy was elected out of a very weak field of candidates. I think the Republicans are incredible at staying on message, incredible in bringing people together, but they run the worst candidates.

JASON: Is it amazing? Wasn’t the Democrats just a couple of elections cycles ago? People would say the same. The Democrats couldn’t find a candidate. They couldn’t pull together. They were a bunch of wimps. They couldn’t fight hard. And now, you have Obama, who’s a bit of a gangster.
CHRIS: He’s an amazing candidate, he still has the party behind him that can’t stay on message. The Democrats, in their nature, are just scattered all over the place. Se he can’t always count on his own party, to have his back, but he’s an amazing person. He’s a remarkable candidate. I’ve been lucky enough to spend a lot of time with him, and to see him.

JASON: What’s he really like? What do you think?
CHRIS: So, the kind of event, that Mitt Romney said of classic 47%. I’ve helped the President host a bunch of events like that.

JASON: Which is an event, where twenty people pay thirty-five grand.
CHRIS: They pay a lot of money to sit there.

JASON: I got asked to go to one of those, not by you, but somebody else we know, and it’s thirty five grand, you pay to the super packs, and you got to sit in the room.
CHRIS: They are not superpacks. It’s the party and the candidate. There are lots of events that happen like this.

JASON: 20, 10 people?
CHRIS: It’s about 20-25 people. And you get to have a candid conversation with the President. It’s the format, that’s never existed before in those fundraisers. They’ve always been like, you have a dinner, they deliver prepared remarks, shake hands, and you go. This President said, “Look, I want to have legitimate conversations with really interesting people.” So the bar is, I don’t only have to give the money, but they have to be interesting. They are not always powerful, there’ve been some really interesting people in these rooms. And I will tell you, the President has no qualms about looking someone in an eye and being like, “You’ll pay more under my administration. You need to pay your fair share. In order to get where we need to go, you can afford it, you need to pay for it.” He’s just not a pussy. He’s not afraid to tell how it is.

JASON: Massive integrity.
CHRIS: He doesn’t sugarcoat it, et cetera. Bijan Sabet, on his blog, I don’t know what domain is, wrote a post about one of these meetings recently, and how the President was willing to be very direct…

JASON: Bijan Sabet of Spark Capital, a great VC from Boston.
CHRIS: He wrote this post about what that experience is like. It’s very genuine, authentic, and candid. That’s who this guy is. I think this guy too rustles with really tough decisions.

JASON: Guantanamo.
CHRIS: Guantanamo is interesting.

JASON: Health care.
CHRIS: I’ll actually share something. I have to think how to share this, because this happened in a don’t-share-conversation, but I would take a chance there. I think it speaks volumes about this President. I have pounded the table about Guantanamo. I have pounded the table, “Hey, look, if America stands for anything, it’s our rights. It’s that we would rather set ten guilty people free, then imprison one innocent person. When I travel abroad, that’s what I always stood for.

JASON: Human rights.
CHRIS: And I lived abroad for a lot of my life, that’s what we’ve always stood for. Habeas corpus, justice, and accessible justice system.

JASON: Justice for all.
CHRIS: The data are clear, people of color don’t get same access to justice that white people do, poor people don’t get same access, than rich do.

JASON: The DNA is proven that. The Exoneration Project.
CHRIS: We’ve lost sight of that. It’s a massive injustice.

JASON: Domestically, we have. Yes.
CHRIS: I pounded the table with the President saying, “Guantanamo is an example, if we don’t stand for it. What is the United States stand for, if we don’t stand for justice?

JASON: Wow!
CHRIS: And the President in a very cool, non-dickish, straight-up way said, “Here’s the thing. If you knew that 25 of the guys, that were in Guantanamo, were some of the most dangerous, evil, capable of destroying thousands and thousands of American type guys… And they could do it. And that, you have all the intelligence, that shows you that, if released, they would do it. What would you do?” And he just asking me that without going to his conclusion on the problem. I think it’s a problem he continues to wrestle with, and I expect him for it to be back on the agenda in this next administration, when he is reelected, but he just asked it straight up. “What do you do?” And in doing so, I was like dumbstruck, right? I was, God, it’s really easy for me to (bleep) while watching TV and be like, “What the fuck? Why do we still have those guys down on Cuba? This is really fucked up, it not for America stands for? Imagine him in a briefing and someone straight up says, “I think if we let a couple of these guys go, they will destroy thousands of American lives.”

JASON: Yeah, like these are 9/11 level people.
CHRIS: What do you do? That’s not black and white, it’s grey, right?

JASON: Right.
CHRIS: And so, the President said, “People, the news stations report on politics, not government.” That’s true. If you start with that mind, if you start watching what happens in newspapers, and on TV, and stuff like that, it’s all politics, right? But government is fucking hard. It is messy. It is grey. It is nasty. I don’t know how that guy sleeps at night. The decisions he has to make are fucking hard. And the more exposure I’ve got at him, the more I realized that guy is up for it, he takes it really seriously, and tries to do the best thing for America in the greatest sense of that tradition. Sometimes it means ignoring his own party. Sometimes it means compromising with people he probably doesn’t want to compromise with. He really does take doing the right thing for the country in the grandest sense of the word, and that’s why I’ve lined up behind him. That’s why I feel good about raising a bunch money for him. And that’s why Mitt Romney fucks up every time, he underestimates Americans, because they see that, they’re not stupid, they have a visceral sense, that this guy is looking out for them. Mitt Romney can spread as much disinformation as he wants, and they’re really good at that. They’re really good at bullshit. Paul Ryan is the fucking master of bullshitting, but at the end of the day this President really connects with truth, and voters get that.

JASON: He cuts through it. It seems like, every time they throw the smoke bombs, he just rises above it.
CHRIS: What turns out, when truth is in your favor, that luckily, in America, that still works. Truth still works. It’s teetering on the brink of not working, and that’s something I think we all need to wrestle with, but, for right now, truth still works, and this is why this President will win this election.

JASON: He’s going to win. Hands down.
CHRIS: Yeah.

JASON: He should win. Mitt Romney is a complete disaster, and I can’t trust the guy, I mean. His ideas about, if I was born in Mexico, it could have been easy. You just get the sense, wow! This is confirming, this is an evil, private-equity douche bag, who, if given the reins, is going to do more damage than Bush. It feels like this guy could do more damage than Bush, and we have been there. We’ve seen what destruction can occur, when one of these people gets into the Office.
CHRIS: No doubt.

JASON: It’s not worth the downside risk.
CHRIS: Not so long ago, the Republican party was a totally reasonable legit party, that had a different view on how to govern, but it was a legitimate reasonable thoughtful view. It was not that long ago. I mean, my dad was a Republican in our county. He was a very thoughtful person.

JASON: Reagan, Bush I.
CHRIS: What happened was, they sold themselves to the extreme. John McCain is a very reasonable person. Look back at his voting record, campaign finance reform. That’s the number one, biggest issue. If we fix campaign finance, so much of the other stuff would sort (bleep) out. He took a bold stand. He is braking from the party orthodoxy multiple times. He is done things, I disagree with, but he’s done it for the right reasons, right?

JASON: He is a hero. Yeah.
CHRIS: He would have been a perfectly reasonable President, not my preferred President, but he would have been a perfectly reasonable President, had he not sold himself down the river to extreme right.

JASON: Sarah Palin?
CHRIS: That was just a disaster. That was a cartoonish and horribly cynical move to sell themselves out to that side of the party.

JASON: We are going to go with the dumbest, most redneck, just out-there person, who doesn’t know who the leaders are of the free world.
CHRIS: She’s really disgraced.

JASON: Was that the moment? Was that the moment that they just jump the shark?
CHRIS: I think they underestimated the voter again. I think they thought they were playing a TV, and voters actually see through that shit, right?

JASON: So the pandering to the right, religious, nut cases, it actually imploded on them.
CHRIS: It leaves behind the real people. It leaves behind the majority. Not even intelligent and book smart, not even talking college grads, it just leaves behind America. It leaves behind all these people in the middle, right? I mean you can say the same about too much of the extreme left. Although, I just don’t think they are active, and I don’t think they have as much traction, and they don’t own any television stations right now. I think the greatest thing, that could happen to the Republican party, is that they’re going to get spanked in this election, and I think they’re going to have to reboot. I think they’re going to have to look around and be like, “Do you know why we lost? Because we are a bunch of the nut cases right now, because we’ve lost sight of what we stand for.”

JASON: Gun control, repealing Roe vs. Wade, anti choice, pro automatic weapons.
CHRIS: They’ve made their government about making this President fail. That was the entire thing. This entire administration was, what can we do to make this President fail?

JASON: By the way, we are at $1200. Are you shitting me?
CHRIS: Somebody’s keeping the tally.

JASON: $1300.
CHRIS: That’s awesome. That’s awesome.

JASON: I’m giving $1300 for charity. By the way, $1300 goes in here. And I’m going to throw the party for my team.
CHRIS: That’s $2600. If we keep this going, we can buy a whole well. I might make you $5000.

JASON: How much is the well?
CHRIS: $5000. Here you go.

JASON: (Bleep) Oh, God.
CHRIS: We can get a well going. By the way, I was out to visit those wells in Ethiopia. It’s an amazing impact that Scott Harrison and “charitywater.org” have.

JASON: I love that shit. Fuck it now, if we are in for this much, I don’t give a shit.
CHRIS: We are going to buy well. Let’s just call it a well. $2500 each.

JASON: Set a (bleep) goal.
CHRIS: $2500 each.

JASON: No, we have to be legit to get there.
CHRIS: OK. Is the tally still there?

JASON: The tally seems to be around 1300. Could you scroll down, guys, in the chat room? It’s fucking unbelievable. 1380? Yeah, we are twelve hundred something.
CHRIS: Wait. Was there a racial slur?

JASON: No. OK.
CHRIS: Somebody is saying, if you racial slur that cost $10.

JASON: We are at $2500 combined, what DomainNoob is reporting. DomainNoob is my ultimate super fan. I love DomainNoob. Can we get DomainNoob on the program? I need him to be on the program. He is the major superfan. He thanks every sponsor. We have superfans.
CHRIS: I love that, dude. That’s the best.

JASON: It’s unbelievable. I want to have a dinner for my superfans. Can we set up a superfan dinner in Vegas at the World Series.
CHRIS: Give me a spot at that table.

JASON: You may not want to be at that table. These are some cocky people.
CHRIS: I met some of Kevin Rose’s superfans. It’s a religion. It’s a cult.

JASON: It is. I’m thinking about starting actually a religion. I saw “The Master.” And I’m really getting obsessed with Ron Hubbard. And I’m going to make a religion based on entrepreneurship. Read from “The Book of Jobs.”
CHRIS: What is the principal tenet? Book of jobs?

JASON: The book of Steve Jobs ["Steve Jobs" or "iSteve: The Book of Jobs"]. I think the principal tenet is that, in order to be part of the religion you have to believe wholeheartedly, that things can change, and that you can iterate to make the human condition better. That’s going to be the core tenet. It is that through creativity and through hard work and implementation, we can make everybody on the planet’s lives better, and that we can create more prosperity for ourselves and for our teams. And that not everybody is suited for this religion. It is for those people, whatever percentage it is, who want to make better. It’s to be better. Better as individuals, better microphone, better swear jar, better President, just to be better. It’s an aspirational religion, not a control religion. Anything that you can do to increase your skill, or dexterity, or the products around us, the services around us the friendship we have, whatever it is, just to want to be better, and to put our energy towards being better.
CHRIS: That seems accessible to anybody. It is just not everyone is a founder, right?

JASON: Yeah.
CHRIS: There are people who are great at being second fiddle, third fiddle, who embody that entrepreneurial spirit.

JASON: Yeah, inside of companies. In a way, investor is that.
CHRIS: Companies don’t succeed, when there are a lot of chiefs and no Indians, right?

JASON: But you have entrepreneurial Indians, who, when they get caught behind enemy lines, they figure out how to get back.
CHRIS: There are a lot of people, who don’t want to take credit. Who just want to be there, who are taking the risk by joining the startup company, who want to drive, want to keep those hours.

JASON: Those guys are my heroes. Brandis is out here, who works for me. I love this girl, Brandis, Lady Brandis.
CHRIS: I met your whole team.

JASON: She cares. She cares about the microphones. She cares about the cable. Caroline, who has been working with me, she just cares. I like people who care.
CHRIS: They own it.

JASON: They just care, and they just want to get own it, they want to make it a little bit better.
CHRIS: That might be a part of the prayer: “They own it.” Just “Own it.”

JASON: “Own it, make it better. Ummm”
CHRIS: What are the major feast days in your religion? What are the major festivals?

JASON: We have to have one for, when Steve Jobs… I think it has to be around people who have done this. One for Sir Ernest Henry Shackleton, when he got to the north pole or something.
CHRIS: That’s amazing.

JASON: We have to get one for Shackleton, I think we got to give one up for Steve Jobs. It’s got to be around people, who dented the universe in some way. Gandhi.
CHRIS: These are the saints.

JASON: The saints would be people, who have dented the universe in some way, to make it better, e.g. the guy who cured polio and made it open-source. That kind of stuff.
CHRIS: You can still break bread too.

JASON: We’ll have something like that. I’m trying to do the low-carb thing, but, yes, I think we could.
CHRIS: I’m gluten-free.

JASON: I’m trying to stay gluten free. Hey, listen, we are two hours and twelve minutes, and this is the greatest episode literally. I think this might be the best episode of the program.
CHRIS: Can I say? I have one gripe, I want to get on.

JASON: Get on! Let’s do it. I think it would be a two-parter, by the way.
CHRIS: I think there’s an epidemic in Silicon Valley right now.

JASON: OK, let’s hear it.
CHRIS: It’s taking credit. I think a new number one problem in this entire business among investors, among founders is taking credit.

JASON: Who takes credit?
CHRIS: I see too many people, in their tweets, et cetera, are taking credit for the success of their portfolio companies. And I thought that could (bleep) stop right now.

JASON: It’s so fucking annoying.
CHRIS: I think that’s the number one. It’s easy for investors to project out, VCs got too many companies, prices are too high, et cetera, and those are all worthy topics to talk about.
It took me awhile to figure this out, and so I’m not on a high horse now, I think I was an exhibit ‘A’ in the self-promotional department, but there it’s way too many investors, who are out front of their companies try to take credit.

JASON: I do feel that, because I’m an entrepreneurial investor, I’m particularly attuned to this issue, and when I see an investor talking about a portfolio company more than the founder, I disapprove of that. And you really have to be careful, because I love Uber, and I’m the tiniest of investors, and I have nothing to do with their success. When I tweet about it, I just tweet about “I love Uber.” That’s it. I know as an investor, I have zero impact on the company, maybe, a couple of people will find out about.
CHRIS: Maybe, you could. Maybe, Travis Kalanick says, “Hey, look, I need to get the word out about all the bullshit is happening in DC,” so you are in service business, as an investor, you are a service provider.

JASON: Yes, not the credit business.
CHRIS: That’s the problem.

JASON: People are high on their own supply.
CHRIS: Yeah and so what’s happened is we are in the cult of personality investor phase. And what’s funny, you got guys like Bill Gurley, who add value all fucking day long.

JASON: Nobody knows who Bill Gurley is.
CHRIS: He writes really good blog posts at http://abovethecrowd.com/.

JASON: When he does CNBC, when they brought him on CNBC, the IQ of CNBC went up a hundred-points immediately.
CHRIS: But you’ll never see that guy talk about all the stuff, he’s done for a company, like Uber.

JASON: And people don’t even know, he’s an Uber investor.
CHRIS: It was Josh Kopelman, who taught me this lesson. My job is to obsolete myself.

JASON: Josh Kopelman from First Round Capital.
CHRIS: My job is to obsolete myself by series B. The company should be at a point, where the magnitude, gravitas, the investors, who are there, solve problems, which I don’t. I was involved in the company, where Bill Gurley is there, and the company was thinking about hiring CFO, and Bill opens up his folder, and he’s got six CFOs, ready to go. Like guys of public company quality. I was, “I don’t know six guys. I don’t know six public companies’ CFOs in the world.” Right? But when you’re just getting started, I’m the guy you want in your room to help design your product, build the funnel to convert, help you recruit your first couple of employees, get that shit done. And so, but the guy, like Bill Burley, will never (bleep) take credit for that. But we are in environment, where I see too many investors taking credit for their companies.

JASON: It’s so fucking annoying to me.
CHRIS: I think we got a call people out. The same way we call people on Humble Brags, and we got to call people out on taking credit.

JASON: A credit brag, it’s just like, you know what. And with so much money around, do you think these fucking shmos would get the fucking message. If Yuri Milner comes in and says, “YCombinator? I’ll take all of them.” And then, they say, “Seriously, here’s the menu,” and he says, “Yes. I’ll take the menu. And I take the menu for the next five years.” If he comes in and does some gangster shit, like that, what the fuck does some investor, who is making five investments a year, think that they’re so gangster for writing a hundred thousand dollar check? That guy came in and was like, “Oh, Silicon Valley? Yes.” He literally came in and said, “Silicon Valley? Yes.” – “Which one?” – “Yes, all of them.” I have to applaud the guy. I think it’s weird. What do you think of that, when you saw that?
CHRIS: That happened around the same time, when Ron Conway threw the grenade in a room full of angel investors. [http://en.wikipedia.org/wiki/Angelgate] The five families were gathered and blown up. I actually wasn’t even at that meeting, but I ended up getting up for the full…

JASON: You got some shrapnel.
CHRIS: I was on the other coast and got some shrapnel from that meeting.

JASON: The Angelgate meeting.
CHRIS: But despite that going down, I respect the move. I do think it’s a gangster move. I think those guys did some math and said, “Look. We’re going to be run most of the time, but when we are right, we are really right, it’s going to pay off.”

JASON: Airbnb, Dropbox – boom!
CHRIS: I mean, you and I, as investors, are wrong more often, than we are right. That’s the other thing that goes with taking credit, “Dude, you never take credit for all the shit that fucked up.” In fact, most people remove it from their website. As these things are out of business, I don’t want to admit that I have anything to do with that.

JASON: I talk about, for example, Gowalla, which, I thought, was a tremendous success in terms of building an awesome product, but just didn’t work for a number of reasons. I talk about that as one of the things I’m most proud of in working with Josh Williams, and trying to make the product work. That’s the first person, I tell them, to call, when they ask me should I be an angel investor.
CHRIS: Yeah. I just think, generally speaking, it’s fun, when people listen to investors and take everything they say, as Bible, because those investors usually got where they were, because they had one or two data points, that tend to pay out, right?

JASON: Broken clock works twice the day.
CHRIS: They built a company that worked really well, now, they’re rich, and so, suddenly, they must have the right answer to everything. And then, across their portfolio, most of these shitty investing goes nowhere. Right? And this applies to anyone equally. And they ask us to come on panel discussions, and spat all this wisdom, that people write fucking down and see it retweeted all the time. And yet, we are wrong. We are in the business of being wrong. It’s just, when we are right, we are really fucking right.

JASON: You’ll need one Twitter, or Instagram to make up for the other nineteen failures.
CHRIS: Heroku, Photobucket. We thought a few more out there. But on a percentage basis, I’m wrong more than I’m right.

JASON: I know, but your rights have been pretty fucking amazing.
CHRIS: But again, I don’t take credits for those. Look, Kevin Systrom pulled me into Instagram. I didn’t seek him out. He pitched me, and in that pitch, I was just drawn magnetically to him. He thought I could be helpful in some ways, that we worked on together. That is me, admitting that I would not have chosen Instagram, right? There’s a lot of shit in my portfolio, that I chose for what I thought were all the right reasons, and are all the wrong fucking reasons.

JASON: They are clunkers. That’s when an expert pulls you in.
CHRIS: And my money never came back, it went away, right? And so, it’s kind of funny, like Heroku, I got it. I thought I could be helpful. James Lindenbaum knew I could be helpful in certain ways. He drew me into that company.

JASON: I need to have him on the program. Karin, take a note. I’ve got to get that Heroku guy.
CHRIS: He’s amazing.

JASON: What do you think about him?
CHRIS: I don’t want to steal the thunder of his story, but you got to talk about the negotiation, when he had the opportunity to sell that company. He had an opportunity to sell that company multiple times.

JASON: Yeah, Mydesign, Google. Everybody wants that company.
CHRIS: That guy has the same thing that Systrom had. You just look that guy in eye, and he knows he’s building something huge. It’s just not time to step off the elevator yet.

JASON: He is like, “I’m good.”
CHRIS: Months before he sold that thing for 220 million dollars, somebody offered 85 million. 85 million is a lot of money for a company, that he still owns a ton of, because they hadn’t raised much money. And it was an employer, he would have been happy to work for, et cetera. And he was, “We got a lot of work left to do.” The guy is a legend, legend! I remember being with him once, right before the Salesforce deal got done. The original Salesforce offer was lower. And he said, “What should we do?” And I was like, “I don’t know. Maybe, if it’s X, maybe, I can get like X plus ten or fifteen percent. Maybe, I can help you do that, but I think you should take it.” And he was, “You know what, thanks for your advice.” And then, he called me 72 hours later, “I got X+80%,” or something like that. I mean, that’s holy-shit! This is supposed to be the other way around. As the investor, I’m supposed to be like, “Go, go, fuck it! Go to a billion dollars.” As the founder is supposed to be, “That’s a lot of money to me.” But that guy’s a legend. You look in his eyes, and he has no doubt, that that thing is going to work out. And that’s the hallmark of a great entrepreneur. But, if you look at everything amazing in my portfolio, there has been a symbiotic, like I’m drawn in, and, at the same time, I might have an inkling of what that thing could be. And that’s the thing, that’s funny about investors sitting back, and taking credit, and trumpeting the things, they were great about. First of all, they didn’t found shit. I think the founders have every right to take credit, investors shouldn’t.

JASON: What do you think of AngelList. I mean, Naval Ravikant seems to be helping entrepreneurs tremendously. What’s your take on that? I talk to one group of people, they say, this is transformative, then I talked to some VCs, and they just say, they don’t like it. And they don’t like the idea that all these angels have bonded together in a little group. They feel like it could be disruptive. Is it or not?
CHRIS: Nobody likes when the market renders them useless. Nobody likes being an emperor with no cloth. There’s a lot of expensive real-estate up-and-down Sand Hill Road with no cars in the parking lots right now, because nobody gives the fuck these names. There’s that top tier of Benchmark Capital, and Accel Partners, and Sequoia Capital, and KP [Kleiner Perkins Caufield & Byers], and these names that still has some resonance, even though some of them are struggling with being relevant to a twenty-something entrepreneur.

JASON: Yeah, nobody cares about Kleiner.
CHRIS: But below that, there’s a bunch of names, that have just been like riding out the tail on a ten-year fund, and are having trouble raising any money, et cetera. They don’t like the democratization of fundraising. There used to be access to a special club, that’s what allowed you to get access to capital, and now it’s much more democratic. So I applaud AngelList for what they are doing. I think Naval is amazing. One of the things, I worry about though, is that if it tips too far in the other direction, we end up with these rounds, that don’t have any leader. Money gets raised without any actual professional investor stepping up and being, “I’m going to be your counterpart.”

JASON: And why is that important? Why is that dangerous here?
CHRIS: It’s important, because the founder needs someone to bring their A-game to, I think. I did the analysis across my portfolio actually, and the companies I have, that had leaderless seed-rounds have underperformed. I think it’s important for anybody. Anybody! To have to sit down, put together a deck, and bring their A game to somebody else, who’s going to listen, to somebody, even if they are not on a board of directors.

JASON: A coach.
CHRIS: A coach, somebody, you feel accountable to. I do shadow board meetings with few of my companies, where I’m not on a board. I don’t really take board seats, I’m an observer at Uber, that’s it. And so, with most of these companies, I think. What we see is that, if they are left to leaderless rounds, they just have this money in the bank, and then they look inward, and none of the angels really feel like owners there, and so, they’re not constantly pinging in, et cetera, and sometimes, the entrepreneurs are slower and afraid to ask for help from the outside, and so, the result is this thing, where they go sideways. Whereas if you’re the founder, and you got to sit down with me every month, whether I have an official vote or not, you put together the deck, and we talk about this company. Every founder, I do this with, finds it relieving, finds it awesome, they get a little excited about the night before, they are going to exam it the next day, and they bring it, it’s not interviewing for their job, it’s not worrying about whether the board is going to fire them, instead it is, “Let me defend, where we are this month, let me share with you this vision, let me talk outside the company for the first time to a trusted collaborator, and see, if this is something, that’s going to go somewhere.” And that’s an important part in the development of company, so I worried about is, there still has to be a lead, there still has to be an owner, it’s something, I’ve been saying to the companies recently, “I will commit to your round, but only if there’s an actual natural lead. And it’s not about owners’ terms, not about somebody busting your balls and documents, but it’s about somebody feeling like he cares. They wake up in the morning and think about that company.

JASON: Somebody invested enough. If anybody is there for $25k, everybody is then for zero.
CHRIS: I mean, on the one hand, I know a couple of VCs, who call their portfolio companies every day. That’s going to be fucking crazy. If your investors called you every single day, you wouldn’t get shit done on it. On the other hand, there are angels, who have 75 companies and don’t call any of them ever, right? And so, I think a founder has responsibility to take advantage of the investors they have, to use them well, to communicate effectively. You and I are investors in Backupify.

JASON: Yeah.
CHRIS: I think Rob May writes the best investors update email, I’ve ever seen.

JASON: Oh! The best!
CHRIS: Rob, every month, gives us the information we need to know, gives us an update on the company, and says right there, how you can help. These are your action items, go get fucking shit done. And so, if they’re in your wheelhouse, go get them done, if they’re not, at least you know where he is. And what it does too, checking with your investors and using investors that way, also keeps Backupify in mind, so that I talk about Backupify at show like this. I mentioned it to another investor, I mentioned it to a user, I tweeted about them. They are in front of mind, I have stuff on my list, that I hadn’t thought about in a while, because I don’t hear from those founders, we don’t engage, and I don’t know enough of that company, that the first thing on my mind to go dive in and get deep with them.

JASON: And you don’t want to be overbearing with any investment, if they are not pinging you, and they’re not engaging you. You don’t want to be like, “I’m checking in like daddy.”
CHRIS: I work with Melody McCloskey at StyleSeat. Right? One of the most gifted founders everywhere, just anywhere, she’s amazing. To be candid, I think, because she’s a woman, and because she’s dealing with a space that men don’t get shit about, which is beauty professionals, I think she’s underestimated.

JASON: Yeah, another underestimation.
CHRIS: Her traffic is in the millions and millions of users, and she just (bleep) blowing it up. She has a clear commerce model, and Dan Levine, who does all the coding over there, is amazing. And two of them ship multi platform with five people there. Maybe it even four. When I sit down with her, she already has action items for me, saying, “I’d need you to do this, I need you to help us with this, I need to review this deal with you, give me your opinion, I’m doing a business development deal with a big partner, help me figure this shit out.” Right? “Here’s the spreadsheet of investors I’m thinking of talking to for our next round, give me the insights you have on these guys, let’s build something here.” That’s how you use an investor. And we do so, because I’m one of the biggest investors, that I feel like a real stakeholder. We actively work on that.

JASON: It really is an attention in a way. And I tried to explain this to some folks, “Don’t optimize for terms or valuation, as much as, optimize for the attention of the important people in ecosystem and good people in the ecosystem.”
CHRIS: And then, take advantage of it.

JASON: Right. That’s not enough to optimize to get him.
CHRIS: You are more than willing to send out a tweet, connect somebody with somebody, think of some partners, give them advice on the next round, connect them to an investor.

JASON: Anytime.
CHRIS: But if they don’t ask you, they’re likely not going to get it. Right?

JASON: No.
CHRIS: Because it’s lower down on your list, and you like, “Oh! Wait. How this company is doing?”

JASON: Yes, and you don’t want to feel like you are imposing upon them, because that entrepreneurs are sensitive. They didn’t take you as an investor to have you to be their daddy, or to be there an overbearing coach. We are there, if they need us.
CHRIS: You’re there to earn it. And like I said, the problems, they’re encountering, by the time we’ve got a few rounds in, I’m probably not the guy to help with that, right?

JASON: Right. A couple of questions from the audience.
CHRIS: What we got?

JASON: Here we go. Give me a question from the audience. Where does the name Lowercase Capital come from? Good question.
CHRIS: It comes from the same place my shirt comes from. I mean, “Lowercase Capital” is a pun obviously, right? “Lowercase capital” is like “jumbo shrimp.” About ninety percent people don’t see that. I think one of our biggest problems is that we take ourselves too seriously, right? If we start to think our own shit smells like roses, and I think that’s a real problem. With the name, I wanted to show right of the bat, that I wasn’t trying to be too institutional about it. What’s great is, when I talk to big institutional investors, it doesn’t even occur to them and they think my fancy flowery logo shows them, that I’m a big venerable institution. The same with the shirts. The first of these shirts, which I bought, I bought at Reno airport. I live near there up in Truckee, California. A flight out of there was delayed, and I was in the gift shop, it was 80% off, I bought it. It’s the one on my profile, I picked the black one. I was there to give a speech, I gave no explanation for why I was wearing it, but people chuckled, when I walked on the stage, and I was just like, you know what, this sets the right tone. This sets there like, I’m not going to take myself too seriously, and you should neither. And this just moves the whole conversation to a much nicer place. I also don’t have to waste time thinking what to wear in the morning, I just reach into my closet and put out the cowboy shirt.

JASON: We already answered about the Google’s Special Initiatives, your hands on, hands off, we answered that. We answered all this stuff already. Why doesn’t Obama put Guantanamo prisoners on trial? We answered that already. We got to wrap this up. Two and a half hours in, it’s a record. You set the longest and most interesting episode.
CHRIS: Somebody should have brought lunch half way through it, I think.

JASON: I was thinking we should probably have a little sushi.
CHRIS: We should order. We should “taskrabbit” some lunch in here.

JASON: Are you investor in TaskRabbit?
CHRIS: Do you want to filibuster this? We just go twenty-four hours. We just keep going.

JASON: How much fucking money and how many wells we are going to (bleep)? Right now, we are combined twenty-nine (bleep) hundred dollars, which means we are $2000 out of fucking well. That I now have to pay for, which I do not fucking mind, because I’ve done pretty fucking great.
CHRIS: Grand total is only twenty nine hundred?

JASON: Well, yeah, because think about it. $20 a pop. You are talking about how many curses. It’s hundreds of curses.
CHRIS: I’ll stop talking right now, if you agree to go halves on well with me, $2500 each.

JASON: I’m fine, I’ll do it.
CHRIS: OK, great. That I won’t filibuster your show anymore.

JASON: I mean, but we had to cut into two fucking episodes.
CHRIS: And that is great. It’s more advertiser’s exposure.

JASON: Now I have to at this point.
CHRIS: You can take a week off.

JASON: I can take a day. Oh, God, man. If you have a good kid, you don’t have a hundred people working for you, right?
CHRIS: No, in fact, I have one person working for me.

JASON: A billion dollars and one person – that’s genius.
CHRIS: I’m thinking hiring somebody.

JASON: Do you hire a second person? A driver?
CHRIS: Yeah, that’s why I need a business insurance, by the way. That something to go back to your ad, I forget what is it?

JASON: Hiscox.
CHRIS: Hiscox, thank you, I wrote it down.

JASON: Thank you @HiscoxSmallBiz.
CHRIS: That’s why I need business insurance, I’m going to hire somebody.

JASON: Hey, listen. If that is good enough for Chris Sacca, it’s good enough for you. Thank you so much of @HiscoxSmallBiz. Everybody, thank them. And thank you so much to “Stamps.com,” which is also Chris Sacca’s favorite. He is going to get a complimentary Stamps.com’s scale on the way out. Hey, that’s a good idea.
CHRIS: What do you do at “Stamps.com” again?

JASON: You are not going to go to the post office. Instead of going to the post office, you just print stamps from home.
CHRIS: That’s awesome. I mean, I work virtually.

JASON: Yes, go to Stamps.com and print them, but you have your people for that.
CHRIS: I want to mention it to my one employee.

JASON: Hey, listen. Thank you so much for being on the program, Chris Sacca. Everybody, follow @ChrisSacca, @sacca. Thanks @Hiscox, and thanks to my crew for crushing in another perfect episode. And we’ll see you next time on “This Week in Startups.”
CHRIS: Right on.

Executive Producers

• Louis-Eric Simard
• Benjamin Gifford
• Jacek Artymiak
• Octavian Mihai
• Will Paoletto
• Geoffrey Clapp
• Jeff Hoffer
• Austin Miller
• Rashaun Sourles
• Robb Kunz
• Greg Berry
• Sean Lynch
• Mary Ann Halford
• Jim Joyce
• Morgan Howard
• Margaret Johns
• Kyle M. Brown
• Paul Cole
• Nick Duncan
• Magnus Ingvarsson
• Amir Ayalon
• Carlos Zaidenweber
• Avery Keitt
• Joshua Shipsey

Producers

• Eli Coler
• Ted Inoue
• Radek Rybicki
• Hunter Owens
• Ildar Khakimov
• Matti Hallanoro
• Rodrigo Dauster
• Rodrigo Fuentes
• Anthony Ortenzi
• Daniel de la Cruz
• Michael Hofmann
• John Meneses
• Mike Sunyich
• Sami Rageb
• Michael Lustig
• Alex Deli
• John Davies
• Mark Burcher
• Morgan Howard
• Jeffrey Yan

Associate Producers

• Brad Pineau
• Kat Ganesan
• Nicholas Christian
• Mau Frontier
• Kyle Braatz
• Serena Ehrlich
• JD
• Alex Lotoczko
• James Kennedy
• Benoit Curdy
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• Marcos Trinidad
• Allen Cordrey
• Daniel Mich
• Joshua Rosen
• Grant Carlile
• James Smith
• Christopher Rill
• Elliot Myhre
• Nihon Giga
• Nathan Gielis
• Greg Meadows
• Rick Cartwright
• Jacques Struwig
• Robert Ward
• Adam Gering
• Shelley Gaskin
• Jim Shute

Supporters

• Ryan Hoover
• Michael Cranston
• Josiah Thomas
• João Fernandes
• Petrus Theron
• Michael Wild
• Dale Emmons
• Tim de Jardine
• Alejandro Vasquez
• Milan Babuskov
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• Priidu Kull
• Patrick Desroches
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• Paul Ardeleanu
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• Christopher Smitley
• Roshan H.
• Barcy Cordrey
• Matt Beaubien
• Matthew Smith
• Oscar Bueno
• Tim Hoyt
  
• Ian Gerstel
• Taphon Maddison
• John Bradley
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• Janus Lindau
• Chris Mancil
• TR Ludwig
• Giles Thomas
• Jason Cartwright
• Michael Del Borrello
• Joshua Rosen
• David Karlberg
• Marcus Schappi
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• Isaac Hill
• Robert Haydock
• Dan Sfera
• Flaviu Simihaian
• Kiko Cherman
• Chandra Siva
• Kasper Andkjaer
• Zach Woodward
• Chris Galasso
• Chad Olsen
• Michael Grabham
• John Shiple
• Gregory Hoffman
• Chris Rickard
• Eskil Steenberg
• Jay Moran
• Karim Sarkis
• Michael Davidovich
• Petru Marchidan
• Sam Drzymala

 

• Fannybumper

  The audio version is only the first half of interview Twist #291, can you add this second half please.

• Jo

  what a amazing episode, bring this guy back on, and maybe kevin rose.

• Alex

  best show ever, thanks for having this show running so inspiring and motivating. Jason you are really awesome.