Ian Bernstein :  Founder & Head of Product at Misty Robotics

On the latest episode of This Week in StartupsIan Bernstein, former Co-Founder & CTO of Sphero and current Founder & Head of Product at Misty Robotics stops by. Ian introduces his programmable robot, Misty II, and we discuss the current state of generalized robotics, as well as more advanced functionalities that seem to be just around the corner.

Join us for a glimpse into the future of consumer robotics, AI, the brain-computer interface, and more 🔥.

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Show Notes:

01:50: Introducing Ian Bernstein, former co-founder and CTO of Sphero and founder and Head of Product at Misty Robotics. Ian talks about founding entertainment robotics company Sphero, the high cost of marketing, more.

05:48: Ian explains how adding character, personality, and gamification to Sphero’s robots led to a Disney-sanctioned BB-8 robot.

11:55: Thank you to sponsor, Weebly. Visit weebly.com/twist for 15 percent off your first purchase.

15:05: Ian talks about the history of generalized robotics and and the inspiration to create Misty Robotics. He also covers lack of consumer readiness as a cause for market failure. He says companies like Amazon are paving the way for more advanced home robotics by building useful AI and familiarizing people with it.

20:14: Ian demonstrates the Misty robot. Currently targets developers without robotics experience. The robot is programmed via JavaScript. He lists available functions, including 3D mapping, navigation, voice interaction, computer vision, more. Misty is designed to be hackable in terms of software and hardware. The company is letting developers build whatever they choose right now, but will establish a more controlled system later.

25:53: Thank you to sponsor, LinkedIn. Visit linkedin.com/thisweekinstartups for a $100 a credit.

29:00: Jason and Ian talk about marijuana use at work and the impact on productivity of getting into a flow or zone.

31:30: Ian says Misty I, the robot his company handcrafts in Colorado, is now available. Misty II will be available in December (on presale now through May 31). It runs $3.2k but it’s currently half off and TWiST listeners get another $100 off. Ian says one of the reasons Misty chose crowdfunding was to build a community, as, he says, most consumer robotics apps will come from third-party developers.

34:21: Jason asks when generalized robotics will expand from the hobbyist tinkerer space into useful functionality for average people. Ian says the tech required for general functionality is just now becoming affordable for consumers. Ian notes Misty will support Cortana, Google Assistant, and Alexa. Also has Arduino integrations. Ian and Jason talk about the power of having an assistant-equipped robot following you around. The pair discusses fun and practical applications.

44:52: Jason asks about Misty Robotics’ strategy in terms of funding, the pace of development, etc. Ian says that while hardware startups are still difficult because the development process is slow and requires several years of runway, investors are becoming more open to it right now. It’s very important to get the right people involved. He says Misty spun out of Sphero in order to focus specifically on home robots.

48:35: Jason lists a series of jobs, asking Ian which ones are best performed by a robot today. For jobs best performed by humans, he asks how long it will be before robots can take over. They discuss what’s currently (theoretically) possible and the importance of 100-percent functionality versus robots that can perform only some parts of a given process.

58:21: Jason asks about the state of robotic arm technology and notes the falling cost. Ian speaks about software improvements making lower-cost arms and hands more precise. Sensors and AI play a significant role in improving precision. Jason asks about advanced prosthetics and Ian talks about brain-computer interfaces for prosthetics and for home robots.

1:02:25: Jason asks Ian what robotics developments in the past year have impressed him the most. Ian says the space is accelerating quickly. Boston Dynamics’ engineering is incredible. The pair discusses applications for Boston Dynamics’ dog-like robot.

1:04:28: Jason asks about Misty in schools. Ian says that in 15–20 years, robotics will be critical for young people coming out of college, so it’s important that children today have some introduction — the same way he was introduced to computers as a child.

Reminder to listeners to visit mistyrobotics.com/thisweekinstartups for $100 off the Misty II.

Ryan Rzepecki – Founder & CEO of JUMP Bikes

On episode 820 of This Week in Startups, I sit down with Ryan Rzepecki, Founder & CEO of JUMP, the dockless, electric bike-share startup that Uber acquired last month for 9-figures. We discuss the many ways in which multimodal transit solutions can transform cities, the future of commuting versus denser cities, the regulatory changes needed to build the cities of the future, and much more.

Join us for a lively discussion about the challenges of transitioning from a car-oriented society to a multimodal society, and for a glimpse at the future of urban life.

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Show Notes:

00:47 – Jason, an Uber investor, introduces Ryan, founder and CEO of the Uber-owned dockless electric bike-share company, JUMP. Ryan talks about the conception and founding of his company.

03:15 – Ryan explains the electric assist feature of JUMP’s bikes and the regulatory benefits of limiting the fleet to Class 1 electric assist (no throttle, the motor only engages while the user is pedaling).

06:36 – Ryan explains the locking mechanism, which enables dockless sharing. He also talks about where users can leave the bikes, which leads to a conversation about cities making more space for electric bike and scooter parking/charging.

11:52 – Thank you to WordPress, which powers the TWiST site and Jason’s personal blog. Go to wordpress.com/twist to get 15 percent off any new plan.

14:51 – Ryan talks about the falling cost of electric bikes and battery packs. He covers the average income for each bike and the costs of operations and maintenance. He explains JUMP’s plug-free charging system. Currently, JUMP has to pick bikes up from drop-off locations and bring them back to a charging station. JUMP is currently expanding incentives for users to bring bikes to a station for charging. He and Jason also discuss the possibility of a standardized charging system, usable by bikes from multiple companies.

19:57 – Jason asks about bike thefts. Ryan says JUMP operates in multiple cities around the world and theft is immaterial to the business. There is no aftermarket for heavily branded and specialized bikes.

21:58 – Ryan talks about JUMP’s relationship with cities and says city governments benefit from JUMP’s data.

22:48 – Ryan talks about the need to scale its fleet, as San Francisco users find no nearby bikes for one-third of app opens. He also talks about people choosing JUMP over short Uber rides.

24:41 – Thanks to our sponsor, Walker Corporate Law, which focuses on serving founders and startups. Visit walkercorporatelaw.com.

26:33 – Jason brings up the Uber acquisition and says bike-sharing is exactly what Uber needs. Ryan says that for JUMP, the sale to Uber will enable rapid global expansion. They discuss the leadership skills of current Uber CEO Dara Khosrowshahi and the legacy of former CEO Travis Kalanick. They also discuss Uber giving its leadership in each city the power to experiment.

31:10 – Jason asks what a government would need to do for JUMP to reach scale in a given city, and what that would look like. Ryan says JUMP would need to track utilization rates but a city like San Francisco might support up to 10k bikes. That would require the reallocation of public space for parking and charging. The city would benefit as JUMP would pay for infrastructure and provide the city with data. Would also reduce congestion.

36:43 – Jason says Uber drivers could be paid to return JUMP bikes to charging stations or to areas where they’re needed. Ryan says Uber already has great tech for demand repositioning. He notes Uber’s multimodal partnerships and says the company provides an excellent alternative to car ownership.

39:49 – Jason asks about JUMP’s city permit fees and talks about how partnerships with transportation startups can be beneficial to cities, providing increased revenue, reduced pollution etc. Ryan says Copenhagen probably has the best bike lanes/bike-only roads.

41:39 – Ryan talks about his time working at the New York City Department of Transportation and the closure of Times Square to create pedestrian plazas. He and Jason talk about the increasing popularity of bikes in New York and San Francisco.

45:38 – Ryan talks about JUMP’s footprint (40 cities in six countries) and future expansion plans. He and Jason talk more about the utilization of public spaces, congestion, the inefficiencies of parking, the long-term trend of making streets friendlier to people, more.

50:06 – Jason and Ryan talk about how autonomous vehicles could change commutes, where people choose to live, etc. Those who can work while traveling to the office might be more likely to live farther away from their offices. Self-driving cars could reduce congestion and enable higher speed limits, possibly enabling sprawl, however, denser cities are likely the better solution.

56:08 – Jason closes the show by saying JUMP represents entrepreneurship at its rawest and best: years of passionately working on an idea without anyone taking much notice, followed by a great outcome.

Brendan Eich — Founder of Brave, Mozilla & Creator of Javascript

Episode 819 of This Week in Startups features a fascinating interview with JavaScript creator, Mozilla co-founder, and now Brave Software Founder & CEO, Brendan EichBrave Software offers a browser with built-in ad and tracker blocking. We dig into the details of Brave’s Basic Attention Token (BAT), the ethics of online advertising, the browser wars, the shady nature of many ICOs, and more.

Join us for an insight-rich conversation between two long-time web insiders.

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Show Notes:

04:39Jason covers Firefox’s deal with Google search (before Chrome launched). The pair discusses the launch and dominance of Chrome.

00:42 — Introducing today’s guest Brendan Eich, the creator of JavaScript, Mozilla co-founder, and co-founder/CEO of Brave Software. Brendan explains the origins of JavaScript.

03:06 — Brendan discusses Brave’s motivation for creating a new browser. He says the current top browsers are essentially owned by advertisers. Brave includes ad-blocking and anti-tracking tech.

08:47 — Brendan talks about Brave’s launch, user experience versus publishers’ ability to advertise, the legality and ethics of ad-blocking, and a new model for publisher revenues.

11:32 — Jason thanks sponsor Asana. Visit asana.com/twist and try it for free.

15:32 — Jason asks about sites that either restrict ad-blocking users or that simply don’t function correctly with ad-blocking browsers. Brendan says Brave is developing machine learning and web crawling to automate exception handling.

16:09 — Brendan explains Brave’s Basic Attention Token. He says Brave will serve to prove the BAT’s value, and hopefully, other browsers will adopt the tech. Brendan says many ad-blockers don’t prevent tracking, and they receive substantial payments to let some ads through.

17:47 — Brendan demonstrates Brave and shows a graphic that details the ads and trackers that load at TMZ.com with other browsers versus what loads when using Brave. Jason and Brendan discuss how some trackers are used to work against publishers and users.

22:49 — Brendan says Brave hopes to launch its own ads, free of trackers, which can be targeted without compromising anonymity (using zero-knowledge proofs).

26:12 — Jason asks about how Brave handles Facebook and third-party tracking, says the Like button was a huge scam to gather publisher data and destroy publishers.

29:22 — Jason thanks sponsor Squarespace, which powers all of LAUNCH’s event sites. Use offer code “twist” to get 10 percent off your first purchase.

32:01 — Jason talks about the shady nature of many ICOs, then asks Brendan about the Ethereum-based Basic Attention Token (BAT). Brendan says Brave’s ICO helped to fund the project and supply users with BAT, which can be used to reward creators, more. Users can also fund their own wallets. He also demonstrates how Brave automatically rewards publishers based on user attention and how users can set budgets and only fund specific sites.

40:23 — Brendan says Brave has 16k publishers and 10k YouTubers on board to collect payments. The pair discusses YouTube’s biased demonetization practices and the effect they have on lower-level creators.

45:02 — Brendan says Brave’s top partner publishers are generating thousands per month from Brave. Jason asks about BAT support at various exchanges and what that could do for Brave. Brendan says Brave is building a long-term platform and BAT is a utility token (though some users are interested in the speculative aspects).

48:35 — Brave claims more than 2.2M monthly active users and expects 5M by fall. Brendan talks about advertising goals at scale.

50:42 — Brendan talks about Brave’s fundraising, the costs of operation, BAT’s value and potential beyond Brave. Jason talks about Mahalo’s virtual currency initiative.

54:34 — Jason and Brendan discuss fraud in advertising, then Brave’s rising profile among large companies.

57:12 — Jason asks why average consumers are finally paying attention to online privacy. Brendan says people aren’t just responding to big stories about data breaches; they’re noticing very specific ad targeting.

58:14 — The pair discusses major companies facing investigations, lawsuits, regulations, etc.

1:01:45 — Jason asks how Brave will know when it has succeeded. Brendan says standardization: when BAT is used by other apps. Standardization also applies to anonymous donations and anonymous ads revenue. Jason agrees that consumers should get some ad revenue for viewing or interacting with ads.

1:03:38 — Jason asks Brendan about Prop 8 and surrounding issues.

News Roundtable: Elon Musk rants, FB Dating, Telegram cancels ICO, CamAnalytica folds

Join us for another News Roundtable episode of This Week in StartupsDave MathewsAustin Smith, and I discuss an action-packed week of big news. Topics include Elon Musk’s earnings conference call, Facebook dating, Jan Koum’s departure, Telegram’s canceled ICO, and more.

Don’t miss the return of “Guess the fake Startup!”

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Timestamps:

01:23Jason introduces TWiST regulars, NewAer founder Dave Mathews and Inside.com President and GM Austin Smith for this news-packed episode.

03:07 – Tesla’s earnings conference call, in which Elon Musk dismissed multiple questions. Jason says Elon doesn’t have to play analysts’ games, and that some questions came from short sellers who are trying to manipulate the stock. Dave discusses robotics in auto manufacturing.

12:36 – Jason thanks sponsor Walker Corporate Law, which provides flat-rate pricing and focuses on founders and startups: walkercorporatelaw.com

13:50 – Guess The Fake Startup returns: Austin describes three dating app startups and Jason and Dave guess which one isn’t real.

  • Delightful.com: Match Group product with Steve Harvey serving as “Chief Love Officer”

  • HODL My Heart: Dating for cryptocurrency and blockchain early adopters

  • Clown Dating: Dating for clowns and clown lovers

27:52 – Jason thanks sponsor Athletic Greens. TWiST fans get 20 free travel packs with first purchase. Visit https://athleticgreens.com/twist

29:39 – Facebook’s f8 conference: Oculus Go, Clear History, and news of a coming dating feature (which punished Match Group stock). Dave notes the awkward timing of announcing the dating feature while the Cambridge Analytica scandal is still in the air. Jason isn’t sure users are concerned about it (Austin agrees), and says Facebook is already functioning as a dating site. He also says Facebook could block Tinder from using Facebook Login and use Instagram and other Facebook properties for dating.

38:19 – Jan Koum leaving Facebook: Dave talks about the passion he shares with Koum: air-cooled Porsches. After discussing Koum’s stated reason for leaving (Facebook’s business practices and weakening WhatsApp security), Dave says a source told him the app’s encryption keys are already compromised. Jason talks about data mingling between Facebook apps and says the company cannot be trusted. He advises founders to disbelieve any promises Facebook makes in an acquisition offer: do not sell to Facebook.

46:11 – Cambridge Analytica shutdown, bankruptcy.

48:28 – Telegram cancels public ICO after raising $1.7B via pre-sale. Jason says this is the kind of thing the SEC needs to investigate immediately. The trio discusses the practical applications of Telegram’s virtual coin and the considerations for ICO investors and LPs.

59:10 – Video of the Week: Puppy rescued from drain by drone with a custom-built crane.

1:03:24 – Scooter-rental bike wars in San Francisco. Jump Bikes, Bird, LimeBike, Spin, etc. The trio covers safety issues, including users riding on the sidewalk rather than in the bike lane. People are also keeping scooters locked up for personal use, removing them from the pool.

The groups also discuss other transportation issues, such as street congestion caused by cars and trucks competing with scooters and foot traffic.

1:20:27 – Jason talks about LAUNCH Festival Sydney and Founder.University.

Productivity for Your Startup: An Action Plan

In episode 816 of This Week in Startups, Mike Ghaffary, Partner at Social Capital, stops by LAUNCH Incubator to give a talk on productivity. He details techniques for reducing cognitive load, improving work proficiency, working almost 100 percent mobile, and more.

Join us for a discussion that addresses the unique challenges founders face in getting things done, as well as the importance of personal time and health.

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Timestamps:

00:48 — Introducing Mike Ghaffary, Partner at Social Capital. Mike lays the groundwork for the day’s talk by detailing the limitations of increasing productivity merely by working more hours.

04:18 — Mike covers his background in education, as a computer scientist, as an entrepreneur, and as an investor.

07:29 — Mike talks about the problem of inbox overload

08:00 — Thanks to our partners at Squarespace Inc., which powers all of LAUNCH’s event sites. Use offer code “twist” for 10 percent off from your first purchase.

10:09 — Mike discusses inbox zero, an email client that motivates the user to get through all messages. Mike says entrepreneurs don’t have to use that system, but they need some sort of system to prevent themselves from getting bogged down with email.

Mike recommends choosing from “The Four Ds” when going through email:

  • Do it (take an action, such as respond)
  • Delegate it
  • Delete it (read and archive)
  • Defer it (if it can’t be done now but requires an action, create a task or event)

14:13 — Mike explains the themes of the talk:

  • Attaining 50/50 proactive/reactive balance
  • Reducing cognitive load
  • There’s no time like the present
  • Be mobile — don’t put off tasks you think of as desktop activities

15:19 — Proactive vs reactive: Mike covers scheduling free time to think, using apps to simplify life.

24:12 — Mike says the most important tool relevant to productivity is a task list. The key feature requirement is syncing between mobile and desktop. He recommends no more than three prioritized tasks per day. Use actionable verbs. Create small tasks with urgency, not broad goals.

33:35 — Mike covers the importance of being able to do everything mobile and provides examples of how to perform tasks on mobile that people generally consider desktop activities.

35:55 — Thanks to partner Rxbar, a whole food protein bar company. Get 25 percent off your first order by visiting https://rxbar.com/twist and entering promo code “twist”

38:55 — Mike returns to discuss mobile productivity, starting with calendar use. He also notes that even spreadsheet work can be done while mobile. He says 99 percent of founder tasks can be completed while mobile. When you run into something that can’t be done mobile, create a task to find a new solution or to handle it later on desktop.

44:40 — Mike explains email bankruptcy: select all inbox emails, label them as “(month name) bankruptcy day” and archive them. They are still available when you have free time to go through them.

46:19 — Mike covers the benefits of using shortcut keys.

Questions:

47:45 — How does budget figure into radical delegation?

51:13 — What do you think about recruiters, cost taken into account?

55:10 — How do you avoid being on your phone non-stop and disconnecting from others?

57:24 — Jason recommends removing unnecessary social and entertainment apps from your mobile device. He also recommends putting the device away after work.

59:10 — Was there an A/B test or success that led you to sending recruiting emails on Friday evenings?

1:01:58 — Can you walk us through your typical Thursday when you were CEO at Eat24?

1:03:13 — Jason and Mike discuss the importance of getting a good night’s sleep and exercise.

01:06:39 — Mike details the best times of day for specific types of activities for maximum productivity.

1:10:08 — Jason concludes the talk by summarizing the goal: making the best use of your time given your company’s stage.

Female Founder University, June 4-6 in SF

Applications for the next Founder.University, taking place on June 4th, 5th and 6th in San Francisco, are now open.

[ Click to Tweet (can edit before sending): https://ctt.ec/v26lm ]

This class is for women entrepreneurs and it’s free to attend.

We are looking for founders with a product in market but pre-Series A.

To apply here for the June 4-6 class:
https://www.founder.university/june

The deadline to apply is MAY 8 (attendees will be informed by May 15).

Additional Founder.University classes in 2018 are as follows:

Please share with any founders you think will be interested.

All the best,
Jason + the LAUNCH team

PS – LAUNCH Festival Sydney has 1,500 founders coming for free for two days on June 19 and 20 and will feature three startup competitions: one for new companies (under a year old), one for crypto startups and one for frontier technologies (i.e., technologies that are not mainstream yet, like robotics, AI and new food technologies). http://launchfestivalsydney.com

PPS – LAUNCH Angel Summit in July is almost filled. This two-day event is for investors with one to 100 early stage investments, and we’re thrilled to announce David Sacks, of Craft Ventures (and previously Zenefits, Yammer, and PayPal) as our first keynote. http://launchangelsummit.com

Howie Liu, Co-Founder & CEO of Airtable

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

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

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Timestamps:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Answering Question’s about The OpenBook Challenge

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

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

Best, @Jason

jason@calacanis.com  

openbook@launch.co

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

Here are the answers:

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

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

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

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

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

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

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

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

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

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

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

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

See above.

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

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

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

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

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

https://www.onavo.com/

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

It could happen.

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

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

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

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

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

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

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

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

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

Andy Rachleff – CEO of Wealthfront & Co-Founder of Benchmark

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

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

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

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Timestamps:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The timeline and frequently asked questions are below.

Best,

Jason Calacanis

Founder, LAUNCH

——————————————–

How will the competition work?

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

The competition will occur in three stages:

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

What are you looking for?

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

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

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

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

Who will make the investment?

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

What will the terms of the investment be?

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

How will you pick the 20 finalists?

Ability to execute.

How will you pick the seven winners?

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

How can we stay up to date on the project?

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

Timeline

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

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

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

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

Startup Tuneup: Pitches from 6 Australian Startups

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

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Timestamps:

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

Pitch: Neuromersive – VR-based brain rehabilitation

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

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

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

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

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

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

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

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

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

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

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

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

Pitch: Sky Grow – Autonomous tree-planting robots

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

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

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

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

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

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

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

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

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

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

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

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

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

Pitch: Udrew – DIY building plans and permit approvals

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

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

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

Jason picks his Top Three:

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

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

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

Jason speaks a bit about LAUNCH Festival Sydney

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

This Week In Startups

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

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Timestamps

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

Mark Zuckerberg’s testimony before Congress:

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

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

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

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

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

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

Trump versus Amazon

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

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

YouTube Shooting:

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

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

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

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

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

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

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

Iain says next week will be big for security news.

Brian explains how Clipisode works.

Jason talks about LAUNCH Festival Sydney.

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

This Week In Startups

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

Listen on iTunes



Timestamps:

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

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

5:43 What does the term digital gold mean?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Defending self-driving cars in the face of tragedy

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

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

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

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

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

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

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

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

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

Continue reading Defending self-driving cars in the face of tragedy

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

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

I took a moment to think it through.

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

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

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

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

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

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

  1. This Will End Badly For Most

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

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

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

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

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

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

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

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

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

Friends,

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

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

Hope to see you there.

Best,

@jason

MIAMI ITINERARY: 1/30 & 1/31

TUESDAY 1/30:

12PM-2PM Private Lunch with Gramercy

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

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

WEDNESDAY 1/31:

10:00AM: Brunch with raffle winners.

ANGEL Book Tour Dates (frequently updated)

The Seed Slowdown

My pal Fred Wilson wrote about the “Seed Slowdown” today. The numbers show two clear trends:

1. 2015 was the peak of angel investing in technology startups in terms of dollars and number of deals.

2. 2017 is crashing in terms of the number of deals closed, with dollar amounts off significantly — but not as much.  

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Fred points out some of the reasons for the boom and bust, and I’m in agreement and expand a bit on what happened — since I lived it and recently wrote about it in my book (angelthebook.com).

There were two major trends contributing to the 2014/2015 boom:  

1. Facebook created a crazy number of new investors (e.g., Dave Morin, TWIST #216 and Chamath Palihapitiya TWIST #238 & #776), who were added to the legions of Google angels running around town (e.g., Andrea Zureck, ANGEL #3).

2. Coordinated seed efforts: These started after Web 2.0 (the 2002-2006 era) and created a professional class of early-stage investors. These efforts include stuff I was working on like TechCrunch50/LAUNCH Festival, Sequoia Scouts & the Open Angel Forum (where Uber Pitched), and notably, Naval’s work on AngelList (TWIST #244) and Paul Graham’s scaling of YCombinator to mind-blowing heights (TWIST #421).

The reason for the decline? I would sum that up in 3 points:

a. Indigestion
When you break into the 30, 40 or 50 angel investments like Matt Brezina (ANGEL #10), Joanne Wilson (TWIST #358 & Fred’s better half) and I have, you need time to digest these deals. As I describe in the book, your startups will start coming back to you 9-12 months after you give them money, and most will not be able to clear market with other investors. This leads to dozens of founders needing your help to raise funds or come to terms with the death of their startups. It’s exhausting, and most angels take breaks investing.

b. Startups Staying Private
By now everyone knows that startups can stay private indefinitely, and this is a bad, bad trend for the entire ecosystem — but more often than not it’s worst for the company, which loses the discipline and the maturation that going public cause. My pal Bill Gurley (TWIST #722), considered by many to be the best VC on the planet right now, outlined this in his infrequently– but poignantly — updated blog, “above the crowd” (he’s tall, he’s a brilliant strategist): http://abovethecrowd.com/2016/04/21/on-the-road-to-recap/  

c. Angels Moving Downstream
Many angel investors learn their craft and get picked up by major firms. Cyan Banister was a frequent guest at the Open Angel Forum, and invested in Uber and Thumbtack at the events. Over the years she became one of the most respected investors in the world and Brian Singerman at Founders Fund recruited her. Joining a big firm is a better life for an angel investor because, well, you do fewer deals at larger dollar amounts. This leads to the opposite of the indigestion in point (a) above! Fewer, more meaningful bets is simply an easier life than being an angel, which at times feels like being a hospice worker — which it obviously isn’t! In fact, that’s a big part of the job of being a great angel investor: explaining to distraught founders that this isn’t life and death.

As Fred points out, being an early-stage investor is hard and some people are leaving to do later stage investing which means…it’s a huge opportunity!

Continue reading The Seed Slowdown

ANGEL media hits so far… thank you.

Wanted to say thank you to everyone who has had me on their podcast/networks/etc. to discuss my new book ANGEL.

Podcast/Radio: Guest Appearances on Angel
2CentDad: Interview by Mike Sudyk
Bloomberg Markets: Interview by Carol Massar and Cory Johnson
Educate Yourself: Interview by Ryan Carson
Forbes: Interview by Steven Bertoni
The Full Ratchet: Interview by Nick Moran
Inside Outside Innovation: Interview by Brian Ardinger and Josh Berry
Intercom: Interview by Des Traynor
The James Altucher Show: Interview by James Altucher
KindredCast: Interview by Alex Michael
The Learning Leader: Interview by Ryan Hawk
The Matt Report: Interview by Matt Medieros
The Meb Faber Show: Interview by Meb Faber
Mixergy: Interview by Andrew Werner
Success! How I Did It: Interview by Alyson Shontell
The Twenty Minute VC: Interview by Harry Stebbings

Media Hits

7/18/17: Cheddar TV (1 hour 35 min)
7/19/17: CNBC Squawk Alley
7/23/17: Salon
7/25/17: Bold TV
7/26/17: Fort Knoxx
8/25/17: Live Talks LA

If you would like to have me on your podcast to talk about the book, tech, angel investing and life, email me [ jason at calacanis.com ]

Should everyone be an angel investor? + some upcoming events

The biggest question I was asked about angel investing during my New York book tour was, “Can anyone be an angel investor?”

Today I want to try and answer that question and let you know about some upcoming events.

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First, some upcoming events:

This Tuesday, August 15th, I will be in Los Angeles speaking at Google in Venice (Google employees only) from 11:30AM-1:00PM.

Tuesday night, August 15th, I will be speaking at a public event, “Live Talks Los Angeles: An Evening with Jason Calacanis” at 8:00PM, which you can register for here: http://bit.ly/eveningjcal

I’ll be going to Stockholm, New York and Los Angeles in the fall. Frequently updated schedule here: angelthebook.com/tour

Second, “Can/Should everyone angel invest?”

I wrote the book “Angel” in order to detail the risks involved in angel investing, and share strategies that might increase your odds at having a positive outcome if you choose to become an angel.

[ ANGEL book reviews: http://bit.ly/5starangel ]

There is one important rub, however, here in the United States: traditionally private companies only accept investment from “accredited investors.”

Accredited investors are basically rich people, who have a lot of money in the bank or have large, well-documented salaries. Non-accredited investors are the other ~95% of Americans (of which I was one for 75% of my life).

You can read more about this at the SEC’s website here: http://bit.ly/secinvestor

However, last year the SEC introduced a new class of investment commonly called “equity crowdfunding.” This is a way for non-accredited investors to invest in private companies. It’s a bit complicated, and it’s only a year old, but I think it’s a very positive development.

Continue reading Should everyone be an angel investor? + some upcoming events

ANGEL the Book Tour

Friends,

My book “Angel: How to Invest in Technology Startups” is out and I can’t wait to hear what you think about it. You can order ANGEL here, and if you like it, please write a nice review on Amazon!

The book tour is in full swing, below are past & upcoming events. If you’re interested in hosting a book signing or meet-up, more info is here. Hope to see you on the road.

best,
@jason

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Upcoming Events
(updated frequently here)

Tuesday, August 15, 2017

Google Talk LA: 11:30AM-1:00 PM
Private Event

Live Talks LA: An Evening with Jason Calacanis: 8:00PM
Purchase Tickets Here

Monday, September 4 – Friday, September 8, 2017

Stockholm and Norway – Event details coming soon!

Monday, September 25, 2017

Speaker and Book Signing at TechStyle: 11:45AM-1:30PM
800 Apollo Street, El Segundo, CA

Fireside Chat, Q&A, Book Signing at Mind & Mill in Riverside, CA: 5:30-8:30 PM
Details Here

Previous Events

Thursday, July 27, 2017

Seed Invest – Fireside Chat: Jason and Ryan Feit at Silicon Valley Bank, NY: 12:30 PM

Seed Invest – Q&A and Book Signing at Silicon Valley Bank, NY: 3:00 PM

Wednesday, July 26, 2017

Dim Sum with Jason at The Golden Unicorn, NY: 6:30 PM and 8:30 PM

Tuesday, July 25, 2017

Fireside chat: Jason and David Sorin at Montclair University, NJ: 6:00-9:00 PM

Monday, July 24, 2017

Book Signing at Barnes and Noble Tribeca, NY: 6:00-8:00 PM

Wednesday, July 19, 2017

Fireside chat: Jason and James Altucher at Squarespace HQ, NY: 6:00-9:00 PM

Tuesday, July 18, 2017

Harvard Business School Event, NY: In Conversation w/ Jason and John Reese: 6:00-8:30 PM

Wednesday, June 28, 2017

Bloomberg Beta Future Founders: Fireside Chat: Jason and James Cham: 6:00-8:00 PM

Tuesday, June 27, 2017

Fireside Chat: Jason and Michael Todasco at Paypal: 1:00-2:00 PM

Fireside Chat: Jason and Asra Nadeem at Draper University: 6:00-9:00 PM

Monday, June 20, 2017

Keynote Speaker at San Diego Startup Week with special guest James Heller (Wrapify): 7:30-10:30 PM