Jason Calacanis– On Poker and the Art of Angel Investing

Jason Calacanis | In episode 80 of Light Culture Podcast, Paper Magazine founder David Hershkovits talks with an angel investor specializing in tech startups like Uber and Robinhood. 

Jason Calacanis likes to play high stakes Poker and bet on tech startups like Uber when it was little more than a penny stock. Perhaps best known for Launch, a meetup and schmoozefest for aspiring entrepreneurs, he’s also hosts the podcast This Week In Startups, is a regular on Squawk Box, an intimate of tech moguls, an adversary of Mark Zuckerberg and an all around gadfly. 


Read Transcript


David: [00:00:00] 

Jason Calacanis is a gambler. He likes to play high stakes Poker and bet on tech startups. As you might expect, he’s had good days and bad days, but mostly good – especially in the tech scene, where he is known as a brash but savvy investor, who’s made millions of dollars putting his money down on Uber, for example, when it was little more than a penny stock. As transparent as they come, Calacanis has been sharing his wisdom and acumen on his podcast, This Week In Startups, talking with up and coming entrepreneurs and giving them useful advice on what to do next. Then there’s the All In Podcast with poker buddies, who also happen to be major startup success stories. He is perhaps best known for Launch, a meetup and schmoozefest for aspiring entrepreneurs who get a chance to pitch their products to a room full of potential investors. When we met in the ’90s, he was making the downtown night life and party scene. Calacanis, I quickly learned, knew more about the burgeoning tech world than anyone else I’d ever met. So I asked him to write a column for Paper. Ever the quick learner, he was soon launching his own publication, the Silicon Alley Reporter. The bubble grew then burst and Jason came out ahead of the game, selling weblogs to AOL for twenty-five million. Fast forward, here he is, a regular on Squawk Box, an intimate of tech moguls, an adversary of Zuckerberg, and an all around gadfly. So welcome, Jason.


Jason: [00:01:47] 

David, thank you for having me. And, that was a great walk down memory lane. I still remember meeting you back in the day in the basement of Barney’s.


David: [00:01:56] 

Oh shit, you’re right. I remember that too.


Jason: [00:01:59] 

And I was absolutely, as a twenty-four-year-old, in awe that I had met the founder of Paper Magazine, which was of course a bible for anybody who was trying to make it in the world and cared about anything hip or interesting in New York City during, what an amazing period, the ’90s. 


David: [00:02:21] 

Yeah, they don’t get enough respect. Given everyone talks about the ’80s, I think more and more the ’90s are emerging as something unique on its own.


Jason: [00:02:34] 

Yeah, the ’80s were interesting. Cause I was born in 1970, so I was ten-years-old in 1980. And I remember looking out at this world of Manhattan. My dad would take me there from Brooklyn, and we’d come over the Brooklyn Bridge or the Battery Tunnel if he had a little bit of money, he could pay the two bucks to get through the tunnel and save a half hour. But usually it was one of the bridges on the East River. And I was just in awe of Manhattan and the energy and- and everything going on. And all these different neighborhoods. My dad would take me to the Village art show or, we’d go some funky joint on the Lower East Side, or we would be uptown in Lincoln Center and going to see a show on Broadway. Just any number of possibilities. And it really was distinct. Brooklyn was a different thing, and you’re trying to get out of Brooklyn and get into Manhattan. So for me to have my first writing gig at Paper, and writing about Internet companies – And really at that time, DVDs and online services, cause this was right before the Internet. I remember coming to your office in ’95 when you had that amazing little corner office.


David: [00:03:36] 



Jason: [00:03:36] 

On Broadway and-


David: [00:03:37] 

Spring and Broadway.


Jason: [00:03:38] 

Spring and Broadway.


David: [00:03:38] 

Which is now like Nike central.


Jason: [00:03:41] 



David: [00:03:41] 

They tore it down and they built a headquarters there.


Jason: [00:03:44] 

They did. Oh wow. Like anything else in New York, torn down and rebuilt.


Jason: [00:03:48] 

And I remember sitting there and just couldn’t believe that you had that office that looked out there. And I said, “This is what I want to have. Somebody I want to have a magazine and be powerful, and people come to my office.” And I was just in awe of it all. And you gave me a shot, and I’ll never forget that. I always carry that with me, David. When young people email me and they have energy, but maybe they’re not refined. Like I couldn’t spell, I didn’t know how to put a column in. But, Christine Muhlke.


Jason: [00:04:13]  

Muhlke used to edit my stuff, and she’d be like, “My god, you don’t even know how to spell, and here’s how commas work. [laughter] Just give it to me, I’ll fix it.” God bless her. She would fix it, and she’s like, “There’s some good stuff in here though. I’m really interested.” And she’d have questions for me. And I really appreciate you giving that shot, right.


David: [00:04:28] 



Jason: [00:04:28] 

And- every time I asked you for advice on how magazines worked. And that really was the platform back then. A magazine was a startup. That was one of the few startups you could have. There was a zine slash magazine, and you started kind of ziney and went into glossy. You could have a restaurant or a bar or a performance art space. That was another kind of startup in that day. Obviously fashion, hip hop, started to emerge. And I think that’s why the ’90s, to me, were really fascinating. And I really attribute a lot of it to being this computer nerd inside of Paper Magazine, where I had no business – with my khaki pants and my penny loafers, just like a preppy kid from Brooklyn hanging out with you. And I always tell people stories of you introducing me to Bjork or taking me to a Chemical Brothers or an Orbital show at the Roxy. You don’t remember these moments when you would let me come into the VIP as a twenty-four-year-old kid, and introduce me to Bjork or, you know, whoever it was. Jim Jarmusch one time. You and I sat with Jim Jarmusch and talked about movies. And I’m sitting there like, “I’m sitting with David Hershkovits and Jim Jarmusch.” And just being near the locus of the energy and the art, and that’s where the ’90s- Digital film combined with the Internet, combined with hip hop, combined with fashion, all of that,


David: [00:05:49] 

Combined with money.


Jason: [00:05:51] 

Combined with money from Wall Street, just splashing everywhere. And it just made for a really exciting time, when you felt like every night in New York City was opening night for something. There was something launching tonight, there was something happening in the ’90s. The energy was electric, man.


David: [00:06:09] 

So much.


Jason: [00:06:09] 

And it didn’t matter if it was a fucking Monday or a Tuesday. In fact, if it was a Sunday or a Monday it was even better, because the working zhlubs weren’t gonna show up at Bungalow, Eight, or Apartment-


David: [00:06:18] 

No, totally.


Jason: [00:06:19] 

Or Florent, or wherever the heck we were hanging out. Mars.


David: [00:06:22] 

Yeah, we used to run pages and pages of listings for each night of the week of all the various parties at the different clubs. Dozens for each night.


Jason: [00:06:31] 

Oh, so good.


David: [00:06:32] 

But, you know, baby, look at us now, you know?


Jason: [00:06:35] 

Look at us now. Yeah.


David: [00:06:36] 

It’s changed quite a bit. You know, I started the introduction by calling you a gambler.


Jason: [00:06:41] 

That’s true.


David: [00:06:41] 

And so I’d like to, you know, ask you, what have you learned from Poker that has helped you in business?


Jason: [00:06:47] 

It’s such a great question. You know, at the Poker table anybody can sit down with money and play the game. And that is unlike a lot of other things in the world, where you need to have access. If you wanted to play in a sports league, you can’t just show up at Madison Square Garden and jump on the court. Whereas with Poker, the more dead money, the more people learning, the better it is for the people who have moved up. And when you look at Poker, as opposed to Chess – I started playing Chess. I was watching Queen’s Gambit, and I was like, “Well, let me see if I can get into Chess again.” [laughter] Started playing Chess again, and it was a lot of fun on Chess dot com. 


David: [00:07:24] 

Yeah, I’m on there too.


Jason: [00:07:25] 

Yeah? Oh, maybe we have to play.


Jason: [00:07:27] 

So I’ve been trying different types of games. And a really interesting, game, obviously. But you know- It’s a finite game. There’s only a certain number of possibilities, which is why a computer can brute force it, right, and win so easily. And in fact, the app now just tells you when you make mistakes. It analyzes every game in ten seconds. Tell you, “Here’s your blunders, here’s your mistakes, get better.” With Poker, you can’t do that. Why? Well because a certain number of the pieces, the cards, in Poker are not turned over. There’s no transparency. And then you add lying to it. So imagine if, you could say, I’m moving this piece, but you don’t know if it’s a pawn or a king, so you don’t know how it’s going to make its next move, and then you add this four or five, you know, streets of betting. You know, you have pre-flop, the flop, the turn, and the river in Texas Hold ‘Em. [laughter] And then people are re-raising each other. So now you’ve added this element of deception to it, intimidation, trapping people. In other words, it’s the perfect proving ground for how actually a business works in the world. And I think that anybody who likes some combination of strategy, math, intimidation, deception is gonna really be drawn to it. I think it’s one of the reasons why, I think, women should play more Poker. Because I think in terms of gender, or at least when we were growing up, I’m not sure for this generation, which seems to be less gender-based. But I know when I was growing up as a Gen-Xer like these things were very separate. And I notice a lot of female founders, when they start to play Poker, they really get into it for the strategy of it, the intimidation, the deception, the aggressiveness. It’s a really cool thing. So it’s one of the things I’m working with my daughters right now. Got two of them addicted to Chess, and then I’m gonna try to get a Poker game to break out amongst my three daughters at some point.


David: [00:09:08] 

Yeah, you gotta give them a lot of money, man, to play with.


Jason: [00:09:12] 

Exactly. But it’s also nice because you learn at very low stakes, David.


David: [00:09:15] 



Jason: [00:09:15] 

So when I was starting, you remember there was that movie, Molly’s Game.


David: [00:09:20] 



Jason: [00:09:20] 

And Molly would invite me to games all the time in LA at the Four Seasons. And she’d be like, “Oh, you know, Toby’s here, Leo’s here. They really want to see you.” [laughter] And I would say to her like-


David: [00:09:30] 

Like, uh-oh.


Jason: [00:09:30] 

They want to see me lose fifty grand. And they were playing for big numbers like that. And I was playing in Kevin Pollack’s home game. Me, Kevin, and he would have a rotating list of actors, writers, tech people, whatever, and we’d be buying in for two hundred bucks, five hundred bucks, playing two dollar, four dol- two dollar, five dollar, one dollar, or two dollar, whatever it was. And, you know, the most you could lose is a thousand or two thousand, it wasn’t like some big high stakes Poker game. And so I learned and it really built a lot of comradery too, especially if you play. So I kind of feel like it’s the modern day golf. There’s a social aspect to it, there’s a strategy aspect to it. And it does relate in some ways to what I do in my day job, and in many ways it does not.


David: [00:10:10] 

Right. Well one of the ways is luck, I suppose.


Jason: [00:10:13] 



David: [00:10:13] 

It’s a big factor in both of those games that have to do with anything that you might be able to bring to the game on your own.


Jason: [00:10:22] 

Right. There is a component of pure luck. So I could have one deck in the card that saves me, and we could put all of our money in, and there could be literally a hundred thousand dollars in the pot, and you could have done everything right. And there’s only forty cards left in the deck. And I hit the one I need, which is a, roughly just above two percent chance of me hitting it. And you lose all your money. So one of the great painful aspects to Poker is you could do everything right and still, in the end, lose because of a random event. And, you know, that is part of the fun of it is you have to calculate, “Okay, I have a thirty percent chance, but what could I win?” Right? And so this concept of implied odds is very important. Like if I stick around and I do hit my flush, right, and I hit a spade on the turn and a spade on the river to make this flush. You know, I have to hit two cards in a row that are roughly a twenty-five percent chance. So you get the idea of the math. Maybe I got a six or seven percent chance of hitting this. But if I do, what will I win? And- and that’s where things get really interesting. Or if I have a set and the board pairs, and somebody else has that flush, oh my god, could I win their entire stack? And that is actually where Poker becomes analogous to startup investing. If most startups I invest in, seventy-eighty percent go to zero, and then, you know, one or two out of the ten don’t result in anything major. But one out of fifty pays off two thousand to one. You know, which is what an Uber bet paid off, two-three thousand to one. You know, one dollar turns into three. Or four dollars. This is a big deal. Or Comm, you know, a two or three hundred X. So when you start to get into those kinds of numbers, it makes up for a lot of mistakes. And so what I tell people is like, the Poker game I play in, imagine you lost eighty hands, you pushed on nineteen of them, and then one of them paid off five hundred to one. It takes weird psychology to get your brain and your brain chemistry into long odds. But I think being a journalist and watching long odds succeed all the time, and watching my friends succeed against all odds and hit these outlier results, it rewired my brain in a way and my brain chemistry, to be like, “I’m just a guy who bets on the fifty to one horse.” You know, all the time and has it work out some of the time. It’s a living. I’ll leave it at that. 


David: [00:12:47] 

But you’ve also lost big, and I know there’s, one on Texas Hold ‘Em, was it? Still on YouTube. Where you lost a huge pot. Was it like a hundred thousand or something?


Jason: [00:13:02] 

I’ve been involved in a hundred hundred thousand dollar pots in my life. I think prior to this year, I was net up in Poker. This year, I’m net down lifetime. [laughter] Uh…


David: [00:13:11] 

Oh yeah. Covid really affected you, right? [laughs]


Jason: [00:13:12] 

Because I started playing online. And I think the online games are rigged.


David: [00:13:14] 

Oh, online is dangerous. That’s really addicting.


Jason: [00:13:16] 

I think I got suckered, I’ll be honest. But, you know, lesson learned. I’m not an online player. And so I stopped playing online. It’s nothing, you know, anywhere near, a fraction of a percentage point of my net worth. But it’s still frustrating to lose. And I don’t like losing, and so it’s got me pretty tilted. I think that’s something you want to keep this desire to win, desire to succeed in producing something in the world. And I know Poker is but a game, but in that moment you really do want to try to win, right? And I like the idea of people trying to build things in the world.


Jason: [00:13:51] 

Creative things, and to actually win and succeed. It’s almost weird in 2021 to say you want to see people win and succeed, the reaction from people is generally, “At what cost? And who lost?” You won, that means everybody else lost.


David: [00:14:07] 

Somebody lost, right.


Jason: [00:14:10] 

And then we look at just the state of humanity in the world, with the exception of Democracy which hasn’t been growing as fast as it should. We actually stalled and went down a tick. Aside from Democracy, everything else is going incredibly in the humanities right direction, despite the fact that in our country we feel so divisive and angry at each other for what other people have. I think a lot of this phenomenon might have to do a little bit with social media, might have to do with people’s-


David: [00:14:41] 

You think? [laughs]


Jason: [00:14:42] 

Yeah. Just a wee bit. You know, listen, I’m rich and I feel it, you know? You knew me when I was broke and was taking the subway just to go to a party, couldn’t get in a cab, god- You know, when I open Instagram and I see people in Tulum or I see people at these different things, I start to be like, “I’m a goddamn loser.” I’m like, wait a second, I’m not a loser. Why do I feel like one? It’s like, okay, I get it. Yes. You didn’t post-


David: [00:15:09] 

Well you like to work hard though.


Jason: [00:15:11] 



David: [00:15:12] 

I was just gonna say, you know, the hustle and hard work is very much a part of who you are as well.


Jason: [00:15:18] 



David: [00:15:18] 

As you know, it says startup investor, it sounds pretty easy, you have money, you listen to people, you pick a good idea that you hope will work out. But I’m sure there’s a lot more to it. You’ve got so many different projects going on. You know, I’m sure you’re booked, you know, throughout the day and night.


Jason: [00:15:37] 

Yeah, you’d think. There’s a secret. When you’re running a business, you’re responsible for everything. You know that from the magazine. Whether it’s an upset advertiser or the printer screwing up a color and now the person’s cover is screwed up and they’re upset, and their publicist is upset. It’s just one thing after the other. Pick the business that we’ve talked about, the buck stops at the founder’s, CEO’s desk. And what I do in investing, actually, it’s quite delightful, I’ll be totally honest. In that I place bets, but I’m not actually responsible for executing. I’m there as a guide, I’m there as a warm ear, I’m there to provide connections or, you know, there were seminal moments in a startup where things get screwed up. I’ve kind of made my brand as when things go wrong, you know, I can talk a founder through it or help them maybe come up with a strategy, or just even be there for them. When Travis and Uber were going through a real brouhaha, uh, if you remember when it was snowing one time, surge pricing made a thirty dollar ride three hundred. And people were like, “Uber’s predatory.” And I was like, they’re aggressive but they’re not predatory. What they’re trying to do is give the driver an incentive to leave their house in the snow. And we all know when it snows in New York, there’s no taxis. The taxi doesn’t get any economic incentive to go crash their car to drive five miles an hour, and to have to clean it and have everybody angry at them. It’s just a complete waste of time for a taxi driver to go out on a snowy day. But Uber drivers, they would put snow tires on their cars, they would have chains ready to go, and they would take on that risk and know that they were gonna go and do one-fifth the number of rides because they were gonna get paid five times the amount for those rides. And so it was about having availability. And having availability in a pinch was Uber’s idea of what would be more important. We’d rather have rides available than cap the fees. If you want to go travel during the summer to Italy, those planes fill up and the hotels fill up, and you gotta make your reservation early. 


David: [00:17:53] 

That’s a fair point.


Jason: [00:17:54] 

When talking to Travis about that specific situation, he explained it to me. I was like, “You know, it makes total sense the way you explained it to me. I wonder if we could write blog posts with a couple of graphs and charts that explain this?” And sure enough, they did that and they released it for New Years’ Eve where they said, “Hey, here’s how to not get caught in a surge.” Leave early, here’s why we do surge pricing. Or otherwise who’s gonna go out on New Years’ Eve and drive people around when they puke in your cars and there’s car accidents? Anyway, long story short, my job is pretty easy compared to running a company, I’ll be totally honest. And I have outsourced everything I don’t like to do. So lawyers, accountants, you know, research, other stuff that just is super time consuming. I have twelve people on the investment and the podcast who just do everything. And then I just meet with the top founders and just make the investment decision, and everybody else does the diligence, the work, they talk to the customers. So I’ve tried to craft my life, now that I’m fifty-


David: [00:18:48] 



Jason: [00:18:49] 

I know it’s crazy.


David: [00:18:51] 

I tried to make you sound like a hard worker, man, and you’re ruining it for me.


Jason: [00:18:54] 

No. No. Not as hard as I used to be. I’ll be totally honest. I don’t work half as much and, uh, you know- [laughs]


Have to make more time for kids.


David: [00:19:04] 

Yeah. That matters quite a bit. But you know, the more successful you are, the less you work. You know, given that hypothesis to some extent, correct? 


Jason: [00:19:14] 

Probably directionally correct.


David: [00:19:14] 

You know, one of the issues today is about people paying the just amount of taxes. Billionaires, corporations, others.


Jason: [00:19:23] 



David: [00:19:23] 

And since you’re of that class to a certain extent, maybe not a billionaire yet, I don’t know.


Jason: [00:19:31] 

Not yet. No. No Knicks for me yet. No jet.


David: [00:19:31] 

Not yet. Okay. Working on it. So how do you feel about that? Do you think that that’s a fair thing?


Jason: [00:19:36] 

I think we have to look at each issue individually. Corporations are clearly not paying taxes to the extent they should. That’s just super obvious. And so in that case, there’s just gotta be some minimum tax that they pay and we just have to clean up the tax law, which requires politicians to stand up to these big special interests, and it’s really hard to do. But clearly, you know, Amazon or, the years Apple or Google didn’t pay any taxes, you’re starting to see people say, “You know what, these regulations, there’s gotta be some minimum.” So I think a minimum tax threshold for companies would be a smart move. And then when it comes to individuals and society, I think simplifying the tax code would also be a good idea. 


David: [00:20:24] 

Good luck with that. It’s like a million pages long and…


Jason: [00:20:28] 

I know. They definitely have to simplify it. And then some things are so overreaching that I think they would drive people to change their behavior. And so what I try to look at is how are we treating the people who are coming up, and what’s the minimum they make? As opposed to trying to cap the top earners. I think that’s gonna be very hard to do, because the scale of these companies is getting global. So I think that’s pretty hard to do. But a minimum on corporate taxes would be an easy thing to levy. And then if you were to look at minimum wage, there was this big question of if you raised the minimum wage, would it actually kill jobs? And it will kill certain jobs, right? Like we saw it in New York with cashiers and people working at the registers at fast food restaurants. They demanded fifteen dollars, and then Panera Bread or whoever says, “You know what? That company that had the iPads and you could order on the iPads, maybe it’s time we try that again, because this doesn’t make any sense.” Right? We can’t have somebody at the reception desk taking orders for fifteen bucks an hour. And so they changed it.


David: [00:21:31] 

Right. But that’s inevitable anyway. I mean, that’s just a matter of time.


Jason: [00:21:34] 



David: [00:21:34] 

When that would happen.


Jason: [00:21:36] 

Right. But it does force people to embrace technology quicker. So I don’t think McDonalds would have done these ordering kiosks, et cetera, if they hadn’t been pushed to a fifty percent raise.


David: [00:21:43] 

Incrementally. Incrementally.


Jason: [00:21:46] 

So it’s on the margins. But what they found in Seattle and other places where they aggressively moved to fifteen dollars an hour is that the restaurants did better. And it turned out people who were making more working in restaurants and other places, and had a living wage, they spent more money. I’ve made minimum wage in my life. I’ve made double minimum wage, triple minimum wage. I went through that whole process. And when you’re making minimum wage, do you save any money? Of course not. You’re just getting by. So all it does is put more, what’s called monetary velocity into the economy, which is good for everybody. If a waiter or a bartender goes from ten to fifteen dollars an hour, fifteen to twenty, they’re not saving that money and putting it into a bond and never touching it. They’re gonna go spend it on something. So that’s good. And so I think that would be a very easy concession for America to make. And countries like Australia have done it, they have a very high minimum wage. Norway has done it. And I think part of this is the feeling of unfairness. Like it feels unfair. Maybe more than it is unfair, right? And that is valid. If people feel like they’re being treated unfairly, and they don’t have the American dream, that actually is important. We need to make everybody buy into the American dream. That anybody can move up if they want to, but also people can make a living if they need to. Both of those things can occur. I think decoupling healthcare, um, we either have to have a free market for healthcare where people pay for their healthcare, and they’re customers, so they actually do bargain hunting and they pick where they’re gonna do their knee surgery or, who’s gonna be their dentist based on the cost. Or we need to have it be paid for by the government and take it away from businesses. How much agita did you have running Paper Magazine and dealing with healthcare? You know, at what point does this person get healthcare-


David: [00:23:34] 

It’s expensive.


Jason: [00:23:35] 

Or how much does it cost? And then every year, healthcare was your number, you know, three expenses.


David: [00:23:40] 



Jason: [00:23:40] 

After rent and salaries, and maybe printing the magazine, right? The fourth thing was healthcare. And it just got bigger and bigger every year. And then you have this perverse, weird thing, right, David? When you hire somebody, they have a family, they can’t leave the company cause they need healthcare. And it might not be a small company, it might be a big company. So then you have people not leaving jobs to go to other jobs, which is bad for the economy. People should be able to move jobs quickly if they find a better opportunity. Or move cities if they find a better opportunity. But now people at the bottom are so constrained because of healthcare and the cost of moving – There are jobs in other parts of the country, but people don’t even have enough money to move to those other parts of the country. So we really need to work on this like basic amount of money people make, and I think that is the easiest, quickest win. You have to be a true scumbag to be fighting against an extra dollar or two an hour.


David: [00:24:35] 

There’s a couple of people out there like that. You just called a lot of people scumbags.


Jason: [00:24:38] 

McDonalds was actually-


David: [00:24:39] 

You called the Republican Party, uh, you know- [laughs]


Jason: [00:24:43] 

Some Republicans are in favor of it actually. The Republican Party really needs to expand their base, right? They can’t be a bunch of like- What- what’s gotten them to here is not gonna get them there, given the demographic shift in the country. Championing minimum wage would be the most brilliant move they could ever do, because it would expand their base, right? 


Jason: [00:25:08] 

It’s such a lay-up for them. They’re so dumb if they don’t take it.


David: [00:25:10] 

They don’t want those people in their base. So it doesn’t really work well. One of the things that I hear quite a bit, when it comes to startups and, you know, presenting to investors is does it scale?


Jason: [00:25:23] 



David: [00:25:23] 

That seems to be the number one question.


Jason: [00:25:25] 



David: [00:25:25] 

And the idea of scale keeps on scaling itself, right? So it’s not a million or ten, it just keeps growing.


Jason: [00:25:34] 



David: [00:25:34] 

With the idea, what’s going on right now. Do you think there’s room for a niche for today’s investors? For creating products that serve a community, it has to have obviously some scale. But does it have to go compared to Facebook or Twitter or whatever?


Jason: [00:25:53] 

Yeah. It depends. It’s a great question. I get it a lot. There are some businesses that should not be propelled by venture capital. Venture capital as an asset class has a lot of zeroes, right? You have a lot of companies go to zero, and then the small number that hit outlier success pay for the losses. So in portfolio construction, you’re basically gonna have, thirty companies and two of them are gonna pay back the funds. So you raise a three hundred million dollar fund as a venture capital fund, you’re expected to give back nine hundred million. You invest in thirty companies, ten million dollars each. One of them returns ten times your money or thirty times your money. If one of them that you invested ten million in returns thirty times your money, you’ve paid for your portfolio. And if two of them do, now you’ve doubled the money. Well doubling would have occurred on Wall Street, so you kind of gotta triple. And so that’s where the game becomes really hard. The VCs don’t want to waste a single bullet, if they know the company cannot grow to be thirty, fifty, a hundred times the value after they invested. And so for niche things, content falls into this, restaurants fall into this, consumer packaged good typically falls into this, it just doesn’t make sense to waste one of the bets you’re gonna place on a bet that doesn’t pay more than five or ten to one in the best case scenario. But there are alternative funding sources now, like equity crowdfunding, sites like Republic Seed Invest are allowing people to put small amounts of money. And then there are funds that are designed with a different return profile, and we’re starting to see that. Some people are starting funds, and their idea of a positive return is, “Okay, yeah, we want to return people more money than they invested. But we really want to take carbon out of the atmosphere.” So my friend, Chris Sacca, who did very well with Uber, he put in ten times as much money as I did into Uber, so he had ten times the returns. He is doing Lower Carbon Now is the name of his fund. Instead of Lower Case Capital, where he was investing in startups, now he’s only investing in carbon. Given that it’s probably a good investment opportunity, but maybe not as good as just being agnostic, but that’s what he wants to do with his next funds. So we’re seeing that more and more. And people are making funds to invest in typically under-represented groups of founders, NGOs that are under represented, different countries, different cities, different States. So I think that there’s gonna be more purpose-driven capital, and people are starting to look at, “Well my money’s sitting in this bank account and what is it doing? I don’t- I don’t be in Marlboro or whatever, you know, company that I don’t believe in. I want to move my money out of that and put it into some other company. Or some other concerns to-” You know, all of that environmental and cause-based capital is becoming a real thing. And it’s really a paradigm shift. If you look at the Boomers, they really cared about their 401ks and their retirements. And then Gen X, we kind of were like half purpose-driven and then half narcissists who wanted to build something and kind of take over. And then you look at Millennials and, really, Gen Z, they are purpose-driven. They will not go to work if they disagree with the mission of the company. And I think Gen Xers, we wanted to start our own companies but we would work for the man if we had to. And Boomers obviously work for the man, they were the man. Now we’re seeing this great generational shift, and that’s why it’s hard to hire a journalist today. If you hire a journalist from that group, they want to do advocacy. They want to take Trump out of office or on the other side, they want to eliminate Obamacare. It’s just so polarized. They all want to do opinion. And there’s no journalism left.


David: [00:29:52] 

The people with the more extreme views get the most followers, and sharing. So it’s kind of a vicious cycle here.


Jason: [00:30:01] 



David: [00:30:01] 

Where, yeah, you want to succeed, how stupid can you be? 


Jason: [00:30:05] 

Yeah. Or opinionated. Yeah. I mean, if you look at-


David: [00:30:07] 

Or opinionated.


Jason: [00:30:08] 

If you look at who is succeeding in journalism, Ezra Klein, Kara Swisher both left Vox my friend, Jim Bankoff’s company, to go to the New York Times. I’m sure they were getting paid a million dollar contracts a year, something in that range, five hundred K, a million dollars to do what they’re doing. Your book proposal used to determine, and maybe a couple sample chapters, how much you were gonna get paid and people’s opinion on the work. Now, when I did my book deal, a lot of the discussion was how many people listen to the podcast, how many follow you on social.


David: [00:30:43] 



Jason: [00:30:43] 

How many emails do you have. And if you have, you know, a Kardashian who’s never written a paragraph would get more than somebody who’s suffered through five novels.


David: [00:30:55] 

Yeah. Right.


Jason: [00:30:55] 

That, you know, won awards.


David: [00:30:57] 

Hey, there’s no justice. There’s just us.


Jason: [00:31:00] 

[laughs] Just us.


No justice. I love it. There’s just us. So, you know, you have to play the game to a certain extent.


David: [00:31:03]  

[laughs] Yeah, that- I think that was a Richard Pryor line by the way, just so I give him credit.


Jason: [00:31:08] 

Credit where credit is due. It’s a good one. Yeah.


David: [00:31:10] 

You mentioned packaged goods. 


Jason: [00:31:13] 



David: [00:31:13] 

Which makes me think of cannabis as a market play.


Jason: [00:31:17] 



David: [00:31:19] 

That’s getting a lot of attention.


Jason: [00:31:21] 



David: [00:31:21] 

Do you follow that? And is there a tech play with cannabis at any point?


Jason: [00:31:27] 

So we have one investment in a company called Kush dot com. K-U-S-H dot com. They don’t touch the product, but they’re a marketplace. They were running cannabis magazines and maps. So if you went to Colorado or Seattle, they would have a map of the dispensaries, they experimented with cannibalism tourism. They did a bunch of different cannabis projects. And then the one they found was somebody who had called them and said, “My buyer for this amount of bud, you know, bailed on me. I need to move this or it’s gonna go bad. Do you know anybody?” And they said, “Yeah.” And they emailed like, you know, twenty-five people on a BCC and got three offers. And then they emailed those three people back and said, “The high offer is X, would you like to match it? We’re doing a- a second round.” And the person matched it. And then they said, “Hey, we sold this for you. Or we found a buyer for you.” And they said, “Great. Take ten percent or take five percent.” And they were like, “Oh, a marketplace. Interesting.” And so if you look at the cannabis space, and I’m a neophyte on the business side you have-


David: [00:32:33] 



Jason: [00:32:33] 

People who grow, you have people who process, you have people who package. So somebody might grow and then somebody might make a tincture, and then somebody might package that tincture, and then you have a dispensary. And then you even have these ordering services. And so there’s multiple parties and they don’t know each other. So this is a business-to-business marketplace that we invested in. But, you know, it’s very hard. We can’t really touch the product yet. And it’s without a clear regulatory environment. Which, you know, Obama was gonna do in his second term. Trump would have been such a great move for him to do it. We just need to have the federal mandate finally for wagering, Poker, and cannabis. This is what the people want. I don’t know why this is taking so long. But if you look at Canada, when they just made it legal and regulated and set up some guardrails, the stock market went crazy, the companies became more professional, the product became more professional, the dosing became more professional. The dosing of a gummy five or ten years ago, versus the dosing today has to be a completely different process. Because I get pitched on so many companies doing testing or testing, labs that make sure that these mints do have two point five versus three point five, and get dosage right. I think it’s gonna be incredible if they finally solve this federal mandate for it. And I think that will happen, I think in this presidency, I hope.


David: [00:34:06] 

So you’re not ready to get in there, knowing that it’s going to open up before too long. I was reading about this cannabis DNA, company, dot com, which matches people to strains that work best for them.


Jason: [00:34:21] 

Such a good idea.


David: [00:34:23] 

[laughs] So you like that, right?


Jason: [00:34:25] 

Yeah. I got pitched on, you know, Peter Thiel was investing in this psilocybin company in Europe that was doing treatments, ketamine treatments seemed to be working really well, there’s a lot of research out of Stanford.


David: [00:34:36] 



Jason: [00:34:37] 

Tim Ferriss, my friend, is sponsoring a lot of the maps work on MDMA. And my friend, Nick Jarecki, just did a film called Crisis, which comes out in the beginning of March. It’s a really great film. And he’s a great director. About the opioid crisis. And we were having a really frank discussion, like we really need to just look at the entire class of drugs and say, “Well what thing should be criminalized, and which things should be regulated, and which ones should be just a complete over the counter kind of situation?” And it really does feel like fentanyl is a different type of drug than cannabis. I know this sounds crazy-


David: [00:35:19] 

Well they found that in places where they have legalized cannabis, the opioid epidemic decreases.


Jason: [00:35:26] 



David: [00:35:26] 

So there’s a relationship there, if there’re options that are legal, people will take them. A lot of people argue today that all drugs should be legal.


Jason: [00:35:38] 

Yeah, I’m not sure where I stand at all. I think we have to take a more scientific approach than all, because with these synthetic drugs, the lethal dose of fentanyl is so small that when kids buy it off the Internet, off the dark web or a police officer busts a lab or something, we’ve had people like paramedics die because they got a contact high. And just three or four little grains from what I saw in one of these like little infographics is the lethal dose. But please don’t take your fentanyl dosing from me, but…


David: [00:36:12] 



Jason: [00:36:12] 

It’s a very small amount. And then-


David: [00:36:14] 

None. None is best.


Jason: [00:36:16] 

Yeah. I would say, no- If you were gonna do fentanyl, I would say do none or zero. [laughter] Somewhere between those two numbers, zero and none. But, we need to look at that drug in a different way. I think it’s like a super drug, and I think we’re gonna keep having these super drugs emerge because they’re so cheap. And the really pernicious part of what happened with opioids was we were giving them to people who hurt their backs at work, then they get addicted to it, then they’re doctors cut them off, we put regulation on it. We put all this regulation in, we never thought, “Well what’s the exit ramp for people who are addicted?” The exit ramp, when you run out of money, when you run out prescriptions, is to buy pills on the street. The pills you’re buying on the street, if they’re real, are thirty dollars a pill, and it costs you three, four, or five hundred dollars a day for your addiction. Which is serious money for people. Or you start buying pills that are actually fentanyl and heroin. Or you just say, “Fuck it. I’m gonna just buy heroin, cause it’s available and it’s ten dollars or twenty dollars a day. Or fentanyl, it’s twenty dollars a day.” 


David: [00:37:39] 

There’s a couple of things though I’d love some reactions. I know you- Investor in Robin Hood, for example.


And of course that’s a big story in the news, Game Stop, shorting Game Stop.


Jason: [00:37:52] 



David: [00:37:53] 

How do you feel about shorting in general? What appealed to you about this whole concept? And Reddit, take it from there.


Jason: [00:38:04] 

There’s a lot going on there. Robin Hood, as a company, wanted to empower this next generation, Millennials, to invest. When I met them, I thought this was the craziest pitch ever. They want to get people who are living in their mom’s basements and, you know, on their parent’s Netflix accounts, and who don’t own cars and take Lyfts, and stay in AirBnBs, and they want them to save for the future. It seemed like a crazy idea. But I suspended disbelief and said, “Well what if it works?” And, you know, maybe they’ll get ten million people, or five million young people to start trading and understand how finance works, and that would be much different than our generation, right? That could be amazing for them, if they learned this kind of stuff early in life they would participate in equities, and equities are the way to financial independence in my mind. Or just the concept in general of equity. So I made that bet. Obviously, it’s unfortunate that they apparently got caught in some kind of covenant or a liquidity where they needed to have much more money in the bank than the number of people trading. This was really a black swan event. You have these hedge funds shorting more shares than are available, that needs to be addressed. That should not be allowed. I don’t like the entire concept of shorting stocks. I would feel much better if shorting didn’t exist, and what existed was, I’m going to ignore the stock and not buy it, and let it die a slow death. As opposed to this perverse incentive to like, “We need to beat up this stock and get it to go down. And spread fear, uncertainty, and doubt.” And, you know, these are real companies with people in it. So I have some misgivings about that. But generally, there just needs to be more transparency in this. And I think this black swan event where hundreds of thousands, or potentially millions of people – we don’t have the data – decided to take the other side of this shorting trade and try to crush the hedge funds. We need to be prepared for this kind of stuff. And if people are shorting more shares than are available, this is gonna keep happening. Where there’s gonna be these bizarre moments in time. It’s another one of these Uber-like moments, where a company that I’ve invested in is, you know, dealing with a big public brouhaha. They’re good people at Robin Hood, they have great intent, I can tell you that. And they’re fixing the problems, and they raised a bunch of money, so they shouldn’t get caught in this kind of trap again where they basically don’t have enough capital on hand to cover the trades.


David: [00:40:18] 

Yeah, they didn’t really seem to do anything wrong. They were just caught in the middle of this whole thing.


Jason: [00:40:24] 

It’s all really dark, because people are betting over a company, Game Stop, which definitely deserves to exist in the world, but it doesn’t deserve to be worth twenty million or thirty- twenty or thirty billion dollars. So this, you know, boutique retailer, this medium-sized retailer should exist in the world. Should it be shorted and people try to crush it? No. Should people try to pump it in order to squeeze the shorts? I don’t think so. I’d rather people just buy high-quality companies and hold them for a decade. Which is what I do. I’m a shareholder in Uber for the second decade right now. I don’t see myself ever selling those shares, because I think the company will just continue to grow. I don’t know a company that’s gonna grow faster, or many companies that will grow faster. So my advice is always buy companies that you imagine will be here ten or twenty years from now. I don’t see a world where Uber, Amazon, Disney don’t exist. Game Stop? I can see a world where that doesn’t exist. I think we see the world where it doesn’t exist. People download games and don’t go to stores anymore. It’s pretty obvious it’s not gonna exist.


David: [00:41:27] 



Jason: [00:41:28] 

So they need to transform-


David: [00:41:28] 

What about Reddit? Reddit’s influence. Do you feel that they’ve disrupted the whole economy, or at least the market, the way things are handled currently. Will this be ongoing?


Jason: [00:41:41] 

It really is amazing what many hands can do. Like many hands makes for light work. When you get a thousand people or ten thousand or a hundred thousand or a million people doing a very small behavior, it can have a big ramification. People forget about Operation Wall Street, the kind of sit-ins and how many months they lasted down there. That was, I think, the dry run for this. Which is They couldn’t really make an impact just camping out at the foot of Wall Street. Who cares? Like, you know, not taking showers and hanging out there and banging drums did nothing. But-


David: [00:42:22] 

[laughs] You’re talking about it all these years later.`


Jason: [00:42:25] 

I guess so. I should say, I don’t think it fundamentally changed any of their businesses. It definitely made us aware and pay more attention to it. So in fairness to them, banging drums and, you know, eating- eating, vegan stir fry, you know, like, great.


David: [00:42:42] 

Hey, don’t knock it, man. C’mon.


Jason: [00:42:44] 

[laughs] Like a little vegan stir fry, get a little tofu in there.


David: [00:42:46] 

[laughs] I know you’re a big BBQ fan, so…


Jason: [00:42:49] 

I like a little barbeque once in a while, to be honest. But, now we’re seeing what actually happens if you buy one share in a company. Like one share doesn’t seem like a lot until a thousand, or a hundred thousand, or a million people buy that one share. And that’s the story of Tesla-


David: [00:43:06] 

Unless it’s Bitcoin, also.


Jason: [00:43:08] 

And Bitcoin’s another one. People are just opting out of the US financial system. They’re like, “Yeah, dollars are interesting. But I’d rather own this thing that goes up. My dollars don’t seem to go up. They just seem to go down. My buying power goes down with a dollar, and when I keep it in Bitcoin, it goes up.” I mean, it is imaginary money controlled by nobody, so with those two caveats, be careful.


David: [00:43:27] 

So you’re not in there in a big way, it sounds like.


Jason: [00:43:29] 

You know, it’s interesting. I had all these Bitcoin people on my podcast a decade ago, or close to a decade ago. My wife bought a bunch of Bitcoin at two hundred dollars and, I think, eight hundred dollars.


David: [00:43:38] 

Oh nice.


Jason: [00:43:38] 

And we’ve been sitting on it all these years. So I’m sure that’ll be a nice return but I don’t understand… what’s going on here. It doesn’t make a lot of logical sense to me, and so I’d be very careful – especially with all these alternatives as well. It does seem like Bitcoin has some staying power, because everybody’s bought into it. But, man, I’ve seen things that everybody buys into, and then everybody collectively doesn’t buy into, or things get hacked, or a better thing comes out. So I’ve always felt, there’s a better Bitcoin around the corner, and when that emerges, people will start to buy that. And then once that happens and it tips over, so if there was one that was easier to use, more user-friendly, faster, cheaper, better, whatever vectors it was better, you could see people say, “You know what? Bitcoin’s not growing. I’m gonna put half my Bitcoin in, you know, Bitcoin two point O.” And then Bitcoin three point O comes out, and people put half their money that, and all the sudden you see people start moving towards other assets that do better. Um. So be careful is what I’m saying. Be very careful.


David: [00:44:37] 

Yeah, if you don’t understand it, uh, that’s enough for me.


Jason: [00:44:42] 

One percent of your net worth, two percent of your net worth, if you’re into it, you’ll probably be able to recoup it and you can probably afford to lose it. But I know people who have fifty percent of their net worth in it, or a hundred percent, and that, to me, seems crazy unless you’re a crazy single person who doesn’t care.


David: [00:45:00] 

And Club House? Where is that going?


Jason: [00:45:02] 

Yeah. That’s a really interesting one. It really is the product of the pandemic will be delivery food services and audio. And this casual audio. It’s a very interesting product, because people are not always camera ready. Obviously Zoom is great. We’re on Zoom right now, we’ll make some clips out of it. But it’s oppressive to be on Zoom for, the third, fourth, or fifth hour. It’s not oppressive to listen to the radio for four hours. People would put Howard Stern on or Rush Limbaugh, who died on the day we’re taping this. These people would listen to those shows for three, four, five hours a day, five days a week. And you can’t be on video for that much, but you can participate in audio. And it’s a very casual, um, nice in between with podcasting. Us doing a podcast when you’ve got a great interviewer and an interesting subject, that’s not what this is for. Casual audio is, hey, there’s a breaking news story, let’s go talk about. Or let’s just have ten artists get together and talk about art, and let other people listen. And it’s super compelling, and people have now gotten accustomed to nuance moving to audio, and, dunking on people, cancelling people, high fiving each other, being outraged is Twitter. But you don’t feel the same outrage culture when you’re talking to people and you hear the tone of their voice. You could get in a heated argument, but you’re going to hear each other out. So I think it’s kind of like an anecdote, in the same way podcasts and long form. Here, you know, you’re trying to keep this on the short side, under and hour. And Joe Rogan goes three or four hours, I go two hours on my podcast. Taking some time to unpack issues doesn’t happen on the Tonight Show, whatever, Jimmy Fallon, and it certainly doesn’t happen when you do a quick CNN hit. You know, it’s just like by the time you get in and out of a CNN hit, you’re spinning because it’s ninety seconds. And that’s the news. It’s just impossible to say anything nuanced in ninety seconds. So I think it’s a really interesting product. I think it’s really gonna be the next wave of social, and there’ll be twenty of them. So the same way Friendster and MySpace, were the leading stars, Club House might be the Facebook, or the Facebook might be coming. So I think there’ll be five or ten players in this space, all with different spins on it.


David: [00:47:29] 

Well, talk about Facebook currently there’s this whole dispute going on between Tim Cook and Mark Zuckerberg about the nature of information.


Jason: [00:47:37] 

Yeah, it’s so great. Yeah.


David: [00:47:40] 

[laughs] Speak to that.


Jason: [00:47:43] 

Well, no, it’s fantastic. I mean, Zuckerberg’s the worst. He’s super horrible as a human being. I don’t mean to make it personal, but I do think on a personal basis that it’s really not the person you want to give a lot of power to, if you were to, to want to give power to somebody. I think he’s very unsophisticated when it comes to thinking about his own users and what’s in their best interests, but he’s highly sophisticated in stealing other people’s ideas, executing on them better, and being a marauding capitalist. And I am a marauding capitalist, but, this concept of moving fast and breaking things, that’s fine when you’re building an app. I get it. You want to go fast, you don’t want to make perfection the enemy of progress. But when you get to ten million, a hundred million, a billion, two billion, three billion people on the platform, and you keep that same attitude where you just don’t give a shit what happens you can break things. And I think people are fed up, because he broke people’s privacy, he broke our democracy, and he empowered horrible people to become famous. And to use his algorithm, which basically keys off of outrage he basically built that algorithm to benefit himself, and then it got hacked by whoever, Info Wars, you know, picked the extreme person who leveraged the algorithm. That when somebody’s outraged, that’s the first thing you see. You should not trust Zuckerberg, you should not sell your company to him, you should not talk to him about your company, cause he will steal your idea. And he really is the enemy of the people, and I think the company should be broken up and held to a really high standard. I think what Apple is doing is just. I have my own problems with some things Apple does. Running a closed ecosystem. I think there should be more interoperability. But that being said, to compare Zuckerberg and Apple would be like comparing BP Oil, spilling oil into the Gulf of Mexico, with Tesla making EVs. Like it’s literally two ends of the spectrum. One person is dumping oil into our beautiful oceans, and the other person is building electric cars that take carbon out. Zuckerberg is just a horrible, horrible, horrible human, um, and I mean, that sincerely.


David: [00:49:59] 

[laughs] Well thank you, Jason Calacanis. [laughter] You lived up to your introduction. I’m so glad you did, and I’m so glad we had a chance to talk again. It’s been too long.


Jason: [00:50:08] 

I thought we were supposed to light up a joint right now and just-


David: [00:50:12] 

Oh, yeah.


Jason: [00:50:12] 

Isn’t that like the whole point of this podcast? Is we’re supposed to blaze a huge doobie?


David: [00:50:16] 

Go for it, bro. Go- [laughs]


Jason: [00:50:18] 

I gotta run to the other room.


David: [00:50:19] 

I could do it virtually. Yeah, but next time we meet-


Jason: [00:50:21] 

I just took four gummies before I got on. They’re hitting right now. Whoa. [laughs]


David: [00:50:24] 

Love it. So next time, we meet, we’ll take it up from there.


Jason: [00:50:29] 

Yep. We’ll blaze it. Alright. Good to see you, brother. And, hey, just sincerely, you know, when I look back on my life, there’s a half dozen people who just really gave me great opportunities, and you’re one of those people. And, every time I come to New York, I immediately try to have dinner with you and a couple of my friends.


David: [00:50:46] 



Jason: [00:50:47] 

And I can’t thank you enough for what you did for me as a young person in New York with no experience, and giving me a shot. And I know that there’s countless people who were in that Paper family, over decades, who you did that for, who went on to do great things, and I really think your legacy is just tremendous.


David: [00:51:01] 

Thank you.


Jason: [00:51:03] 

It really means a lot to me.


David: [00:51:04] 

Thank you. I’ll take all the credit for your success, Jason.


Jason: [00:51:07] 

You should get some credit for it.


David: [00:51:08] 

But not for your opinions. [laughs]


Jason: [00:51:10] 

No, I mean, literally the first byline is in Paper. That’s it. You know, it’s really that simple.


David: [00:51:13] 

I know. I know.


Jason: [00:51:15] 

And when I asked you questions on how to build a magazine, you just gave me the entire roadmap with absolutely no expectation of anything in return. I thank you for that.


David: [00:51:25] 

Alright, my friend.


Jason: [00:51:26] 

Alright. Be cool.


David: [00:51:27] 

Talk soon.


Jason: [00:51:27] 

Cheers. Bye.


David: [00:51:28] 

Be well.





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