Avoiding buzzwords and marketing-speak (feat. Thomas McInerney) | E2236

This Week In Startups is made possible by: Lemon.io - https://lemon.io/twist Deel - http://deel.com/twist LinkedIn Jobs - http://linkedIn.com/twist Today's show: Some pitches sound just like ads… and it's a huge red flag for investors. On our latest edition of TWiST Tokyo, Jason welcomes legendary angel investor (and long-time friend of the pod) Thomas McInerney. His list of investments reads like a Who's Who of the tech elite, including Notion, SpaceX, Uber, OpenAI, Anthropic, and Perplexity…. At Founder University x Tokyo, they discuss how the angel investing landscape has shifted, why it's so important for founders to stay humble, the reasons that investors need to stay not just optimistic but aggressively so, and what angels can add to companies beyond just writing checks. Plus we revisit some classic TWiST clips featuring Thomas from over 10 years ago AND take a look at three of our favorite pitches from our Japanese founders. Timestamps: (00:00) FLASHBACK: Clips from Tom's classic TWiST appearances (02:54) Why Jason and Tom love hanging and building in Tokyo. (05:30) How has the angel investing landscape changed over the last decade plus? (09:38) "Being an investor is a commodity… You have to provide more than just money." (12:17) Lemon.io - Get 15% off your first 4 weeks of developer time at https://Lemon.io/twist (13:34) How Thomas evaluates very early stage startups (14:56) Why Thomas invested in nuclear tech when it was hugely unpopular (17:31) Why it's so important for new founders to be both humble and smart (18:50) The relevance and accuracy of Marc Andreessen's "Idea Maze" metaphor (20:40) Deel - Founders ship faster on Deel. Set up payroll for any country in minutes and get back to building. Visit http://deel.com/twist to learn more. (21:41) How Elon Musk brings oversized, visionary ideas to life (26:11) Why founders using buzzwords is a huge red flag (27:13) The little "poker tells" Thomas and Jason look for in a founder (28:26) "If there's any doubt, there's no doubt." (30:47) LinkedIn Jobs - post your job for free at http://linkedIn.com/twist then promote it to get access to LinkedIn Jobs' new AI assistant. (32:04) PRO TIP: Don't run out of money! (38:10) The importance of being an aggressive optimist for investors (43:27) The human brain cannot comprehend 1000x growth (45:33) PITCH #1: Sakenomist is the cross-border commerce platform, starting with sake exporters (Hiroshi Takeuchi) (51:47) PITCH #2: HomiiWorld, the IRL social app which helps you meet new people anywhere in the world * Subscribe to the TWiST500 newsletter: https://ticker.thisweekinstartups.com/ Check out the TWIST500: https://twist500.com Subscribe to This Week in Startups on Apple: https://rb.gy/v19fcp * Follow Lon: X: https://x.com/lons * Follow Alex: X: https://x.com/alex LinkedIn: https://www.linkedin.com/in/alexwilhelm/ * Follow Jason: X: https://twitter.com/Jason LinkedIn: https://www.linkedin.com/in/jasoncalacanis/ * Thank you to our partners: (12:17) Lemon.io - Get 15% off your first 4 weeks of developer time at https://lemon.io/twist (20:40) Deel - Founders ship faster on Deel. Set up payroll for any country in minutes and get back to building. Visit http://deel.com/twist to learn more. (30:47) LinkedIn Jobs - post your job for free at http://linkedIn.com/twist then promote it to get access to LinkedIn Jobs' new AI assistant. Great TWIST interviews: Will Guidara https://youtu.be/pvJa2pzuXWQ Eoghan McCabe https://youtu.be/9dHN4YFkgv4 Steve Huffman https://podcasts.apple.com/us/podcast/reddit-ceo-steve-huffman-on-mod-revolt-building-a/id315114957?i=1000617333424 Brian Chesky https://podcasts.apple.com/ca/podcast/airbnb-ceo-brian-chesky-on-early-rejection-customer/id315114957?i=1000611761112 Bob Moesta https://youtu.be/y2UMzSqX94Q

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  So I look for technical founders with domain expertise, generally pretty young. They have a point of view about something that they know, that they understand. And normally, it's a bit different.

• 0:11Jason Calacanis?

  Red flags? Top two or three that it's not the right investment for Thomas?

• 0:16Speaker 00

  Buzzwords, you know, SaaS-enabled, dah dah dah. When people start using buzzwords, I get, you know, very turned off. I want it in simple English.

• 0:24Jason Calacanis?

  Because?

• 0:25Speaker 00

  You're taking too much from the outside world, and those trends are sort of like, you know, fashion, they change daily. And so I think being able to reduce your idea into like a real simple concept that's not using a lot of buzzwords is good.

• 0:40Jason Calacanis?

  Let's talk about other red flags. Too high of evaluation.

• 0:45Speaker 00

  Evaluation in the sense that you just, not to be greedy about equity, but rather to be focused on getting the right people on board.

• 0:56Speaker 02

  This Week in Startups is brought to you by LinkedIn Jobs. Post your job for free at LinkedIn.com/Twist, then promote it to get access to LinkedIn Jobs' new AI assistant, Deal. Founders ship faster on Deal. Set up payroll for any country in minutes and get back to building. Visit Deal.com/Twist to learn more. Lemon.io. Get 15% off your first four weeks of developer time at Lemon.io/Twist.

• 1:27Jason Calacanis?

  All right, everybody. Welcome back to This Week in Startups. I'm your host, Jason Kalkanis, and we are here in Japan for our Founder University. As I explained on the last episode, when I'm on the road like this, launching Founder University, and we now have it on three continents, in three cities, the United States, occurring in San Francisco and Austin, we have it in Saudi Arabia, in Riyadh, and now we have it here in Tokyo. That's enough work. We're not going to launch three more cities because I've got a family to raise and I've got a portfolio with hundreds of investments in it. We're really excited about the program. If you want to learn more about the program, specifically here in Tokyo, go to Tokyo-launch.co and you can apply for the next one we're going to do, probably in the summer or in the fall.

• 2:09Jason Calacanis?

  And if you want to learn more about Founder University, which is a pre-accelerator, it's a program you come to for 10, 12 weeks, where we work with founders to just go over all the tactics and strategy around building a company, especially in year zero. About half the companies who come to the program are not yet incorporated. They're just projects. They're MVPs. They're business plans. They're vibe-coded little prototypes. And we love that because that's where founders could use a lot of help in learning how to pitch their product, how to go to market. And today, we're going to talk all about that with a good friend of mine, who is making his third appearance on the program. I can't believe it, Thomas. Thomas McInerney is an angel investor extraordinaire, and he now actually lives here in Tokyo, correct?

• 2:54Speaker 00

  Yep. I mean, maybe the most livable city in the world, don't you think? The cleanest, best food.

• 2:59Jason Calacanis?

  Safest. Everything is fantastic here. I love it.

• 3:03Speaker 00

  I mean, you see six-year-olds walking to school by themselves. It's unbelievable.

• 3:06Jason Calacanis?

  My nine-year-old daughters, my twins, were absolutely flabbergasted about that. And I saw all these kids walking to school with their backpacks.

• 3:14Speaker 00

  So cute.

• 3:15Jason Calacanis?

  So cute. And everybody has the same backpack.

• 3:17Speaker 00

  Yeah.

• 3:17Jason Calacanis?

  So then I worked backwards with some of my founders here. I said, where do we get those backpacks? You know, I asked some Grok and ChatGPT, where do you get them? I figured out where you get them. And I went and I bought my daughters these with all the stickers. And now they bring them to their school with them.

• 3:30Speaker 00

  That's awesome.

• 3:31Jason Calacanis?

  Yeah.

• 3:31Speaker 00

  They're special backpacks. They're very nice. They're not just, you know.

• 3:34Jason Calacanis?

  Unbelievable.

• 3:35Speaker 00

  Yeah.

• 3:35Jason Calacanis?

  All right. So let's get started here. You've been an angel investor. Well, let me ask you before we do that. Why did you move to Tokyo?

• 3:41Speaker 00

  I, like you, lived in California for a long time, about 25 years. During the pandemic, I lived in LA. I was in Santa Monica. Conditions got pretty rough there, as you know. It was pretty frustrating. A lot of people moved during the pandemic to various places. And we moved to London.

• 3:56Jason Calacanis?

  Hmm.

• 3:56Speaker 00

  And we lived in Chelsea. We evaluated three cities, Tokyo, Miami, and London. We chose London, and we were there for about three years. And then they changed the tax policy.

• 4:06Jason Calacanis?

  Yeah.

• 4:06Speaker 00

  In a big way on us. They got rid of Nondom, which is kind of, they, they used to not tax worldwide income. So anyway, we, and, and we loved Tokyo to begin with. My wife's Japanese.

• 4:16Jason Calacanis?

  Yeah.

• 4:16Speaker 00

  So it was a good excuse to, to come here. We've been here about a year now.

• 4:19Jason Calacanis?

  And you're not the only one. I won't say who else is here, but we had a lunch when I was here in the fall.

• 4:25Speaker 00

  Yep.

• 4:26Jason Calacanis?

  And I was just. Delighted to have a dozen of you show up for lunch with me. And it's all these incredible founders and entrepreneurs here. Why do you think entrepreneurs and founders, especially successful ones, wind up here in Tokyo?

• 4:41Speaker 00

  I think if you're from a pure lifestyle standpoint, Japan, like we kind of covered a minute ago, is so hard to beat. It's clean, it's safe, it's cosmopolitan. You can be anywhere and generally one flight, certainly one stop and, you know, anywhere to anywhere in the world. It's got skiing, it's got culture, it's got incredible food, you know, more Michelin stars than Paris and on and on and on. So I think it's one of the most livable cities. I think the tech ecosystem's new, you know, vis a vis Bay Area and other places that are more developed. But there's a lot of interest at the government level and, you know, we're having dinner with some of those people and JetRO sponsoring this event. So I think the government's backing and, you know, putting capital and effort into supporting tech.

• 5:26Speaker 00

  So I think it's a great time to be here.

• 5:27Jason Calacanis?

  Yeah, it's a fantastic time to be here. So let's get into, even before you were an angel investor in incredible companies. Notion, Segment, man, both of those companies, fantastic. And then even some that were very promising early, but then had some challenges. Bird and Clubhouse come to mind. And you started doing some late stage. You got SpaceX in there, Uber, Yum Yum, OpenAI, Anthropic and Perplexity. So you have really run the table. Total number of investments you've done?

• 5:54Speaker 00

  Probably about 130 or so.

• 5:56Jason Calacanis?

  130. And you and I started about the same time, right? Like 10, 12 years ago?

• 5:59Speaker 00

  That's right.

• 5:59Jason Calacanis?

  What was it like 10 years ago in the United States when you and I started angel investing? And then how has it changed in the last decade?

• 6:06Speaker 00

  So definitely, and it might be more than 10 years. My first deal I saw, which is, which is the one that haunts me to this day, was Airbnb. My lawyer incorporated them, a guy named Michael Blum. And I saw it at like two and a half before they went to YC. So that, that was probably just like 2000.

• 6:26Speaker 00

  Nine, maybe, something like that. Anyway, you know, when I did segment, for example, it was a Y Combinator was itself brand new. There were like thirty, you know, metal chairs that were folding chairs and Paul Graham, we'd all, he would open them up. And, and Paul Graham was running it and I did segment at a $5 million valuation. So YC deals were priced that way, so much cheaper. There were fewer of us back then, as you know.

• 6:50Jason Calacanis?

  We were trying to build syndicates before syndicates existed.

• 6:52Speaker 00

  Exactly.

• 6:53Jason Calacanis?

  Just so we could get ten people to give 25 or 50K each, just to give the founder enough money to get to a proper seed round and be ready for a venture capitalist.

• 7:03Speaker 00

  Exactly. And you, you did the Sequoia Scout Program. I think that was the first VC Scout Program.

• 7:08Jason Calacanis?

  It was.

• 7:08Speaker 00

  So that, you know, all of it was getting built. All of it was new. And that was, to me, a super fun time to be in the Bay Area.

• 7:15Jason Calacanis?

  It was awesome. And there weren't as many startups. And the people who were choosing to do startups were of incredibly high caliber. And you had to be a bit resilient and a bit of a maniac to do it, yeah?

• 7:28Speaker 00

  Yeah, I think there was, you know, now it's actually, um, you know, prestigious or, or sort of, you know, understood. But back then, it, there was a lot of authenticity, just because it was a smaller universe of people, people that were really in it and doing it. Cause that's what, you know, they didn't know anything else. Now, uh, you know, everybody, you know, after Facebook and, and, you know.

• 7:50Jason Calacanis?

  The social network movie.

• 7:52Speaker 00

  Exactly. It's, it's, you know, uh, it's.

• 7:54Jason Calacanis?

  It's high status in a way, yeah?

• 7:55Speaker 00

  It's a high status thing, you know, it's almost like being in the movie business or something. So it changed.

• 8:00Jason Calacanis?

  And it was low status when you and I started. If you said you were an entrepreneur, especially in Los Angeles, or even in the Bay Area, people were like, ah, why would you do that? Sounds painful. You're, you're a misfit, right?

• 8:12Speaker 00

  Well, yeah, certainly in the Bay Area, I think that it, it was cool, but it was, it was hard, you know? There weren't the rails, they hadn't been built out, the YCs, you know, it was much harder to raise money.

• 8:24Jason Calacanis?

  Angelists, syndicates, even angels.

• 8:27Speaker 00

  Exactly.

• 8:27Jason Calacanis?

  When I, when I started. Open Angel Forum, I think I got to maybe a dozen people, two dozen people in the major cities.

• 8:34Speaker 00

  Yeah.

• 8:34Jason Calacanis?

  But it was hard because there just weren't that many of them.

• 8:37Speaker 00

  No, no, exactly. And you know, our friend, Naval, our mutual friend, you know, he got Angel List going, which kind of created a little bit of a, a, a good ecosystem for investors to connect. And like you say, cobbled together enough half a million, a million dollars to sort of start a company.

• 8:52Jason Calacanis?

  And at that time, we were very coveted as early-stage investors.

• 8:55Speaker 00

  Yeah.

• 8:56Jason Calacanis?

  It was like, I really appreciate you. When so much money came into the system and YC, in some ways a victim of their own success, because so many people want to go there with status, that it became a bit of a competition to see, and I've got to be, you know, judicious here with my comments, but I think the posture changed from, wow, these angels really are angels in that sense. They're, they're putting their money on the line. They know it's a 90% chance they get nothing back to, hey, how can we manipulate a bunch of dentists and high net worth individuals to come to a demo day, create scarcity? And it became very pushy and gamed a little bit, yeah?

• 9:31Speaker 00

  Yeah. And even venture itself, the VC start pushing into earlier and earlier as well. So it, it became definitely for us now, I think money, being an investor is a commodity. So you definitely have to provide more than just money. You really have to, which is, you know, what you're doing here. You have to, you know, help the founders really fundamentally. You have to build a reputation over time. There's a lot, you know, you have to do, and it's competitive.

• 9:56Jason Calacanis?

  What do you think on our best days, angels, those first couple of checks, the first 10 investors before a proper seed fund comes in? What do we do really well? And, and why were we coveted? Still coveted, but what do we aspire to do in those, that year zero, that year one?

• 10:14Speaker 00

  Yeah. Well, number one, don't get in the way, you know? Don't be a pain in the ass, which is sometimes, you know, underrated. Hopefully you give some bona fides, you know, and you give some credibility. When someone's starting out, as, as all of you know, the hardest thing to do is you're young, you're not well-known, you don't have any traction. So you're trying to just develop a reputation and get, get people to pay attention to what you're doing. So part of it is, hey, Jason's an investor in my company. Oh, Jason, oh, Jake L is, oh, wow.

• 10:44Jason Calacanis?

  And Thomas is also in, and now Sock is in, and Naval came in.

• 10:48Speaker 00

  Boom, boom, boom.

• 10:49Jason Calacanis?

  And that momentum is in a way, it's kind of like building consensus.

• 10:54Speaker 00

  Yeah.

• 10:55Jason Calacanis?

  And it's a filtering mechanism.

• 10:56Speaker 00

  Right.

• 10:57Jason Calacanis?

  And when you look at VCs, they're so busy, they have to put so many large chunks of work together.

• 11:02Speaker 00

  Yeah.

• 11:03Jason Calacanis?

  That they really do appreciate, sometimes they don't always show it, and they try to, the bad ones try to run over the angels.

• 11:10Speaker 00

  Yeah.

• 11:10Jason Calacanis?

  And maybe take away their rights, or, you know, whatever it happens to be, we've got some good war stories there we'll get into, but they appreciate that filtering mechanism.

• 11:18Speaker 00

  Yeah, absolutely. I mean, even me, when I look at my inbox, I'm looking for a reason to delete an email, you know, every email, I'm thinking, how can I delete this? Because that's one less thing I have to deal with.

• 11:29Jason Calacanis?

  Yes.

• 11:29Speaker 00

  And so even, you know, cold intros, it's so much better to get a warm intro, which your early checks can provide, because that filtering mechanism is strong. And so the curation piece, which is what you're saying, you know, as curators say, hey, we, we met this guy or girl, we like them, we think they're good, we think this is an interesting space, and so take a look.

• 11:50Jason Calacanis?

  All right, when we get back from this quick, commercial break, a little pause for the cause, and we do cover our sponsors here at This Week in Startups, I want you to take me through your rubric, your heuristics, your rule set for companies that you absolutely have to invest in, and then also your turn offs, things that are red flags that you will never invest in when we get back on This Week in Startups.

• 12:17Jason Calacanis?

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• 13:02Jason Calacanis?

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• 13:22Jason Calacanis?

  All right, we're back at This Week in Startups here, live in Tokyo.

• 13:29Jason Calacanis?

  Excellent. We have about 50 founders in the room, representing 30 companies here. Most of them are first-time founders. When we meet with these companies, we like to assess what they need help with. Number one, number two is almost, well, top three. How do I raise money? How do I get you to give me a check? Number two, how do I find a co-founder? Although, if they're here, we've already sorted for that. And then typically, the third thing is how do I get my customers? How do I go to market? Let's start with how you look at and evaluate an early-stage startup, one that either is about to put their product into the market, or the product's been in market for, let's say, under 100 days. You don't have meaningful data to review.

• 14:09Speaker 00

  It's all about the founder, as you know, and so I try to take a very close look, and that's been what I've been good at, and my secret sauce. These markets change super rapidly. When I hear guys like David Sacks, or, you know, was it Thomas Tung's, the guy that writes the...

• 14:24Jason Calacanis?

  Yeah, Tung's, yeah.

• 14:25Speaker 00

  You know, that has these... These guys are really smart about an ecosystem. Those SaaS has just changed, but it's continuously changing. So my strength was not mapping out that topology. It was rather kind of human profiling and looking at a founder and saying, "Hey, is this the person that's going to get it all the way across the finish line?" So I look for technical founders with domain expertise, generally pretty young. They have a point of view about something that they know, that they understand. And then normally, it's a bit different. I'll give you an example. I did Radiant Nuclear. I went to see the founder a couple of days ago in El Segundo. He told me, I actually didn't realize I was his first check. So, you know, they're just raising 350 million right now.

• 15:10Speaker 00

  Tim Draper at close to $2 billion. When I did a nuclear company, this was, you know, I can't remember, maybe six years ago, nuclear was not in vogue. I mean, nuclear was not...

• 15:20Jason Calacanis?

  It was dead.

• 15:21Speaker 00

  It was dead. It was weird.

• 15:22Jason Calacanis?

  That would be a fool's errand, because we hadn't built one since, I don't know, '70 or '73.

• 15:28Speaker 00

  Exactly.

• 15:28Jason Calacanis?

  We had, we have a couple of plants where we might consider building one, but after Fukushima, after Three Mile Island, and after Chernobyl, after those three, this fear of like, "Oh, my God, this is terrible." So you then, I am guessing, had to figure out why this would be different.

• 15:46Speaker 00

  Yes.

• 15:47Jason Calacanis?

  Why was it different?

• 15:48Speaker 00

  So the founder Doug, I had always been drawn to deep tech companies. So, super technical founders, you know, segment was three MIT dropouts and another guy. So, I liked, I've had a propensity to bet on technical founders. This guy had worked directly for Elon on some projects at SpaceX, had been there a long time, super bright guy. And he ended up raising, I remember this, Series A from Andreessen and Union Square. And I was shocked because I was like, nobody was, they weren't doing those kinds of things back then. They were doing more sassy, software kind of stuff. So, in my case, and in the founder's case, you have to be different, right?

• 16:29Speaker 00

  If you're one of a hundred entering some crowded space, like, you know, say LLMs now, or, you know, AI coding or something, it's going to be super, super hard. So you have to be weird, you have to be different.

• 16:41Jason Calacanis?

  And there has to be some thesis of why you're going to disrupt a space where there's some number of incumbents.

• 16:48Speaker 00

  Exactly.

• 16:49Jason Calacanis?

  Yeah. Let's unpack, double-click on the individual.

• 16:52Speaker 00

  Okay.

• 16:52Jason Calacanis?

  Technical.

• 16:53Speaker 00

  Yep.

• 16:54Jason Calacanis?

  What else? When you're talking to the individual, they have deep technical, you said young, it is a young man's game, a young person's game, to use non-gender-specific language, it's a young person's game. I think most people agree, you have to do a lot of sacrificing. Although the returns for second and third-time founders are really good too, but we do see that sort of dichotomy. Either it's Mark Pincus on his third startup, or Elon on his third or fourth.

• 17:17Speaker 00

  Yep.

• 17:17Jason Calacanis?

  Or it's somebody right out of college or just dropped out.

• 17:20Speaker 00

  Right, exactly.

• 17:21Jason Calacanis?

  But unpack more of the, if you can put your finger on it, the personality type. Not that we want people here at Founder University to be inauthentic.

• 17:30Speaker 00

  Yeah.

• 17:31Jason Calacanis?

  But I'm just curious what you've learned.

• 17:32Speaker 00

  I've found that they're humble, but smart, so they're listening. They're not defensive when they're, if you ask them a hard question, like, why this? Why that? There's no defensiveness, or even if you say, I don't think this will work for this reason. They don't take it personally. They kind of process what you're saying and then sort of, you know, have a counterpoint. So you have to have this kind of crazy confidence to to bet on yourself and think you're going to disrupt an industry. At the same time, you have to have a certain humility to take feedback and and respond to the universe when it's telling you something's not going right.

• 18:06Jason Calacanis?

  This is super interesting, I think. I call it internally at our firm, like, is it enjoyable to volley, to play tennis, to play ping pong, pickleball, whatever it is with the founder? A founder, when you ask him a tough question, hey, there's seven other L L Ms, and now there's 15 open source projects, how are you going to cut through the noise? Now, some of them might just be like, well, we'll be better. And you're like, okay, can you explain to me how? And if the person is just filibustering or it's not credible, and they're not asking you questions, and it's not that productive discussion, you're like, wow, I wonder how this person is going to hire people, find partners, or raise money from a series A firm. They need to have that humility to engage that discussion, but also that confidence of you, we're going to figure that out.

• 18:52Speaker 00

  Exactly. Mark Andreessen talks about this, the idea maze. I really love this idea that when you're, and Mark looks for this, and he's a better investor than I am, he looks for a founder who, you know, they say they're so far into the idea maze. So when you talk about an idea, their idea with them, you can see that they've tried this, they've tried that, they've thought about it this way, they've thought about it that way. They they are so deep in it that when they're talking to you, they're, it becomes immediately clear, or should be clear, that they don't have all the answers, but they they know what they know well.

• 19:27Jason Calacanis?

  It's such a great metaphor, because if you think about it like the maze from The Shining, or any of those kind of mazes, like the hedge mazes, or the the ones made of hay, if you were to just, while they're talking, it's almost like you see it being drawn, and you are pulled up to the three quarter view, and you look down on the maze,

• 19:43Speaker 00

  Yes.

• 19:44Jason Calacanis?

  and you're like, oh, I see. Yes, dead end, dead end. The mouse is looking for the cheese. Oh, yeah. You figured out two thirds of it, a third of it,

• 19:51Speaker 00

  Right.

• 19:52Jason Calacanis?

  you're ahead of everybody else.

• 19:53Speaker 00

  And they'll take you through that. A good founder will take you through that. Even Doug with Radian, I'm certainly not a nuclear expert, I'm a generalist, but I started asking questions and it became clear, you know, well, the neutrons will hit this, this thing and do this and do this and then this will happen and then the design of his reactor, there are small kind of rice-sized pellets surrounded by carbon and so that they can't go critical and he broke all those pieces down for me in a way that was understandable. And that's another thing about Elon that I think he's probably the best in the world at, is taking really complicated things like rockets or, you know, self-driving cars or whatever it is, the physics of a battery in cars and breaking that down in a way that is super understandable and straightforward to anyone.

• 20:41Jason Calacanis?

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• 21:24Jason Calacanis?

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• 21:42Jason Calacanis?

  It's really interesting, when you started saying that, I'm just dovetailing with the maze, I remember sitting there with him when he lived in, when we both lived in Los Angeles and we were, you know, had some of the first roadsters and we were talking about batteries and consumer behavior.

• 21:54Speaker 00

  Yeah.

• 21:55Jason Calacanis?

  And was like, okay, this thing is gonna, can do like 180 theoretically, but I'm getting more like 90 miles.

• 22:02Speaker 00

  Yeah.

• 22:03Jason Calacanis?

  That's fine, because I'm driving to Culver City from Brentwood and you're going to, you know, else, else again to SpaceX, but...

• 22:11Jason Calacanis?

  Like, how is this gonna work out? And he said, "Well, we have this idea of you're gonna be able to drive when you're going cross-country, and there'll be superchargers, and we're gonna have these ones that go much faster. Then, we're gonna have the ability for you to go in, undo all the screws, the battery will drop out, move over, and we'll slide it up."

• 22:28Speaker 00

  Yep.

• 22:28Jason Calacanis?

  And it'll be one of those two. And then, we're gonna have these at your office, and we're gonna subsidize people to make it a destination. So, having a charger will get you those customers who have the $150,000 car.

• 22:39Speaker 00

  Yep.

• 22:39Jason Calacanis?

  Your hotel, you're gonna love that. And like, all of a sudden, as I'm saying this.

• 22:43Speaker 00

  Yeah.

• 22:43Jason Calacanis?

  This is... How old is the Roadster? 2013 or 14? Maybe we'll have to look it up. It was incredibly early.

• 22:52Speaker 00

  Yeah.

• 22:52Jason Calacanis?

  It was 2006 when I got mine. Oh, my God, it's been 20 years.

• 22:55Speaker 00

  I had, I had Roadster number 633. Which, which, do you know your car number at all?

• 23:00Jason Calacanis?

  16.

• 23:01Speaker 00

  Wow, okay.

• 23:02Jason Calacanis?

  You know it's my car number 16. But we were some of the first, and that car was dangerous and fun and exhilarating.

• 23:10Speaker 00

  Yeah.

• 23:10Jason Calacanis?

  And crazy. But he was going through the IDMA's. And I saw a similar thing with SpaceX. People don't know, but before SpaceX, his idea was, he wanted to back up the biosphere. So, he's always been thinking about, not Fermi's paradox, but there's another... I remember at some point, he said, "How do you think the world ends?" And I said, "Meteor or pandemic." He's like, "Oh, that's exactly what I think, number one and number two." And, you know, and then I was like, "Yeah, or nuclear holocaust." He's like, "Yeah, that's number three." We were going through this IDMA's of just, "How does the world end?" And his idea was to build, like the movie Silent Running, great 1970's fiction film with Bruce Dern, to put giant biospheres and send everything up there, like those seed banks? But put it all up in space. And he's like, he went to see the Russians.

• 23:55Speaker 00

  To buy a rocket.

• 23:56Jason Calacanis?

  To buy a rocket, to do it, or buy a carriage on the rocket. And then, he realized, "Oh, my God, I, maybe I should just build the rocket." So, biosphere to rocket, and then Starlink.

• 24:05Speaker 00

  Yeah.

• 24:05Jason Calacanis?

  You know, it's very interesting, like...

• 24:07Speaker 00

  Unbelievable, unbelievable. And you don't know all the, even someone like Elon, who's super bright and writes out the master plan. You don't know all the answers, but as you move down the road, your headlights shine that much further and then you can start to work on the next set of problems. So you're sort of like keeping this mental kind of north star. And then, you know, okay, but there's a storm, so we're gonna have to take down the sails or we're gonna have to... So you're kind of continuously adjusting and responding while ideally having some big vision, which he's done. And then he did also a super good job connecting his employees, motivating them with, you know, even like, you know,

• 24:52Speaker 00

  "I make the screw for the fin that gets the rocket into space so that we can put mankind on Mars." But even if you're working on a screw at SpaceX, it rolls up to the mission. You understand how what you do connects to that big vision.

• 25:09Jason Calacanis?

  At Tesla, it was to, you know, make sustainable energy in addition to the electric cars. The electric cars were the way that the battery packs, the solar. All of that would manifest itself eventually. And then FSD sort of became his obsession as well. So you're looking for those founders, and I'm assuming also a level of work ethic, resiliency, where that mission kind of drives you to wake up every day. And, you know, when you do that 12 or 14-hour day and you do it for 100 days in a row and nothing goes right, you don't quit.

• 25:43Speaker 00

  Yeah, it's very hard. It's very hard. I mean, you gotta love this business, you know? And we were talking about Elon. You know, people talk about Steve Jobs. I worked at Apple in the 90s when he'd come back. You know, you study the greats, right? If you're in this business, you look at, you know, it's like studying a football player or a soccer player or a tennis player. You know, you watch hours of footage, you hit, you know, hundreds of balls or kick thousands of balls. You know, you're just, every day. You're in it. Eventually, over time, you make progress.

• 26:12Jason Calacanis?

  Okay, red flags? Top two or three that it's not the right investment for Thomas?

• 26:17Speaker 00

  Buzzwords, you know, SaaS-enabled, da-da-da. When people start using buzzwords, I get, you know, very turned off. I want it in simple English.

• 26:26Jason Calacanis?

  Because?

• 26:27Speaker 00

  Because I think that you're taking too much from the outside world and those trends are sort of like, you know, fashion, they change daily. And so I think being able to reduce your idea into like a real simple concept that's not using a lot of buzzwords is good.

• 26:45Jason Calacanis?

  And let's talk about other red flags. Too high of evaluation, I don't know.

• 26:51Speaker 00

  Yeah, valuation in the sense that you just, not to be greedy about equity, but rather to be focused on getting the right people on board. And once, if you do that, everything takes care of itself. If you make something big, whether you own 10, 20, or 30%, it won't matter.

• 27:06Jason Calacanis?

  Especially in the first company.

• 27:08Speaker 00

  Yeah, yeah. This is a secret that I normally don't share, but I will for you since good opportunity. I take people out to like typically a lunch or breakfast, sometimes dinner, and then I see, you know, are they kind to the staff? Are they kind to the waiters? What kind of human being am I dealing with? Just their little tells like that, little poker tells that you look for.

• 27:29Jason Calacanis?

  Yeah, that's a great one. The ability to also hire and inspire, that's a really important one for me.

• 27:35Speaker 00

  Key.

• 27:35Jason Calacanis?

  Key.

• 27:36Speaker 00

  How do you suss that out?

• 27:37Jason Calacanis?

  You know, when I ask to meet the team, or hey, let's have my team meet the team and just, hey, why are you here? What did you do before this? If you look at the pedigree and how they found the person, and hey, how did you meet Jason? Or how did you meet Elon? And it's like, I emailed him. You know, if you were to ask Travis, and we had somebody who worked for Travis at both Uber and Show yesterday spoke, he worked at Uber doing recruiting and at Cloud Kitchens. And I said, oh, how did you wind up meeting him? And he's like, I emailed him, you know, gave him some ideas. And then when he was doing Cloud Kitchens, I emailed him again, and he responded. And how you meet the person, I remember talking with this back to Elon and just some other folks, they typically

• 28:19Jason Calacanis?

  It's really weird, but through social media and through their network, they just meet smart people and they really are good at assessing that. And then they're also really good. I remember we were, Elon was struggling with who was going to be the CEO of Tesla when he, you know, started investing in the company and then he had to fire a bunch of people. I said, oh, you seem like you have a lot of doubt about this. He says, yeah, I got a lot of doubt. And I said, yeah, what are you going to do? And he's like, I've been struggling with that. And he said, but at the end of the day, if there's any doubt, there's no doubt. And that was like, opened my brain up. And he had heard it from somebody else in Silicon Valley. But when you have these doubts about somebody on the team.

• 28:52Speaker 00

  Yeah.

• 28:52Jason Calacanis?

  As a founder, you're a hundred percent right. There's never a chance where you're like, this person's not the right person. I need to get rid of them. It's only, how quickly do you do it?

• 28:59Speaker 00

  Yeah, yeah, it's hard. It's hard to do that, but it's better to fire early because you're setting your culture, right? So when you have the, the early founders and bad people in the culture will be rejected almost like an immune system in the body where if someone is not the right fit, they will be, so it's super key to get that DNA set early.

• 29:21Jason Calacanis?

  I also think about that when I ask them, another like secret tell kind of thing is when they, I ask them, like, tell me about your first three customers. And they're like, well, you know, we have, we do, we sell into the, you know, the military and we sell into this. I'm like, yeah, okay, tell me the top three companies, the one you landed first, the second one, the third one, how'd you get them? And sometimes we'll get that during the due diligence process, but a lot of times they're like, yeah, the first two are my friends from college or my fraternity brothers and they did it for me as a favor.

• 29:47Speaker 00

  Right.

• 29:47Jason Calacanis?

  But the third one I reached out to through LinkedIn and then they didn't respond. So I cold emailed them and then I, I met the next three at a trade show. I'm like, what trade show? They're like, oh yeah, there's a trade show for lawyers in Milwaukee. I went out to it and I just, I couldn't afford a booth, but I just intercepted people at coffee and I introduced myself and I got three customers there and you're like, holy cow, this person is like, you know, those dogs that hunt for truffles in Italy?

• 30:08Speaker 00

  Yeah.

• 30:09Jason Calacanis?

  Ever go on one of those truffle hunts?

• 30:10Speaker 00

  Yeah, yeah.

• 30:11Jason Calacanis?

  It's wild to watch these dogs. They just, all of a sudden they just run away and then they're just pointing and scraping at the bottom of a tree and then there's five truffles there.

• 30:18Speaker 00

  Yeah.

• 30:18Jason Calacanis?

  They're like those truffle hunters.

• 30:20Speaker 00

  Yeah, yeah, that's right. Cause that, that understanding of your customer is super key because it rolls into the product, right? You've got to be, you have a tight loop between what's your customer, how your customer is using the product and how the product is evolving.

• 30:33Jason Calacanis?

  When we get back from this quick break, I want to ask you, what should founders do with that first 250K, 500K in year one of their startup? When we get back on this week in startups.

• 30:49Jason Calacanis?

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• 31:32Jason Calacanis?

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• 31:59Jason Calacanis?

  All right, we're back here live in Tokyo for Founder University.

• 32:05Jason Calacanis?

  Let's talk a little bit about what should the founders hear. Let's say they're successful in raising that 250K. They've got it deployed. They get into an accelerator. They get another 250K, whatever it happens to be, 125K. What are you trying to accomplish in those first 12 months?

• 32:18Speaker 00

  Well, don't blow it. That's the first thing. Burn rate is interesting. You would be shocked. The number of companies that I've been an investor in that have gone wrong from overspending, it is crazy. And even one I have now where it was going to do an acquisition. It was a big company. It raised hundreds of millions. The partner on the deal had a medical problem, a serious medical problem, dropped out. They had already signed to make the acquisition. So I've seen every permutation of companies running out of money. So I know it sounds like obvious or pedestrian, but really do not run out of money, you know? And it's pretty rare where I've thought, oh, these founders are too cheap.

• 33:01Speaker 00

  You know, get crappy furniture, get a crappy office.

• 33:05Jason Calacanis?

  Frugality matters.

• 33:06Speaker 00

  Frugality matters, frugality matters.

• 33:08Jason Calacanis?

  The way I've said it internally is we're looking for founders who get a dollar of value from a nickel, not founders who get a dollar of value from a hundred dollar bill.

• 33:16Speaker 00

  A hundred percent.

• 33:17Jason Calacanis?

  And yeah, when you get that money in the bank, sometimes you just do stupid things. I had one founder who hired a PR firm because people had told him, and I said, how much you paying the PR firm? I said, thirty five thousand dollars. And he had raised like two million. And I'm like, okay, yeah, you gotta stop that. We don't need that much press and it's like not important. And he's like, oh, I signed an eighteen month agreement. I'm like, okay, I'm gonna call them and read them the riot act. And I got them to settle to get it out of that.

• 33:38Speaker 00

  To get them out of it.

• 33:38Jason Calacanis?

  Yeah, but it was pretty brutal. Have you seen a company with a lot of money in the bank go out of business?

• 33:44Speaker 00

  Yeah, oh, time and time again.

• 33:46Jason Calacanis?

  Right. No, no, company with a lot of money.

• 33:48Speaker 00

  Oh, right, right, right. No, no, exactly. Yeah, yeah, that, that is your, that is your oxygen. I mean, that is like you're in an airplane, that is your gas. You know, you run out of gas, the plane is going down. You cannot run out of gas. You cannot spend your money, you know, to, to the end. And you, and you cannot, investors, they'll string you along. They'll, who knows, you know, you can, I, I've also seen real misconceptions between where the founder thinks they are in a fundraise and where they actually are.

• 34:17Jason Calacanis?

  How do they go from saying, okay, I'm, I'm about to close this million dollar seed round?

• 34:23Speaker 00

  Yeah.

• 34:24Jason Calacanis?

  And you know, you're not even close.

• 34:26Speaker 00

  Yeah.

• 34:27Jason Calacanis?

  What do you, how do you advise them that like, yeah, you, you may wanna cut half the staff or get everybody to reduce their salaries and take your three months of runway to nine? So you have more time to close this because I don't think you're gonna close it.

• 34:39Speaker 00

  You're not gonna make it. That's very hard. It's very hard, but they gotta do it. You just make the tough decisions. Ideally, you don't get your burn up that, you know, you're always thinking like, how many months left do I have here? How many, you know, I've got twenty four months of runway, we call runway, right? Twelve, twelve months of runway and where am I gonna, what, what am I gonna accomplish in that time? So runway is super key, money in the bank is super key, and then the milestones you're gonna hit, you know, where you think, okay, I'm gonna, because you're also looking, I mean, look, once you reach product market fit, there are all kinds of guys show up on your door to help you and give you money, right? I mean, not only just, you know, investors, but also, you know, employees, right?

• 35:21Speaker 00

  If you have a product market fit kind of company, things get a lot easier. But that initial, you're drilling for oil, you're wildcatting, you're sort of land manning, you need to drill as many holes as possible to figure it out.

• 35:35Jason Calacanis?

  Running out of money is just brutal.

• 35:38Speaker 00

  So unfun.

• 35:39Jason Calacanis?

  I tell folks who are like, oh, my God, I've got this one person, they've committed, and I'm like, okay, can I see the term sheet? They're like, oh, we don't have the term sheet, but they gave me a verbal. I'm like, okay, anything that's not a signed term sheet is a no. So ask them, say, listen, you know, I've got some other investors. We talked about some broad terms. Would you like to send us a term sheet, or should I send you the term sheet?

• 35:59Speaker 00

  Yeah.

• 35:59Jason Calacanis?

  And just be a forcing function. And then if they don't send you a term sheet, when they say they're going to, they're out.

• 36:06Speaker 00

  Yeah.

• 36:06Jason Calacanis?

  And proceed as such.

• 36:08Speaker 00

  Right.

• 36:08Jason Calacanis?

  And you have to, I mean, in a way, it's like ball control or pot control in a poker game. You have to control that process. What is a great fundraising process for a company that doesn't have a hockey stick?

• 36:20Speaker 00

  And find out what they need to get to that term sheet. Like, okay, I need X data, or I want to talk to these three customers, or what is it they need to get there? And ask them really, because they'll share that normally, unless they're being really cagey or just keeping, you know, being, I think a good investor will be super candid about, A, if they're in or not, like you say, but you've got to kind of really put them, you know, put their feet to the fire, and then B, if they're almost there or not quite there, what they need to get across the line.

• 36:49Jason Calacanis?

  How do you say that to them?

• 36:50Speaker 00

  Say, what do you need to get to a yes here? What do you need to like, sign the term sheet?

• 36:54Jason Calacanis?

  Yeah.

• 36:54Speaker 00

  You know, what do you need to see from me? And that makes your job a lot easier, because a lot of the challenges is like, communicating what your value is, and people have different things. I want to, you know, you may want to see something different at Founder University than I do.

• 37:08Jason Calacanis?

  And some people might. Not do reference checks and not even do due diligence. And you're like, okay, well, what's the holdup here?

• 37:15Speaker 00

  Yeah.

• 37:16Jason Calacanis?

  And that's where forcing them to get it in and get that term sheet in and sign it. And, you know, tell them the timeline that you're doing this on.

• 37:23Speaker 00

  For example, let's say I was raising money, you know, Jason, you said you were going to do, you're interested in about a 200K check size. Is that right? You know, you need to take notes even in the meeting and say, okay. And then what's the timeframe in terms of closing this? You need 30 days. What's your process like? Well, Tom, we need to look at, you know, we need to speak to three customers. We need to look at your code. We need to da, da, da. So that your investors will generally, and your customers too, they'll tell you what they need.

• 37:48Jason Calacanis?

  It's up to you to force the issue. If you ask. And, and they think maybe some first time founders are like, wow, I don't want to push them. You actually, they want to be pushed. They want to get this decision made. And sometimes they're just busy. They have a life, these investors, maybe they, you know, are dealing with other issues in their personal life or in their firm.

• 38:08Speaker 00

  Exactly.

• 38:09Jason Calacanis?

  There could be dynamics going on you're not aware of and pushing that issue. What do you wish you knew now with 100 investments that you didn't know then?

• 38:17Speaker 00

  I wish I had been more aggressive. I think I'd taken more risk. For example, Airbnb, I overthought it, you know, it was the second angel deal I'd seen. So I should have just done it. And I was even, didn't even know how to do the docs back then. And, you know, should I get my lawyer or should they? This is even pre safe notes. Safes had just been kind of.

• 38:34Jason Calacanis?

  It was back in the convertible note days.

• 38:35Speaker 00

  Yeah, yeah, yeah, yeah. And it was early. And so take more risk, be more of an optimist, you know? I think that's something Marc Andreessen is super, super good at. He's still good at it. I heard that they raised, you know, such big funds. People were like, you're going to have to return like $600 billion or something to, you know, or, or, you know, you're going to have to have $600 billion of outcomes or something. You know, they did it easily. They cleared it. So be an optimist. I think, you know, even AI was quite bullish on AI, but I should have bet bigger into the AI trend.

• 39:05Jason Calacanis?

  Are you conservative by nature or are you cynical? Have you been burned? Why were you not as aggressive, you think? Was it fear?

• 39:13Speaker 00

  Well, yeah, you know, when it's your own money, I haven't dealt with that. I haven't generally, I've done a few SPVs, but generally I bet my own cash. Which is different to most. You know, when I was starting, I thought, I need to learn. But there was, that was such a good time, right? And I bet five years from now, 10 years from now, we're gonna look back and we're gonna say, "This was such a good time."

• 39:33Jason Calacanis?

  Right.

• 39:34Speaker 00

  You know, we might say like, "This was such a good time in Tokyo." It was brand new, the ecosystem was just developing. You remember, Jetro is holding events in Arc Hills, and you know.

• 39:45Jason Calacanis?

  Optimism is key.

• 39:46Speaker 00

  Optimism is important.

• 39:47Jason Calacanis?

  There's this great expression that they tell drivers, you know, in race cars. "Look at the track, not the wall."

• 39:54Speaker 00

  Yeah, yeah.

• 39:55Jason Calacanis?

  Because you look at the wall, you drive into the wall.

• 39:57Speaker 00

  That's right.

• 39:58Jason Calacanis?

  You follow the track, and I was teaching my daughters how to ski through trees. And they love it. It's their favorite thing to do, is ski through trees.

• 40:04Speaker 00

  Yeah.

• 40:04Jason Calacanis?

  Mom's not as excited about it as we all are. They said, "Well, how do you not hit the trees?" I said, "Don't look at the trees. Look at the space between the trees."

• 40:12Speaker 00

  Yeah, look at your line.

• 40:13Jason Calacanis?

  Find your line.

• 40:14Speaker 00

  Yep.

• 40:15Jason Calacanis?

  And what you want to do is, when we start out, we're just gonna stop, and all three of us or four of us are gonna stand there. And you're gonna tell me what your line is, you're gonna point to it with your pole and draw it for me.

• 40:25Speaker 00

  Think about it, visualize it.

• 40:27Jason Calacanis?

  And think about it, visualize, and how many turns is it? You're like, "Well, I'm gonna make like a couple of turns." Nope. One turn here, one turn there, and then you're gonna go straight, and you're gonna pick up a little speed on that straight one. But the speed's okay.

• 40:37Speaker 00

  Yeah.

• 40:37Jason Calacanis?

  But you're not gonna look at the trees, you're gonna look at that space. What do they call it, the negative space or something?

• 40:41Speaker 00

  Right, right.

• 40:42Jason Calacanis?

  Between the trees.

• 40:43Speaker 00

  Yep.

• 40:43Jason Calacanis?

  These girls can ski through trees like you wouldn't believe. And I think that's in some ways what we all do as investors and founders, which is like, you make this big, long list.

• 40:52Speaker 00

  Yeah.

• 40:52Jason Calacanis?

  These are all the things that will go wrong in a nuclear startup.

• 40:54Speaker 00

  Right.

• 40:55Jason Calacanis?

  What could go right? What's on that list? That list is like, two things.

• 40:59Speaker 00

  Yeah.

• 41:00Jason Calacanis?

  Three things. The list of what could go wrong is 300.

• 41:02Speaker 00

  Yeah.

• 41:03Jason Calacanis?

  If you over-optimize on that, you will talk yourself out of every decision.

• 41:06Speaker 00

  Yeah, I think, now, just to your point, it's a super, super point. Like, the founders, what we noticed in companies was a founder versus a non-founder, is the mind of a non-founder goes first to the risk. First to why it's not gonna work, first to what can break, or first to... Whereas a founder sees that opportunity, and then they're like, "Okay, there, these challenges or risks, and I can manage them, or I can deal with them." But they first go to the opportunity versus going to the risk.

• 41:34Jason Calacanis?

  What if you could? What if small modular nuclear reactors worked? What would that look like?

• 41:39Speaker 00

  Yeah, exactly. And then, if you stay around... The longer you're alive, and this is back to burn rate, the more chance you have to get lucky. I mean, now for radiant, there's such energy demand due to AI.

• 41:52Jason Calacanis?

  Right.

• 41:52Speaker 00

  There's no way Doug predicted that, but he knew that energy was important and the demand was compounding. And so now he's in a super lucky place. There's now a bunch of pull.

• 42:02Jason Calacanis?

  Yes.

• 42:02Speaker 00

  In a new way that he couldn't have even guessed, but.

• 42:05Jason Calacanis?

  It is a really interesting thing that happens. You have something like COVID and if you're Airbnb.

• 42:11Speaker 00

  Yeah.

• 42:11Jason Calacanis?

  You just totally get your ass kicked and you have to figure out how to survive. If you're DoorDash.

• 42:16Speaker 00

  Yeah.

• 42:16Jason Calacanis?

  All of a sudden, everybody's like hockey stick, like, how do I get food to my house during quarantine or Instacart?

• 42:23Speaker 00

  Yep.

• 42:23Jason Calacanis?

  And people are like, I'll take the 15 minutes to figure out how this works.

• 42:28Speaker 00

  Exactly.

• 42:29Jason Calacanis?

  And staying alive to do that is the key.

• 42:32Speaker 00

  Yeah. Yeah. A friend of mine, a guy, Adam Ross, you may know, a super guy, has an expression. It's like if you hang around long enough in Silicon Valley, you get hit by the money truck.

• 42:42Jason Calacanis?

  Absolutely.

• 42:42Speaker 00

  And so, you know, hopefully.

• 42:44Jason Calacanis?

  You're looking at me in a very targeted way.

• 42:48Speaker 00

  Both of us.

• 42:49Jason Calacanis?

  Yeah. Well, I mean, even for investors, that is key. It's so key as investors to get lucky. And if you make a certain number of bets and you don't give up, you will eventually get lucky. It's just somewhere around the 20th or 30th investment, I find something breaks for an angel, for a seed fund.

• 43:08Speaker 00

  Yeah.

• 43:08Jason Calacanis?

  But you have to, talking about our business, if you only do five investments, man, the chance is hard. How long did you know before you got the sense you were good at this?

• 43:18Speaker 00

  Actually, the one thing about Airbnb was every time I go to the airport, they'd be on the cover of some magazine, the guys. And that was like, why did, you can only lose one X your money. You learn this later as an investor, but you, you know, if you miss out on a thousand X or 10,000 X, and maybe the case of Airbnb. That kind of said, hey, you know, I was like, wow, I had miscalibrated my risk, you know?

• 43:42Jason Calacanis?

  This is so key. The human brain has a very hard time understanding the concept of a thousand X. It's just so exponential. And it doesn't exist anywhere else in finance. When you get your credit card bill, if you don't pay it and they charge you 2% that month or 30% that year, you're okay. And then if you buy a stock and it goes 5X and you went 500% in five years, you're like, oh, my God, this is incredible.

• 44:06Speaker 00

  Right.

• 44:07Jason Calacanis?

  And when I talk to people and they talk about the Uber or the Robin Hood investment, I'm like, yeah, 1,007,000X and growing. And I still haven't sold any shares of Robin Hood. And I paired my Uber position early to Masayoshi Son had some shares to buy. We halted, but I haven't sold any since. I'm like, wow, that is a very bizarre thing to have a 7,000X or 1,000X.

• 44:25Speaker 00

  And all the compounding, the doubling at the end, I mean, one doubling at the end is worth all the multiples up until that point. So Buffett was extremely good at understanding compounding. You're right. It's not like in the physical world, the delta between how much we weigh, maybe 20% or 30% or 10%. It's hard to think in these orders of magnitude where, you know, the startup world and the tech world and certain things don't run that way. They're running like exponents and they run in a different kind of math.

• 44:55Jason Calacanis?

  If you were in a poker game and there were nine people in it and they each put $10,000 in and you've somehow figured out how to take everybody's money in a cash game, you would make nine times 90,000.

• 45:05Speaker 00

  Exactly.

• 45:06Jason Calacanis?

  Now imagine a poker game where you put the 10,000 in and you made 1,000 times it and you're like, how is that even possible? It's 100 other poker tables.

• 45:13Speaker 00

  Yeah, yeah.

• 45:14Jason Calacanis?

  Worth of players.

• 45:14Speaker 00

  10 million, yeah?

• 45:15Jason Calacanis?

  No, more, I think it's 100 million, right? So 1,000, 1,000 would be 1 million. No, it's 10 million, you're right. So it's like, how did I put 10,000 down and make 10 million? It doesn't make any logical sense.

• 45:25Speaker 00

  Yeah, exactly.

• 45:26Jason Calacanis?

  Pretty amazing business.

• 45:27Speaker 00

  Yeah.

• 45:28Jason Calacanis?

  Thomas, I asked if you would be so kind as to take very raw pitches

• 45:31Speaker 00

  Okay.

• 45:32Jason Calacanis?

  from these year zero companies. Thomas and I will do a couple of pitches and we'll just give some candid feedback.

• 45:36Speaker 00

  Sure, sounds great.

• 45:37Speaker 03

  Hi, everyone. My name is Hiroshi Takeuchi. I'm a founder and CEO of Sake Namist. We offer AI-native cross-border commerce platform for sake exporters. So here's a customer, Mai. She's the first Mrs. Sake and she's owner of Sake export business. She has some problems, one of them declining Sake burriers due to the decrease of domestic consumption. You want to improve that, she needs to enhance export capability. However, it's a lot of paperwork and then it includes documentation and language barriers. This is why we have a solution, Sake Namist. My she uploads the product documentation to the cloud and then in back end part, validation check is executed. And once it's done, she creates a content on top of that,

• 46:22Speaker 03

  then publish and then sell it to the importers. Then once partial sort in place, and then she can ship that documentation to the country selected. And then she can trace in orders, you know, what type, what's going on the order. As you can see, the operation is quite complex and have in just a specific requirement. This is why Sake Namist is a very unique position compared to other multi places. And then a GTM strategy to brand as an alternative wine and then brand in Dubai and sell in US. And then create a new segment, aged Sake as new asset class. Business model is get transaction fee from the importers payment to the exporters, no initial, no license cost. Then we have some government subsidy in the past

• 47:06Speaker 03

  and then we identify a customer right now that we are looking for the important now. And opportunity, one segment is vertical right now, but we have a playbook we can extend to the other regulatory commerce in the trade. And we have a team here, myself and then tech lead in the Masami. We have spent open source in the past in 10 years. Then we have a GTM advisor, Katsu. With this team, we are going to promote Japanese culture and spirit to the world. Thank you for listening.

• 47:31Speaker 00

  What are your first thoughts? Key key point you showed in near the end, Sake is not a big enough vertical of investors, especially the later stage guys like the series A, Bs. They're going to look for huge TAM. They all care about TAM. And so I like the idea of starting with a vertical you understand, like Sake. And then there's, you know, Indians importing, you know, a certain type of curry to, you know, to Japan or to Dubai or. So I like the idea of this going beyond the Sake vertical into many, many verticals. And it's really about exporting from one country to another, any kind of product. And, you know, it sounds like the regulatory piece is the hard piece, certainly for alcohol, but probably any kind of, really, probably anything nowadays. There's a lot of paperwork.

• 48:16Speaker 00

  So to make this a really big business, if you're good at doing that, I think it's a really good idea.

• 48:22Speaker 03

  Thank you.

• 48:23Jason Calacanis?

  And this was exactly what I was thinking. And we both kind of looked at each other when you showed the other verticals. Because I was thinking, wow, this is so niche. And it's a declining market. There was a time when the newspapers were declining. Yep. And everybody was building tools to help newspapers stop declining. And anybody who was in venture was like, you can't stop that. So you're essentially selling into the Titanic, that you want to sell ice cream on the Titanic. And it's like, yeah, that Titanic's going down. There's not another voyage. And you tie yourself to it and it goes down. So you presented as your first market, a market in decline. And we're thinking, yeah, people stopped drinking. People are on Ozempic. Like, you want to find a beach where the tide's coming in, not going out.

• 49:05Jason Calacanis?

  So this pitch had all these signals of no, no, no, no. And then at the end, it had the yes. Oh, he's going to do it for these other verticals. But the name also, then, you're trapped in the name. So I want you, and I'm going to give you permission, to think big. You have my permission. Okay. So you're now allowed to do it. Yes, yes.

• 49:24Speaker 00

  Ditto on the name. Yeah, I was thinking that you could have this name and then do other names. But I think try to make more of a general name. And this is maybe all super clear in your head, but for investors, they need to know this is super big right from the start.

• 49:37Jason Calacanis?

  And you did explain the problem really well, too. So we can fix this. You said, hey, look at all this paperwork you have to fill out. And it's very regulated, a lot of paperwork. This was a great slide, the problem slide. And what I would say is, hey, we have a big problem. When you do import and export, there are regulations. And there are regulations in Japan. We have a lot of rules. Sake, in order just to sell sake to another country, you have to fill out, how many forms? More than 10s. You have to fill out over 10 forms just to sell sake to another country. And in that country, to import it to Korea, how many forms on the other side do you have to fill out? Oh, we need to feed out.

• 50:20Jason Calacanis?

  So what we're doing is we're taking this old process and we're going to use AI. And our company, Trade AI, is going to make it incredibly fast and easy and reduce the error rate. And take it from costing $50,000 in paperwork down to $50 in paperwork. From 50 days of work to five hours of work.

• 50:46Jason Calacanis?

  And we're going to do it across, we've identified 150 verticals in Japan. And Sake is a declining one, but the consumer electronics is a bigger one. Chips is an even bigger one. We're going to take every form, every antiquated, and we're not putting it into the large language models. We're putting it into an open source model that we control. And this is something that ChatGPT or Claude or Grok or Gemini, they won't even have these forms. We're going to have these proprietary forms. And by the way, the forms change every 18 months on average. Now it's like, whoa, okay, there's a big problem and AI is perfect for this problem. So you have the kernel of such a great idea and you have the passion for it.

• 51:29Jason Calacanis?

  We just have to flip the entire presentation. We can fix it.

• 51:32Speaker 03

  Okay, thank you very much.

• 51:34Jason Calacanis?

  Okay, well done. Anything else you want to add, Thomas?

• 51:36Speaker 00

  No, it's great. Exactly that. Yeah, and especially for small business, right? I mean, God, that's like, almost makes it, you go from being, I can't do this to I have all these new markets. So it opens up the TAM for small businesses in a way that they didn't have before.

• 51:50Jason Calacanis?

  Awesome.

• 51:50Speaker 04

  Hi, I'm Jason. Hi, Tom. Hi, everyone. I'm founder of Homie World. Homie World is IR social network. So here's the problem, meeting the people in the real world, it became so hard, as you know. So to solve this problem, we built Homie. Here's a demo. So we, he's Maria, meet Maria, she's like, she just moved to Japan and she was head of IT company. She looking, she lonely, she looking for the event and the people on the event. So she feel the who's coming. So she feel she is interesting because of same interest and same occupations. So that is why she decided to join and chat to meet her.

• 52:29Speaker 04

  Not only that our AI understand her and recommend who to meet, others and who, and why, recommended by AI. So I want to connect to her as well. So AI create a personal message for both party to attract each other. This is not just idea, this we already launch, this already launch. So this is our business model, this is Omakase, friend subscriptions.

• 52:55Speaker 04

  Our AI matches the people like every week if you pay. So this is our traction so far. So our core value is building an AI native trust network on a map. That is why I believe we can expand other categories. Imagine the world, wherever you are, where you live, our AI, you have AI understand you a very well and connect you the people and match you the events and stay places, something like that. So this is our team. This is also our investors. The one of them is like legendary consumer app founders before Facebook. And one of them is like a board and also co-founder of Pokemon Go. I have a last question to people where I live.

• 53:37Speaker 04

  What can AI anybody place in the 20 years, 30 years later? I believe real human connection in the real world. We empower real human connection in the real world. That's why we should exist for the world. Thank you very much. This is Homi.

• 53:51Jason Calacanis?

  Thomas, we saw a very good-looking design. I love good design. What comes to mind?

• 53:57Speaker 00

  I'd want to know your background a little more. You kind of shot past that, but just obviously you've gotten some good people like the co-founder of Pokemon Go. You must have some pretty good industry experience. Definitely hit on that when you're doing the presentation. I know you don't have a lot of time, but what was your background?

• 54:12Speaker 04

  I have been managing startup in Japan for seven years in the past. And that is like homestay matching platform. I know how trust network will happens, how people connect. So that's my background.

• 54:26Speaker 00

  Okay.

• 54:27Speaker 04

  And I also do hosting more than 100 guest travelers in my home as well.

• 54:31Speaker 00

  That's perfect because it ties into what you're doing. It kind of demonstrates that how you know about this space and why this is your idea. You know, why you chose this idea because you you know a lot about it.

• 54:42Speaker 04

  Covid hit 19 hit. I feel lonely at the time for two years traveling around the world. But when I get most enjoyable experience, I always meet the matchmakers to connect with people and something like that. So when I back to home, I host, start hosting my guests at my home. So they're everyone looking for not place but people. So. I and when I introduce people or a bar, they feel like amazing. So if you, as you say, they, if you experience in the seamless way by the app or something, that would be next level. So I thought that was impossible because, you know, I had a lot of work, hard work and,

• 55:26Speaker 04

  you know, not business model. But when I just see the GPT launch, oh, oh, my God, that became possible because that is my story.

• 55:36Jason Calacanis?

  Yeah, you know, consumer apps are incredibly hard until they're not. And it's very much about finding a behavioral loop that people become addicted to. And that actually solves that problem for them. And I'm not convinced that you've found it yet, but my friend started this company meetup.com. We talked about it the last time I was here, Scott Hyferman. And what they eventually found was that there were people who were weird, like you, who like to be hosts and like me, I like to host. And there, those people are called connectors and they are really good at matchmaking and building people.

• 56:15Jason Calacanis?

  How it grows beyond your ability to do it and learning that loop that is becomes viral and you have this viral coefficient is going to be so critical. And it looks like you're figuring that out and you just have to bring us along on that journey as investors. If it's for everybody to do anything, as investors were like, huh, what's the ICP? What's the beachhead market? Is it book clubs? Is it group dinners? Is it hiking? And you showed so many pictures, so many different things. I think it would be more effective to say, we know here in Japan, there are three things that people are going to go crazy for. Everybody is looking for somebody to go on a day trip, get on a train and go to Kyoto

• 57:00Jason Calacanis?

  or go on a hike. Everybody wants to be active and they're looking for somebody to play pickleball with or to go skiing with. So we're starting with those group activities. 10 people going skiing, getting on the train. And then everybody loves to cook or explore restaurants. So we're doing a bar hop and a, you know, going and eating street food. And here's the first one we did, and this grew into 20, and now it's 250. And here are the people who run those groups. I'm very interested in who are the Airbnb hosts of this? Who are the people who will build this? The eBay sellers? And that, to me, would be the magic is if you know how to find the other weirdos.

• 57:41Jason Calacanis?

  And people didn't, everybody thought eBay was like, people would just get rid of junk in their garage. They never anticipated that there would be people who would make it their full-time job. And that's something that now people can imagine because of Airbnb, because of being an Uber driver, because of, you know, all these weird monetizable hobbies, being a podcaster, being an influencer. So I'm very excited about your company. Your strength is design and then go-to-market. And explaining to us that the next piece for you will be that, I believe, that'll get investors to this, is for you to show us the growth journey and the top customers, the top verticals. Close market. The go-to-market is, and you know Zuckerberg had one.

• 58:24Jason Calacanis?

  He's just like, I'm gonna go after college campuses and dating and liking and just figuring out the relationship status. Now, if you were to look at the Metacorporation now, it's not really about relationship status, is it? It's grown to be so many different things. And I'm trying to think of another example, like Snapchat. It was really about people having these friendship streaks for ephemeral messaging and making the messages disappear. And it was like a private social network. There's all these different devices of who the initial group is that builds the foundation. MySpace was, I think, artistic people in LA who were trying to get, you know, was kind of pre-influencer. It was like the original influencers. Paris Hilton had one.

• 59:07Speaker 00

  Yeah, it was like self-expression.

• 59:08Jason Calacanis?

  Self-expression and then maybe trying to even make yourself famous. Yeah, it was like that sort of combination. Here's a very interesting one. Is there somebody who makes a living doing this? In your system now, or do you know of somebody who makes a living hosting events like this?

• 59:24Speaker 04

  We're hosting by ourselves right now, so we don't yet like have that.

• 59:28Jason Calacanis?

  I wonder if hiking would be an interesting one. I saw hiking in there. What do you think is the most interesting two?

• 59:33Speaker 04

  For me personally, or like in the business?

• 59:35Jason Calacanis?

  Which two do you think you could get to grow and double every month?

• 59:38Speaker 04

  I think we need to focus on the expert international and community and founder builder community in Japan, in Tokyo.

• 59:46Jason Calacanis?

  XPAC community.

• 59:47Speaker 04

  XPAC community.

• 59:47Jason Calacanis?

  Perfect. That sounds like a great one.

• 59:50Speaker 04

  I would appreciate it if you share the perspective, like should we, how should we handle the focusing point in the Tokyo or New York? Because if we focus on too much on Tokyo, that will not become global standardized product. We, yeah, social network, I think we need to create so global standardized product.

• 1:00:05Jason Calacanis?

  It's fine, just start here.

• 1:00:06Speaker 00

  Yeah, and Tokyo's super in vogue, and it's also hard for foreigners to access Japan, you know? They don't speak the language, there are all these like secret spots, so I think you could take advantage of that. Also, I like that you really hit upon trust, you know? In order to meet someone in real life, I mean especially for women, there has to be a trust component there. So I think that's definitely gonna be part of your secret sauce is getting that right.

• 1:00:30Jason Calacanis?

  I want to build on Thomas's comments there. Trusted, right now, one of my theories of these kind of businesses and growth is I call it like hot embers. You know like coal?

• 1:00:44Speaker 04

  I don't know that word.

• 1:00:45Speaker 00

  Fire, small, small bits of fire.

• 1:00:46Jason Calacanis?

  What do you call charcoal in Japan? Sumi. So if I have a brick of sumi, and I put it here, it's hot, when we're sitting here, we don't feel it. That's one person. Then you put five people, and you put them next to each other. Now, we're gonna feel a little bit of heat. Then you put 10 people on, you have 15 coals, they start heating everything up, and we're gonna step back, whoa, it's getting hot. Then you put another 15 on, whoa, it gets really hot, it's rating, it burns the desk, it burns to the floor. And you have to just very quickly build or very slowly and methodically add that coal to the fire. And I think that would be very interesting for expats. So if there is a German, Germans in Japan and Americans in Japan and French people in

• 1:01:31Jason Calacanis?

  Japan, that's really fascinating because then when I come here, I started a group with the people we had lunch with that time. And I was like, hey, I'm thinking about going skiing. Hey, I'm looking for a place to stay. Hey, I'm looking for this. And I popped up my own little one and people started giving me good advice. And then people started giving me direct advice. Hey, this hotel is like a secret one. I didn't want to put it in the group chat, but it's really like a little bit less expensive. And here's the person. Man, if you can solve problems for people like that, that feels like a great place to start. And you want to start in your own backyard with something you know and you can be successful at and that you're going to enjoy doing. Expats sounds perfect.

• 1:02:04Speaker 04

  Thank you very much.

• 1:02:04Jason Calacanis?

  Because there's expat bars here in Roppongi. Somebody took me to one. I think it might have been champagne only, but all the Americans were going to this one place in Roppongi that was a champagne bar. It's very weird, but there's a, is there American expat? Are there American expat places here that?

• 1:02:22Speaker 00

  Yeah, yeah.

• 1:02:23Jason Calacanis?

  Is it, is it like a specific neighborhood or is it just specific spots?

• 1:02:28Speaker 00

  Roppongi, but lots, lots of spots.

• 1:02:30Jason Calacanis?

  Lots of spots where if you go there, you see the Americans. Is there equivalent for Germans and French?

• 1:02:34Speaker 00

  Yeah.

• 1:02:35Jason Calacanis?

  Yeah. That's, I mean, and where does that exist? How would I find that? Reddit, maybe there's a subreddit or something? How would I ever be aware of it? Some, you have to learn from a friend, right?

• 1:02:44Speaker 00

  Well, especially if someone can take you, you know, and then bring you around, I think is, and this, you know, if you trust, you met someone on this app and then you can trust that they're not gonna, you know, that they're like a nice person, it figures out mutual contacts or whatever.

• 1:02:57Speaker 04

  Imagine the experience when you're, whenever you come to find like place here, not only find stay, so you can seamlessly group, spontaneously group to welcome you, like this is the handle by AI so that, you know, I think I believe we can change the way to how do we connect people. So that's my like strong convictions about how we change the people connect.

• 1:03:19Jason Calacanis?

  All right. Big round of applause for our presenters and for Thomas.