The interview Calacanis did with Sacca is split up into two parts, which each 60-90 minutes long and the first episode 291 of This Week in Startups and second episode 295. The interviews themselves are definitely worth listening to, and below are the things that stood out to me (not an actual transcription, but what I found most interesting) from episode 291:
Background overview - Sacca started his Lowercase Capital investment company in 2007 and prior to that was an attorney, then worked at a startup, and then Google.
Being helpful - Most of his investments made haven't come from leads through his site or meeting people at conferences, but through his network and relationships that he's built and people he's been helpful to. He notes that there's many different opportunities to be helpful and types of types of people to be helpful to, entrepreneurs, the press, users, service providers, and more.
Startup founders & belief in themselves - Sacca notes how important startup company founders are and how with more and more startups there's many founders that aren't that great, but that truly disruptive founders have a different gene. Examples of this provided include Ev Williams and how Williams views situations without really viewing failure as a possibility for himself, rather he looks and says the world would be cooler if something built and the failure option isn't a part of his math. Another example noted is Elon Musk and how he goes after huge problems and huge opportunities, it's a a fearlessness. Sacca notes how one challenge he faces is if he has to be asking founders how a business can be 100 times bigger as the founder should be doing that on their own. Another leading founder example given is Travis Kalanick of Uber and how he’s both unreasonably fast moving and executes on huge plans. Additionally, Kevin Systrom of Instagram is mentioned as a founder that's bullish and magnetic and someone who you look into his eyes and have no doubt he’s going to succeed.
How now a great time to have a startup - It's covered in the interview how 10 to 15 years ago it was harder to have a startup as bankers controlled much of the access to capital needed to run a business. Now the tools like Amazon Web Services are more in place to empower the new class of entrepreneur.
Sacca background prior to the Valley - Sacca details how starting in sixth grade, he went to the University of Buffalo to do math and then by high school got burned out on it, applied to the top school in the country that had no math, and went to the School of Foreign Service at Georgetown. Then he was living in Spain and Netscape went public and helped rekindle his interest in computers and math. He came back to the U.S., didn't know any venture capitalists, applied to law school, got in, took the student loans and used the money to start a company. His company went nowhere, but he had enough left to start trading, and in 1998 picked good stocks that went on huge runs and turned $10K into $12M in 18 months. Nobody told him to cash out, rather that he a genius, and he was fully leveraged in two stocks, had the market unwind and within a couple weeks was $4M under water in his own name.
Time in the Valley prior to Google - Sacca came out to the valley, got a job at a law firm and was working for them during the day and at night writing business plans. He was still heavily in debt, but didn't want to go bankrupt and have that potentially get in the way of a future career so worked out payment plans and started grinding away to get the debt down. Things were going well, but then he four days prior to Sept 11, 2001 got laid off and had to go out and hustle, attending every networking event he could find. People would pat him on the back and say things will work out and Sacca then rebranded myself, creating for himself a fictional company, the Salinger Group, which did any number of things that he may want to do later. People began hiring him for work and Sacca ended up at a company called Spedera, about which he said he learned more working there at a small company than at Google as he did so much, heard so much, and came away with a generalist knowledge.
Early investing - Sacca covers how he finally made it back to zero, had some money to do angel investing, and his first was Photobucket and second investment was Twitter. That came about because he was an early user of Twitter and Ev Williams called and said "hey, I've got you for $25K" (which Sacca didn't really have, but went in anyways). He notes how he as a non-employee just started showing up at the company and helping as he could, and how people often don't give themselves enough credit for how helpful they can be. Even if not an expert, insight someone has can be valuable. This notion of being helpful that was mentioned earlier in the interview was credited as then leading to him building up a portfolio of investments.
Later investing - He first raised an $8.5M fund that was broad based and went across the startup market. It's noted in the interview how when you’re raising money for a fund, potential investors are evaluating just you, which can be harder then if it’s your company, where they’re evaluating both you and the company. That first fund went well and Sacca then raised a fund to buy Twitter shares from early employees and investors. He covers how he depleted his entire checking account on Twitter shares and had less money than any reasonable angel investor should have, but just believed.
Venture capital industry - Sacca noted how the relationships between investors and founders change depending on the stage. In the first few rounds of investment, people are in it together, but then as things reach Series B investments, there can be a divergence of interests. It's easy for a VC who already has the money to tell a founder to swing for the fences, a million dollars or zero dollars. Basically, people can have different agendas financially in terms of exit strategies.
Twitter as a company - Sacca covered how he got into Twitter because Ev pulled him in and later doubled down on the company. He also spoke of how Twitter has had three CEOs now, feeling that each the right person for that phase of the company, smarter than he, and when he sits down with current leadership he has confidence in the decisions they make. Also covered about Twitter is how it's so simple, but people don’t recognize how powerful its simplicity is and how hard it is to get there. He notes how on his business card it says simple is easy to use, hard to make, and hard to charge for, but complex is hard to use, easy to make, easy to charge for. The beauty of Twitter is all the stuff that’s not there, and that’s not an accident, but years spent letting the simplicity spent for itself. Additionally noted is how Twitter is a commercial platform and place to get things done. Basically a massive commerce engine that helps people take cues from others who they know or care about that give signals about what they should be buying.
Current investing by Sacca - He notes how he's got over a billion dollars under management in funds and is an opportunistic buyer. Covered is how at the time of the interview Sacca had two funds primarily, Lowercase Spur which is larger and writes half million checks to startups and Lowercase Stampede which invests at the intersection of tech and content. Sacca notes that he wrote a whole thesis on it, but the space finally makes sense as traditional VCs were afraid to do content, but there a gap where valuable stuff not getting done. Also covered was how he invests in entertainment and another investment was Kickstarter. In relation to that, Sacca spoke of how when he saw the opportunity, he thought it would make the world a better place, but didn't know if it would make money so put his own cash in and didn't include it in the fund. He additionally talked about how Kickstarter being run for the long haul, like a 20-year horizon where the company founders don’t want to sell, but want to just draw salary and not go public. Sacca talked about how he knew this up front and had to soul search before investing.
The final thing to mention from the interview that I found interesting was Sacca and Calacanis both Howard Stern fans and knowledgeable about the show. More reason in my mind to like the guys and part one of the interview was really interesting and beyond reading this writeup, totally worth viewing/listening to.