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#81 Jason Calacanis: Intelligent Risk

Apr 14, 2020 1h 4m 22 insights
Angel investor Jason Calacanis talks high stakes poker, how to make intelligent investing decisions, how systems enable or forbid, and demystifies the culture of Silicon Valley. -- Want even more? Members get early access, hand-edited transcripts, member-only episodes, and so much more. Learn more here: https://fs.blog/membership/   Every Sunday our Brain Food newsletter shares timeless insights and ideas that you can use at work and home. Add it to your inbox: https://fs.blog/newsletter/   Follow Shane on Twitter at: https://twitter.com/ShaneAParrish
Actionable Insights

1. Continuously Add New Skills

Continuously acquire new skills using the vast, free resources available online (e.g., MIT/Harvard/Stanford courses, Khan Academy) to improve your outcomes and career opportunities, as there’s no excuse not to learn today.

2. Work Hard on Passions

If you love what you’re doing, work hard, because there is a direct correlation between increased effort, skill development, and better outcomes, similar to how Olympians or Navy SEALs dedicate themselves to their craft.

3. Critically Review Past Decisions

Record your decisions (e.g., poker hands) and critically review them, replaying scenarios to understand mistakes and avoid survivorship bias, which helps distinguish good play from lucky outcomes and fosters continuous improvement.

4. Bet on Founder Resilience

When investing in startups, prioritize the founder’s ability to not quit, as giving up is the number one killer of startups, even more so than running out of money.

5. Assess Founder’s Singular Focus

Evaluate a founder’s singular focus by asking what else they are working on; a lack of other significant commitments (e.g., multiple side projects, nonprofits, conferences) indicates a higher likelihood of success in their primary venture.

6. Recognize Past Founder Resilience

When evaluating founders, view past failures where they worked on a company for years before shutting it down as a sign of resilience, hard work, and dedication, rather than a mark of being a ’loser'.

7. Adopt Outlier-Win Mindset

Reconfigure your brain chemistry to withstand numerous losses (e.g., 50-100) in angel investing, as a single outlier success can make up for all previous failures by paying off 200 to 1 or more.

8. View Early Investments as Experiments

Treat early-stage angel investments (companies with 2-5 people, product in market for weeks/months) as experiments, which helps manage the emotional impact of failures and encourages continued investment in new ventures.

9. Bet Small, Scale on Performance

When learning angel investing, bet small initially (e.g., $2,000 bets from a $500k bankroll) to gain information, then allocate larger amounts ($25k-$100k) to the top-performing companies based on their early traction.

10. Invest Post-Product-Market Fit

For new angel investors, wait until a product is in the market and talk to actual customers (not friends/family) to reduce investment risk by 90%, ensuring there’s at least one person who likes the product.

11. Consistently Take Intelligent Risks

Consistently take intelligent risks in poker and angel investing, understanding that a small edge over many iterations adds up over time, even if individual outcomes are not always favorable.

12. Play Below Your Means

Play well below your financial means in high-stakes games to prevent the amount of money at stake from influencing your decision-making and causing your game to collapse.

13. Identify and Leverage Your Edge

Be self-aware of how others perceive your playing style and leverage that perception to your advantage, for example, by bluffing more effectively if you’re seen as a conservative player.

14. Strategically Select Opponents

In poker, identify players better than you and avoid hands with them, while actively seeking to play hands against those who are not as skilled to maximize your edge.

15. Leverage No-Code for Experimentation

Utilize no-code tools (e.g., Webflow, Bubble, Squarespace, Zapier) to rapidly build Minimum Viable Products (MVPs) and conduct experiments, significantly increasing the pace of innovation and product testing.

16. Never Underestimate Founders

Never underestimate anyone, as great founders, like great chefs, can emerge from any background or location, bringing unique insights and business opportunities.

17. Cultivate Inclusive Industry Spaces

Actively create inclusive spaces and events for underrepresented groups to apply and participate, explicitly signaling that their entrepreneurial spirit and contributions are desired and valued in the industry.

18. Democratize Private Investing

Advocate for and participate in the democratization of private company investing, enabling individuals from all economic backgrounds to access high-growth opportunities and potentially move up socio-economic ladders.

19. Advocate for Systemic Fairness

Support initiatives that provide universal baseline healthcare and expanded public education, including trade schools, as these are fundamental to a fair society and prevent people from turning to less effective systems like socialism.

20. Treat People with Dignity

Treat all people, especially those in lower-paying jobs or just starting, with dignity and respect, recognizing that over-optimization of labor costs can be unnecessary and detrimental to societal fairness.

21. Avoid Over-Optimization

For those with wealth and power, avoid over-optimizing systems (e.g., tax avoidance, excessive demands for HQ locations) as it creates optics of unfairness and can lead to societal resentment.

22. Recognize Game Limits

Understand that even with a seemingly winning system like doubling bets in roulette, casinos impose limits to prevent players from weathering storms and guaranteeing wins, highlighting the importance of recognizing inherent game limitations.