Ashton Kutcher is known globally for his roles on TV and in the movies. Many people are a fan of the work he does on camera, but for a select group of startup aficionados, his work in tech is more impactful. Ashton is a very active tech angel investor, and his quasi namesake fund A-Grade Investments has a broad portfolio of over forty investments including Secret, Airbnb, YourMechanic, Hipmunk, Washio, and Path.
When it came time to raise the remaining seed rounds for Whttl, our new startup, my cofounder and I began reaching out to high profile investors, and Ashton came to mind. But first, it was a requisite for us to do a bit of research. What types of startups does he invest in? What stage? Would he be interested in the type of work we are doing? What’s the best way to initiate the conversation?
In completing our preliminary research, I stumbled across a video of a speech he gave during Y Combinator’s Startup School in October 2011. The Stanford auditorium was packed with hopeful and ambitious startup entrepreneurs, excited to be in the company of renowned Y Combinator alumni including Dropbox, Airbnb, and Reddit.
If you have thirty-four minutes to spare, I highly encourage you to watch the video.
Ashton Kutcher Speech:
If you don’t have half of an hour (I don’t blame you), then take just five minutes to read a synopsis of the video below.
In high school, Ashton was a biochemical engineering student, until he took a big risk and dropped out to become a model. This really upset his dad because Ashton had a “great summer job at General Mills making Cheerios” and school was the only thing that was a sure thing. So he started getting really interested in technology, engineering, and solving problems. He was interested in both his own problems and other people’s problems, in areas of technology, philanthropy, and even performing. All of his attention was focused was about solving problems.
“The single biggest thing I look for in entrepreneurs is people who genuinely want to solve a problem. A real problem.”
Ashton meets a ton of entrepreneurs with really great ideas. As he gets to know them, an alarm bell will alert if they deviate from explaining the problem they are solving, and instead begin chatting about who they can emulate or how much money they’ll eventually make.
“I think, “Wow.” That guy wants to be Mark Zuckerberg.”
Ashton elaborates that a pursuit of a billion dollars may result in not making a single buck. Real entrepreneurs have to be the cause; they have to create somebody else’s new reality. If they attempt to emulate one of the incumbent greats, they will fail. You can’t become Mark Zuckerberg. If you try, the best you’ll ever do is second place because Mark Zuckerberg will always be a better Mark Zuckerberg than you.
Case Study: Carl Fisher
Carl Fisher was one of the greatest marketers and entrepreneurs in American History, yet few people have heard of him. Over a century ago, he opened the first automobile dealership in the U.S. He invented headlights for cars, because he imagined that people were going to want to drive at night, too. He started the most famous and historic automobile race in the world — The Indy 500. He financed the construction of the Collins Bridge, so he could get to the swamp land on the other side. This undesirable land would eventually become Miami Beach.
Fisher amassed a $100 million fortune by building casinos, hotels, and infrastructure in and around Miami Beach. He was able to convince Congress to to build the Dixie Highway so that people would come. Nobody did at first, but the 1920’s would see an unprecedented housing boom in southern Florida. When President Warren Harding’s came to Miami Beach for vacation, Fisher leveraged the event for publicity by using a baby elephant named “Rosie” as the President’s golf caddy.
As he neared retirement age, Fisher one last brilliant idea. He would invest his entire fortune building the “Miami Beach of the North” at Montauk. The stock market crashed in 1929, which led to the Great Depression. Fisher lost absolutely everything and died in a trailer home outside of Miami. About a week before he died, someone took him up in a blimp over Miami, and he was able to see what he had built. He didn’t have a penny to his name. Hardly anyone would even remember know who he was. But he gave the sprawling metropolis below to all of those people, and he knew that no one could ever take that away from him. He could never lose that.
Fisher had the vision to know that it wasn’t about building a name for himself, or being remembered after death, or earning a billion dollars. It was about bringing to reality what was conceived. The swamp land that he turned into a world famous beach destination was his legacy.
The same holds true today. Airbnb, for example, is radically changing the hotel industry. It’s about disrupting markets boldly, in a way that you can leave something behind for everybody else to have and share. Carl Fisher knew that. So you might not know his name, but you use his product everyday, and you might have visited his town. That’s his legacy.
Ashton’s Deal Flow
Ashton typically finds companies to invest in through recommendations by other founders from his portfolio companies. He tries to invest only if he can offer value. He has a team review opportunities that are sent to a referrals-only email address. He publicly releases initiatives for the type of companies that he’s looking for.
“If anything surprises you, if anything seems too stupid or too smart — send those first.”
Usually, the ideas that are too illogical or seemingly impossible interest him most. The notable investor Ron Conway is Ashton’s mentor, and has taught him everything he knows about investing.
It’s not necessarily about the city or the environment. Instead, it’s about the talent. Most talent is attracted to companies that are located in the San Francisco Bay Area and New York City. Within an ecosystem, there’s a culture of people that have similar goals surrounding you. This creates a giant support system. The velocity of innovation is so fast, you must surround yourself with people to keep updated. Half of what any company does is a mimic what other successful companies are doing, further supporting the case for a location in close proximity to other technology companies.
Value Added To Portfolio Companies
Ashton tries to meet with all of his portfolio companies as often as he can, although he is always available via email. He gives marketing advice, product feedback, and can “make calls.” He says he can get phone calls back from otherwise unreachable and unapproachable people. They might not know why he is calling, but if he wants to get a hold of pretty much anybody, he can get a return phone call.
“One of the things that I do as an actor is try to understand why people do the things that they do, so I actually use all the products of the companies that I am invested in, and I give product feedback consistently and constantly.”
“The thing that makes me feel the best is making other good people succeed, so I kind of just follow that path.”
Ashton states that he is motivated because he wants to change people’s lives. He wants to help people, and to give, and share, and connect with people. It doesn’t matter if it’s through investing, acting, or philanthropy, he just wants to share with people.
That’s the end of Ashton’s talk. It’s certainly a unique perspective and he shares some valuable insights, particularly for first time founders or for those thinking about starting a company. If you want to get access to more summaries like this one, follow us on Twitter.
Greg Muender is the founder of Whttl, described as the “Kayak.com for on-demand startups.” Use it to find the sweet startups that have launched in your ZIP code and #winatlife. Drop Greg a line via greg<at>whttl/dot/com or check him out on Twitter.
This post was originally published at blog.whttl.com on January 9, 2015