ABOUT THIS EPISODE

Actor, producer and investor Ashton Kutcher talks with Recode's Kara Swisher about his life as both a TV star and a tech obsessive. Kutcher, who starred in shows like "Two and a Half Men" and "That '70s Show," has invested over the past five years in companies like Uber, Airbnb and Square. But he passed on Snapchat — twice — because he hated the app's design and feared what would happen when it got hacked. He's currently starring in the Netflix sitcom "The Ranch," and says denying the rise of digital media platforms in Hollywood is like denying climate change.
English
United States

TRANSCRIPT

00:00:00Today's sponsor is casper and online retailer premium mattresses for a fraction of the price get fifty dollars toward any mattress purchase by visiting casper dot com slash recode and using the promo code recode Terms and conditions apply i'm kara swisher executive editor of rico you may know me
00:00:17as a person racing ashton kutcher to one billion twitter followers but in my spare time i talk tech and you're listening to rico decode a podcast about tech and media is key players big ideas and how they're changing the world we live in you can subscribe to rico
00:00:30decode at itunes dot com slash rico decode and while you're there leave us a review today In the red chair is ashton kutcher who have known a very long time but he's an actor who has starred in shows like two and a half men and also the netflix
00:00:44series the ranch which just released its second season in two thousand thirteen he played steve jobs in the movie jobs but he's also a tech investor has put his own money into companies that you might have heard of like airbnb dueling go secret and oh yeah uber and
00:00:59full disclosure he's also an adviser to recode's parent company box media i should you get around here Welcome to the show thanks Anyway so your key spots was also an investment although i just have to disclose that just in case there's some like sec issue with that Yeah
00:01:13you sleep on a casper mattress I don't sleep on the casper mattress only because i already had my mattress well after i invested but for the new home well i'm going to definitely outfitted with casper everywhere you like the smoking man but let's talk about let's talk about
00:01:27you ashton So talk about the show right now because you've had like let's talk about the hollywood party of career and then the second part we'll talk about your investments with your extensive you're now doing a netflix show after being on a major network and you were on
00:01:39a network from much of your career and in doing movies and things like that talk a little bit about that transition earth it's won it all for you Yeah well i was doing two and half men and as i was wrapping it up there was a conversation is
00:01:51having one of my best friends danny masters and who's my co star and also a producer on the ranch and we're talking about doing a show together again we had done that seventies show together years and years ago And had always wanted to do a show together and
00:02:03the writers from two and a half men we're talking about wanting to do a show together again and so we also did have a conversation about what that might be and i really only have one place that i wanted to take it which is netflix why why is
00:02:16that Well first of all had already had a conversation with ted sarandos who runs the program in there and i knew that he wanted to get into the sitcom arena and i knew that he they hadn't gotten into the sitcom marino we spent a day least with original
00:02:30sitcoms and i thought there was a chance to actually really advance what a sitcom looked like and felt like and sounded like and the kinds of content that we're in and the kinds of actors that you could have on it and so the idea of doing a sitcom
00:02:42in a place where there were kind of no set rules and nobody knew what worked you sort of opened up the landscape of what could be possible sometimes you get into inside of these sort of sort of factory content machines that have been doing it for years and
00:02:58years and years and years and they have to cater to certain advertisers and they have to cater to a certain ideology that the cater to a certain format that you're calling that the entire studio television system essentially well yeah i mean historically yes So like network television that
00:03:11actually generally does the sitcom format you know there's there's a format there that works and it's a format that's work for years and years and years and years and years and i think it's why most sitcoms tend to look the same and feel the same and have you
00:03:25know they're lit the same they never have music underneath their scenes they rarely take time to go into dramatic pause because they have to fit into this like neat little twenty two minute box that advertisers will like from content perspective you can't be very specific about jokes their
00:03:41products because it might interrupt with one of their advertisers You can't talk the way that people naturally talk and use whatever language people naturally use because that might offend somebody And so you get kind of pressed down into this little box and there are a lot of people
00:03:56that are very good at making that really good version of that kind of show and i thought doing something with netflix would give us the opportunity to really creatively go out and try to reset what a sick comments that i think people really like sitcoms but i think
00:04:09they've become tired over time because there just the same All right so but you've made your career in sitcoms I mean the seventies show was an enormous hit or considered enormous hit and so was two and a half men absolutely oh i mean there's there's audience for it
00:04:22I just think that that you know after you get about twenty thirty fifty episodes in your creative bugs starts to die because you can't really sort of you can't really build on you can't really kind of go outside of the box and on this show you know from
00:04:36from a producing perspective we've been able to like create whether inside of a studio we go outside we go inside you know we can really push the what the content is like all the way to the edge we hired sam elliott who's not a sitcom actor to be
00:04:52on a sitcom show and debra winger who's not a sitcom actor to be on a sitcom and i feel like we've been able to sort of start to press into a creative boundary that i don't think we would ever be able to get to get away with it
00:05:03at a network And so netflix was your first choice because they've been what what about them creates that for you Because it's also not just netflix is amazon it's Eventually google presumably so i think that they have a culture there that trust creators to create they really don't
00:05:19interfere with our creative process at all a traditional network do you get you know a list of notes at the end of a rehearsal before you ended up shooting something that would you know you have to change their creative integrity of the show we don't get the example
00:05:32you know it could be a joke that they feel like it's too crass it could be you know what where a character is heading or the direction of the character that you the way characters behaving or it could be it's just this litany of things where you go
00:05:46i don't understand what explained given give me like some some of some ground level reasoning as to why you want these things and will pursue them and it's usually just because well we can't do that And it's i think it's just a lot of people afraid of getting
00:05:59fired which which tends to be the culture companies that are slightly more season and netflix we don't have that I think the other thing is you know because of the way they actually know who's watching the show instead of how many are watching this show you can start
00:06:16to cater your creative towards the people that actually love the content that you're creating and i think that in a lot of ways that's framed and it makes them a little bit more confident around the decision making process internally so what involvement do they have with you so
00:06:29you bring it to them you brought it to them and you didn't bring it to the networks yeah we took the show to one place we had a script and myself and danny masterson and said we want to make this show they read the script we had a
00:06:42conversation about what we wanted to do and that we wanted to make a show about a conservative family in the middle of america with conservatives fuse and where we're not making fun of people in the middle of america but embracing those views and making fun of the coast
00:06:56and they thought that there was a great opportunity for them to grow into those markets and that this is the kind of show that could help him do that and and so what involvement do they have now they just you just make it and they no i mean
00:07:08we have executives that come to her table read and executives that come you know they're with us all week long but there really are partners on dh they're supporting us and and i think a supposed to a lot of networks where you have you get notes that air
00:07:21prescriptive around what they want change and how they wanted change you know they'll point things out to us that are you know story arcs that they feel like could be strengthened or or character arcs that they feel i could be strengthened But it's it's never like a prescriptive
00:07:34note relative tow stuff that we're going do you imagine this is the way it's going to be for creators because here's someone like you again who's benefited from the system that had been created got famous that way Was that a big it was a difficult shift for you
00:07:47too go to netflix where the audience is smaller unnecessarily or but it's more particular obviously and he's had a couple of hits so yes a netflix won't share our numbers with us explicitly but we've done a little bit of reverse engineering relative to the success of shows and
00:08:04ah i know a couple of companies that have the ability to do some reverse engineering and social i think our audiences is well in the neighborhood of network television shows on and i think it will only grow over time but it is a well known person who's been
00:08:19in sitcoms Did you worry about making some of some people have it or worried about moving away from the old model with away from movies moving away from all kinds of things Yeah no i don't have kind of like flip between television and feature films my entire career
00:08:33and and i i just like to build things i don't really care whether it's you know whether it's a technology company or whether it's a television show whether it's a movie or whatever it is it's for me it's about just sort of exercising their creative bug and trying
00:08:46to build something great that impacts people I think i think the only question i would have is if i'm going to spend time and energy on something i want to make sure that it's hitting an audience where what we're trying to do actually has some impact because i
00:09:01think you know this show on its face early on it won't look like there is a very big social push relative to it but i think over time people will start to see that they're really social hooks in this show that we're actually trying to trying to connect
00:09:15with a mind frame and you know home that mind frame towards maybe a little bit more open minded perspective so explain that what you mean social hooks What would that be So you know the first twenty episodes of the show are really more just sort of like fun
00:09:30down home kind of stuff we're dealing with like family relationships internal family relationships things that are going on and anybody who's watched this new set I don't want to give away too much with the very last episode has a pretty pretty aggressive cliffhanger on it and there's a
00:09:45another character wilmer valderrama who was also in the seventies show with us that gets introduced and wimmer's an immigrant labor working for working at one of the ranches that's a local ranch and i think that immigration is this really abstract thing that becomes this sort of policy conversation
00:10:02in the public zeitgeist but when you connect with someone and actually have feelings for somebody who is an immigrant i think that conversation is very different And then and then i won't give it away with the cliffhanger of the last set of episodes there's an event that happens
00:10:16that i think will dive very very deep into ah an issue that is a polarizing issue in our country and we'll look at both perspectives uh in a slightly deeper way than maybe usually gets done Eso whether skittles or dangerous that's right it's whether skittles were dangerous and
00:10:37that's what this candy stuff going on in this tic tacs skittles they're going after red vines next time sure of it but he was vilified vilified tick tack tick tack people were pissed about i bet that they are put a statement altoids just going crazy but all your
00:10:52money and alito um so when you're thinking about this idea of doing all these shows at once we were talking about the cliff and those air sort of old terms because they these things drop all at once with their old terms but but relative to the way sitcom
00:11:06format and so sitcom has become this incredible financial engine for a television especially for studios where you don't want any of the episodes to be too deeply intertwined from a storytelling perspective have resolution and when you go into syndication cycle you can sell them in bundles and they
00:11:24can hear them in any order that they want and then you'll have to count on the audience coming back week to week to stay with this story and he's riding a bike this week next week she has a cab i'm sure on dso each episode almost lives that
00:11:35is their own independent little story where is on netflix given the binge watching nature where people are going to watch ten episodes in a row now all twenty of our episodes air up there and so there are people that are going to start today and watch all twenty
00:11:47is one rip i think there's a different way that used tell stories relatives that different ways that you carry character arcs and on the cliff hanger in traditional television especially in sitcoms is somewhat disappeared given the syndication cycle in the in the way they resell these shows afterwards
00:12:06and we got to bring it back to a life in on a show like the who shot j r right of our show becomes really really important and valuable because it's what gets you to the next episode the most valuable thing on netflix is the next episode and
00:12:19it has to be the next episodes you're constantly architect in your story in order to create that the value in the next episode and how what else can you do to be creative in that manner like they gave you're dropping twenty episodes ones with some people like and
00:12:32some people don't like i think it's fantastic that creates a whole new viewer experience eso from a comedy perspective you know there's like functions of jokes where you can actually drop the setup for a joke in one episode and then pay it off in the next episode because
00:12:47you have a pretty good inclination that people are going to carry over and watch the next one you can carry you know various like props across episodes you can start a story line and episode three and finishing in episode five and so it really and it really like
00:13:01opens up the writer's room to have to create an arc over a series of episodes as opposed in individual episode and whether it's a comedic arc or whether it's dramatic arc and you met works with dramatic arts it also works with comedic arcs yeah so would you imagine
00:13:16it going So you what do you consider success of what you're doing here with that place We want to create a great show we want to create that show that you get off of the end of your day and you go home and you watch this for netflix
00:13:28i think the measure of success with this particular shows to open up markets that that weren't necessarily that are gonna watch you know house of cards or maybe like aren't into this sort of mme or urban fair shows that end up on the network I think we can
00:13:44open up domestic markets and i think we can open up some international markets that really appreciate comedy and where this community exists in south america has a huge ranching culture we're doing extremely well there were doing extremely well on a couple of markets in europe right now but
00:13:59where we're showing i think the most growth which is really exciting is in the middle of america so i think it turns on this different viewing behavior to a whole different market that didn't have access to it before Did you ever think of that What markets work for
00:14:12you when you're making your pass it comes you just you just sort of throwing this massive thing out Well so let's be clear so my first sitcom that seventies show i was nineteen years old and happy to have a job right was i moved to los angeles and
00:14:24booked at the first day i was in los angeles i was just like i'm making a lot of money to stand in front of people and try to be funny that was so that's how that happened uh yeah say two and a half men i made a joke
00:14:37about how much money charlie she must have been making in that i would take that job and got a call like the next day and went um really you want me to do this the al by elmer jump on that grenade and s o i wasn't really and
00:14:50given the fact that i wasn't a pretty start either those i really didn't have like a cautious about it i think and punked which was an early thing i produced i was just you know making fun and trying to have fun and and you know i definitely thought
00:15:04like as we were casting various people to punk on the show and as we would architect those into like they're like three segments he show and as we architected every one of those episodes i thought about the demos and i thought about the the general demos and who
00:15:20these various people would be appealing to you know this is really the first show like soup to nuts that i'm in that i think i had to have that kind of conscious i think what i'm going to get it is that you have power now that you didn't
00:15:32have before necessarily in this system Um yeah i suppose well yeah creators have more power and this is because you have options and in different places you could go and well i think that's the nature of what's happening with the digital landscape right Like before you only had
00:15:45x number of buyers and you were happy if any of them were interested And now i think i think you khun are detect a story that you want to tell and you can shop it directly to who you think has the most relevance your audio All right we're
00:15:59here with ashton kutcher We're talking about changes in hollywood and changes his own career When we get back we're gonna be talking about his investment because he's a very successful investor in many silicon valley companies castro made a perfect mattress and sells it directly to consumers To save
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00:16:41toward any mattress purchased by visiting casper dot com slash recode and using the promo code recode stop paying for the mattress industries inflated prices go to kaspar dot com slash r e c o d e and use the promo code recode terms and conditions apply i'd also like
00:16:57to tell you about code commerce which is a live event siri's we started this year and i'm here with the host of code commerce jason del ray hello carol how you doing I'm doing great today good so the next event in the code commerce siri's is coming up
00:17:11tell us about it it's october twenty fifth in las vegas during the money twenty twenty payments conference so you and i are going to go to see some shows and gamble and what else will be interviewing striped co founder john collison who was a five billion dollars payment
00:17:25start up we're going to find out how we got to that number and why and how he's trying to help entrepreneurs across the globe not only accept payments but start businesses Yes so these payments cos they're starting to get really big like square and striped and some others
00:17:38and they're sort of competing to change the way people are paid and how how payments are done by businesses Yeah they're trying to make it super easy for any developer to get up and start accepting credit card payments bitcoin payments I don't know if anyone does that anymore
00:17:52That was about a year and they're trying to go global really fast in sort of unique ways without a lot of people on the ground So the whole point is getting rid of all currencies someday and just figuring out a way to do digital everything in payments Well
00:18:05we can ask him that i think they're trying to just you know what they'll say is they're trying to cross borders in a digital way so that an entrepreneur on the other side the globe consult to u s consumers and there's no reason that shouldn't be no i
00:18:18have to get rid of my backpack full of golden All right well i'm really looking forward to it i hope to see some our listeners there Code commerce is an invitation only event october twenty fifth in las vegas during the money twenty twenty conferences jason said For all
00:18:30the details and to apply for an invitation visit recode dot net slash events We're here with ashton kutcher who is a renaissance man of hollywood and entertainment I would say i think people dough people do have a sense that you have lots and lots of tech investments and
00:18:45you but you have some very good ones Actually you've been in a lot of things but you mentioned two are one or two already talk a little bit about your investments because young people realize how long you been at it because a lot of celebrities sort of enter
00:18:58the investment picture and there's sort of just part of a press release versus really active investing Yeah i was saying that was probably not the best time to start entering No not at all Yeah times So you started off with talk about your various investment groups because they've
00:19:11changed over time Yes or why i started off just investing is an independent person I was i was running a production company and uh i saw buffering speeds start to pick up on online and realized there was going to be a migration of content delivery Into that space
00:19:29i was an avid facebook user and an avid youtube user and trying to promote a lot it's funny like when i was doing dude where's my car it seems like a really long i was getting i would get into a well chat rooms i would get into a
00:19:44a well chat room and start to like just start dude sweet threads on then leave that chat room and go to the next one starts so i was like trying to like you know like digitally hacked audience acquisition online like then and then when i said when i
00:19:59was running my production company i wanted to actually turn it into something that we could use and so i sort of looking for different ways t quantify digital audience and things like that and sort of making a couple early investments in companies that were doing that and and
00:20:14then a sigh started doing i started just opening up this canvas of opportunity with various founders that they would reach out to me and i don't know how i'm associated with this company or that company but i'll give it a shot and then i think my race with
00:20:28on twitter with cnn brought light to the fact that i had a slight understanding is not be reduces tools and then so i invested in square which is jack dorsey's financial transaction platform because i got to know him through twitter i invested in four square a couple the
00:20:47company called optimized lee a couple early things just on my own with my own money then they called you they called you correct you had been investing i think it was either they called me or i called them investment company called group me because a friend of mine
00:21:02introduced me to them and uh and i invested in skype early on was your criteria just i think it was it was mostly just really relative to the product in the usability of the product and then really just being willing to be the stupidest person in the room
00:21:18like i was hanging out with really brilliant people and they would you know we have a common open conversation about you know this company or that company and they'd sell me on and i'd use the product i go wow this actually really useful around is actually really interesting
00:21:31and then i meet with the founder and say hey i'd like to invest and then back then nobody was investing well at least no actors were investing and i think that they thought hey i can get a nice little press pop out of this and then i really
00:21:46just started to do relatively well i'm kind of double down on it um my current investing partner guy oh ciri reached out to me and said hey i think i could raise us some money i was like good cause i'm running out like i keep investing these things
00:21:59on my own I don't know how much longer i can do this and so that we met with our third partner at the time ron burkle and we created a grade where ron put up ah line share the finances guy and i put up some of our own
00:22:10money and we built that fund out um and then started a second fund and now that fund is in harvest mode but we ended up investing in airbnb and uber and house and ah siri's of other companies that have all done really really well um and then uh
00:22:28guy and i decided we wanted to do a bigger fund and so we branched off and build our own investment fund called sound ventures which our current fund so now we have another early stage funding the late stage how much total The new fund Um we've invested around
00:22:46thirty million dollars ok And that's how much you raised from no we've raised more than that we've invested that much ok how much should be raised So we raised about one hundred thirty million dollars was that difficult we have two lp is one lp for our early stage
00:23:02fund and one lp for our follow on fund and who's the second around burbles obviously the first no um actually live nation is the lp for early stage fun and liberty capital is the lp for our late so that's easy you don't have to deal with a lot
00:23:15of lps right It makes it very very so and they're very generous towards us with helping with our back office and helping diligence deals and it's also when you when you have a single lp like that you can start to target focus your investments relative to some of
00:23:30their needs as well uh which which only just sort of broadens your scope of what you invest in it so much time do you spend on your busy i want to go through all the investments do that you made because you know you have to break out my
00:23:41no no no you don't but you kind of talked like he sort of stumbled into it but i don't think that's necessarily the case Well i really you know you're already doing better than most vcs on these guesses you've made yeah but which makes you think either it's
00:23:54a lot easier or it's a lot harder i think it's i think it's a couple things so one i think that we have a very very focused agenda as how we invest one were founders first on we believe that every great company is built on the back of
00:24:12really really brilliant founders and we have criteria for the founders relative to their grit relative to their ability to sell their product relative to their domain expertise You we have a serious of things that we vet our founders on and i think that that's like the first thing
00:24:29because because at the end of the day companies are run by people and if you can understand people you can understand what companies may or may not work youth ingrid i'm assuming you're referring to the book that everyone until i come back he loves to talk about i've
00:24:41read like six books on it there's a great book called the willpower instinct that's really wonderful and sort of lays out a lot of the qualities relative to grit What are you looking for in So the first thing i look for in a vendor's is did they have
00:24:55like a hustle when they were young Like because i think entrepreneurs were always entrepreneurs and whether whether it's like selling blow pops out of their high school locker or like selling makeup back to their aunt that they would take from you know like everybody's got some hustle when
00:25:09they were a kid but my assessment of grit is tell me the hardest thing that you actually managed to persevere through and so and it starts with having a passion for whatever your building or the the essence of the problem that you're solving it If if you have
00:25:27a gumption about you or a disdain for the problem that you have the likelihood of you persevering through some great obstacle that you meet along the way is going to be relatively high And so i'd like to find out the things that those people are passionate about how
00:25:42they've actually persevered through obstacles in order to attain whatever their goals might be And you know that's just that's a serious of questions that aren't about the company and a lot of times like you hear investors to get on the phone and first thing they start asking about
00:25:54the company and they forget to ask about who are you And and i think that that's one of our that's one of the sort of core things that we look at really really deeply and one state sort of they can demonstrate some version of them trying to persevere
00:26:08through the problem or they can identify the problems that are going to come to them in their company So whether it's regulatory regulatory hair on the company whether it's having being extraordinarily well versed in their competition and the relative advantages to their competition and whatever landscape that they're
00:26:26trying to trying to build into i think all of those things start to signal that that person is going to be able to persevere because there's not a day that goes by when you're building a company that you don't have a problem especially when you're running i mean
00:26:36it's your mortgage your business but why didn't you ever build a tech company Um seemed like a well i've tried um and i haven't been successful um i think one of the biggest things about building a tech company on another attribute is that you have to have a
00:26:50technical founder that understands and cares about the business as much as you do whatever it may be Um and i say i haven't done it successfully so that's probably not completely sure i built a company called a plus that's a media company um we just sold that company
00:27:06to chicken soup for the soul um and we're trying to do just that space line positive journalism So any story that's out there We try to find a positive spin on an inspiring spinner and optimistic spin on on the story so that that company has been and continues
00:27:21to be successful and then what didn't work for you And you said you weren't sixteen what didn't work doing it um i would say like relative to liken uber and airbnb you're like one of these companies that became like these sort of bow he myths like let me
00:27:35build a new industry i wasn't building a new industry so i wouldn't say it is hard i think i think media is extremely hard to scale but i also wouldn't say that this is like a a tech company per se obviously it's a media company given the fact
00:27:47that it has given the fact that it's we have built some technical tools that are first generation technical tools but i don't think that it has like i don't think it has the same sort of technical domain advantage that some of these other companies night i would say
00:28:05probably my most successful startup is my nonprofit thorn we build software to help police departments prioritize caseload and identify and recover trafficking victims and victims of sexual exploitation of children And so we're currently in all fifty states we have one hundred one thousand seven hundred seventy five police
00:28:26officers or law enforcement officials using our tools toe recover trafficking victims and this year we've recovered or identified like six thousand trafficking victims and you worked with tech companies to do yeah so we built a technical task force and we're with a myriad of tech companies do it
00:28:43and then we designed a product with a company called digital reasoning that helped us build the product and now we've we deployed it and it's doing extremely well and this is a non profit there's a nonprofit yeah what prompted you to do that I saw a dateline special
00:29:00years ago on human trafficking and i saw these like six and seven year old kids um being sold for sex and i thought it was repulsive and as i looked out and try to find groups that we're actually doing something effective toe solve it there weren't very many
00:29:19um and there was certainly none doing in the digital domain and i saw like well i saw a statistic that said that seventy five percent of the transactions around sex or happening online and i thought that in the same way that you can build a business online you
00:29:33khun the only way you're gonna dis intermediate that business it's actually go online and fight it online but there wasn't really any group that had any kind of technical domain expertise relative to that area that would be ableto do anything so we built one well that's astonished and
00:29:50now it's now it's still deployed you still run it or you have people i'm not the ceo of and i'm the chairman of the board and i my former executive director julie korda is now the ceo of it but it's still running and doing extremely well and we're
00:30:03building a bunch of other tools in this space i can't talk about but so getting back to the other investments some of the ones that have done really well and we've talked about it huber you were quite early there correct travis pitch me the company when he didn't
00:30:18have any investors very very early but i do think i didn't quite get it right off the bat because you have limousines all the time Well that may have been a little bit of the limited value and like i didn't i was like why would people pay more
00:30:33to get a black car And it wasn't until i i got my head around the idea that eventually people will pay less tohave a black car that i really understood the value of the company and that was it didn't take that long but it took longer than i
00:30:47would have liked you think when he pitched you speaking of grid that guy has great despair Yep i thought it was interesting that there were a couple other people sort of toying with this ride sharing idea right where it was like i had been pitched a couple other
00:31:02companies that were you know list your car and share your vehicle and i actually thought it would end up falling i thought the a person that would win that space would end up being one of these like ride hitching platforms and not necessarily a company that had the's
00:31:19sort of high end vehicles like this sort of i didn't i didn't kind of understand the luxe value in this space I thought it would end up being one of these like you know almost like the uber ex model that would win out on it So happens that
00:31:32i think that that model is the model that ultimately wins out but it i think he started top down built his brand with the luxe model and then in the down then move down Why did you invest What did it make you do if you saw all these
00:31:45others and thought something different Eventually i saw product mark if it um you know i think we ended up investing like be round and it was pretty clear that there was a product market fit there and growth And then on then i started looking at where the real
00:32:00hair on the company was which is regulatory and on and and i sort of realizing that the regulatory hair that there was it was like bizarre in many places it's like in denver you couldn't have a black car within two miles or within like two city blocks of
00:32:16an establishment there was selling alcohol herbs like some like weird random law that was on the bow Looks for generations and i realized that you know this was just a monopoly trying to hold on to their around and there was enough momentum behind the company that i that
00:32:31i thought it could push through the same thing goes for airbnb I mean i think a lot of these very different founders very very different founders both equally passionate about their business i think a different tact towards the way they build their business but i think they both
00:32:46have like all of the qualities that it takes it sort of pushed through the night when you saw that what did you think they're being being once again I think i saw that in the syria's b there was a clear product market fit it was growing i think
00:33:01i think ah somebody put something in my ear that i think peter thiel's probably like established like his foot hold on around making investments in companies that have non intuitive properties where whatever people's right intuition is about one thing or another so happens to be not true and
00:33:24that when you do that there's green grass for days and days on it right o meter caliente and somebody planted that in my year at one point and when i saw airbnb growing the way that it was growing was like this is totally counterintuitive i i don't know
00:33:39you know i mean who's going to open up their house the stranger and let them sleep in their spare bedroom like is that And it was so it was just the evidence was all over that that was gonna happen and so i downloaded the app and started trying
00:33:52it and it was amazing it was like an extraordinary experience where i got mohr for less and i think you know at the end of the day when when these companies work they have that quality also my partner at the time was ron burkle and run we had
00:34:11a lot of investments in the hotel space so i understood the value he coach me up on the value of investing in hotels and why they have some impervious qualities in shifting market conditions and what i realize is that airbnb had that same quality that people we're still
00:34:29going to travel no matter what the market conditions were and that in fact they would be looking for a maury economic resourceful way hotels aren't impervious as it turns out well not terribly and be so finish up and then talk about where you think investments and hollywood are
00:34:44going but what is an investment you made that didn't work out tons of them I think you mentioned one secret secret yeah that that one didn't work out i don't know i mean i don't know the anonymous space for a chat and conversation i think is something that
00:35:07maybe we want to have happen but people aren't ready to have happen and i think that there's a lot of work being done in a i um actually jared cohen from jigsaw google just had an article in wired that was talking about launching a i tell eliminate trolls
00:35:24from the web and i think that once that technology gets deployed and works really well i think that an anonymous chat or an anonymous social network could could work you know it was sort of a shot that we were taking that you know whisper was kind of percolating
00:35:41secret was percolating there were a couple of them that were percolating all at the same time get jack um and in fact we had made an investment company years ago called like a little and that was a college campus version of secret so we've like that space in
00:35:57general because we believe that there's a true market where people have public fear to talk about themselves in a very intimate way but we'll be willing to do so in an anonymous format for snapshot snapshot ish in privacy to it and and i think that uh i actually
00:36:16think when a ai bots get released to eliminate troll and i think those markets will be working out but we'll talk about that more which is one that you wish you had gotten and you didn't see what i pass on snap shot twice uh um you know t
00:36:34shirts that you know so i went on twitter and i do this like every about every six months i went to twitter i said what's the new app that you're using and what's a new product that you think it's really cool and there were two companies that's like
00:36:45it was like the writing was on the wall it was like there were ten responses that said snapchat and ten responses that said tinder and i was like whoa hold on and so i started using tinder's product and playing around with and i was like this amazing the
00:37:00swipe left swipe right like just just that simple product feature i thought was outstanding like just a beautiful piece of product and i knew sean rad because he had a company called adlai that he was uh wanted me to invest in before that i passed on and so
00:37:14i reached out to sean was trying to best in tender and had a deal done and then found out that they had come out of an incubator that was icy owned and so therefore they couldn't raise money so we had term sheets that got tore up which really
00:37:26bummed me out and then i looked at snapchats product and i hated the product i just thought it was like they woke you actually i just thought that the product was like it was a little cricket ian or rickety and a little not it just wasn't beautiful or
00:37:44elegant and i have this like dome personal pet peeve about that and it really bugged me and it wasn't until twice you didn't you know i passed out twice because i just didn't like the product did not like and i know the dirty little secret that even though
00:38:03everyone thinks that there's privacy and they think that their information disappears that it still sits on a server somewhere and then it's totally hackable over time evan doesn't like hearing this but it's true i mean it's not but anyway well but but it is true and so or
00:38:16at least it was when i was looking at it and they may have changed it i don't know i'm so i'm not going to be an authority on but that really bother me because i went with the first hack where these kids are showing whatever pictures they're showing
00:38:29to each other on this thing the first hack that comes out it's not going to be good for the company and it's not going to be good for the users and it really really scared me and it wasn't until they launched their true messaging product i saw evan
00:38:42out somewhere i was like ok that's a good problem yeah it was like your t shirt you're supermodel girlfriends fantastic she's really nice Yes Yeah ok it has been nice when we get back We'll talk more that's literature about where innovation is going and also where hollywood's going
00:39:01today's show is sponsored by oxford road Ever wonder how these ads on podcasts work A startup pays a host like me to read a script about their disruptive product or service We know you're choosing to listen and that means you will probably at the very least give the
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00:40:46tell you about recode media with peter kafka and this week we have a special bonus episode of recode media that will air on tuesday That is tomorrow peter who'd you talked to this week kara guess who i'm here with jon favreau not the john pepper you talked to
00:41:00the other john february sad john take care how are you john I just talked about we talk about politics obviously because john used to work at the white house and he's still involved in politics he's got a great podcast we talked about hillary we talked about donald with
00:41:13state of the media when my missing uh white house obama john's early facebook folks all kinds of good stuff all awesome stuff you should listen in it's good baggs you confined recode media on itunes google play music or wherever you listen to podcasts we're here with ashton kutcher
00:41:29who is sometimes acts in things but is also a big investor and so he is a new show out on netflix called the ranch which he is a producer of correct producer and then also has continued to do investing now through your company with guy necessary come on
00:41:44some ventures sound ventures so it's a little bit where hollywood's going first Where is it moving I've just talked recently to james corden and others about where things are are going and most people feel that the shifts that air happening and tech still haven't resonated in hollywood yet
00:42:01do you think who says that lots of people they feel like they don't they don't they still are resisting it do you feel they don't that's that's wrong All right that's not true look at netflix right that's a shift in tech that is drastically affected part but it
00:42:14was so resisted for so long until just recently it's still like i mean drastically like to deny that that's absolutely affecting the market i'm talking about the people who run hollywood do you think they have got that well the people who run hollywood who are they I don't
00:42:28know it's abundantly clear that there's an open market now for selling your shows all right so if you're not locked into some studio deal that demands that you go to that network you can take your show to a myriad of buyers whether it's netflix like i did or
00:42:47whether it's amazon or whether it across the board there's there's there's an abundant number of content distributors that are starting to shift that market and now that netflix is spending billion plus on content creation it's just pretty clear that the tide has already shifted i met with less
00:43:05move is years and years ago and he said when advertising is dollar for dollar internet to television but the whole thing is goes upside down right and right now everybody is playing this like weird little arbitrage game with their television ad sales right and then they're spending of
00:43:22a portion of that money to then sell to the advertisers online and actually so well actually sell as an advertiser online to get distribution around their content right and so they're playing this little arbitrage game that will continue to go until its dollar for dollar eyeball for rival
00:43:37and i think that that were virtually there and then it just becomes incumbent upon the digital platforms Tto have the same confidence that netflix has had to actually spend the money on high quality programming and then it's game over it's not just high quality programs how we're doing
00:43:52programming I mean you can talk about v r you can talk about mobile only shows you can talk about I mean i have a fourteen year old on ly watches on mobile on ly what you know and i don't think he's uncommon He doesn't like going to movies
00:44:03He doesn't He watches television off a sword That's right But let's take the are off the table i think everybody's way to overhyped on v r and it's Just not time to play there yet right Like i think v ers still pretty far often that this is you
00:44:18consider even just the number of headsets that are going to be in the market in the next day They're still unwieldy and it's just like this is a problem and you know you have to buy into this Basic notion that people don't want to cut people want the
00:44:31cut right because that is what fast forward you through A story Stories since the beginning of time since you people sat around a campfire and told stories they cut their story they cut out the boring parts and move through an interesting parts That's How you tell a story
00:44:43in the minute that you're forced into a platform where you don't get it Cut relative to your story telling all of a sudden you get into this sort of ambiguous short form zone that it has to be short in order to even engaging all attention So i think
00:44:56that there is a short form content you know i mean first of all digital own short form content There's no other platform that owns that and that's All those are all digital platforms So that's done signed sealed delivered digital owns that it's the long form courting content Play
00:45:12that right now is sort of in the balance whether it's feature films going direct to digital or feature films that are going to get released into theater and a lot of them are going day and date now which i think there's this new deal with eye picks right
00:45:24that somebody just did a new deal with that eye picks that they're gonna go dan date on all their on all their content so i think it's just inevitable it's just happening right And what does that mean for you as a creator As a creator more optionality like
00:45:37right now i can still go to the dinosaurs and sell something into the dinosaur companies and i could go to the nuclear you actually call them dinosaurs when you go see them hi i would call them a dinosaur their face they know they're dinosaurs there's not an executive
00:45:48that is at one of these traditional terrestrial television distribution platforms That doesn't think that in some way shape reform This is their last job Well no not necessarily last job because they can move to digital platforms and become become content creators there But like i think they know
00:46:06that that model of distribution is on the decline There's i mean there's just absolutely it's like denying climate change there's evidence there's legitimate you know statistical data that suggests your platform your way of distributing content is dying so what happens to the you know you say there's not
00:46:23people running but there is a system here just like there's a wall street system just like there's a banking's system all of which acar system right now which is going to be under siege is in the middle of being disrupted obviously so competition in some ways spurs innovation
00:46:39which i think is good andi i think we're seeing that happen i think a lot of the programming that's coming out on netflix in particular is extraordinary programming because it's it's it's being built down in this competitive base and actually think some of the programming on traditional television
00:46:54network if you look at some of the content on hbo right now game of thrones is the most unbelievable thing that people have ever been able to watch in their living room that wasn't made as a movie so so i think that's a good thing right now game
00:47:07has been upped by everybody the game has been up by everybody and i think that that for content creators is wonderful and then i think that that the unit economics are going toe go into pseudo limbo shift right like and they have to be thought about when you're
00:47:24negotiating your content deals up front so for example with netflix they do buy outs long from buyouts relative to what we would get in syndication for very shows and i think that that model is going slowly you know work itself out and i think that that's where all
00:47:40this sort of agents and multiple players get involved and try to get tricky and and bright right now they can make enormous amounts of money selling through the old system but as the new system works itself out i think we'll just the last thing on this thing what
00:47:57about format like things that are going to be created now you you were talking about you know you dump all the shows at once you different things the r's too early but is there a content format you see emerging a different content format I don't know snapchats kind
00:48:11of a content yeah i mean i think i was thinking about like vertical video as a content format of its vertical steps that vertical hold your phone up right I think there's some content within that vertical video asian channel that that could be somewhat interesting and differently consumable
00:48:35yeah i mean i think what instagram is done with their stories as well like i think that lends itself i think the i think we're going to see a lot more higher quality live content over time in the digital domain site i think facebook's putting a lot of
00:48:49energy and everything about what twitter is trying to do with the nfl and every i think it's a pretty cool experience I actually somebody was asking me what's gonna happen to twitter and i said what's going on twitter i said i think the the most interesting thing i
00:49:04actually think that content streaming with conversation associated with it i think it za pretty compelling product move and so i think things like that will persist So what's gonna happen to twitter ashton being one of its most well you and donald trump are so contrary to popular belief
00:49:21i've never had a dollar invested in twitter Um i wish i had uh which was another thing that sort of spurred by investing I was like wait if i can effect yeah audience growth what's gonna happen twitter so it looks like everybody's kind of bowing out and it
00:49:35looks like you in the salesforce board is is pushing mark to bow out as well So that leaves the company in a really sort of tricky position at this point Seven who uses the platform and loves it obviously so either they roll out some product things that really
00:49:54start fixing it quickly um and ramp up the revenue or they're in deep deep deep deep deep trouble and you know it's sort of like it's interesting like so that you know jack was in there and then williams came in and then dick costello came in and jack
00:50:10is back in and it takes with a company of that size it takes like a a year plus to actually start to see some of the products that are being developed by the navy team even rollout right Like even since jack spin it did he like has he
00:50:25had enough time to like get this staff I mean by the way i'm talk to him and all that so i know i don't know anything as you had time to even get the staff in order to actually build the products and then you roll out the products
00:50:36that are actually going to affect the platform in a positive manner The most interesting product i've seen come out as the nfl product pretty cool might be too late maybe and i think twitter sort of suffered from in the beginning it was a really intimate environment that you
00:50:50go to and get one to one one too few one too many feedback loops and it was a conversation it was an open face conversation was going on which i thought made the platform extremely compelling and then i got inundated by people just trying to sell you stuff
00:51:04and or by media organizations just trying to post links toe to drive you out now had deep linking existed then they probably would have held a lot of that content on platform and then i think that because they went public when they went public they were sort of
00:51:22forced to try to drive revenue really early and then lost that you know the product revs that were necessary the platform became this like non intimate platform and then all the trolls trolls showed up sort of beating everybody up so then it became a platform you couldn't have
00:51:36that honest conversation and then you know jack's comeback and is trying to do some things around around media and actually embraced the media platform that it's become but i don't know i mean that's another platform that maybe could really benefit from some anti troll a i that they
00:51:53would help the people think that for sure you told me it's certainly more fun in a way that that is very hard but it's also one of the most emotionally demented companies in silicon valley of so many but they really are there's so much emotionality in that company
00:52:05from the very beginning i think but there's also emotionally cooked in the product right Yeah everything about it is i mean it is if you could see into the brain of society platform that's a good way and when you look at it you might be scared of what
00:52:19the brain of society so i am every day every time donald trump tweets talk about very well finish talking about other things you think are promising an investment Are you self driving car guy or you love it You like the vertical thing i wrote about recent that uber's
00:52:33thinking of a vertical helicopter omit experience Yeah so i think i think that lift and take off vehicles already so i i love self driving vehicles Um it's brilliant invested Um no i'm not invested in any individual company I'm an investor in tesla on the public market but
00:52:52like the self driving mode is extraordinary Now i liken it to a cruise control right now where you kind of always still have to pay attention You really still have to pay attention like really have to pay attention But it's cruise control that being said i think that
00:53:06the self driving car movement is inevitable and i think it's wonderful actually think for semi trucks of leader a couple companies and i know uber required otto which is a which is in my truck i think it's unbelievable for that I mean just open freeway creating mass efficiencies
00:53:20in that market It's great And by the way the beauty of it is when one person gets in a car accident in their driving The person that learned the lesson might be dead when a self driving car gets into an accident which will happen every car get smarter
00:53:35um and so and i think for traffic congestion i think for automobile accident deaths i think i think it's going to be revolutionary as long as lawmakers don't kill it all right omei could no they won't ok but i don't think they will what else do you like
00:53:49You know what I really love his voice interface i think that this amazon echo echo married mine it's unbelievable and i think obviously google's just launched there's and i'm sure apple has won in the pipeline because i think that you can't miss that market i think that's going
00:54:07to be an extraordinary like if there's anything from ah hardware perspective that i've seen that could have the same value from an investor perspective as what the smartphone had in the app ecosystem had it could be an ecosystem of applications relative to voice interface i invest in a
00:54:25company called es i that sold early that was just building pipes for voice and we saw it relatively early and thought about it with the with the mobile phone but now that these devices exist they're unbelievable and i think that there's a whole ecosystem of use case that
00:54:39could be relative to that and there's a whole other ecosystem of hardware that can be relatives that like there's no reason why i can't just say make the coffee and have my coffee be made like i don't i shouldn't have to go do all the business or feed
00:54:52the dogs and they should be able to just be there i think there's a lot of just sort of the device yeah and then and then you know now the googles is out i'm very interested to play with their version of it because it what was it go
00:55:06There you go so because it knows so much about my personal context in my relationships and i'd be hard pressed to believe that facebook at some point in time wouldn't launch one of these as well given that has such great contextual understanding of my relationships and so it's
00:55:21going to interesting out i was thinking about putting the google one of my office and i've got the echo at home so you know we need to order things for the house or whatever the stuff on prime it's kind of wonderful having in the house and we have
00:55:31connected the lights and the tv and the hole in the whole shebang which a little annoying still there because not worked out but i think that platform is going to be an extraordinary system for growth yeah anything else Food health i think There's a lot of opportunities in
00:55:45health uh i'm not smart enough about it to really talk about it aa lot but i'm looking at a lot of things in space um in the science is just in general i think there's some extraordinary so that's happening way invest in a company called ambo clouds lab
00:56:00that built laboratory in the cloud it's almost like what eight of us is but for a scientist so that all of their experiments could be done under perfect control and so they have a software front end that scientists can use or laboratories or universities can use to affect
00:56:16whatever invitro experiments they wantto effect and because uh there's so much falloff in capacity tio create redundancy and whatever scientific experiments were doing this creates profit controls every single time so you have absolutely dynasty so we think that that's really exciting and this coming all bench lean that
00:56:35soon a lot of genetic engineering stuff and in a similar fashion so are smart enough to get into very very hesitantly because fair happening tio it's a little uh whenever you get into those for me consumer it's like the consumer is my domain expertise i am a consumer
00:56:52so i can really try the product and understand it which is one of my important thresholds and yeah you know investing these companies but some of these things air they're almost too exciting or not you know it's very last question that we have to go what mistake have
00:57:05you made is an entrepreneur we could argue that your art oprah nure what i was thinking you may say a lot of people this is our wanting to be entrepreneurs and what would you what did you do about it I'm very very very very loyal ah as an
00:57:20entrepreneur on dh probably like stick with people and things when the writing's on the wall that it's not gonna work because i have this sort of absolute optimists perspective on things and it's really hard for me to like pull the plug and i'm so founder friendly that even
00:57:39sometimes when companies should just sell i'm like no you have a vision for you wanted to it and if you fail doing it then you failed doing trying to do the thing that you want to do and i've sort of grown to realize that in some cases there's
00:57:54an outcome that's better with a reset whether it's a reset with an employee that isn't working out where you go listen you're you're not thriving here and i want you to thrive as a person and i want you to thrive in your career i needed like do a
00:58:08reset on that it actually sometimes telling people know is being a better friend and telling people yes but it's a good thing to end on ashton can say now i think you're probably still be an optimist you my guess anyway it's been great having on the show thank
00:58:21you so much that was full of lots of fasting things you enjoyed the interview as much as i did be sure to subscribe to the show be the first list of future episodes or catch up on previous episodes include some really fantastic interviews i've done with investor alien
00:58:34lee uber board member bill gurley and walker and company ceo tristan walker just to name a few all those interviews and mohr rico dot net slash decode and we have some great news for our podcast fans this week we have two bonus podcast for you tomorrow we'll have
00:58:49an extra episode of recode media with peter kafka on on wednesday you'll get an extra episode of rico decode where i talked with u s secretary of commerce penny pritzker to be sure you don't miss an episode subscribe to our shows on itunes google play or wherever you
00:59:02get your podcasts in addition to rico decode and recode media there's also too embarrassed asked which i host with lauren goode of the verge and recode replay where you can hear audio from all our live events thanks for listening thanks also to digital media which distributes his show
00:59:17this has been another episode of rico decode remember described the show and leave us a review at itunes dot com slash rico decode tune in them

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