I haven’t exactly made a secret of the fact that my budding career as a TV recapper, reviewing Shark Tank episodes this season, originated in my interest in seeing Chris Sacca on national TV. The longtime Silicon Valley investor and behind-the-scenes hustler made his name making prescient bets on Twitter, Uber, Kickstarter, Instagram, and Twilio, to name just a few of his high-profile winners. His firm, Lowercase Capital, has stakes in such prominent startups as Medium, Slack, Stripe, Blue Bottle Coffee, and Gimlet Media. There are cool podcasts out there with Sacca (here, here, and here are good places to start). But now the Western shirt wearing, always candid, and occasionally profane Sacca was going to be on ABC?
I was in.
We’ve had to wait until week six of this season’s Shark Tank for Sacca’s first appearance, which airs tonight. As a preview, Sacca and I recently spoke by phone to discuss what he gets out of the show, what he’s learned about business from being a Shark Tank judge, the power of Shark Tank’s platform, how it’s rekindled his passion for early-stage investing—and of course, Twitter. Our conversation has been edited for length and clarity. Sacca being Sacca, he got the first question in before I could–opening up our conversation by asking, “Are you an actual fan of the show?”
Fast Company: I have to admit, I had not really watched Shark Tank until hearing you, Ashton [Kutcher], and Troy [Carter] were a part of it. I’m learning the characters and the show. I find it a lot more fun to see a great idea from people who know what they’re doing.
Chris Sacca: It puts us kind of in the same place. This became a huge international phenomenon and I didn’t even notice. Once my ears were open to hearing mentions of Shark Tank, I was surprised by how many people in our world even, in our industry, tech and finance, loved the show. I have buddies on Wall Street, bankers and hedge fund guys who don’t miss an episode ever. And at the same time I’ve got my niece and nephew, who are 11 and 9, who never miss an episode. About the time I was talking to the Shark Tank guys about coming on the show, I was cross country skiing with the family and we stopped to get some hot cocoa, and the people next to us were like, ‘So yeah, my husband’s trying to get his auto part invention onto Shark Tank and if that happens that would change everything.’ My wife and I looked at each other, just eyes popped. “This is everywhere.”
Is there anything you’ve learned from the experience that you have or think you’ll take back to the day job?
I have learned a ton about inventory, co-packing, wholesaling, end caps. All these concepts are easy to breeze by in what I do for a living or assume that there is a marketing manager or specialist in one of our companies that handles that. I certainly understand supply chain management in the kind of stuff we work on, but supply chain management when it comes to perishable goods on their way to a Walmart? That’s fascinating. The show has been incredibly educational for me.
Can you share a specific improvement to the show that you suggested that has been implemented that we will see this season?
I can’t take credit for this but what I really pounded the table on was to have more apps businesses. Historically, the folks who make the show were hesitant to bring apps on because they’re worried they don’t make for great TV. You can’t taste ‘em, you can’t smell ‘em, you can’t juggle ‘em.
There’s no presentation table with apps.
Yeah. Again, I wasn’t alone in this, but I said, ‘Everybody at home knows apps.’ They’ve all got their phone out in front of them at the same time they’re watching. You’re missing out on a layer of interactivity. On the one hand, they’re watching Mark sample a whiskey mixer or put on a hat, but if it’s an app, they’re actually able to participate in it at home because while you’re still talking about it they’re able to go to the App Store and download and see what they think. It’s compelling TV because the demo is in the viewers’ living room, not just in the studio.
One of the most popular pitches last season was Scholly.
It’s an app that was backed by First Round Capital, but I think a lot of reasonable people would say they wouldn’t have done that deal by traditional Silicon Valley standards, because it was a little early. But that app appears on Shark Tank, there’s a really exciting back and forth. Lori wants to do the deal, but she does it so fast the other sharks walk off the stage. A lot of fireworks. That app dominated the App Store for the next few days as a result of that show. It proved the point that everyone watching has their phone there.
I’m fascinated by the idea of Shark Tank as a platform. What makes the show such an effective and powerful one?
It lets everyone watching have an opinion on the pitches. Because they put so much effort into making it approachable, understandable, and entertaining, every person watching feels empowered to say yay or nay on a deal. You talk back to the screen. It’s inevitable. If you’re watching it with other people, you’re all talking out loud and saying, No way, are you kidding me? Or I’d buy that. It’s enabled everyone watching to make the call. And guess what, we’ll revisit this episode down the line and see how that product worked out.
As a result, it becomes social. If you’re watching a drama, great, but you’re a bystander. Shark Tank’s participatory. There’s so many people on Twitter for this show and they all feel like they’re in the tank, making calls on this stuff.
How do you manage investments made on Shark Tank versus your day job?
The quality of the deals and the types of deals have improved to the point where some of these deals on the show are my day job. They fit right into what I do for a living. One of my rules for investing is, I don’t invest in a deal where don’t think I have an unfair advantage and where I don’t think I can personally impact the outcome. I have found already on the show a couple of things that just seemed perfect for me and what I do for a living anyway, and then a couple that were a little far afield from what I do but when I paid attention and looked at my background and what their need was, I realized there was a chance to work together.
You’ve been pretty vocal about the state of Silicon Valley culture right now, deals being overvalued and the like. How has Shark Tank energized you regarding—this may be a bit grandiose, but—the American entrepreneurial spirit?
I actually don’t think that’s too over the top. This is the embodiment of the American Dream. Think of how relatable the entrepreneurs are. So many of them are people who were working a regular job and had an idea, or who lost their job and said it’s finally time to pursue that dream. There’s an entrepreneur you’ll see who was trying to make one thing and literally had an accident and came up with something else. There’s something uniquely American about that.
One of the things that happens when you’re in my industry and your funds start getting big and you manage a ton of money, late-stage investments across big companies worth tens of billions of dollars, it can get pretty political. There’s more and more mouths around the table to feed, people with disparate interests, the seed investors may not have the same interests as the series E investors. The early execs may not see eye to eye with the more recent execs, and the early users of the products may feel a little disenfranchised by changes made to accommodate new users of the products, and so on and so forth. There can be a lot of friction and frustration as companies get bigger and bigger.
Shark Tank reminded me of why I got involved in the investing business in the first place. When you sit down with three gals or guys and they’re unreasonably optimistic, their faces have no bounds. They see nothing but potential and they’re working their asses off to get there. It’s completely contagious. Those entrepreneurs who come into the tank, they have that. It reminds me of my first days starting in this business when I was meeting a couple of people writing code in a coffee shop. They didn’t have a masseuse at their job, no cushy benefits and off-sites. Usually they didn’t have any office space or any budget at all, totally bootstrapped and trying to find free Wi-Fi where they could put their laptop down and crank, crank, crank. Shark Tank brings me back to that place and makes what I do for a living feel pure again.
How did you train yourself not to curse on stage?
[Laughs] A couple answers to that. I don’t know if you realize this, but each pitch is an hour and a half long. And they whittle it down to eight minutes, so there are some incredibly powerful editors there who are able to take that stuff out. Number two, there is some colorful language. No f-bombs, but stay tuned later in the season when Cuban and I get into it and they’re flying in both directions. I’m known for my colorful language but I adjust to my audience. If I’m at a tech conference full of a bunch of grownups, then let’s get real. But if I’m at my kids’ preschool…One of the things I really do love about Shark Tank is knowing how many different people, different ages are there. My parents would come to the taping, there’s kids lining up all over the studio to get autographs from Cuban and Barbara and Lori, and it’s wild.
In the last few years, you were like a cool indie band that the in-crowd knew about and now you’re playing stadiums, you’re everywhere. What made you decide to become more of a public figure?
In contrast to it being an overall strategy of being out there, there’s been three things that all happened. One was that Forbes article. The years leading up to the Twitter IPO were the hardest working years of my life. There were a lot of politics, a lot of contention, a lot of stress. Raising all that money and buying that much of the company was insane. When Forbes decided to write that article, I said, I want to come out and let people know what I’ve been doing the last few years holed up and not talking to anybody.
I can’t remember if I said it in the article, but that Midas List [Forbes’ ranking of the top tech investors] meant a lot to me because when I was unemployed, I wrote letters to everybody on the Midas List asking for a job and none of them gave me a job. When they offered me the cover of that one it was an unbelievable opportunity and I wanted to take it. I mean, if the Gray Lady [The New York Times] comes to you and says, ‘David we really want to write a profile on you and how you’ve been doing as an editor at Fast Company,’ at some point, you’re going to say, ‘You know what, fucking A, I’m gonna do that. I’ve been doing a great job in this career. I want to take a victory lap.’ That was the Forbes article for me. I’m doing well, but I’ve had a bunch of people abandon me along the way, a lot of heartache, my ass kicked from time to time. I was like, hey, I’m going to let myself enjoy this one.
Number two was the Twitter stuff. For years I was helping in the background. When I got to the point where I thought the company was going sideways and was missing out on the big picture and most importantly was so misunderstood by people outside of the company that I just said, well, hell, if they’re not gonna tell the story, I will. I cared too much about this company. It’s not telling its own story. I’m watching it be beat up by people who don’t understand it and it’s not their fault they don’t understand it. This company has not told them how to understand it and has not delivered on the products it needs to deliver to make it worthwhile to them. That’s when I started to write up my thoughts for what I thought Twitter could be, why I thought it had so much potential. I tried to say, Look, I hope to god they’re doing all this stuff and more, and it turns out, luckily, they are. And I’m thrilled by that. I think that ended up becoming intertwined with the process of the old CEO leaving and the new CEO being chosen.
Throughout the CEO transition, I bit my tongue for a bit. I didn’t do CNBC other than to say this company’s getting a great hand. And the board just sat on its hands for months while it was clear the management team wanted Jack, the other big shareholders wanted Jack, the employees wanted Jack. He has a 100% rating on Glassdoor. The advertisers and partners wanted Jack. The media companies wanted Jack. Everyone at Square wanted Jack to do both jobs. And they were still sitting on their hands. I was like enough with this shit. I’m just gonna come out and say it. And that time I did it by an Andreessen-style tweet storm. I didn’t even bother writing a big blog post.
The Shark Tank stuff is most significant because it’s opt in by me. It’s a more affirmative move in a direction of being public. It’s me saying, ‘I really like this, I’m good at it.’ I really like when it’s just the founders and a product that is brand new and the entire future is in front of it. I love that. So you give me a platform where I can do that and hopefully inspire millions of people along the way, that’s really fun for me. And in parallel, mix it with Cuban and talk a bunch of smack.
Shark Tank airs Friday at 9 p.m. ET/PT. Check back on Mondays for David Lidsky’s recaps of each episode.