In a comprehensive conversation on "20 Minutes VC," host Harry Stebbings interviews Ashton Kutcher, founder and general partner at Sound Ventures. Kutcher, renowned for his media presence, is also celebrated for his savvy investments in tech startups like Spotify, Alibaba, and Airbnb. With his partner Gaia Siri, Kutcher has propelled Sound Ventures to the forefront of West Coast investment firms. Kutcher's journey from biochemical engineering student to actor and then to a tech investor illustrates his unique approach to investing, driven by cultural trends and an unwavering dedication to building a happier future. He emphasizes the importance of a company's narrative and product sensibility, sharing how personal experiences, including fatherhood, shape his investment perspective. Kutcher’s vision for Sound Ventures is not defined by fund size but by the positive impact and the collective strength of a network dedicated to solving the world's most challenging problems.
This is the 20 minutes VC with me, Harry Stebings, and you can see all things behind the scenes on Instagram at H. Debbings 1996 with two B's. But to the show today, and I've wanted to do this episode for a long, long time. We're all fans of his media work, but he's also the most incredible investor and product mind, and I'm just very, very honored and grateful to be able.
This quote introduces the podcast and the host, Harry Stebbings, while setting the stage for the featured guest, Ashton Kutcher, highlighting his achievements in media and investment.
Before we move into the show today, though, I wanted to take a moment to mention Hellosign, a great example of a company that found success in building a product focused on user experience.
This quote is a promotion for Hellosign, emphasizing its success due to its focus on user experience and its acquisition by Dropbox.
Oh boy, what a journey. So I'd have to probably start. I went to University of Iowa School of Engineering. I was studying biochemical engineering, but that was really my first introduction to the power of a computer.
Ashton Kutcher describes his educational background and initial exposure to technology, which played a role in his later interest and success in the tech industry.
Well, so at that point, I started reaching out and looking for companies that could help me quantify the distribution of content. And then I started looking for other companies that would help me accelerate the distribution of content.
This quote explains Kutcher's initial strategy in tech investments, focusing on companies that could enhance and quantify content distribution, which led to his first investment, Optimizely.
Well, here's what's somewhat interesting. I believe that the people who are creating the future of the Internet are perpetually young.
This quote by Ashton Kutcher reflects his belief that young entrepreneurs drive the future of the internet, and his role as a father has given him insights into emerging technological interests, impacting his investment choices.
"You can't see your own face. I mean, you really can't see your own head. So the only thing that occupies the space of your head is the world around you that your lens, or your ears, or your sense of feeling draws in. That is what occupies the space of our head. And when you have children, you have more than one head because you have such empathy for those individuals."
The quote reflects on the philosophical idea that one's perception of self is limited to the sensory input from the external world. Having children broadens one's perspective as you empathize and care for them, effectively extending your sensory experiences through theirs.
"I think most major VCs in the valley, at least most of the partners in those firms, come from a technical background... We have technical chops on our team, but it's not the first lens that we're looking at companies through."
The quote explains that while many venture capitalists have a technical background, Ashton and his team prioritize cultural insights when evaluating potential investments. This approach distinguishes their investment strategy from the norm.
"We move our investment thesis based on what we feel to be cultural trends, and then our value add as investors and the companies we're interested in working in are only the ones that we feel like we can add value to."
The quote emphasizes the strategy of aligning investment decisions with cultural trends and ensuring that as investors, they can contribute significant value to the companies, particularly in terms of shaping their narratives.
"I do a lot of sourcing through other people... And then I just run pattern recognition across thousands or hundreds of home screens and then pick off the apps that appear to keep showing up that I don't know what they are, and then I start the investigation process."
Ashton describes his method of sourcing new ventures by analyzing the home screens of smartphones, which he gathers from a wide audience. This pattern recognition helps identify popular and potentially investable apps.
"So if you look at where somebody came from and where they've gotten to, that is the more important metric than what's the hardest thing that you've persevered through?"
The quote introduces a refined approach to understanding a founder's resilience by comparing their starting point to their current status. It suggests that the journey and progress are more indicative of a founder's potential than just the challenges they've overcome.
"If I sense that that's the case, I usually move towards a space of vulnerability for myself. And generally, if you're willing to be vulnerable with someone, they then open up and realize they see your humanity as opposed to the image of who they think you are."
This quote explains how Ashton Kutcher uses vulnerability to connect on a human level with founders, which helps break down barriers that his celebrity status might otherwise create.
"So I think it's hard to have strong intuitions about product in areas where you're not too familiar. I think you need to get familiar."
Ashton emphasizes the importance of becoming familiar with a product to develop a strong intuition about its potential success. This involves personally using the product to gain insights that might not be evident from the outside.
"And that nomenclature led to what I would call the amplification of many consumer products, which were like the first successful applications that came to the app ecosystem."
This quote highlights the significance of the user-friendly language introduced by iOS, which catalyzed the success of early applications in the app ecosystem.
"So it's really about how do you get people what they want, but also that is the most valuable thing for your company."
The quote emphasizes the dual focus of product design: fulfilling user desires and creating value for the company.
"I think on PR, we're very versed on that, having lived in public for 20 years and done enough stupid things that no reason why I should even still have a career to some degree."
This quote reflects Kutcher's extensive experience in public relations, which has been honed through years of public exposure and learning from mistakes.
"And I think the biggest thing sort of goes back to the end of the day if you understand the narrative of your company, and storytelling is what's at our roots."
Here, Kutcher stresses the importance of understanding a company's narrative and the foundational role of storytelling in shaping a company's direction and public image.
"As the check sizes grow, it's interesting. A lot of funds have these mandates about how much of a company they need to own to make the investment of value to them."
This quote discusses the growing trend of investment funds seeking larger ownership stakes in companies as the size of their investments increases.
"And FRANKLY, a check size that is worth your time is harder. Especially when I was writing my own checks."
Kutcher reflects on the difficulty of ensuring that the larger check sizes from the fund are justified in terms of the time and effort invested by the team.
"And the thing I'm constantly pressing on my team is let's make sure that we're proportionately spending enough time adding value to companies relative to looking for the next deal."
This quote underscores the importance of dedicating a substantial portion of time to enhance the value of current investments, which is key to maintaining a sustainable and reputable fund.
"My mantra is invest in a happier future. And if you want to know what the future looks like, build it."
This quote reflects Ashton's philosophy of shaping the future by investing in solutions that contribute to overall happiness, indicating that financial metrics are not his primary concern.
"True happiness is being able to afford to take your time."
This quote captures Ashton's belief in the intrinsic value of time and how it relates to one's happiness, which is a recurring theme in his investment philosophy.
"I've never been one to track returns. Personally, I just like working with the best and brightest people on the planet, solving really hard problems and making other people's lives better."
This quote highlights Ashton's focus on the qualitative aspects of investment, such as the caliber of people and the nature of problems being addressed, rather than quantitative financial returns.
"I mean, what can I say? One of the highlights of my time doing 20 vc doing that episode. Such a pleasure to have Ashton on the show and cannot wait to see the exciting times ahead for him and sound."
Harry Stebbings concludes the podcast by reflecting on the enjoyment and significance of the episode with Ashton, indicating the value of the insights shared during their conversation.