Perspectives: A Conversation with Jason Calacanis

August 17, 2011

Jason Calacanis is an Internet entrepreneur and blogger, perhaps best known as the co-founder of WebLogs, Inc., which was acquired by Time Warner/AOL in 2005. He began his entrepreneur career during the dot-com boom as the founder of Silicon Valley Reporter, a trade magazine covering New York’s Internet and new media industry.

Jason is currently the CEO and Founder at Mahalo.com Inc., a human-based search engine and knowledge exchange that launched in 2007. He is also an angel investor with Gowalla Incorporated and founder of ThisWeekIn.com. He recently worked to create the first LAUNCH Conference, an event aimed at generating funding for new startups, products and services.

When building a company, how have you spent the bulk of your time? It is on product development? Building a strong management team? Customer relationships?

It depends on if you have a cofounder or not, and what phase the company is in.

Time management is a critical skill at a startup. Product is number one, but a majority of the time, fundraising also comes up. There have been times when fundraising has taken up 100% of my time, and I’ve left the product execution to the team while I go out fundraising for a few weeks. There are times when I will not pick up the phone, will not do interviews, will not take meetings. I tell people I’m in product mode and I’m going to be in it for 30 days, and all I’ll do is focus on product.

My technique for scaling a business [is really about] what stage the business is in. When you’re in the scale phase, what I like to do – and it suits my ADD personality – is look at the range of functions of the company — sales, marketing, product, corporate development, recruiting. I’ll look at them and say, “Which one are we sucking the most at?” And [then for] the subsections under those, which one of those is sucking the most? And I’ll focus my energy on where we’re weakest, and then try to make that our strongest area. I know the strongest areas have momentum already and they may not need my level of detail and focus. And people may naturally not want to focus on things that are a bummer. My job as CEO and founder is to go find those areas that people might actually be avoiding and engage them.

So as an example with Mahalo, our technology was completely screwed up a year and a half ago. I focused like a laser on that, got it working really well, and then became [only] half involved six months ago. And now, I’m not super involved because it’s going so well — I don’t need to tinker.

The sales effort was going terribly a year ago. I got involved and changed all the people we had doing sales, because they were the wrong people and we did a bad job of selection there. We got the right people in, and I engaged totally with that the last six months and it’s been going wonderfully. So now I have to focus on sales, and once we get some of those big sales in I’m going to focus on the execution and delivery of those sales, and maybe go back to corporate development, too.

I like to bounce around, and I think that it’s good to do that. Now if I had a cofounder who was an awesome product person and I had another cofounder who was an awesome sales person, then maybe I would silo myself a little bit. But here at Mahalo, I’m sole founder. At WebLogs, Inc., I had a technical cofounder, Brian Alvey, who is now the CEO of his own company, Crowd Fusion.

So it really depends – founder, cofounder, stage of the company, etc. But my strategy is to focus on what’s broken and let the team focus on what’s already got momentum.

How would you describe your management style? How do you get everyone aligned and moving in the right direction?

My management style is pretty frenetic; high energy, demanding, and I wouldn’t necessarily recommend it as the best style out there. I think I’m particularly good at the early stages and mid-stages of a company, I don’t know that my level of product focus, insanity, or demand engagement scales to a 500 person company. I’m pretty good with the sub-100 person company region.

So you have to know what your interest is and how your style performs. There are people who are really great at scaling a business from 100 [employees] to 1,000, and if you put those people in a sub 30-person company, they don’t get anything done. And then there are people who are really good at the early stage at creating something from nothing, but then when you put them into a 500 person company, they can’t get anything done because they don’t know how to deal with 500 people or groups of people. It’s a really different skill set. If you get past 50 people as an entrepreneur, you don’t have the ability to create a tight, personal relationship with each one of them. Then you have to start relying on management techniques, and you have to start accepting maybe a good effort from people instead of an excellent effort or a great effort.

There’s got to be little bit of a buffer for a passionate founder because you lose control over this little, neat squad. You go from running a Navy Seal unit to running a platoon, and it’s just not the same level of intensity. So I think you have to understand which area you are good at. I’ve got a president at Mahalo who’s good at that 100-500 person range. I’m still running my little commando unit, and I swoop in to the different areas that need commandos.

What factors to you attribute most to your success with growing companies?

Generally I’m a year or two early. I think that’s critical; to get into a space before anyone can think about it, and establish sort of a beach front and grow a hill into a mountain. So I always like to be a year or two ahead and have some learning.

Silicon Alley Reporter, my first business, which was a magazine about the Internet industry in 1996 — that was one of three magazines. There were very few options in that era to get news about technology concerning the Internet. And then when I did WebLogs, Inc. in 2003, there was really no commercial blogging going on other than Gawker, which had two blogs. We had 10 in six months. So I think that being a little bit early [is important].

[Also], not being afraid to scale — to go big and make mistakes and try a lot of different things. Some people go slowly and they just try to make one effort. I like to try a lot of different things, throw a lot of things at the wall and move quickly with intensity. So I would say intensity and being a little bit early have been my traits that have made me successful.

But I don’t think there’s any one trait that makes everybody successful. Some people, like I’ve said, they go slow. Twitter has gone very slow in product development, but it’s very considered. They have had a lot of success by not adding features to the product, by not scaling the service too much, by keeping it super simple – and dumbing it down in fact.

But then other people — like Zuckerberg with Facebook is just relentlessly adding features and changing it and pissing off the user base. And he doesn’t care. He’s like, “I can piss off the user base because I know that this is the future anyway, and I don’t care if I make a product like Beacon that invades people’s privacy. I have to make a $10 million settlement with the government and get sued 50 times in the course of two or three years. I don’t care! I’m just going to move really fast. And if I’ve got to knock people over on the way, I’ll do it.” Other people don’t like doing it that way. So again, it’s not any one way.

Looking back, is there anything you’d have done differently? What are some of the key mistakes you’ve learned from?

My first business with Silicon Alley Reporter … was geographically tied to New York, and [I also had] a magazine in Los Angeles called Digital Coast Reporter, [and they] covered the two technology scenes. My director of sales at the time said we should just have a magazine about silicon or something, and report on all technology. And she was right. I insisted on keeping it local because I preferred that. But I think that maybe I was a little intimidated about going big or maybe had some weird sense of loyalty to the local community. But looking back on it? I would have gone wider and bigger.

I mean, we could’ve launched five more blogs – personal finance, gossip and some other categories. We could’ve gone bigger – raised more money and gone bigger. But at the time, I raised what I could with the reputation I had. Now with Mahalo? I went big.

Continue to part two: How is an entrepreneur like a samurai?

For more from Jason, visit his blog, Calacanis.com, and follow him on Twitter @jason.

Content Strategist

Brendan worked at OpenView from 2011 until 2012, where he was an editor, content manager and marketer. Currently Brendan is the Vice President of Corporate Marketing at <a href="https://www.brainshark.com/">Brainshark</a> where he leads all corporate marketing initiatives related to content, creative, branding, events, press and analyst relations, and customer marketing.