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Full transcript: Actor and investor Ashton Kutcher on Recode Decode

“I just like to build things. I don’t really care whether it’s a technology company or whether it’s a television show or whether it’s a movie or whatever it is.”

Museum of the Moving Image Honors Netflix Chief Content Officer Ted Sarandos And Seth Meyers - Inside Photo by Nicholas Hunt/Getty Images

On a recent episode of Recode Decode, hosted by Kara Swisher, actor-turned-investor Ashton Kutcher talked about his Netflix series, “The Ranch,” and why he passed on Snapchat twice.

You can read some of the highlights from Kara’s interview with Ashton at that link, or listen to it in the audio player above. Below, we’ve posted a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Recode Decode on iTunes, Google Play Music, TuneIn and Stitcher.

Transcript by Celia Fogel.

Kara Swisher: Today in the red chair is Ashton Kutcher, who I’ve known a very long time. He’s an actor who’s starred in shows like “Two and a Half Men” and also the Netflix series “The Ranch,” which just released its second season. In 2013 he played Steve Jobs in the movie “Jobs,” but he’s also a tech investor who’s put his own money into companies that you may have heard of, like Airbnb, Duolingo, Secret and, oh yeah, Uber. And full disclosure, he’s also an adviser to Recode’s parent company, Vox Media. Ashton, you get around here, welcome to the show.

Ashton Kutcher: Thanks.

Anyway, so ...

Your key sponsor is also an investment. So I just have to disclose that in case there’s some SEC issue with that.



You sleep on a Casper mattress.

I don’t sleep on a Casper mattress only because I already had my mattress after I invested, but for the new home I’m definitely going to outfit it with Casper.

You’re like everywhere, you’re like the smoking man. But let’s talk about you, Ashton. Let’s talk about the Hollywood part of your career, and then we’ll talk about your investments, which are extensive. You’re now doing a Netflix show after being on a major network. And you were on a network for much of your career and then doing movies and things like that. Talk a little bit about that transition, or if it’s one at all for you.

I was doing “Two and a Half Men,” and I was wrapping it up, and there was a conversation I was having with one of my best friends, Danny Masterson, who’s my costar and also a producer on “The Ranch.” We were talking about doing a show together again — we’d done “That ’70s Show” together, years and years ago, and had always wanted to do a show together.

And the writers from “Two and a Half Men” were talking about wanting to do a show together again. So we all started having a conversation about what that might be, and I really only had one place that I wanted to take it, which is Netflix.

Why is that?

Well, first of all, I had already had a conversation with Ted Sarandos, who runs programming there, and I knew that he wanted to get into the sitcom arena, and I knew that they hadn’t gotten into the sitcom arena, at least with original sitcoms. 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 were in it and the kinds of actors that you could have on it.

So the idea of doing a sitcom in a place where there were no set rules and nobody knew what worked sort of opened up the landscape of what could be possible. Sometimes you get into these factory-content machines that have been doing it for years and years and years and years, and they have to cater to certain advertisers and they have to cater to a certain ideology, they have to cater to a certain format.

You’re calling that the entire studio television system, essentially.

Well, historically, yes. Network television that actually generally does the sitcom format. You know, there’s a format there that works, and it’s a format that’s worked 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, you know, 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 neat little 22-minute box that advertisers will like. From a content perspective, you can’t be very specific about jokes or products, because it might clash 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. So you get pressed down into this little box, and there are a lot of people that 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 creatively go out and try to reset what a sitcom is, because I think people really like sitcoms. But I think they’ve become tired over time because they’re just the same.

All right, but you’ve made your career in sitcoms. I mean, “That ’70s Show” was considered an enormous hit, and so was “Two and a Half Men.”

Absolutely, there's audience for it. I just think that after you get about 20, 30, 50 episodes in, your creative bug starts to die because you can’t really build on it, you can’t really go outside of the box. And on this show, you know, from a producing perspective, we’ve been able to create weather inside of a studio, we go outside, we go inside, we can really push what the content is like all the way to the edge. We hired Sam Elliott — who’s not a sitcom actor — to be on 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 start to press into a creative boundary that I don’t think we would ever be able to get away with at a network.

And so Netflix was your first choice. What about them creates that for you? Because it’s also not just Netflix, it’s Amazon, it’s eventually Google presumably, Facebook.

I think that they have a culture there that trusts creators to create. They really don’t interfere with our creative process at all. At a traditional network, you get a list of notes at the end of a rehearsal before you end up shooting something that would would change the creative integrity of the show. We don’t get those.

Give me an example.

It could be a joke that they feel is too crass. It could be where a character is heading or the direction of a character or the way a character is behaving. Or it could be ... It’s just this litany of things where you go, “I don’t understand. Explain. Give me some ground-level reasoning as to why you want these things and we’ll pursue them.” And it’s usually just because, “Well, we can’t do that.” I think it’s just a lot of people afraid of getting fired. Which tends to be the culture at companies that are slightly more seasoned.

At Netflix, we don’t have that. The other thing is, because of the way they actually know who’s watching the show instead of how many are watching the show, you can start to 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 freeing. And it makes them a little more confident around the decision-making process internally.

So what involvement do they have with you? 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, myself and Danny Masterson, and said, “We want to make this show.” They read the script, we had a conversation about what we wanted to do and that we wanted to make a show about a conservative family in the middle of America with conservative views, where we’re not making fun of people in the middle of America but embracing those views and making fun of the coast. 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 them do that.

And so what involvement do they have now? You just make it and they ...

No, we have executives that come to our table-read, and executives that come — you know, they’re with us all week long. But they’re really our partners, and they’re supporting us, as opposed to a lot of networks where you get notes that are prescriptive around what they want changed and how they want it changed. They’ll point things out to us that are story arcs that they feel could be strengthened, or character arcs that they feel could be strengthened, but it’s never a prescriptive note relative to the stuff that we’re building.

Do you imagine this is the way it’s going to be for creators? Because here’s someone like you, who has benefited from the system that had been created and got famous that way. Was that a big difficult shift for you to go to Netflix? Were the audiences smaller, necessarily? They’ve had a couple hits.

Netflix won’t share our numbers with us explicitly. But we’ve done a little bit of reverse engineering relative to the success of some other shows. I know a couple companies that have the ability to do some reverse engineering on social. I think our audience is well in the neighborhood of network television shows, and I think it will only grow over time.

But as a well-known person who’s been in sitcoms, did you worry about making ... Because some people are worried about moving away from the old model. Moving away from movies, moving away from all kinds of things.

Um, yeah, no. I’ve kind of flipped between television and feature films my entire career and I just like to build things. I don’t really care whether it’s a technology company or whether it’s a television show or whether it’s a movie or whatever it is. For me it’s about just exercising the creative bug and trying to build something great that impacts people. 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 it’s hitting an audience where what we’re trying to do actually has some impact.

Because I think this show, on it’s face, early on, it won’t look like there’s a very big social push relative to it. But I think over time people will start to see that there are real social hooks in this show that we’re trying to connect with in mindframe and hone that mindframe towards maybe a little bit more of an open-minded perspective.

So explain that. What do you mean, social hooks? What would that be?

The first 20 episodes of this show are really more fun, down-home kind of stuff. Dealing with 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, but the very last episode has a pretty aggressive cliffhanger on it. And there’s another character, Wilmer Valderrama, who was also on “That ’70s Show” with us, that gets introduced. Wilmer's an immigrant laborer working at a local ranch.

I think that immigration is this really abstract thing that becomes this policy conversation in 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 — I won’t give it away — but the cliffhanger of the last set of episodes, there’s an event that happens that I think will dive very very deep into an issue that is a polarizing issue in our country and will look at both perspectives in a slightly deeper way than maybe usually gets done.

Whether Skittles are dangerous or not, right?

That’s right, it’s whether Skittles are dangerous or not.

What’s with this candy stuff going on? Tic Tacs, Skittles — they’re going after Red Vines next, I’m sure of it.

Just vilify the Tic Tac.

Vilify the Tic Tac. The Tic Tac people were pissed about that.

I bet they are.

They put a statement out.

Altoids is just going crazy right now. Put all your money into Altoids.

So when you’re thinking about this idea of doing all these shows at once, and you’re talking about the cliff[hanger], those are sort of old terms. Because these things drop all at once.

Well, they’re old terms, but relative to the way sitcom format had ... Sitcom has become this incredible financial engine for television, especially for studios, where you don’t want any of the episodes to be too deeply intertwined from a storytelling perspective.

Right, because you want them to have resolution.

And when you go into syndication cycle, you can sell them in bundles and they can air them in any order they want, and they don’t have to count on the audience coming back week to week to stay with the storyline.

Right, Bebe’s riding a bike this week, next week she has a cab or something.

Sure. And so each episode almost lives as their own independent little story, whereas on Netflix, given the binge-watching nature, people are going to watch 10 episodes in a row and now all 20 of our episodes are up there. So there are people that are going to start today and watch all 20 at one rip. I think there’s a different way that you tell stories relative to that, different ways that you carry character arcs. The cliffhanger in traditional television, especially in sitcoms, has somewhat disappeared, given the syndication cycle and the way they resell these shows afterwards.

And we got to bring it back to life in our show, like the “who shot JR?” 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 it has to be the next episode. So you’re constantly architecting your story in order to create the value in the next episode.

And what else can you do to be creative in that manner? Like if you’re dropping 20 episodes at once, some people like it, some people don’t. I think it’s fantastic, but it creates a whole new viewer experience.

From a comedy perspective, there’s functions of jokes where you can actually drop the set-up for a joke in one episode and then pay it off in the next episode because you have a pretty good inclination that people are going to carry over and watch the next one. You can carry various props across episodes. You can start a storyline in Episode 3 and finish it in Episode 5. It really opens up the writers’ room to have to create an arc over a series of episodes as opposed to an individual episode, whether it’s a comedic arc or whether it’s a dramatic arc.

It works with dramatic arcs.

It also works with comedic arcs.

Yeah, yeah. So where do you imagine it going? What do you consider success for what you’re doing here with Netflix?

We want to create a great show. We want to create that show that you get off at the end of your day and you go home and you watch this. For Netflix, I think the measure of success with this particular show is to open up markets that weren’t necessarily going to watch “House of Cards” or maybe aren’t into the sort of more urban-fare shows that end up on the network. I think we can open up domestic markets and I think we can open up some international markets that really appreciate comedy and where this community exists. And South America has a huge ranching culture, we’re doing extremely well there. We’re doing extremely well in a couple markets in Europe right now. But where we’re showing 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 have to think of that? What markets worked for you when you were making your past sitcoms? Or are you just sort of throwing this massive thing out there?

So let’s be clear, my first sitcom, “That ’70s Show,” I was 19 years old and happy to have a job, right? I moved to Los Angeles and booked it the first day I was in Los Angeles, so I was just like, “I’m making a lot of money to stand in front of people and try to be funny!” So that’s how that happened.

So you had no say.

And “Two and a Half Men,” I made a joke about how much money Charlie Sheen must have been making and that I would take that job and got a call like the next day and went, “Umm, really? You want me to do this? Yeah, I’ll jump on that grenade.”Given the fact that I wasn’t a producer on either of those, I really didn’t have a consciousness about it. “Punk’d,” which was an early thing I produced, I was just making fun and trying to have fun, and I definitely thought, as we were casting various people to punk on the show, and as we architected every one of those episodes, I thought about the demos and I thought about the general demos and who these various people would be appealing to. This is really the first show, like soup to nuts, that I’m in that I had to have that kind of consciousness about.

I think what I’m trying to get at is that you have power now that you didn’t have before, necessarily, in the system.

Yeah, I suppose.

Well, creators have more power in this system because you have options and different places you can go.

I think that’s the nature of what’s happening with the digital landscape, right? Like before you only had X numbers of buyers and you were happy if any of them were interested. And now I think you can architect the story that you want to tell and you can shop it directly to who you think has the most relevance to your audience.

We’re here with Ashton Kutcher, who is a Renaissance man of Hollywood and entertainment, I would say.

I think people do have a sense that you have lots and lots of tech investments. But you have some very good ones, actually. You’ve been in a lot of things. You mentioned one or two already. Talk a little bit about your investments, because I don’t think people realize how long you’ve been at it. Because a lot of celebrities enter the investment picture, but they’re just part of a press release versus really actively investing.

I would say now is probably not the best time to start entering.

No, not at all. So you started off with ... talk about your various investment groups, because they’ve changed over time.

I started off just investing as an independent person. I was running a production company and I saw buffering speeds start to pick up online. And realized there was going to be a migration of content delivery into that space. I 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?” — which seems like a really long time ago — I would get into ...

That’s a classic unsung movie.

[laughs] I would get into AOL chatrooms and just start “Dude, sweet” threads and then leave that chat room and go to the next one. So I was trying to digitally hack audience acquisition online, back then. And then when I was running my production company, I wanted to actually turn it into something that we could use, and so I started looking for different ways to quantify digital audience and things like that. And started making a couple early investments in companies that were doing that.

And then, as I started doing that, I started opening up this canvas of opportunity with various founders. They would reach out to me, and I was like, “Well, I don’t know how I’m associated with this company or that company, but I’ll give it a shot.” And then my race on Twitter with CNN brought to light the fact that I had a slight understanding as to how to use these tools.

You’re a digital dude, yeah.

I invested in Square, which was Jack Dorsey’s financial transaction platform, because I got to know him through Twitter. I invested in Foursquare. A company called Optimizely. A couple early things, just on my own with my own money.

They called you, correct? You had been investing, or ...?

It was either they called me or I called them. I invested in a company called GroupMe because a friend of mine introduced me to them. And I invested in Skype early on.

What was your criteria?

It was mostly relative to the product and the usability of the product. And then being willing to be the stupidest person in the room. I was hanging out with really brilliant people and we’d have an open conversation about this company or that company, and they’d sell me on it and I’d use the product and I’d go, “Wow, this is actually really useful,” or, “Wow, this is actually really interesting.” And then I’d meet with the founder and say, “Hey, I’d like to invest.” And back then, nobody was investing. At least, no actors were investing.

And I think they thought, “Hey, I can get a nice little press op out of this.” And then I started to do relatively well and kind of doubled down on it. My current investing partner, Guy Oseary, reached out to me and said, “Hey, I think I could raise us some money.” I was like, “Good, because I’m running out. I keep investing in these things on my own, I don’t know how much longer I can do this.”

And so then we met with our third partner at the time, Ron Burkle, and we created A-Grade, where Ron put up the lion’s share of the finances and Guy and I put up some of our own money, and we built that fund out. And then started a second fund, and now that fund is in harvest mode. We ended up investing in Airbnb and Uber and Houzz and a series of other companies that have all done really really well. Then Guy and I decided we wanted to do a bigger fund, so we branched off and built our own investment fund called Sound Ventures, which is our current fund. So now we have an early-stage fund and a late-stage fund.

So how much, total, have you invested?

The new fund, we’ve invested around $30 million.

Wow. And that’s how much you’ve raised.

No no, we’ve raised more than that. We’ve invested that much.

How much have you raised?

We’ve raised about $130 million.

Was that difficult?

We have two LPs. One LP for our early-stage fund and one LP for our follow-on fund.

And who’s the second? Ron Burkle’s obviously the first one.

No, actually Live Nation is the LP for our early-stage fund and Liberty Capital is the LP for our late-stage fund.

So that’s easy, you don’t have to deal with a lot of LPs, right?

It makes it very, very easy. And they’re very generous towards us with helping with our back office and helping diligence deals. And it’s also, when you have a single LP like that, you can start to target-focus your investments relative to some of their needs as well. Which only just sort of broadens your scope of what you can invest in.

So how much time do you spend on your investments? I want to go through all the investments, too, that you’ve made.

Do I have break out my ...

No no, you don’t have to, but you talk like you stumbled into it, but I don’t think that’s necessarily the case here. You know, you’re already doing better than most VCs on these guesses you’ve made.


Which makes you think either it’s a lot easier, or it’s a lot harder.

I think it’s a couple things. So one, I think that we have a very, very focused agenda as to how we invest. One, we’re founders-first; we believe that every great company is built on the back of really, 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, we have a series of things that we vet our founders on. That’s the first thing. 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.

When you say grit, I’m assuming you’re referring to the book that everyone in Silicon Valley loves to talk about.

I’ve read like six books on it. There’s a great book called “The Willpower Instinct” that’s really wonderful and lays out a lot of the qualities relative to grit.

So what are you looking for?

The first thing I look for in a founder is, did they have a hustle when they were young? Because I think entrepreneurs were always entrepreneurs, whether it’s selling Blow Pops out of a high school locker or selling makeup back to their aunt, everybody’s got some hustle when they were a kid.

But my assessment of grit is, “Tell me the hardest thing that you actually managed to persevere through.” And it starts with having a passion for whatever you’re building or the essence of the problem you’re solving. And if you have a gumption about you or a disdain for the problem you have, the likelihood of you persevering through some great obstacle that you meet along the way is going to be relatively high. I like to find out the things that those people are passionate about and how they’ve actually persevered through obstacles in order to obtain whatever their goals might be.

And you know, that’s a series of questions that aren’t about the company. A lot of times you hear investors get on the phone, and the first thing they ask about is the company, and they forget to ask, “Who are you?” That’s one of the core things that we look at really, really deeply.

Once they can demonstrate some version of them trying to persevere through the problem, or they can identify the problems that are going to come to them in their company — whether it’s regulatory hair on the company, whether it’s being extraordinarily well versed in their competition and their relative advantages to their competition and whatever landscape that they’re trying to build into — all of those things start to signal that that person’s 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 it.

Let me ask you more about your investments. Why didn’t you ever build a tech company? You seem like [you were] a hustler at 12.

I’ve tried. And I haven’t been successful. I think one of the biggest things about building a tech company, and another attribute, is that you have to have a technical founder that understands and cares about the business as much as you do, whatever it may be. And I say I haven’t done it successfully.

That’s probably not completely true. I built a media company called A Plus. We just sold that company to Chicken Soup for the Soul, and we’re trying to do baseline positive journalism. Any story that’s out there, we try to find a positive spin or an inspiring spin or an optimistic spin on the story. That company has been and continues to be successful.

What didn’t work for you when you said you weren’t successful? What didn’t work doing it?

I would say relative to an Uber or Airbnb, or one of these companies that became these sort of behemoth, “Let me build a new industry” — I wasn’t building a new industry.

And media is hard to scale.

Media is extremely hard to scale. I also wouldn’t say that this is a tech company per se. I would say it’s a media company, given the fact that we have built some technical tools that are first-generation technical tools, but I don’t think it has the same sort of technical domain advantage that some of these other companies do.

Probably 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. We're currently in all 50 states, we have 1,775 police officers or law enforcement officials using our tools to recover trafficking victims. And this year we’ve recovered or identified like 6,000 trafficking victims.

And you worked with tech companies to do that, correct?

We built a technical task force and worked with a myriad of tech companies to do it. And then we designed a product with a company called Digital Reasoning that helped us build the product, and now we’ve deployed it and it’s doing extremely well.

And this is a nonprofit.

This is a nonprofit, yeah.

What prompted you to do that?

I saw a Dateline special years ago on human trafficking. I saw these 6- and 7-year-old kids being sold for sex and I thought it was repulsive, and as I looked out and tried to find groups that were actually doing something effective to solve it, there weren’t very many. There were certainly none doing it in the digital domain, and I saw a statistic that said that 75 percent of the transactions around sex are happening online. And I thought that in the same way that you can build a business online, the only way you’re doing to disintermediate that business is to 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 able to do anything, so we built one.

And now it’s still deployed. Do you still run it? Or you have people running it?

I’m not the CEO of it. I’m the chairman of the board and my former executive director, Julie Cordua, is now the CEO of it. But it’s still running and doing extremely well, and we’re building a bunch of other tools in the space that I can’t really talk about.

So getting back to the other investments, some of the ones that have done really well, and we’ve talked about it: Uber. You were quite early there, correct?

Travis pitched me the company when he didn’t have any investors.


Very, very early.

And what did you think?

I didn’t quite get it right off the bat.

That’s because you have limousines all the time, Ashton.

Well, that may have been a limiting factor. I was like, “Why would people pay more to get a black car?” And it wasn’t until I got my head around the idea that eventually people will pay less to have a black car that I really understood the value of the company. It didn’t take that long, but it took longer than I would have liked.

What did you think when he pitched you? Speaking of grit, that guy has grit to spare.

Yup. I thought it was interesting. There were a couple other people toying with this ride-sharing idea, right? And I’d been pitched by a couple other companies that were, you know, “list your car and share your vehicle.”

I actually thought it would end up falling. I thought the person that would win that space would end up being one of these ride-hitching platforms and not necessarily a company that had these high-end vehicles. I didn’t understand the luxe value in the space. I thought it would end up being one of these like, you know, almost like the UberX model that won out. It so happens that I think that model is the model that ultimately wins out. I think he started top-down, built his brand with the luxe model and then moved down.

Why did you invest? What did it make you do if you saw all these others and thought something different?

Eventually, I saw a product-market fit. I think we ended up investing in the B round, and it was pretty clear that there was a product-market fit there and growth. Then I started looking at where the real hair on the company was.


Which is regulatory.

We talked about that a lot.

And I realized that the regulatory hair was bizarre in many places. Like, in Denver, you couldn’t have a black car within two miles, or within two city blocks, of an establishment that was selling alcohol. It was some weird random law that was on the books for generations. I realized that this was just a monopoly trying to hold onto their ground, and there was enough momentum behind the company that I thought it could push through. Same thing goes for Airbnb.

Very different founders.

Very, very different founders. Both equally passionate about their business. I think a different tack towards the way they build their business. But I think they both have all the qualities that it takes to push through to the next level.

And when you saw that, what did you think?



Once again, I think I saw that in the series B, there was a clear product-market fit, it was growing. I think somebody had put something into my ear that I think Peter Thiel’s probably established his foothold on, around making investments in companies that have non-intuitive properties where whatever people’s intuition is about one thing or another just so happens to be not true. When you do that, there’s green grass for days and days on end.

Right, that is a Peter Thiel-ian thing.

Somebody planted that in my ear at one point, and when I saw Airbnb growing the way that it was growing, I was like, “This is totally counterintuitive, I don’t know. I mean, who’s going to open their house to a stranger and let them sleep in their spare bedroom?” The evidence was all over that that was going to happen. So I downloaded the app and started trying it, and it was amazing. It was an extraordinary experience where I got more for less.

I think, at the end of the day, when these companies work, they have that quality. Also, my partner at the time was Ron Burkle, and Ron had a lot of investments in the hotel space. So I understood the value. He coached me up on the value of investing in hotels and why they have some impervious qualities in shifting market conditions. What I realized is that Airbnb had that same quality. People were still going to travel no matter what the market conditions were, and in fact they would be looking for a more economic, resourceful way [to travel].

Hotels aren’t impervious, as it turns out. Not to Airbnb. So we’ll finish up here and then we’ll talk about where you think investments in Hollywood are going. But what is an investment you made that didn’t work out?

Oh, well tons of them. I think you mentioned one, Secret.

Oh Secret, that’s right. I forgot you were in that.

Yeah, that one didn’t work out.


I don’t know. The anonymous space for chat and conversation, I think, is something that maybe we want to have happen, but people aren’t ready to have happen. I think that there’s a lot of work being done in AI — actually, Jared Cohen from Jigsaw at Google just had an article in Wired that was talking about launching AI to eliminate trolls from the web. Once that technology gets deployed and works really well, I think that an anonymous chat or an anonymous social network could work.

You know, it was sort of a shock that we were taking that [investment], Whisper was kind of percolating, Secret was percolating, there were a couple of them that were percolating all at the same time. Yik Yak. And in fact we had made an investment in a company years ago called Like A Little that was a college campus version of Secret. So we’ve liked that space in general because we believe there’s a true market where people have public fear to talk about themselves in a very intimate way but would be willing to do so in an anonymous format.

Or Snapchat.


Ish. A privacy to it, and ephemerality.

Yeah. I actually think when AI bots get released to eliminate trolling, I think those markets will become a lot better.

We’ll talk about that more. Which is one that you wish you had gotten into that you didn’t? That you went, “Ah, that’s too bad.”

I passed on Snapchat twice.

Why? Did they have better t-shirts than you, Ashton?

I went on Twitter — I do this like about every six months — and I said, “What’s the new app that you’re using?” Or, “What’s the new product that you think is really cool?” And there were two companies that it was like, the writing is on the wall. There were 10 responses that said Snapchat, 10 responses that said Tinder, and I was like, “Whoa, hold on.”

So I started using Tinder’s product and playing around with it, and I was like, “This is amazing.” The swipe left, swipe right, just that simple product I thought was outstanding, just a beautiful piece of product. And I knew Sean Rad because he had a company called Adly that he wanted me to invest in before that I passed on. So I reached out to Sean and was trying to invest in Tinder and had a deal done, and then found out that they had come out of an incubator that was IAC-owned so therefore they couldn’t raise money. We had term sheets that got torn up, which really bummed me out.

And then I looked at Snapchat’s product and I hated the product.

You’re too old, as young as you are.

Actually, I just thought that the product was a little crickety and a little rickety and a little not ... It just wasn’t beautiful or elegant and I have this dumb, personal pet peeve about that and it really bugged me.

Twice. You hated it twice.

I passed on it twice because I just didn’t like the product. And I know the dirty little secret that even though everyone thinks that there’s privacy and they think that their information disappears, that it still sits on a server somewhere and that it’s totally hackable over time.

Evan doesn’t like hearing that.

But it’s true.

He says it’s not. But anyway.

Well, but it is true. Or at least it was when I was looking at it. They may have changed it, I don’t know. I’m not going to be an authority on it, but that really bothered me because I went, wait, the first hack where these kids are showing whatever pictures they’re showing to 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 out somewhere and I was like [through gritted teeth], “Okay, that’s a good product.”

[KS laughs] Is that how you said it?

Yeah, I did. Maybe I was a little nicer than that.

“I like your t-shirt, your supermodel girlfriend’s fantastic, fiancée…”

She’s really nice. She’s always been nice.

We’re here with Ashton Kutcher, who sometimes acts in things but also is a big investor. He has a new show out on Netflix called “The Ranch,” which he is a producer of, correct?

That’s right.

And then also has continued to do investing now through your company with Guy Oseary called ...

Sound Ventures.

Sound Ventures. So let’s talk a little bit about where Hollywood’s going. Where’s it moving? I’ve just talked recently to James Corden and others about where things are going, and most people feel that the shifts that are happening in tech still haven’t resonated in Hollywood yet.

Who says that?

Lots of people! They feel like they still are resisting it. Do you feel they don’t?

Oh, that’s wrong. Come on, that’s not true. Look at Netflix, right? That’s a shift in tech that has drastically affected the market.

Yes, but it was so resisted for so long, until just recently.

But still, I mean drastically. To deny that that’s absolutely affecting the market, I mean ...

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 know, who are they?

It’s abundantly clear that there’s an open market now for selling your shows, 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 whether it’s Amazon. Across the board, there’s an abundant number of content distributors that are starting to shift that market. Now that Netflix is spending a billion plus on content creation, it’s just pretty clear that the tide has already shifted.

I met with Les Moonves years and years ago, and he said, “When advertising is dollar for dollar, internet to television, the whole thing goes upside down.” Right now, everybody’s playing this weird little arbitrage game with their television ad sales, right? And they’re spending a portion of that money to actually sell as an advertiser online to get distribution around their content. So they’re playing this little arbitrage game that will continue to go until it’s dollar for dollar, eyeball for eyeball. And I think that we’re virtually there. Then it just becomes incumbent upon the digital platforms to have the same confidence Netflix has had to actually spend the money on high-quality programming, and then it’s game over.

Well, it’s not just high-quality programming, it’s how we’re doing programming. I mean, you can talk about VR, you can talk about mobile-only shows, you can talk about ... I have a 14-year-old, he only watches on mobile, and I don’t think he’s uncommon. He doesn’t like going to movies. He watches television of a sort.

That’s right. But let’s take VR off the table because I think everybody’s way too overhyped on VR, and it’s just not time to play there yet. I think VR’s still pretty far off in the distance, if you consider even just the number of headsets that are going to be in the market in the next x number of years.

And they’re still unwieldy, and the whole device is a problem.

And you have to buy into this basic notion that people don’t want the cut. People want the cut. Because the cut is what fast-forwards you through a story. Stories since the beginning of time, since people sat around a campfire and told stories, they cut their story. They cut out the boring parts and moved through to the interesting parts, that’s how you tell a story. And the minute that you’re forced into a platform where you don’t get it cut relative to your storytelling, all of a sudden you get into this ambiguous short-form zone that it has to be short in order to even engage on it.

First of all, digital owns short-form content, there’s no other platform that owns that. And those are all digital platforms. So that’s done. Signed, sealed, delivered. Digital owns that. It’s the long-form content play that, right now, is in the balance, whether it’s feature films going direct to digital or feature films that are going to get released in the theater. A lot of them are going day-and-date now, which — I think there’s this new deal with iPic that they’re going to go day-and-date on all their content. It’s just inevitable, it’s just happening.

What does that mean for you as a creator?

As a creator, more optionality. Right now, I can still go to the dinosaurs and sell something at the dinosaur companies, and I can go to the new companies ...

Do you actually call them dinosaurs when you go see them? I don’t.

I would call them a dinosaur to their face. They know they’re dinosaurs. There’s not an executive that’s at one of these traditional terrestrial television distribution platforms that doesn’t think that in some way, shape or form ...

This is their last job.

Well, no, not necessarily last job, because they can move to digital platforms and become content creators there. But I think they know that that model of distribution is on the decline. There’s absolute evidence. It’s like denying climate change. There’s evidence, there’s legitimate statistical data that suggests your platform, your way of distributing content, is dying.

So what happens to ... I know you say there’s not people running it, but there is a system here just like there’s a Wall Street system, just like there’s a banking system, a car system right now which is going to be under siege, [which] is in the middle of being disrupted, obviously.

Competition in some ways spurs innovation, which is good. I think we’re seeing that happen. A lot of the programming that’s coming out on Netflix, in particular, is extraordinary programming because it’s being built in this competitive base. I actually think some of the programming on traditional television networks ... I mean, you could look at some of the content on HBO right now, like “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. I think that’s a good thing right now.

The game has been upped by everybody.

The game has been upped by everybody, and I think that, for content creators, is wonderful. Then I think the unit economics are gonna go into pseudo limbo shift, right? And they have to be thought about when you’re negotiating your content deals up front. So for example, with Netflix, they do buyouts, long-term buyouts, relative to what you would get in syndication for various shows. That model is going to slowly work itself out and that’s where all the agents and multiple players get involved and try to get tricky 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 it will just gently shift over.

And last thing on this subject: What about format? Things that are going to be created. You were talking about, you know, you dump all the shows at once, you do different things, VR’s too early. But is there a content format you see emerging, a different content format?

I don’t know.

Because Snapchat’s kind of a content format that’s different.

I was thinking about vertical video as a content format.

What’s vertical video?

Well, Snapchat, vertical video.

Oh, vertical video, I see.

Holding your phone upright. I think there’s some content within that vertical video distribution channel that could be somewhat interesting and differently consumable. What Instagram’s done with their Stories as well, that lends itself. We’re going to see a lot more higher-quality live content over time in the digital domain because I think Facebook’s putting a lot of energy and effort into [that].

And what do you think about what Twitter’s trying to do with the NFL and everything else?

I think it’s a pretty cool experience. Somebody was asking me what’s going to happen to Twitter and I said ...

Yeah, what’s going to happen to Twitter, Ashton?

I actually think that content streaming with conversation associated with it is a pretty compelling product move. So I think things like that will persist.

So what’s going to happen to Twitter, Ashton? Being one of its most well known ... You and Donald Trump are some of the best-known citizens.

Contrary to popular belief, I’ve never had a dollar invested in Twitter. I wish I had, which was another thing that spurred my investing. I was like, “Wait, I can affect the audience growth, what’s going to happen to Twitter?” So it looks like everybody’s kind of bowing out, and it looks like even the Salesforce board is pushing Marc [Benioff] to bow out as well. That leaves the company in a really sort of tricky position at this point.

What happens? As someone who uses the platform and loves it, obviously.

Either they roll out some product things that really start fixing it quickly and ramp up their revenue, or they’re in deep, deep, deep, deep, deep, deep trouble.

It’s interesting. Jack was in there and then Ev Williams came in and then Dick Costolo came in and now Jack is back in. With a company of that size, it takes a year-plus for some of the products that are being developed by the new team to even roll out. Like even since Jack’s been in, has he had enough time to get the staff — by the way, I haven’t talked to him at all about this, so I don’t know anything — has he had time to even get the staff in order to actually build the products? And then to roll out the products that are actually going to affect the platform in a positive manner? The most interesting product I’ve seen come out is the NFL product.

Yeah, it’s 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 could go to and get one to one, one to few, one to many feedback loops. And it was a conversation. It was an open-faced conversation that was going on, which I thought made the platform extremely compelling.

And then it got inundated by people just trying to sell you stuff, or by media organizations just trying to post links to drive you out. Had deep linking existed then, they probably would have held a lot of that content on platform.

I think because they went public when they went public, they were forced to try to drive revenue really early and then lost the product revs that were necessary. So the platform became this non-intimate platform.

And then all the trolls arrived.

Trolls showed up, started beating everybody up, so then it became a platform where you couldn’t have that honest conversation. And then, you know, Jack has come back and is trying to do some things around media and actually embrace 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 AI that would help the platform.

Many people think that, for sure. It’s almost one of the most emotionally demented companies in Silicon Valley, of so many. There’s so much emotionality in that company, from the very beginning.

But there’s also emotionality cooked into the product.

Yeah, everything about it.

[It’s an] if-you-could-see-into-the-brain-of-society platform ...

That’s a good way of putting it.

... and when you look at it you might be scared of what the brain of society looks like.

Oh, I am every day. Every time Donald Trump tweets. Let’s finish up talking about other things you think are a promising investment. Are you a self-driving car guy?

I love it.

Do you like the vertical thing I wrote about recently? That Uber’s thinking of a vertical helicopter kind of experience? Vertical lift and takeoff vehicles.

Okay, so I love-self driving vehicles. I think it’s brilliant.

Are you invested?

No, I’m not invested in any individual company. I’m an investor in Tesla, on the public market — the self-driving mode is extraordinary. I liken it to cruise control right now, where you always still have to pay attention. Like really have to pay attention, but it’s cruise control. That being said, I think that the self-driving car movement is inevitable and I think it’s wonderful.

I actually think for semi trucks — I’ve looked at a couple of companies, and I know Uber acquired Otto, which is a semi truck [company]. I think it’s unbelievable for that. It’s just open freeway, creating mass efficiencies in that market. It’s great. And by the way, the beauty of it is, when one person gets in a car accident and they’re driving, the person that learned the lesson might be dead. When a self-driving car gets into an accident, which will happen, every car gets smarter. I think for traffic congestion, I think for automobile accident deaths, I think it’s going to be revolutionary. As long as lawmakers don’t kill it.

Right, which they could. No, they won’t.

They could, but I don’t think they will.

What else do you like?

Do you know, what I really love is voice interface. I think that this Amazon Echo is ...

I love the Echo. I married mine.

It’s unbelievable. And obviously Google just launched theirs, and I’m sure Apple has one in the pipeline because I think that you can’t miss that market. I think that’s going to be an extraordinary [market]. If there’s anything from a hardware perspective that I’ve seen that could have the same value from an investor perspective as what the smartphone had and the app ecosystem had, it could be an ecosystem of applications relative to voice interface.

I invest in a company called that sold early that was just building pipes for voice. And we saw it relatively early and thought about it with the mobile phone, but now that these devices exist, they’re unbelievable. There’s a whole ecosystem of use cases that could be relative to that. And there’s a whole other ecosystem of hardware that could be relative to that. There’s no reason why I can’t just say, “Make the coffee,” and have my coffee be made. I shouldn’t have to go do all the business, or feed the dogs.

Once the device is in place.

Yeah, and now that Google’s is out, I’m very interested to play with their version of it.


What is it called?


There you go. Because it knows so much about my personal context and my relationships. I’d be hard pressed to believe that Facebook at some point in time wouldn’t launch one of these as well, given it has such great contextual understanding of my relationships. So it’s going to be interesting.

I was thinking about putting the Google one in my office, and I’ve got the Echo at home. So when we need to order things for the house or whatever, the stuff on Prime, it’s kind of wonderful having it in the house. And we have it connected to the lights and the TV and the whole shebang, which is a little annoying still, there, because it’s not worked out. But I think that platform’s going to be an extraordinary ecosystem for growth.

Anything else? Food? Health?

I think there’s a lot of opportunities in health. I’m not smart enough about it to really talk about it a lot. But I’m looking at a lot of things in the space. In the sciences, just in general, there’s some extraordinary stuff that’s happening.

We invest in a company called Emerald Cloud Lab that built a laboratory in the cloud. It’s almost like what AWS is, but for a scientist, so that all of their experiments can be done under perfect control. They have a software front-end that scientists use or laboratories or universities can use to affect whatever in-vitro experiments they want to affect. Because there’s so much fall-off in capacity to create redundancy in whatever scientific experiments you’re doing, this creates perfect controls every single time. So you have absolute redundancy.

Wow, that’s interesting.

We think that’s really exciting. And there’s a company called Benchling that’s doing a lot of genetic engineering stuff in a similar fashion.

So you are smart enough to get into that.

Very, very hesitantly.

Yeah, you don’t want a Theranos happening to you, do you?

For me, consumer is my domain expertise. I am a consumer, so I can really try the product and understand it, which is one of my important thresholds in investing in these companies. But some of these things, they’re almost too exciting to not try to make work.

All right, very last question, and then we have to go. We could argue that you’re an entrepreneur. What mistake have you made? Because a lot of people who listen to this are wanting to be entrepreneurs. And what did you do about it?

I’m very, very, very, very loyal as an entrepreneur and probably stick with people and things when the writing’s on the wall that it’s not going to work. I have this absolute optimist’s perspective on things and it’s really hard for me to pull the plug. I’m so founder-friendly that even sometimes when companies should just sell, I’m like, “No, you have a vision for it, you want to do it, and if you fail doing it then you fail trying to do the thing that you want to do.”

I’ve grown to realize that in some cases there’s an outcome that’s better with a reset. Whether it’s a reset with an employee that doesn’t work out, where you go, “Listen, you’re not thriving here and I want you to thrive as a person and I want you to thrive in your career and I need to do a reset on that.” Sometimes telling people “no” is being a better friend than telling people “yes.”

Oh, that is a good thing to end on. “Ashton can say no.” I think you’ll probably still be an optimist, would be my guess. Anyway, it’s been great having you on the show, thank you so much.

Thank you.

That was full of lots of fascinating things.

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