Travis Kalanick’s first company got him sued for $250 billion. Time to quit the startup game, right?
Wrong.
Third Time’s a Charm
Travis is known as the brilliant founder of Uber and CloudKitchens. But his first company, a file sharing service called Scour, was a disaster.
Angry about music being pirated on Scour, the recording industry sued Travis’ company for a quarter trillion dollars, forcing it into bankruptcy.
If anyone sued me for a quarter of a trillion, I’d beg for forgiveness and go burrow into some corporate bureaucracy for the rest of my days.
But that’s why I’m not Travis.
His second company was a modest success. Red Swoosh, which helped companies transfer media files, was acquired by Akamai for $18.7 million.
It wasn’t until company number 3 that Travis really hit.
Backing a Founder Again
If you were an investor in Scour, you might put Travis on your “Never invest again” list.
But you would be wrong. With each company, Travis was learning…
A great investor will look not just at the outcomes, but at Travis as a person. He worked incredibly hard, and failure never deterred him.
An entrepreneur like that, you want to back again and again. Had you done so, you’d be sitting on a mountain of Uber shares today.
If At First You Don’t Succeed…
On a summer afternoon last year, I sat at a cafe near Bryant Park. I was enjoying coffee and pastries with Justin*, a great entrepreneur I had backed in 2021.
His company had recently been acquired for a modest sum. We got our money back, but nothing more.
In startupland, this is actually an incredible outcome. Usually, you lose the whole investment!
We chatted about his company, what’s new in tech, and ideas for the future. I left the meeting with a big smile on my face, full of energy.
I know Justin gave his startup everything he had. And for a first company, it actually did pretty well!
He needed some time to rest and vest. But I could hardly wait for Justin’s revenge startup.
My Strategy for Backing Founders Again
Every six months, I shoot Justin a message and see how he’s doing. Some day, he’ll be ready to start his next company.
When he does, I want to be the first to know.
When I back a founder, all I expect is for him to do his best and keep us updated. If he does that, I want to back him over and over.
Throughout Justin’s career, he might start 3 or 4 companies. I plan to be an investor in every one of them.
Sooner or later, with his tenacity and technical skills, he’ll strike gold.
Wrap-Up
Creating a billion dollar company out of nothing is really hard. Not many founders make it on the first try.
When I make an investment, I’m starting what can be a lifelong relationship. Even if Company 1 or 2 fails, I’ll have the inside track for 3 and 4.
When you back great founders over and over, sooner or later you’re going to hit.
Do you like repeat founders? Leave a comment and let us know!
Have a great weekend, everyone!
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*Names are changed to protect privacy.
Photo: “LE WEB PARIS 2013 – CONFERENCES – PLENARY 1 – TRAVIS KALANICK” by LeWeb14 is licensed under CC BY 2.0.
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