Why I invested $250,000 in Swell

I thought you guys might be interested in hearing how I’m tackling the absurdly hard task of trying to pick winners as an angel investor. My goal in talking about my bets—uhhh, I mean investments—isn’t to promote myself or the startup, but rather get your insights into my process.

Also, writing is clarity of thought. If I set the benchmark that I’m going to write out my thinking on every investment I make, that should force me to think deeply about each one. Not that I don’t already do that, but there is something about the forcing function of writing that just works for me.

Swell is an App that my friend Josh from DFJ showed me at a poker game. When he handed me his phone and said ‘it’s Pandora for talk radio’ I got it immediately.

Get it - http://swell.am

Here are the signals that made write a check:

1. Trusted referral / respected early investors: my friend Josh showed me the product, and Google Ventures was also involved. I’ve got deep respect for Josh (early investor in Box), and for the GV team, which include my old friend Kevin Rose (who just did a fireside chat for the LAUNCH Hackathon: catch the podcast 12/10 - on Swell, too). I also have a bunch of other friends/people at those two firms including Tim Draper, Steve Jurvetson (who I had on the program recently http://youtu.be/O2tK0Wl2F8w), MG Siegler (who pisses off more people than me when he writes—always a good thing), Daniel Burka (who gave me solid advice on Inside.com design) and Joe Kraus (who I always respected deeply on a product level).

2. Clarity of mission and a singular focus: Swell is doing something very simple, but very hard, getting people to the best talk radio out there. This could be a TED talk, a public radio show or a podcast.

3. My Knowledge of the Space: I’ve been podcasting for two decades, since before it was called podcasting in fact. I did the Silicon Alley Reporter radio show on Pseudo back in the ‘90s, CalacanisCast in 2007, This Week in Tech, Gillmor Gang and then This Week in Startups (just past 400 episodes!). I’ve done at least 600+ podcasts as a host or guest. The biggest problem in podcasting is discovery, as in getting the right people to your podcast. Apple has done some fine work in this space, but the fact is only 5% of the potential audience for Leo Laporte’s This Week in Tech actually know about the show—and he’s been doing it for almost a decade!

4. Stunning design and UX: Swell uses ‘cards’ as their user experience and it works brilliantly. Imagine playing cards on your phone in a stack that you can swipe through quickly and that’s how Swell works. Similar to Tinder, the dating app, but very different than a feed like Twitter and Facebook, where you scroll up and down a bunch of tiles (which you could call ‘cards’ but I won't for reasons of clarity).

5. Audible Addiction: I’ve been addicted to talk via podcasting for years, but before that I was a huge fan of a tiny startup in NJ called Audible. They eventually got bought by Amazon, and I’ve been a Platinum Subscriber for years. That means I spend ~$200 a year for 20 titles a year. I do this because I travel and drive a lot, and I feel like that time is wasted. If I listen to audiobooks I feel like I’m getting smarter and more worldly, whether it’s something in business, pop culture or a biography. I find myself splitting my time between Audible’s awesome titles and Swell’s excellent curation now. In fact, Swell helped me discover a bunch of new programs I didn’t know existed.

6. Great founder. When I met the founder I could tell he was capable of building a big, lasting company immediately because his concerns were around two important people in his ecosystem: the listeners and the content producers. Too often Silicon Valley companies are obsessed with the former and not the latter. Having been through a lot of struggles with Google, both the Search Group and YouTube, where I felt they were not supportive enough of me as a content producer, I found this refreshing and on point. Right now YouTubers feel like YouTube doesn’t care about them as much as they care about their own growth. I believe this is what will limit YouTube’s and Google’s future. Netflix, Amazon, Yahoo and AOL might have a small fraction of the usage of YouTube, but they care more for their creators.

Over time I think YouTube’s position will erode as someone like Twitter, Amazon or Yahoo makes a bold move to support the YouTube creators on a much deeper level. Swell has that potential for podcasters and talk products. Having a founder who groks this made me feel like their heart was in the right place.

7. TuneIn and Stitcher: I’m big fans of these other startups in the space, but I wasn’t able to invest in them (too late!). So, being able to bet on a new entrant who I think has the edge in the curation and interface space was a welcome opportunity for me.

8. I think I can be of service to the team: One of my big roles as an angel investor is helping with branding, marketing, positioning and product design—at least that’s what my fellow founders tell me. In this case, my domain expertise in talk radio as a creator and metaconsumer should help me act as a great resource to the founder.

There is a long way to go for Swell, but I’m really excited to be an early supporter. I think it’s a potential unicorn.

LAUNCH Fund is ~$9m in size, is ~8% invested and has eight investments.

Q1: What do you think of Swell?
Q2: What do you think of my investing signals?
Q3: What’s your big idea for Swell?
Q4: If Swell was offered as an AngelList Syndicate investment would you consider it? (accredited investors only can signup here: https://angel.co/jason/syndicate)

best @jason

PS - LAUNCH Festival is in 80 days! Get a complimentary ‘builder’ ticket here http://launch.ticketleap.com/launch-festival-2014/dates, using the code LAUNCHTIME.  You can buy a conference pass, VIP pass or Super VIP (each has access to different events of note).

PPS - The LAUNCH Ticker is the easiest way to keep up with the technology industry. For $100 a year you can read the “daily briefing” my researchers create for me! It’s 12 hours of daily research in two short emails. Sign up here: http://launch.co/promembership

PPPS - In case you missed it we had Naval on This Week in Startups. It’s a fireside chat we did at the LAUNCH Hackathon (#2). http://launch.wistia.com/medias/8vs30ocul6

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