Invest to build a better future: Advice from successful actor and tech investor Ashton Kutcher
In early September, the Cedar team gathered in our NYC office for a very special Cedar Talk, featuring Cedar investor and Sound Ventures co-founder Ashton Kutcher. Kutcher is well known for his career as an actor and producer – starring in That 70s Show, Dude, Where’s My Car?, Jobs, and The Ranch, among others – and for his successful track record as a tech investor.
Kutcher highlighted his investment philosophy as betting on the people and products that are in it for the greater good – and that’s why he felt so compelled to invest in Cedar. While his talk was full of great career and investing advice, the following five insights especially stood out to the Cedar team:
#1: Work with people who are building a better future
Having been an early investor in Skype, Foursquare and Optimizely, as well as Uber, Airbnb, and Spotify, Kutcher quickly realized that he had a knack for identifying high-potential companies at an early stage. Over his 15 years investing, he’s developed key questions that he asks every single startup when weighing an investment, including whether the product will actually help build a better future.
Kutcher has experienced the frustration of medical billing firsthand and feels strongly that Cedar’s enhanced patient billing platform passes the test. “You get this great care in the hospital, and then you have a terrible experience [with the billing process],” said Kutcher. “It’s awful. Just a terrible experience. And you really have an opportunity to solve a giant pain point in people’s lives.”
#2: Get comfortable with the uncomfortable
Building a new company – especially an innovative or revolutionary one – is an inherently difficult process. It requires continually overcoming obstacles and moving forward. Describing what makes teams successful, Kutcher says it’s all about grit. A successful startup requires “the willingness to exist within discomfort and the savvy to get yourself out of it, while knowing that more discomfort is on the way.”
#3: Own – don’t rent – your company culture
Creating the right culture is all about taking ownership as a team, according to the prominent investor. People tend to treat houses they own much better than those that they rent – the same dynamics apply to culture. As a company grows, it’s important to ensure that its values and systems are still upheld by the expanding team, ensuring that “functional collective ownership of the space is yours.”
#4: Learn from losses to improve your wins
While well-known for his successful investments, Kutcher is no stranger to failure. Of the 200 companies he has invested in, he estimated that only about 40 have been successful. Despite that ratio, he’s learned that the impact of his wins tended to outweigh the smaller numbers, reflecting that it’s important to take calculated risks over time to learn from mistakes and ultimately improve so that “your wins far outweigh your losses.” Whether it’s new product features or investment decisions, a few key victories can end up having a truly transformative impact if you are willing to learn as you go.
#5: Work with people who aren’t just in it for themselves
Kutcher has seen startups with great concepts and products fail because the key people cut their losses and left the venture early. Real success requires founders and employees who are invested in long-term collective success. His experiences have taught him that “product isn’t everything – it’s a function of people.” And now he looks to invest in founders who are committed to “an enduring marathon,” rather than a “quick-flash return.”
So what’s next for Kutcher? These days, he’s laser-focused on investing in the right people and products to make a difference: “Personally, I’m at a point where I want to build things that make other people’s lives better…Happiness is the core. If we can build things that increase the happiness in people’s lives, that’s a win.”
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Cedar Talks is a thought leadership series focused on connecting the Cedar team and broader community with tech entrepreneurs who are dedicated to solving hard problems with great design, thoughtful engineering and industry expertise. Recent Cedar Talks have included PayPal and FoundersFund Co-founder Ken Howery, Flatiron Health Co-founder Nat Turner, and AppNexus Founder Brian O’Kelley.