Why Ashton Kutcher passed on investing in Snapchat, twice


The actor-turned-investor couldn’t get over Snapchat’s design.

When Ashton Kutcher* first made the leap from actor to investor, he relied largely on his gut, investing in companies like Skype, Square and Foursquare because he was wowed by their founders and products.

“Consumer is my domain expertise,” Kutcher said on the latest episode of Recode Decode, hosted by Kara Swisher. “I am a consumer, so I can really try the product and explore it.”

But despite several hits in his portfolio, and the portfolios of his firms A-Grade and Sound Ventures — including Airbnb and Uber — Kutcher also remembers the ones that got away. After asking his Twitter followers for recommendations on cool new apps, he was flooded with tips about two: Tinder and Snapchat.

“I started using Tinder’s product and playing around with it and was like, ‘This is amazing,’” Kutcher said. “The swipe-left, swipe-right, just that simple product feature, I thought was outstanding.”

Not so much for Snapchat, which he passed on twice.

“I looked at Snapchat’s product and I hated the product,” he said. “I just thought it was like, a little crickety and a little rickety. It just wasn’t beautiful or elegant. And I have this dumb, personal pet peeve about that, and it really bugged me.”

“And I know the dirty little secret, that even though everyone thinks that there’s privacy and that their information disappears, it still sits on a server somewhere, and it’s totally hackable over time,” he added.

“[Snapchat CEO] Evan Spiegel doesn’t like hearing that,” Swisher pointed out on the new podcast.

“But it’s true,” Kutcher countered. “Or, at least, it was when I was looking at it. They may have changed it, I don’t know. But I went, 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.”

Today, Snapchat (which recently rebranded as Snap, Inc.) is valued at around $16 billion.

You can listen to Recode Decode in the audio player above, or subscribe on iTunes, Google Play Music, TuneIn and Stitcher. On Wednesday, we’ll have a bonus episode of Decode in which Kara talks to U.S. Secretary of Commerce Penny Pritzker.

If you like this show, you should also sample our other podcasts:

  • Recode Media with Peter Kafka features no-nonsense conversations with the smartest and most interesting people in the media world, with new episodes every Thursday. Use these links to subscribe on iTunes, Google Play Music, TuneIn and Stitcher. Tomorrow, we’ll have a bonus episode of Recode Media in which Peter talks to former White House speechwriter Jon Favreau.
  • Too Embarrassed to Ask, hosted by Kara Swisher and The Verge’s Lauren Goode, answers the tech questions sent in by our readers and listeners. You can hear new episodes every Friday on iTunes, Google Play Music, TuneIn and Stitcher.
  • And Recode Replay has all the audio from our live events, including the Code Conference, Code Media and the Code Commerce Series. Subscribe today on iTunes, Google Play Music, TuneIn and Stitcher.

If you like what we’re doing, please write a review on iTunes — and if you don’t, just tweet-strafe Kara.

* Disclosure: Kutcher is an advisor to Recode’s parent company Vox Media.

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