TheGrill 2015: Investor Chris Sacca Says Twitter Made ‘Fundamental Mistake’ During IPO (Video)

Tech veteran also speaks about universal support for social platform’s returning CEO Jack Dorsey at TheWrap’s sixth annual Media Leadership Conference

Last Updated: October 7, 2015 @ 6:57 PM

Chris Sacca, venture capitalist and investor in giants of tech disruption like Uber and Twitter, thinks that the 140-character social platform made a “fundamental mistake” during its IPO process.

“In its IPO filing Twitter said, ‘You should measure the growth of this company based on monthly active users who are logged in to the site,'” he told TheWrap’s CEO and editor in chief Sharon Waxman during the sixth annual TheGrill media leadership conference. “I think that was a mistake.”

Sacca explained that such metrics make sense for a platform like Facebook, which requires login, friend associations and a pint of blood to work, but “In order to get the Twitter experience,” he says, “it doesn’t actually need to know anything about you.”

It was further evidence, according to Sacca, that those who took the company public wrongly tried to mold it to the Facebook model. “It was really advocated strongly by the bankers and mutual funds who wanted to buy something familiar and put it into an existing model. I think they didn’t fundamentally understand Twitter and that set us up for that challenge.”

He went on to speak highly of returning Twitter CEO Jack Dorsey, whom Sacca claimed had near universal support upon his return to the company following a six-year absence.

“Jack Dorsey understands normal people better than most of the folks in technology,” he said. “He walked the streets in Ferguson when all that was going on. You saw his Vines and Periscopes literally from the front lines. He’s the guy who meets with small merchants in markets all the time. He understands real people and knows how to make this product simpler, more approachable and more engaging for normal people.”

Sacca also said that, when considering investing in a company, he looks for founders who have absolute faith in their product, such as when he first met Instagram co-founder Kevin Systrom.

“He wasn’t trying to sell me. You get the sense that he was looking right through you to the future and you want to get on board before they leave you behind,” he said.

Sacca also spoke about the benefit of online platforms for content creators, such as his brother, comedian Brian Sacca. Brian created his own web series for $50,000 that he was able to sell for $600,000.

“We have distributed the risk. We have distributed the wealth. And I think we’ve enabled a whole new generation of creators who can succeed without having to necessarily be on magazine covers but be perfectly happy and content,” he said.

But he admitted that not all of his decisions have been correct. Sacca, one of the youngest billionaires in the country, admitted that he passed on investing in the incredibly popular apps like Snapchat.

Watch the full interview here:

“I can imagine saying no to Snapchat, because I was one of those people,” Sacca said. “Those guys came up to me me after an event in LA…and I was like ‘The dick pics? That thing?’ I was totally close minded to that being the one.”

Sacca also revealed that he passed on Airbnb, the popular lodging rental site. “Back then it was renting a room in someone’s house when the owner was still there,” he said. “I took the founders aside and I said, ‘Look, you guys, somebody is going to get raped or murdered and the blood is going to be on your hands.’ It’s happened one time. $20 billion company and it’s happened one f–king time.”