How It Feels When Your Investor Launches A Competitor To Your Startup

This morning, serial entrepreneur and startup investor Jason Calacanis launched a mobile news app, Inside.

He's been wanting to launch the company for a long time. Earlier, he launched a minimum viable product, Launch Ticker. He's also wanted the domain name Inside.com for 10 years. He tried to buy it four times from three different owners when he finally obtained it.

While discussing Inside with Calacanis, I asked about his involvement with Circa, another mobile news app. Calacanis has been an investor in it for a few years, and yet he just launched a similar-sounding competitor.

Circa writes bits of news that are easy to digest on mobile devices. They're often very short. Calacanis' Inside is a mobile news curator that links out to high-quality content. It re-writes story summaries in 300 characters or less.

Calacanis said he invested in Circa through an AngelList syndicate when the company was first getting off the ground and that he's friendly with the founders. Calacanis formerly founded Weblogs and sold it to AOL for ~ $30 million. He's invested in a bunch of startups, including Uber.

I asked Calacanis if he had spoken with Circa's co-founders Matt Galligan and Ben Huh about Inside before its launch. He said he hadn't because he was trying to keep the startup under wraps. When asked if he thought Circa's founders would be mad about Inside, Calacanis said he didn't think so. He feels they're different products.

"With us you follow a topic, with them you follow a story," says Calacanis of Circa. "I see them as a competitor to Business Insider, Huffington Post and New York Times. They say they're the mobile version of The New York Times. So we look at them as a source, we're not in competition to them. We're a curator and we point people to the best journalism. To the extent that they're the best, we will point to them. They are doing some original reporting. Their stuff is beautiful."

So, how did Circa really feel when Calacanis launched his similar-sounding news reader this morning? I asked CEO Matt Galligan via email. Here's what he said.

Business Insider: I'm curious how it feels? Are you mad, surprised, indifferent?

MG: I'm pretty indifferent, somewhat flattered, and even more energized. Frankly, we knew it was on the way for some time and had prepared for it. We did as much as we could to learn about what it was going to be, eventually understanding that it was primarily an extension of Jason's previous efforts with Launch Ticker. Thus, we understood it to have a focus on brevity, but that's where the similarities would end.

Calacanis didn't tell you about Circa beforehand. He believes Circa and Inside are different but it's difficult not to see them as competitors.

MG: Indeed. We didn't have any sort of real transparency as to what it would be but I felt confident it was going to be something differentiated. We both believe they're different. They serve two different audiences as well...now...not dramatically different audiences as there will be some overlap, but we're trying to accomplish different things here.

Was Calacanis an initial investor in Circa?

MG: He was an investor in an angel round that we put together early last year. No grandfathering here. Just a straight-up investor after we did a This Week in Startups episode about Circa.

BI: It's a bit of an unusual situation to have an investor in a startup launch a competitor.

I can't disagree here, but that's also working under the assumption that Inside is a true-to-form competitor of Circa. While they'll compete for attention and eyeballs both Jason and I believe the audiences to be different. We also see the usefulness of the products to be different. Both focus on brief news, but that's where the similarities end.

Here are some tweets between Calacanis and Circa's Editor in Chief, Anthony De Rosa:

@AntDeRosa @mg @gabrielsnyder perhaps we should turn this into a war rather than a love fest to drive more downloads?!?! :-p

- jason (@Jason) January 28, 2014