How Packy McCormick Turned Not Boring from Newsletter to Venture Fund

Thanks for having me, Chrissy. So, for those who are not familiar, what is not boring? It's a great question that I struggle to answer, but I'm still figuring it out. Essentially, Not Boring is a newsletter and now a fund, kind of writing about and investing in technology companies.

Yeah, I think, so I started at Bank of America Merrill Lynch and was doing that for a little while and I think there were a couple of things. One, I really liked it, like I liked the people I worked with. I actually enjoyed it. I liked working hard, like you know, I think like a young kind of person in finance. No, not at all. The tech has always kind of been a side interest that I was able to make the real interest, like at Duke I definitely did kind of startup competitions and all of that and now I mean I've wanted to be a founder for a while and that'll pop up a couple times and now seeing what good founders look like it's like almost absurd that I wanted to be a founder and so I'm glad that the path kind of took me this way. But I think a few things, one, looked at my MD and realized that like certainly that wasn't, you know, if I worked really hard for 20 years where I wanted to be. And then two, looked at my friends who were really like who loved finance and were really good at it and I just realized like one they were smarter than me but two just like I wouldn't be able to compete with someone who was just like as obsessed as they were with it. So left. I was going to go to business school, ended up joining this startup. I'd actually quit first just pretty much to interview. And I think there's something important there and like burning the boats. I think whenever I've tried to do two things kind of at once it you can never go kind of all in. So burned the boats on that. Worked at the startup Breather for six years. Kind of near the very end, we'd brought in a professional management team. It was a lot less interesting. And I disagreed with kind of where the company was going. So tried to quit a few times and finally did and so kind of burned the boats again. I was going to start a company then and COVID hit and so that fell through and had no choice but to kind of go all in for a little bit on this newsletter that I've been writing at the time. So none of it felt too risky. I think I'm like a very risk tolerant or even risk kind of seeking person. But certainly I think it was helpful both times that I quit before making the transition and just went all in on doing the thing.

Uh, I was honestly bored at work. Um, and I've told this story before, but I was sitting in a board meeting or an exec meeting one day with our team. Uh, and we were talking kind of like in context about like showing the company a bunch of slides with numbers and I said the word innumerate. And like everybody in the room looked at me like I had seven heads and like I had just like made up some word and I was like I am I if I like keep working with these people and not doing anything else like my brain is just going to shrivel and die. Um, and so I at the same time I think I, you know, I was on Twitter then I think I probably had like two or 300 followers, but I saw a tweet um from David Pell about this new writing course that he was uh that he was starting called Right of Passage. And so I just on a whim signed up for that. And so as part of that program, one of the things that we had to do was set up a Substack newsletter. So like there was no thought or intention behind it. The first kind of version that I did was just, you know, here's three things that I've read or found interesting this week. It was like really just a check the box on the assignment. But I took it seriously. And I think there's probably something important there too, which is like even small ridiculous things where it's like 20 people, mostly family members, reading this newsletter. Like I was like, you know what? I said I'm writing every Sunday at the time. And so every Sunday, like I remember being on a train and like writing and trying to send this out, even though it was to nobody. I think the whole first year was 400 people. Um and it wasn't until later that uh once I had started kind of writing longer essays and had that experience trying to start the company and COVID hitting that I was like all right well I do see a hole in the market which is Ben Thompson is the goat. He's like incredibly good at at very serious uh kind of like tech strategy analysis, but he could never be unserious and I can be like very unserious. And so like the beginning was really like take this like Disney thing and then combine it with like this economics thing and write an essay on that. Um and so that was the kind of like initial foothold into the market.

That was the name of the company, the business I was going to start like kind of Soho House for nerds, Not Boring Club. Uh the genesis of that was like I think both in finance and at Breather like I worked all of the time uh in both of those jobs and I had no uh kind of side hobbies or interests and like had kind of realized that I had become boring. Uh and so having this place where you could like go do a bunch of these other things. We started like a mini debate club to kind of prepare for it and like it'd be a bunch of stuff like that that in hindsight I would have been terrible to run and like actually would have been a pretty bad business I think. But um it was the idea was like can I you know there's a lot of people who are working hard in the city at various like would you be less boring if you did this like all this other stuff with the people. Then when that shut down I think my mom actually suggested just kind of the email was called per my last email for a little while. Uh my mom suggested stealing the name and putting it on that.

I think there's definitely something to um the combination of having worked in finance and having worked inside of a startup. Although I do feel like that, you know, atrophies over time like, you know, my knowledge of operating is not what it was uh 5 years ago when when I started this. But I think that was certainly helpful. Um you know, I always liked writing. I was not like a journalism major or an English major, but I always liked writing essays, I think, more than more than most other things that we did in school. So, that was there. And I think like that willingness or like probably like even uh almost like a disease, but like willingness uh to to work hard on things even that don't seem, you know, particularly serious, like writing about the Mickey Mouse Club or whatever in the early days of of Not Boring. I think that has been super helpful.

Yeah. So for the first um for the first couple years it was just on you know for the first I guess it was actually probably nine months it was on the side while I was still at Breather definitely not going paid. Um, and then when I quit, uh, you know, fortunately, I guess in in hindsight, because our lease had expired and it was COVID and we had just gotten pregnant with, uh, Dev who is now 5 years old. Um, we moved in with my in-laws during COVID and so like had very few expenses. We did have like you know healthcare and like that kind of stuff to to figure out but um I think that was super useful because for the first nine months I didn't make a single dollar on Not Boring and so I would tell my wife like you know we are at this point like growing and I was like there's just math like whether we do subscription or CPM like if I get to a certain number of subscribers then the revenue scales with that and like we should be fine trust me and like uh I will forever be grateful to to her that she did trust me on that cuz it sounds crazy in in retrospect and I wouldn't recommend it now. Um, but my plan had always been to go uh paid and start doing subscriptions and then I think I realized at some point that I really liked the kind of growth of the audience and the paid might block that and so decided to go uh the the sponsorship model and in the beginning played with a bunch of stuff like I used to do these sponsor deep dives where a company would pay me to write about the company. One of the first ones I did was was Ramp uh which was which ended up working that well and I've written about them for free and invested in them many times uh since then. Um but mostly it's just like top of newsletter sponsorships. I'm actually thinking through it now. I think in particular Substack is like really prioritizing uh paid newsletters and so you know whether it's vanity or actual growth like not being on the top of leaderboards because I'm not paid is like kind of frustrating. Uh, and so like they're I think it's working whatever they're doing because now I'm I'm thinking about, you know, is there something that I could offer paid?

Totally.

Yeah, it's a good question. I think what surprised me maybe is like how little any growth hack that I tried to do mattered. Like I really I think like in retrospect I think I I I think I was very naive. I was like, well, if I write about a topic like X, then I'll post about it, you know, without any karma or whatever, like in the subreddit that's associated and I'm sure a bunch of people will will read it and subscribe. Or you know my brother and I like during COVID one day on the beach like came up with a list of like a hundred things that we could try to grow and like practically none of them worked and the only thing that really worked in growing it was if kind of in a non-coordinated just totally random way someone with a big audience who people trusted said I read this thing and it was really great and then you'd see a bunch of signups I guess the one other uh thing that kind of worked uh was you know particularly in the early days if I wrote about a company and particularly a company that had like a loyal and passionate a group of employees, it would spread within that company. And so like that wouldn't make it that now. But like I think you know writing about Stripe for example got like 50 signups from people at Stripe and like those types of things worked early. But I think like the importance of the quality of the content over growth hackey stuff particularly doing it over time was probably the biggest lesson for me.

Totally. I think that's a big piece and that brings up another good point too where it's like, you know, some writers are just like excellent writers and I wouldn't put myself in that category, but I think like where I've had some essays fall outside of this, but like where I've had a lot of success on on certain essays is just when I'm like really willing to put in a lot more research effort. So like I almost view my job as like there's this topic that people are interested in. there's a ton of stuff like scattered across the internet and in people's heads about this topic. And if I just go out and spend like a hundred hours getting that into a format that's like more readable, then that's something that people will value versus like here's some like brilliant insight that I have off the top of my head because those come very rarely.

Yes.

Yeah, I mean looking back uh you know 2021 is a very weird time and so like you know I think I think anybody with an idea for anything that involved money I think like probably could have launched in 2021. I think actually what's almost more interesting is what's happened since like there was a period where like anybody with any sort of audience could raise uh a venture fund and a lot of that has shaken out and so actually like one of the challenges now is and I think hopefully like making it through the last uh you know through the bear market and still taking the punches and doing this kind of gives me credibility but certainly trying to raise in 2023 people are like all right you guys are done like this was a stupid thing we should never have invested in stuff like this like glad to see you guys out of there and I Hopefully the difference is like, you know, there's such tight kind of coupling between what I invest in and what I write about that like everything everything I'm doing for the newsletter is in service of the fund in some way and a lot of what I'm doing for the fund is in service of the newsletter and and learning and sharing what I what I learn in those conversations. Um, but like certainly there was probably an overabundance of kind of media first venture funds then and now there's like a few that I think do you know there's Harry Stebings has has 20VC uh Patrick O'Shaughnessy has Positive Sum and there's a few like uh very very good ones out there but I think a lot of the people who just were like this seems like an easy way to get management fees for 10 years are are gone.

Totally. [laughter] I mean, you see you see the LP. I feel like I I write like a separate newsletter every quarter essentially for for LPs and there's, you know, 10 calls a day with portfolio companies and different things to say. So, yeah, you're signing up for the long term. I realized I think like even then I didn't know that I wanted to do this forever. Like I thought it was very interesting. I was like, I'm writing about these companies anyway. I was doing some SPVs, might as well invest. Like I also I think coming from uh having worked in a startup, it felt weird to just be outside kind of like writing and not being involved or putting any skin in the game. Um so I was like, "Yeah, we we'll try a fund." And I've learned that I like really love this. Uh and so, you know, want to be doing this for for a very long time, but it is a different job than than I expected.

Yeah, um so this was actually a company that has now shut down uh called Apt um which my friend Fed had started uh and we met each other while you know he and his brother were building robots when when I was at Breather and I just like always have thought that they're incredibly smart and thoughtful people. Um, and he reached out and said, "I know you don't really write about companies very like startups very often, but a lot of what we're doing here is like based on this natively integrated company idea that you wrote about kind of before Not Boring was a thing." And so we'd love for you to like just write about what we're doing and you know, we're also raising and so if you guys want to invest, you can. We actually did that through a friend's syndicate cuz I didn't have anything set up and I didn't know yet. But that was really kind of the genesis. The first uh the first one that we did in an SPV was a company called Composer which was started by my friend uh Ben Rolland who I'd worked with uh at Breather. Um and that was something similar where he was launching wanted me to write about it and in that case like you know I back Ben to the ends of the earth. They just separately rolled out their kind of like AI trading product today and like normally if I hear like an AI thing like like I just like turn off completely and I understand like probably AI for trading is like even worse but the way that they've like built this company over the past like they like rebuilt all the infrastructure they have this like incredible back testing ability to create these like symphonies or strategies that automatically adjust for you and like the way that they've implemented it is so good where it just like helps you turn crazy ideas into this like structured symphony that will automatically trade. It's not saying like, you know, we're going to beat the market or whatever. It's just like making this thing that was like limited to technical people uh a little a little wider. Like they did that going from kind of like custom uh custom scripts to do this stuff to drag and drop to now this. I'll just say like that one I think we got lucky on and it's like one of my favorite products. Definitely made some some early mistakes as well too though.

Yeah. So I think there's like kind of the very clear and explicit way that that people understand which is like I can invest in a company and write about them and help explain what they do and hopefully other founders see that and it comes back in in the form of deal flow and this works I think particularly well for for more complex businesses um because I'm willing to go super deep on them. I think the less obvious thing is like just writing about so much stuff and spending so much time thinking about like kind of where the world is right now and like where it might be going in a little bit and what the right business models for all of that are is that a lot of I think a lot of the value actually comes from having to put some sort of view on where the world is going uh on paper and defend it and like really think through it. Um, and so, you know, a lot of a lot of we ended up investing in a bunch of crypto, uh, and and that portfolio is doing well. And a lot of that came from just like being turned off by crypto to then like taking it seriously because I saw this like business model thing that, uh, you know, that might be relevant to then spending a bunch of time kind of understanding the space and because I was writing about it, I met a bunch of founders and that kind of flywheel goes. The the next one was I think it was in 2022 uh we had invested a bunch in crypto where there's like this shared infrastructure. We'd invested in Replit and a few others where it just seemed like getting building software was going to be easier to do. And so I wrote a piece about uh the good thing about hard things and that ended up kind of manifesting as like we want to do more hard tech in these like what became kind of vertically integrated startups. And I think like without both the investing and um and the writing that wouldn't have happened and I probably wouldn't have gone uh as hard into that as I have. And I think that's been so far uh a really good decision. We'll see. You know, these things take a long time to to play out. But in terms of early performance and just how much I love uh working with this type of company, I I think that helps and then can refine that thesis. And a lot of the inbound that I get uh or like the companies that we end up investing in come from the founder read the newsletter or like this thing that I wrote about particularly described like what they were the way they were thinking about their business or something like that. And so those two kind of feed off of each other.

Totally, part of that is probably by design. Uh, but yes, for me, like it's the only advantage that I have. There's people who are smarter, who have more money, who have been doing this for for longer and are more technical. And so like the only advantage that I have is is being able to to write and being able to kind of think through things in public. Um, and I think like sometimes you can get things wrong. And so that, you know, I think people probably worry too much about getting things wrong because nobody forgets or nobody remembers those ones. Um, unless you're like really wrong and and loud about it. Um, but if you can like describe something in a way that like a founder has been thinking about a bunch and really and feels that like other people haven't kind of figured out yet, it I think forms like a pretty quick bond with with that person in in an interesting way.

Totally. I I normally cut it like I can't think of many examples of where I've published something uh and been really excited about something and then not invested. It's more when I start the process or start to have conversations with people or I'll talk to a founder

I'll get really excited by the first pitch and then I'll start doing the research and digging in, and normally I'll back out and just say, like, love this. I don't think this is a good fit for what I'm trying to do. I think one interesting category of this would be humanoid robotics. I had met and written about Simon Farered at Formick, which does—they don't make the robots, but they do essentially the implementation and rental and helping actual warehouses use the robots. I talked to a founder in the humanoid space and I was like, this is the coolest thing ever. The world is designed for—all the talking points: the world is designed for humans, labor is the biggest market in the world, like this is a no-brainer. And then I luckily had spent time in the space, talked to Simon, texted him and was like, 'What do you think?' And he was like, 'I wouldn't do it quite yet.' And so after doing a bunch of research, and you know, that wasn't the only research I did for it, you know, backed out. And I think that's maybe as valuable a thing as building up the network through this of people that I have spent time working with on pieces or gotten to know, being able to hit them up. But yeah, often I'll get like a week into kind of the light research process and just say this doesn't feel like one of the ones that we'd want to do.