Okay, we got to get you over 100K. This episode is a failure if we don't get you over 100K subscribers.
All right, so let me timestamp where we are right now just so we know what we need to do. So we are at 88,460.
Welcome to season 9, episode 6 of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert and I am the co-founder and managing director of Seattle-based Pioneer Square Labs and our venture fund PSL Ventures.
And I'm David Rosenthal and I am an angel investor based in San Francisco. And I am back sort of from paternity leave.
An abbreviated partial ongoing paternity leave.
Yeah, we're making it work.
And we are your hosts. Well, today we have a first for Acquired. We are covering a business that is only one person. Not Boring, the newsletter gone media and investment empire run by Packy McCormick. I did some research last night. Not Boring is the number one Substack newsletter on business. If Packy decided to switch to the technology category, from everything I can tell, he would be number one there, too. In fact, even in the crypto category, there are only two newsletters with more reach, and they've existed much longer. Not Boring is only a year and a half old. The Not Boring story isn't just impressive because of its explosive growth. Packy is reinventing the media business model and simultaneously the startup investing business model. He's done all this with a very distinct personal flair, writing in a unique, whimsical voice that makes us all just want to have fun and play the great online game. And we're very lucky that he is a part of our Liquid Super team here at Acquired, so he could join us today live to help tell the story. Welcome, PY.
That was amazing. Thank you, Ben and David. Great to be here.
I was doing my best Pacquiao impression trying to write, you know, whimsically in the unique style you've cultivated.
Had some good buzzword bingo in there with Not Boring piece titles over the I want to say years, but it hasn't been It feels like years. Feels like you always been here.
I had two more. I cut them. It turned into just like a long series of Not Boring titles. Anyway, PY, we do have to let you know this is not going to be all softballs. We're going to like actually do the full Acquired deep dive here if that's okay with you.
I mean, Acquired is I think particularly for the first year when I wrote about SoftBank, when I wrote about Tencent, when I wrote about all these companies, getting deep the work that you did to go deep on those companies was hugely instrumental in being able to write those pieces. So, I would expect nothing less than the full Acquired treatment.
All right, let's do this. Well, listeners, we have a huge announcement, a gigantic exciting piece of news to share with all of you today. For the 98% of you out there who have not joined the Acquired LP community, we are opening up every single episode of the LP Show back catalog to you today. We have created a new public podcast feed in Apple, Spotify, or wherever you get your podcasts called the Acquired LP Show.
That is right. That includes our series on VC fundamentals and our startup deep dives on pricing, marketplaces, SaaS investing with top investors and founders. And in fact, we are about to drop an episode right there in that feed where I interview 15-year president of Blue Origin, Rob Meyerson, on how he sees the space landscape today. Now, of course, members of the paid LP community still get great benefits like exclusive access to new episode for 2 weeks before we drop it in the public feed, the ability to join LP calls, Zoom book club, you know, all this stuff. But if you aren't an LP and you really want to start getting these episodes, you can click the link in the show notes or go search Acquired LP Show wherever you get your podcasts and subscribe.
Thank you to all of our LPs for being on this journey with us. We are very excited to now share all this content more broadly. There's some good stuff. Ben, you interviewed Joseph Gordon-Levitt the other day on the LP show.
You guys kind of look alike.
We've gotten that a few times since Joe is a professional Hollywood actor. I take that as a great unbelievable compliment. So, thank you, PY. All right, listeners, now is a great time to talk about a new partner of ours here on Acquired, Lora, the agentic operating system that is redefining how the world's best legal teams work. Yep, it's sort of obvious that AI is going to completely change the legal industry. I bet most of you listening have dropped a contract into some sort of AI chatbot out there. Lora took that insight and asked the question, what if you really built something with that power from the ground up for the legal industry?
So, the founders did exactly what great founders do, operate with obsessive customer focus. They embedded inside a massive law firm for months. They sat with the lawyers just watching how the work really gets done. And that's how you get features that customers love, like tabular review, where you drop in a folder of hundreds of contracts, and it pulls every key term into a grid a lawyer can actually work with. Lora's bet here is interesting. Since it lets each lawyer handle more complexity, any given person can increase the quality of their work and do higher value work. And this means that the PI can grow even as each individual task takes less time. And they recently launched Lora Agent, offering greater intelligence and performance. The agent lets lawyers set an objective. Then it can handle the planning and the execution and delivery of the final product. Legal teams get to maintain full control and transparency since they're still involved where judgment is required. And Lora works where you already work. You can use it within Microsoft Word while redlining or drafting. The early Lora numbers essentially speak for themselves. When they have a head-to-head pilot with their top competitor, they win 70% of the time. Lora now has over 100,000 lawyers on the platform from 1,200 legal teams in 50 countries and crazily they went from 1 million to 100 million in ARR in about 18 months. Truly insane numbers. And that is the real test. Plenty of things demo well, but the question is whether a busy associate actually reaches for it during crunch time or whether a partner trusts it before going into a conversation with a major client. If your legal team wants to check it out, whether you're a law firm or you're in-house at a company, you can learn more at lora.com/acquired and just tell them that Ben and David sent you.
Well, before we dive into history and facts, we should say this show is not investment advice, though David and I are both investors in multiple Not Boring entities. So, not only are we conflicted, we want to be extremely open about that. We definitely have investments that we are discussing today. This show is for informational and entertainment purposes only. And I promise you it will be both of those.
All right, look, we're going to do the whole Acquired treatment on you, Packy. But the first place I went when I was like, 'All right, I want to start researching, build the script here for the Not Boring story,' I went to your LinkedIn. You know, I know that's kind of a boomer thing to do, but I did. You are listed there as the quote unquote founder of Not Boring. How on earth did you decide on what to put there?
It's a really tough question for me still when I get asked to do, you know, if I'm going on a panel or joining, you know, a podcast or something, I get asked to send over a short bio or CNBC or, you know, if I'm on CNBC or I get asked for a short bio and sometimes it's writer, sometimes it's author, sometimes it's founder. I don't know really what I do or how to describe what I do. And then if you mix that in with Not Boring Capital, like the whole thing gets very confusing. Founder feels like a catch-all. Like I did definitely start this thing. And so anything else beyond that I think is subject to change.
Love it. You are definitely the founder of the Not Boring empire. All right, so let's tell the story. I'm assuming you were born in either 1986 or 1987.
January 26, the same birthday as Wayne Gretzky, Vince Carter, you know, a lot of the great athletes.
Okay, so January 26, 1987 in Bryn Mawr, Pennsylvania, just outside Philadelphia, there's the birth of a baby boy named Patrick. Patrick, also known as Packy McCormick. So, Urban Dictionary tells me that Packy is a very common diminutive form of the name Patrick that is especially popular amongst residents of County Cork, Ireland. Is that where your family is originally from?
I believe so. My dad has done kind of the Ancestry.com deep dives on his side of the family. I think we're probably fourth generation over here. And so we think it's County Cork, but not 100% positive.
Nice. All in the Philadelphia area.
All in kind of the Lehigh Valley. Allentown is where my dad grew up. We have a bunch of family in Scranton, so Joe Biden country.
Yeah. Billy Joel growing up in Allentown. What were you like as a kid? Any little glimmers of the future Not Boring empire that were popping up when you were growing up?
Yeah. I used to make these little books or newspapers on Post-it notes. So, one of my dad's my dad was a consultant at Arthur Andersen. Luckily, it got out before Enron, thank God. But one of his early clients was the Miami Herald. And so, when I was like, you know, 6 years old, I would make these little Post-it note versions of the Miami Herald. I also have this one that was called Golden Memories of a Young Boy's Life. And so, I had all these au pairs and they would take me in like, you know, the women's locker room at the pool or something like that. And I was like a 5-year-old kid and I would come home and draw stick figures of boobs on in this little book called Golden Memories of a Young Boy's Life. So that was probably the earliest version of Not Boring.
You could have taken a very different career direction after that.
I could have. I wasn't a particularly good artist.
Which actually has carried through perfectly to today.
Perfectly to today. I'm still not a good artist. I think it's part of the charm. But you know, even in high school or middle school, we had an eighth grade teacher, Mr. Algeo who would make you write a composition or an essay if you got in trouble. So for me I would actually sometimes try to get in trouble.
Because for most kids that's punishment. For me like if I have to write as much as you write I couldn't do it. There's no way.
I mean I did cross country and track in high school too and that was kind of a similar vibe where for most people that's punishment making them run many miles and I love that. But Mr. Algeo, you know, you'd have to write a composition and I would love to do it because I would try to write a composition that was so funny that Mr. Algeo would let me read it in front of the class or you know in high school I would try to write essays that were a combination of very well done and well researched and all that but funny so that you know even my most serious teachers would have to laugh and give me a good grade despite the fact that I turned them into a joke. So I think kind of always combination of class clown with a backing of kind of serious research.
It's pretty rare to find those two combinations together in one person, right? Somebody who is both the class clown and has a work ethic.
And I think that comes through in Not Boring. All of us who read every or close to every one of your posts, I think that's the charm. That is the style is that you're diligent. You've written many times about how the process works and how you go into your basement and spend the time and do the research and start writing and tear it down and write something. I mean, there's real diligence there. And for sure you are the class clown of serious business newsletter writers.
If there are people who've read every or close to every Not Boring, thank you. I think it takes a work ethic to read all of the Not Borings. It's been probably close to a million words in a year and a half at this point. To get people to read that much, it has to be both kind of informative and entertaining.
I think I'm using your phrase here when I say that the reason it works is because you don't put on your serious business pants.
I don't even own serious business pants.
So where does the work ethic come from?
That is certainly from both of my parents. My dad, as I said, was a consultant at Arthur Andersen and would literally fly to Germany for a day and come home or fly down to Miami to go to Miami Herald and then make it home by 4:00 that night to take us to the fair and then fly back out the next morning. So it was working all of the time. My mom was getting her PhD and working and raising two kids. And so like both entrepreneurial, they both ended up starting their own kind of consulting practices. Both incredible work ethic and then there was just the way that they parented. My absolute favorite story growing up was when I was I think in fifth grade I had told my parents everything was going really really well. I was probably going to get straight A's maybe like a B+ but probably not. And then I got my report card and I remember my dad was coming home from a business trip and you know he was a fancy consultant so he had a cell phone way back in the day in his car. We got our report card and my mom made me call my dad and tell him the grades that I got. I was like, 'Science A, English A, French C++, blah blah blah A.'
And he was like, 'All right, PY, I'm going to be home in an hour.'
By the time that I get home, I want all of your certificates, all of your trophies, anything that would suggest that you might be a winner. I want them in a box in the attic. We're calling that box the loser box because you're a loser.
And my mom said that my dad went to like the Marafi School of Parenting for this. I actually think it was awesome because what he was mad about wasn't that I got a C++ like that wasn't the big deal. It was that I lied all semester and said that I was doing really well in the class.
And so I thought that was, you know, the best parenting lesson that I could have ever received because it was a really good lesson both in honesty and in work ethic because after that I actually started trying in French and I ended up taking it all the way through college and got pretty good at it. I can't really speak it anymore, but it was a really good lesson that if you're not going to do well, at least be honest about the fact that you're not going to do well. And now I think you know when I get things wrong in Not Boring I blare it from the rooftops and probably comes back to that moment.
Yeah. You feel like an intense need to own the mistake. There's a tweet that you had around the crypto winter where you said them's the rules. You got to play fair. And I think you were owning the fact that a lot of things that you thought were going to go up did not go up.
I mean our ideas dinner podcast I think is a testament to the fact that I get things wrong all the time.
Oh, we all do. So, okay. So, you go to Duke. You were on the debate team at Duke, right?
We were able to unearth some pretty awesome photos from that time that maybe we'll link to in the show notes.
I was incredibly cool. I was, you know, in the debate club. I was in an a cappella group. You know, there were a couple of big all male a cappella groups. I was in the cool one on the debate team. Me and my partner, who was my best friend from high school also, we were like the cool team. So, I was like in all the nerdy things and tried to be cooler than I was probably in all of those things. But that was certainly my kind of college vibe was just getting involved in a lot of different things.
So, okay, you graduated in 2009, which I mean I remember I graduated in '07. I sailed through. I was a French literature major. I get the investment banking job. I'm like, 'Oh, this is great.' Then, of course, I got my butt kicked when I actually got to Wall Street. But you got an investment banking job in 2009. Like, nobody got investment banking jobs in 2009. This was the middle of the recession.
Also, just to drive David's point home here, even French lit majors could get investment banking jobs in 2007. And by the time the door slammed in '09, it took something special, Packy, for you to get there.
Yeah. So, I I was, to be fully fair, kind of an investment banking light in public finance. But it started the summer before in 2008 when I got my internship. Things were actually still pretty good. So, I got an internship at Bank of America on the Energy Trading desk. That was a wild experience in itself because Bank of America's energy trading desk was all Enron people and so they were not psyched to not be at Enron anymore and not psyched to be on a desk that didn't take physical delivery. So there are two types of kind of energy trading desks. Some like you know the bigger banks, Morgan Stanley, all of that which will take delivery if they need to of barrels of oil or whatever else. Like those are the kind of serious desks and then there are more just pure financial desks like we had at Bank of America. Worked my butt off that summer. Like, you know, there's the intern programs and there's drinks and there's speeches and there's all these things that you do when you're an intern on Wall Street. My desk wouldn't let me go to any of those things. I had to sit there and you don't do anything when you're a trading intern. Like, you literally sit on these people's shoulders. You're not allowed to trade. You're not licensed to trade.
Right. You're not licensed. You don't have the Series 7, Series 63. Is that the other one you need?
Exactly. Right. So, I asked them dumb questions throughout the day while they were trying to focus on these multi-million dollar trades. It was like the worst experience. They didn't like me being on the desk, but they also didn't want me to have any fun. So, they wouldn't let me go to any of the other things. The summer before my internship, they didn't like the intern, and so they took him out drinking until like 4:00 a.m. And then when he came in a little bit late the next morning, they marched him to the HR team's office and got him fired. And so, that was the environment that I was coming into.
This is like Liar's Poker.
Totally. But, you know, there's definitely the the work ethic there where I just didn't let it bother me. And so, got an offer to come back. Bank of America merged with Merrill Lynch.
Merged, quote unquote. So we bought them but there were higher quality interns quite frankly at Merrill Lynch. And so when we merged I guess the other problem was we all got put at on the Bank of America side in a rotational program. So you got your offer from a specific desk but you came back and had to rotate around different desks whereas Merrill got hired into specific desks. So all the Merrill kids for both of those reasons they were probably smarter than I was and they already had their desk kind of placement locked in. They got their desks. We rotated around and about half the people in the trading program ended up getting spit into public finance which for those listening at home is municipal bonds. So I worked, you know, on the state of New Jersey's bonds that were backed by their tax obligations or the Pennsylvania Turnpike when they wanted to build new roads and issued debt to do that.
Wow, that sounds kind of uh boring.
It was a little bit boring. Hopefully that's the first of hundreds of funds throughout this podcast. But yeah, it was boring, but I actually, you know, I liked it. I was number one in my class kind of each of the years that I was there and I realized very early on because I had friends who were I remember a New York Times article came out about the fact that really top quality investment banking analysts were getting their PE offers way way earlier and I think they quoted two of my friends in that article. So like I had friends who just love this stuff and I just was not one of those people. So, I knew that I'd want to get out of finance at some point. And so, I was really just playing to be as in the top of my class and go to business school.
So, you apply to business school and trollers of your LinkedIn profile will note that you do not have an MBA. Walk us through that and what happens.
One other thing to add was while I was in finance, I started a company called Throgo, which was a terrible name. I had bought the site for something else and then I applied it to building this company that essentially took people from New York down to the Jersey Shore and to the Hamptons every weekend. So, it was a party bus ride. It was so much fun. Paid for my summers. I took it way too seriously and thought that this was going to be my ticket to a great business school. Applied to Stanford, got summarily rejected from GSB. Ended up getting into Chicago, had my deposit down, was going to go and then one, I kind of visited and it was snowing and it was like April or May and I also found a company called Breather on AngelList and had just started a conversation with the founder of Breather where there was no guarantee of even an interview or anything. But I asked Chicago if I could defer. They told me, 'No, I couldn't defer. Your deposit's already in.' If it were Harvard or Stanford, they would have let me defer, but you know, they know that people might try to say they want to defer so they can go to Harvard or Stanford. So, they wouldn't let me defer. And so, I just said, 'All right, cool. Not going to business school.' Had already quit my job. And so, really spent kind of the next four months, I think, in this weird kind of winding interview process just with Breather. Traded pretty actively, made some of the dumbest trades in the history of the world. I think I bought Tesla during that summer at like $29 and sold it. I bought Facebook at $19, sold that, plowed a bunch into like Apple options into earnings, which, you know, it's just like not what
You're admitting your mistakes here.
I bought Bitcoin at 100, sold it at 150. So, like, you know, really had a fun a fun summer where I was
Some nice little returns here. Some nice pops.
Pop. Pretty good. So, you know, had this kind of summer where I had no job. I didn't have a future job lined up, but I was interviewing and trading and making a bunch of dumb decisions that I think would kind of make me a better investor later on. I will say it's hard to buy and hold when you're in that position in life where like the cash is useful and a material amount of your net worth
And you don't have a job.
Acquired wasn't around back then, but you could listen to us have all these people on over the years saying how great it is to let compounding do its thing or the Berkshire episodes or even if you're a deep student of all this on your own and you know this, you kind of can't at that point in your life when you're looking to a learn or b potentially use the cash in a pretty short period of time.
I mean, the Bitcoin sale was a result of going to Oktoberfest with my friends while I was unemployed and they all had jobs in finance still. And so, they went out to the club and I was like, 'Yeah, of course I can do that.' You know, I just got my bonus. And then I woke up the next morning in the hotel and I was like, 'You know what? That was stupid. I shouldn't have done that. I should have conserved my cash. Let me sell these stupid Bitcoin so that I like just kind of refill the coffers with USD.' And so, that was why I sold all 38 of my Bitcoin at 150.
Whoa. Whoa. Okay. Wait, we can't let you gloss over a couple things here. We got to rewind. Am I hearing you right that you wrote your business school application about starting a quote unquote company to bus drunk people from Manhattan to the Jersey Shore and the Hamptons?
Yeah. I mean, it wasn't about busing drunk people from New York to the Jersey Shore and the Hamptons. It was about community and bringing people together. I mean, people who had never met somebody going to the beach town that they were going to made friends. People got married who met on the party bus. It was about community. But yeah, no, seriously, that is how I tried to spin my business school essays.
Wait, wait, wait. So, to quote a writer named Packy McCormick, the hard part about being a great writer is that you can convince people that a really bad idea is a really great idea and you just did that to me.
That is another one of those formative experiences where obviously it wasn't a startup. It was startup light. It was stupid and it was fun and it paid for my summers and all of that. When I was applying to Breather though, I mean like I had done marketing, I had done operations, I had to deal with a bunch of shitty situations. And so like that company in particular, the CEO is kind of an iconic class. He runs a company now called Practice. Julian, great guy. But he didn't care at all about the finance background other than it proved that I could work hard and like maybe I could help with some business stuff, but he really cared that I like got my hands dirty and like had to deal with all of the junk in just being kind of a one person running this company. So, it was definitely a silly experience, but I think it also kind of helped with the next chapter.
What was the name of the party bus company?
Throgo. I actually don't think I've actually technically shut down that LLC. So, who knows?
I have one of those, too.
It's funny, you know, actually doing that gritty stuff of like dealing with tour bus operators. You got to do that when you're an entrepreneur. And so many people that go to business school think, 'Oh, I'm going to get all this glory and start some internet company.' And it's like, you got to be willing to shovel your fair share of manure here.
I mean, that's like the Chris Sacca quote about, you know, he won't hire or work with anybody who hasn't had just a shitty job growing up. So, you know, I'd wash dishes. I had my fair share of kind of those types of jobs. And I think that all helps because I mean, we'll get to Breather, but that was my first year's experience was doing that exact same thing.
Yeah. So, let's jump to Breather. So that summer I had thrown away my money in business school as well. That deposit was gone. Terrible summer from a financial perspective. But the way that I was thinking about it was like I'm either going to spend the next two years not making a single dollar and paying for business school and racking up debt doing that or I can go somewhere anywhere really that will pay me more than negative dollars and learn on the job and get that experience. My interview process at Breather was doing a bunch of really random things. I don't think they knew what they were doing from a hiring perspective. I wrote the JD for the job that I ended up getting, which was New York City general manager.
How big was the company at that point?
It was six people in Montreal. So, I was going to be our first US employee. One of my jobs was Julian said, 'There's a guy at Uber who does a job similar to the one that you want to do. Go track him down and then get him to interview you and then he'll tell me what he thinks.' And so that ended up being Josh Moore who was the New York City general manager at Uber. So met him. He's, you know, remained a friend. That was a lot of fun. I think he works at Levels now.
Yeah, exactly. He's at Super Sapiens competitor Levels now.
And that was one. Another was, you know, our other co-founder, Katarina, was a designer by background. And so she was like, go to a Marriott business lobby and go to the Ace Hotel lobby and then make a presentation on why they're different. And they're obviously very different, but I'm not a designer as everybody who reads Not Boring knows. And so I like had this whole thing about, you know, the vibe of both of the spaces. And it wasn't particularly good, but the fact that I did it is probably what they wanted to see. I learned later that it came down to me and somebody who ended up working for the company later who's way more talented and smarter than I am. And Julian and Katarina went point by point on both of us in the lobby actually of the Ace Hotel the night before they made their decision. And I won by one point and got the job or else I would have had 4 months down the drain and absolutely nothing. So I ended up getting the job. So what Breather did was it rented out meeting and workspace and in the beginning these very small meeting rooms for as little as half an hour at a time. So my job was twofold. My job was first convince landlords to rent spaces to this random Canadian company that wants random people to come in and out of the building for half an hour at a time throughout the day. So that was challenge number one. And I literally like got on my knees and in one case, this is actually like I mean literally got on my knees and begged to one of the landlords to give us the space and they ended up giving us the space.
Because Julian told me I was going to get fired if I couldn't get three spaces by X date.
And you're probably competing against WeWork for a lot of these leases, right?
Ours were really tiny in the beginning. So ultimately we ended up competing with WeWork. In the beginning, we were looking for like the 150 square foot really quirky space somewhere in the building where someone could come take a nap or like maybe get a little bit of work done. But the idea was that your phone should be able to unlock all these spaces that are underused throughout the city. Turns out one of the challenges of that thesis is in Manhattan there's really no underused space in the city. And so we ended up just having to compete with whichever firm wanted to rent that space. Ended up, I think, kind of figuring out how to make that pitch. And so that was one side of it. Once we made it, we had to design and furnish and all these things, these spaces, and then we had to get people to clean them. So, we worked with one cleaning company that ended up getting acquired by a company that got acquired by Google. And the day after they got acquired, they're like, 'By the way, we don't want to do these terrible 5-minute jobs that we have to run all over the city for anymore. You're on your own.' So, some of that was me going literally just cleaning Breather spaces. I would leave dinners with friends and whatever kind of after hours. The other was because I had met Josh during this process. I called Josh and was like, 'Hey, you have that Uber Rush thing. Is there any chance that we could get Uber Rush messengers to clean Breather spaces since they're moving around the city anyway?' And so we actually I was the largest consumer of Uber Rush messengers in the world for a while.
We never had that outside New York, I don't think.
It was a New York test. There might have gone to a couple of other markets, but really kind of a New York test where the idea was if you want to deliver documents from one place in the city to another, which is super common in New York.
From, you know, our banking days, we know, oh, you're always couriering documents around.
And I think part of that is probably what became Uber Eats ultimately is these people kind of moving around the city on on their bikes. But we had a slider in the Uber app where I would call hopefully there was somebody nearby. I would hit the button. I would drop the pin on the space, hit the button, and then have to text with that person to be like, 'Hey, by the way, like this isn't a delivery job. You're cleaning a space.' And to be fair, these people opted in. So, we had our own view where it's only people who opted in. And they made a little bit more by doing that. But I'd be like, 'All right, so this particular space, you go into the room. There's a set of cleaning supplies under the couch. There's instructions there. If you have any questions, just text me. This is my number.' And so 7 days a week, 6:00 a.m. to 11:00 p.m. pretty much when we closed, I was just on my phone texting messengers who were going to go clean Breather. So talking about startups not being glamorous. Like there was absolutely nothing glamorous about this. The fun part on the flip side of that was, you know, I had equity in the company. I was our only US employee. I designed the system myself. I chose to work with Uber. And so it's all on me. And the fun thing about startups is it's all on you. All the crappy stuff is, you know, a product of the way that you designed the system. And so that was a really fun experience. And then, you know, hired a team, signed a bunch of leases, got promoted a couple of times, ultimately ended up kind of like running our operations and real estate and design, which doesn't make any sense, but managed a really talented design team and a bunch of stuff that our COO didn't want to do. I did all of that kind of globally for us. So, incredible experience at Breather, but none of it was particularly easy.
And how big was your team and the company by the time you left?
So in New York, my team grew to about 25 people and we were about half the revenue in the company, which was 10 markets. And then when I got promoted to VP of Experience, which was a fancy title for a bunch of junk jobs, not junk jobs, but like not jobs that would normally go together.
Yeah, it was a catch-all. That sounded way fancier than it was, but that was about a 150 person team, including our operations associates who were full-time employees of Breather and clean and maintain the spaces all the way to our team of designers, our customer care team, our real estate team, operations team, and all of that.
All right. So, I'm assembling sort of the cornucopia or the puzzle pieces that would become Not Boring eventually.
Okay. I mean, you started pure finance, pure analysis, pure spreadsheet jockey. So disconnected from what actually happens at any of the companies or even in the physical trading of the commodities that you're looking at. Then of course you have one of the most operational jobs one could possibly imagine. And of course you have the entrepreneurial moment before that of starting your own company. Now you have leadership. So you have that piece of the puzzle too of understanding like it turns out actually the hardest thing at any of these companies is the people.
And that was the most amazing thing too. I probably stayed at Breather for two years longer than I should have because I really loved the team of people that I was working with. I'd say the last turning point and the last kind of thing that contributed to Not Boring was we deeply overexpanded our supply because we had been given advice by people on the board and others who said you're pretty much like Uber. The job for Uber is to get as much supply on the map as humanly possible. You should also get as much supply on the map as humanly possible, which we did.
The catch was there was actually demand for Uber.
There was demand for Uber and Uber supply could come and go and Uber didn't have to pay them anything. We signed 5-year leases and did construction. And so it was just a very different situation. So we added a space per day in 2016 2017 for about a year there. Every day we were launching a new space and so we were deeply oversupplied. Our gross margins were awful negative I think negative 25%. And then me and Ben Rollert who now runs a company called Composer which just launched. Congrats Ben who was kind of our head of data science at the time decided to spend a Christmas break just figuring out how we could fix this thing. And we had always had this thing where we only did short-term rentals. We only did meetings whatever. But we like just went deep into the we read like a bunch of Ben Thompson and we read Good Strategy, Bad Strategy and we're like we're going to turn this company around using strategy. And so we wrote this like detailed memo full of his data science and my crazy ideas on how we could actually turn the company around by adding monthly space and competing kind of more at the margins with companies like WeWork and then we sent it out to the company. We got back we got the blessing of the exec team. We sent it out to the company.
Did it have GIFs and Taylor Swift references in it?
I actually don't think it had just intel. We took this very seriously.
You put on your serious business pants for this.
We put on our serious business pants for once and the company was on the really on the line. Like it was going to be really hard fundraising or doing anything when we had negative gross margins and too much supply. And the craziest thing that happened was one everybody bought in and got really excited by this vision even though it was a ton of work. Like we had to flip spaces. Part of the thesis was we have this crazy thing that nobody else has which is that we can rent spaces out for as little as an hour and we have this data science team that can price spaces for as little as an hour. So, if somebody wants to rent a space for 1 month and then we want to put it on back online for hourly bookings in 3 days, we'll flip it back and forth depending on what the market is telling us, which meant that for the ops team, it was an absolute nightmare for the design team having to design between the two types of spaces. Absolute nightmare. But everybody bought in and we turned the thing around and we went from negative 25% margins to positive 25% margins and like things were going really really well. And so I think Ben and I were both like, 'Wow, strategy like actually kind of matters here.' Like having a plan and
Getting people to buy into it and having something that makes sense and fits within the market. Like all of that actually, it's not just BS. It's a real meaningful thing. And so I think that was probably also part of why I ended up writing a newsletter that was about strategy.
To foreshadow, I think at one point early on you described Not Boring as if Bill Simmons and Ben Thompson had a baby. And so clearly this is where the sort of Ben Thompson side comes from.
100%. There's a quote from your first newsletter post which was not called Not Boring. It was about this course that you're taking, this writing course. It says, 'The first piece I wrote for the course was an introduction to Ben Thompson. And if you check it out, I would love your feedback.'
It was the spiritual godfather.
Spiritual Godfather. Yeah. The fun thing about that course was I took the course because then we brought in a professional management team and strategy was less valued and my brain was dying and so I decided to take a writing course and I wrote about Ben Thompson because they're like, you know what, instead of starting from scratch. And I think this actually just showed up in my last piece, kind of like go remix other people who you respect, go remix their ideas and like kind of just get a sense for what it feels like to write about and to write like the people that you respect. And so that's how this whole thing kicked off by writing about Ben Thompson.
And so that was David Perell's Right of Passage course, right?
And you also did On Deck at the same time.
I did On Deck at the same time after I left Breather. So, you know, it was a little bit later that I did On Deck, but after I finally left Breather, I tried to quit a few times in 2019. I took a sabbatical, went to Japan, and while I was there, I called our general counsel and was like, 'Get me out of here, please.'
Whoa. You quit from Japan?
The sabbatical was like the last ditch effort to get me to stay. It was kind of like, 'All right, go take a month off and see if there's any way that you'd want to come back.' And while I was there, I just realized that I did not want to stay there. And so I quit from Japan by calling our general counsel.
Does that ever work? It feels like when people get to disconnect and they're already sort of emotionally disconnected, all it does is make them more sure that they're ready to be done.
For sure. I think it's also valuable to give like the team. I had a 150-person team that I think I got along really well with. And so I think the sabbatical is also useful in being like, look, Packy's away in Japan right now and the company hasn't fallen apart and your life is not miserable so everything will be fine when he leaves.
Yeah, it's a good point. Okay. So when you did leave, you didn't start Not Boring as we know it today right away. Am I right that you started two things concurrently with the Not Boring Club, this social in-person experiment, but also a different email newsletter?
I had had Per My Last Email going and that was really like kind of a link roundup where it was an assignment from the Right of Passage course to start a newsletter and to get 20 people to sign up. And so while I was at Breather, I was writing that and I realized I like writing and occasionally I would do an essay, but for the most part it was like here are the five things that I read and listened to this week that I really liked and they're all still on the Not Boring Substack. You can go read them.
But if you go to permylastemail.substack.com, the day that I took it down, somebody else took the site over and I think it's maybe like advertising shampoo or something. It's some scam that is now on permylastemail.substack.com.
Everything turns into a link farm eventually.
Exactly. So, I had that going and then I used that to like kind of just think through and write about different ideas that I had for a company that I wanted to start. I mean, like even while I was at Bank of America, when I was in college, when I was at Breather, I always knew that I wanted to start what I thought, you know, would be a real big startup. I had just managed a big team and I thought I was actually interim CEO for a little while at Breather and thought that I did a fine job there. And so, I was like, 'Oh, I can do this.' Like every level that you go up in a company, I thought that there were like these godlike people above you who had all the answers and realized that they're all as dumb as me, so why not, you know, start something myself? And so I use writing as a way to kind of think through and publicize a bunch of these different ideas. And somehow, despite that tool, the best idea that I came up with was a social club that kind of combined Soho House and college extracurricular. So I was a debater in high school and college. And one of the tests that I ran was starting a debate club in New York and got, you know, 20 friends to come and debate. And people loved it. I had a blast. People really enjoyed it. And so I was like, that's a really good signal. This is going to be a huge business because 20 people like debate club.
This was the NYC debate club, right? Which you can go read about in the Per My Last Email archive.
Yes, you can. But it was, I mean like all of this stuff is a blast. And I think it all comes from the same spot as you know the name Not Boring comes from, which is I had dinner with my mom and her business partner one night in New York while I was still at Breather. And her business partner asked me what I like to do outside of work. And I like just did not have an answer. Like, you know, other than I like traveling and I like hanging out with my friends. Like, I had no passions, which is crazy because in college, like that was all I did. I spent a lot more time doing other things than I did actually probably studying. And so, I think that kind of just like put a bug in my head that I wanted to figure out how to get some of that back. And then I talked to a bunch of other people and they realized that they had kind of the same thing going on that once you kind of got out of school. It was work and then it was your tight group of friends and whoever became your significant other and then your family, but you didn't have those like kind of small groups that were bonded around a particular kind of passion or hobby. So I was like, 'Oh, cool.' Like that plus Soho House, that sounds like the coolest thing in the world. Let me go start that.
And of course, you're coming from a physical real estate company that you just spent six years at.
Well, that was part of the thing, too, is like I just thought that, you know, if I tried to build a software business, I'd have a lot less credibility even with investors than if I said, 'Look, you know, I know how to do all of this. I can go like here's the model. All the numbers work.' I wrote a bunch and you can see these essays too trying to justify like how this could be a venture scale thing if you added a bunch of stuff on top and started community first and like maybe that would have worked. I don't know. I mean, today what Not Boring Club would have been is really a DAO probably with physical locations. I think actually that model works really well for what I was trying to do at the time. It was a real stretch.
Did you pitch any VCs or investors about investing in Not Boring Club as it was coming together at the end of 2019?
Yeah. So, I had a few early conversations with friendly VCs that I knew from Not Boring. And some people actually were like, 'Cool. When you actually start raising, like let us know. This is actually pretty interesting and like we'll back you. You'll figure it out.'
Oh my god. If any of these people had actually invested in Not Boring, like wow.
I know. I might have shut that one down and started fresh. But, you know, it was more of a I think we'll back you, this idea. Like maybe you can do something with it that gets interesting at some point, but we'll back you. But I got a bunch of advice from a bunch of other people who were like don't raise money and don't sign a lease. Please, for the love of God, don't sign a lease before you actually try to build a community because it sounds like the other stuff is hard, but what's really hard is actually building a community around this kind of stuff. So, I started a Slack group. I used the newsletter that had, you know, 400 people at the time to try to get the early applicants. Got the community up and running. We were doing like some book clubs. We did debate club. There were about 150 of the first people. And before we had a club to welcome people in, I was like, 'Great. We're going to do a bunch of small group dinners starting in February of 2020.' Late February, we had, I think, our first four 10-person group dinners. They were a lot of fun. People were really enjoying getting to know each other. And then I think it was March 10th, we had these like separate Slack groups for each one of the dinner groups. And somebody was like, 'You know what? I'm not feeling particularly good. I'm going to just bow out tonight.' And other people were like, 'Uh, you know what? I'm going to bow out tonight, too, because I'm hearing a lot about this COVID thing.' And so, you know, I was trying to start the Not Boring Club in the middle of this COVID thing. And so, you know, we put it on pause, cancelled that dinner out of an abundance of caution, cancelled the next night's dinner and the next night's. And I was like, 'Guys, we'll be back in 2 weeks here.'
Two weeks, remember that. We're all going to be back in two weeks, right?
We're all going to be back in two weeks. As soon as this blows over, we'll be back.
I'm going to put a pin in here. I was trying to figure out, listeners, how to do the thing that I did during the Uber episode where I bring in the share price at every moment throughout history. And I don't have Packy's internal number. So, I don't have the newsletter count, but what I do have is his personal Twitter following as of every month along the way. So here we are today where Packy has 105,000, 110,000, something like that followers. Here in February of 2020, taking us back to the story, 956 followers and that was good, that was like a triple from earlier in the year before I started writing Per My Last Email.
And we could talk about this. One of the things that I wanted to do, from like very, very early on, I would say like, 'Welcome to the new X subscribers, now there are Y of us here.'
Oh, such a good growth hack.
And it wasn't even meant to be a growth hack. It was really kind of like just in case this works out and becomes a big thing. Like there are all these people with a big Twitter following or a big audience, like certainly you were in that conversation where I was like there's all these people that seem again like kind of godlike and like it was just like pre-ordained that they were going to be successful. In case this newsletter becomes anything, I just kind of want to show like that I was just a random unemployed idiot who started writing this thing and so we can kind of like track the whole progression of number of subscribers and all of that throughout the journey.
It's so funny you had that impression of us because I had like zero credibility before starting Acquired. I mean, I felt exactly like you did like I had these startup experiences and I've worked at...
Well, to be fair, there was a front page Seattle Times article about you before you started Acquired.
One day, one moment in time. Yeah. But Packy, like I know that exact feeling. And it's so funny how like at some point, and there's no like clear moment in time when it changes, but at some point then people look at you like you're on the other side of that valley and you're like, 'Wait, how did I get to the other side?' What? It's crazy. And like, you know, I try to be the same idiot that I was then. It is, as you know, like I still tweet dumb stuff and maybe that's good. Like the SEC is going to knock down my door at some point, but I'm like really trying to just be the same person that I've been the whole time. Not in any like, you know, fame hasn't changed me, but really in just like I don't want to care that like I'm going to get responses from a bunch of trolls now if I say something. I really think this breaks when I let that change me and I like get a little bit safer in what I write about because or what I tweet about or anything because there are more trolls out there, more people who are paying attention to what I'm writing and all of that. And so that's been important to me the whole time is kind of remaining the same idiot that I was in the beginning.
I think it's super important. This is the Not Boring episode, not the Acquired episode, but I've had a few conversations recently with people who have grown a personal brand very quickly online. And I think a lot of people make a lot of tradeoffs to do that where they play a part on the internet and play a character rather than being themselves. And you sort of have this magical thing, at least my perception knowing you personally and following your work is that they're pretty much the same person, but you've managed to like grow very quickly by being yourself, which is remarkable because I think in three conversations that I can think of recently, people have told me like, 'I really wish I could be more myself, but I played a character on the internet so that I could quickly grow.' It's easy to make that trade-off.
And I probably did a little bit of that, frankly, early on, like where I would do more threads and different things to like try to boost engagement and all of that. But I still, it was like so small that nobody was paying attention. By the time that I had anybody kind of following, I've just decided to be myself because I'm spending so much time doing this, both writing and tweeting and meeting people and all of that that if you're not yourself, it's not like a be true to yourself kind of thing. It's like you're going to have a miserable experience because all of your interactions are going to be other people wanting to interact with this persona. Or if I were writing from a different voice, everyone would expect me to write from that and it would just make it twice as hard to both figure out the content and the voice every week. And so I realized really early on that I just needed to like kind of be as close to myself as humanly possible or else it was just going to be too much work.
And once you admit that, you're kind of like, okay, well, if it works, it works. And if I don't have product market fit with some subsegment of the internet who can discover me, then shoot, I'll take my ball and go home. But if it works, it's actually remarkably scalable for a one-person operation.
So we can debate when you cross this valley, but certainly at this point in time, you have not. What are you feeling now in March 2020? You're unemployed again, but you're older. You're married. Your wife is pregnant at this point, right?
You are working on a, I won't say harebrained but maybe a startup idea in a physical real estate space with maybe some issues with the business model.
Not particularly venture-backable business.
Not particularly venture-backable. What are your emotions like right now? Are you just I'm happy-go-lucky it's all going to work out or are you like kind of tearing your hair out?
I'm, to a fault, and like you know everybody has their double-edged sword and mine is optimism. Never once was there a time when I was like my life is absolutely over. You know, like when I joined Breather and took a lower salary and it was a risky thing. My mindset was like, you know, my absolute worst case scenario here is that I move back to my parents' house and I can still eat meals and I can still sleep in a bed and there's a roof over my head. So, like the floor is not that low. Certainly this time around. There's 100% an ego piece of this because I have a bunch of friends who are doing really, really great things and I was, you know, when I tried to bring Not Boring Club online I was sitting there, I had trivia nights that I like spent all day writing trivia questions and making slides and seven people showed up and I was like this is, with my Duke education, my expensive high school education, all my experience, like this is incredibly embarrassing. And so I decided to kind of just let Not Boring Club, the digital version, fall by the wayside. In February, early February, great, Puja and I learned that we were pregnant. COVID kind of hit and I remember this probably April when I decided to like really go all in. It was like a bunch of soul-searching conversations with Puja, with my mom, talking to my mom and being like I don't know what to do here. And she's like, 'Well, I like the name Not Boring Club. Like maybe you should just like apply that to the newsletter and just go all in on the Not Boring thing.' So that was my mom's idea to port the name over.
We should all thank our mothers more. Thank you mom.
And even my dad who's always been kind of like don't close off doors and like just serious about me making sure that I did the best that I possibly could was super supportive of this whole thing. Maybe just because they saw that there was like nothing else on the table. To be fair I could have gotten a job somewhere but I just didn't want to get a job yet. I didn't want to quit on the idea of being an entrepreneur and doing my own thing. So, I went to the beach with my brother for a week and was just like, 'All right, like what if I just start writing this newsletter and what if I start writing essays?' And it needs to be different than Ben Thompson. So, I came up with this idea to do kind of a mix between business strategy and pop culture. And so my earliest essays were like creative destruction and the Mickey Mouse Club to explain why COVID was actually a really good thing because it meant that people were no longer going to be stuck in jobs and were going to be freed up to go do the things that they actually wanted to do.
Which is ironically also the subject of your most recent piece.
It's a different twist on it for sure. It's more about the sort of community and societal impacts of that but of the same impetus.
Totally. There are definitely some through lines through a lot of the pieces. I wrote about Amazon had a fashion show and I tried to examine Amazon strategy through the lens of this fashion show and did a bunch of those like direct pop culture x business strategy type essays that also like pretending to be a character became too much where I'd have to both think of like the business side of it and then also figure out what movie that business was like and that became too much. So I kept the tone and I dropped that direct thing. But yeah, I mean it just like I asked Puja if I could have 3 months to grow the newsletter and see if there was anything there and like maybe one day I'd start making money. But for now, let me just see if I can grow this. A friend of mine, Tommy Gamba, who was at Airbnb and getting ready to leave, helped me out on the growth side of things and had this brilliant idea to launch a landing page so that we could launch on Product Hunt. And that alone, I think, took us from something very small, like 1,000 subscribers to 2,000 subscribers. So that was a huge leap. And I remember sitting with Puja at dinner and being like, 'Oh my god, I could actually like this newsletter could be a full-time thing. I have 2,000 subscribers now. This is amazing.'
Seven people at trivia night. Now you have 2,000 people on the internet. Maybe this internet thing is a good idea.
That's what we like to say. We're talking orders of magnitude difference here. That's a VC term. So yeah. So I mean things like kind of started looking up from that point and wasn't making any revenue for a long time. And I still remember having conversations like deeper into the pregnancy where it was like clearly going to be a thing. And I had planned to turn on subscriptions and decided to keep holding off on that because I really liked the growth. And I had conversations with Puja where she was like, 'Are we going to do like a revenue thing here?' And mind you, now we're living at my in-laws' house in New Jersey during COVID and I was writing...
With her parents and I was writing from a basement. So like none of this is glamorous. But she's like, 'Are we going to like, you know, at some point we'll need like health insurance and blah blah blah. Like you going to turn on revenue?' And I was like, 'No, no, trust me. If we can keep not having subscriptions turned on for a while, then we can grow to a point where like I'll be able to turn on subscriptions and if I convert 10% of the audience at $5 a month, then like we could be making a couple thousand dollars a month.'
Subscriptions work as a business model if you architect the right way. There's nothing wrong with it. And obviously our friend Mario Gabriel is doing great with it, The Generalist. But oh, that's such a fallacy, that way of thinking of, oh, if I only get X% to convert. I'm so glad you went a different direction. There's also the dirty secret which it seems like you kind of intrinsically knew which is even 10% is going to be a pretty big stretch. Creators can typically convert at best 2 to 3% to a paid offering unless they're significantly handicapping the main content where you'd say like sorry every other main post is behind the paywall or something big like that but even then I think it's like 10, 15% if you bring out your big stick and that prevents growth and so like it's hard to model out exactly how that's going to play out but my big thing was like I was just addicted because I locked myself into this thing where I was telling people how many I grew every week. Like I was kind of addicted to that number continuing to go up. And so I just kept pushing off kind of turning on subscriptions so that that number would keep going up. And then Mario did it well. Lenny Rachitsky obviously did it really well and has a great business. So there are ways to do it. I think a huge difference between like someone like a Lenny and someone like me is that Lenny's audience is so specific and like you know exactly who you are and who should be paying for that which is people who do product or people who do growth. And not only do they know that they should be reading that and that they need to pay for it, their companies are going to be willing to pay for it for them. Whereas I could not imagine a company that'd be willing to pay so somebody could read about the Mickey Mouse Club. And so that was the other kind of thing that kept me from going to the subscription model is like I just don't know if companies will be able to pay for Not Boring.
Well, I mean that was the secret when I was at the Wall Street Journal and this was in the days of like paid content was such a thing and it was everybody thought oh the Wall Street Journal they did it so right. The New York Times was wrong. It was like yeah this is the dirty secret. Most people who pay for the Journal, it's their companies that are paying for the Journal.
And it's hyper specific. It's, you know, business, finance, it's the most reputable of that.
Yeah. If you're going to go the paid subscription route, it's great, but you need to architect your whole business and content strategy around that. And obviously, you had taken a different path.
Packy is just going to be Packy on the internet.
I was too lazy to do the subscription thing too and think about which should go behind the paywall and which shouldn't and like could I possibly double the amount of content that I was doing so that I could still grow and have some things behind the paywall and keep the quality and so I just frankly couldn't figure all of that out and so that was one of the reasons that I decided not to go that route too.
Okay so what month was your baby born?
Our baby was born on October 4th. I remember I had my laptop in the hospital like he was supposed to be born like a day later and so I was going to be able to finish a piece. I was writing about Reliance and so I was like almost done that piece sitting in the hospital while we were waiting for him to be born and I just couldn't get it finished. So he was born, Devon, who is the absolute best. Shout out to Dev if you're listening to this in the future.
Okay. Well, I asked for our tracker here. So you were talking about later into the pregnancy when Puja was asking you like, 'Hey, are we going to do this revenue thing?' I'm going to assume somewhere end of the second trimester, beginning of the third trimester, you're at 3,500 Twitter followers when you get that question. Then we fast forward to, you know, Devon is born, this big moment in your life, you're already up to 12,000 Twitter followers. So, you're starting to feel like, geez, I'm assuming that this maps similarly to newsletter subscribers. You're kind of looking at this like, well, if it's going to keep growing like this, and it's actually going to grow geometrically, not linearly, we could be in good shape pretty soon. But I imagine you're probably also pinching yourself and going, 'This can't continue.' Right.
In the summer, kind of late summer, somebody was nice enough to reach out. Chris at MarketerHire was nice enough to reach out and be like, 'Hey, I like your newsletter. Are you thinking about taking advertisers?' And I was like, 'Yeah, I'd love to have you advertise.' And he's like, 'Great. Send me your deck.' And I didn't have a deck. And so I surveyed the audience and I asked them for their characteristics and they all came back like exactly like you'd want. 25 to 34, high-income households, leadership positions of companies, well educated...
Owning big budgets, decision makers.
This deck is amazing, by the way. It's still on the internet. We'll link to it in the show notes.
It's still on the internet, which haunts me actually because people reach out and they're like, 'Great. I'd love to do a sponsorship at $1,000 or whatever price I put in in the deck at that point.' But after I made that deck, I was like, 'You know what? Internet thing has been pretty amazing and Twitter's been pretty great. I'm just going to tweet the deck out.' And so that filled up and you know, Public came in, MarketerHire came in, a few other sponsors came in from that, but that filled up pretty much through the end of 2020, all of my sponsorship slots, which was great. And I was like, oh wow. So then I remember having a conversation with Puja. I was like, I don't know, things go really well. Like I think maybe there's a chance that in the future we could do three or $400,000 on this newsletter on sponsorships.
Optimist and I kept relying on the math like I like had some sophisticated formula here. I was like, 'Puja, it's like it's purely math. It's just a CPM thing and so as long as we have enough readers the rates will grow and this will be something that you know at least I can make what I was making when I was a 24-year-old in investment banking again.'
So before Chris at MarketerHire reached out to you about sponsorship, had you been thinking about advertising or were you totally focused on one day when we get to a certain point we're going to flip the subscription?
No, I mean I think the other thing about me is I have an addictive personality and so you know I think we had probably crossed a point where I just realized that I like the growth too much and I realized that I like the fact that you know if I was going to be spending all of this time like you know 40, 50 hours to write an essay I didn't want a thousand people to read that essay and I wanted people tweeting about it and talking about it and all of that. And so at some point I realized it was probably going to go ads. I just like hadn't made the leap because I thought even ads would slow growth and that people wouldn't like me doing ads. And so I was trying to hold off on that for a little while, too. But yeah, a few companies kind of pushed me in that direction and proved that I could actually make a dollar doing that, which was great. There was another moment where I wasn't allowed to buy an iPad until I actually made money from Not Boring. And so, finally, I had made like $10,000 and Puja let me buy an iPad. So, like a bunch of little wins late 2020.
How proud were you at that moment? It's quaint now looking back on it, but like these are the things along the way that I'm sure you remember.
Totally. And it is a glorified Kindle for me. I read books on it and occasionally I'll draw something and throw in the essay. Like this last week's title image I actually drew myself. It's horrendous. I was like, you know, I'm going to be Ben Thompson, all I need is an iPad. Like can I please like dip into savings here and get an iPad? And she's like, no, you don't make any money on this newsletter. Like you cannot buy yourself an iPad that you don't need. You have a computer. You're fine.
Okay. So, two questions for you. One, did you experience the thing where the period of time where, hey, this isn't going to cover our lifestyle, is long, and then, hey, the period of time where, whoa, this is going to more than cover our lifestyle is long. But the period of, hey, this is great, we're like right at break even, sustainable, is like remarkably short. So, you sort of like blow by it, and then you're like, whoa, holy crap, I expected that to be like a longer period of the journey.
100%. Yeah, that happened really quickly. And again, to be fair, covering our lifestyle was like not particularly difficult when we were living in my in-laws' basement. We had a baby and so that was a real meaningful thing. But when you have a baby, David, you know this, people send you probably like the first at least 6 months worth of clothes and diapers and all of that kind of stuff. So, you don't really start incurring expenses on the kid for a bunch of months. And we were living in a basement and my mother-in-law is a phenomenal cook. So like, you know, I was maybe paying for like a Wawa hoagie every once in a while.
It's the best. Do you guys need to do an Acquired on Wawa at some point?
Oh, we totally should. Wait, so okay, let me get to question number two then. And I asked question one because as I've talked with other creators who experienced that moment, there's this really weird thing where you feel like because phase one was so long and you've been looking forward to phase two, the break even phase. I mean, and it's great to be in phase three, but it's like weirdly unsatisfying how fast you blow through phase two because you've been looking forward to it for so long.
I guess it's the optimist thing again. Like, because I set the first three months up as an experiment and knew that I could go, you know, find another job somewhere and that hopefully maybe the newsletter would have introduced me to somebody who might be willing to hire me because they liked what I wrote. So, that wasn't like a revenue-desirous period. And then there were those months in between kind of after that where it was growing and I was like this is going to happen. So probably everybody around me was relieved that it happened. But for me it was kind of like no, no, no, again it's math here. And so like this will happen and as long as it keeps growing then it'll become like a number that is really exciting. I didn't think it was going to go as well as it did. But there was no point where I was like I really hope that I'm like you know able to eat and that I can scrape things together. Again probably because we were living in my in-laws' basement. But I think that probably would have made it a little more satisfying if I was like every month dreading the rent check. But fortunately that was not an issue for us.
Yeah. Okay. So then that leads me to question number two which is you have pioneered a pretty unique sponsorship format. Like we thought we pioneered a unique sponsorship format and the presenting sponsorship where you we like really throw our lot in with the presenting sponsor for 3 months. Shout outs Pilot, Altimeter, website, everything, interview on the top of the show and then here comes Packy McCormick and says you know what every week one of the two posts that I do is going to be pure unadulterated I'm getting paid by the subject to write this I am doing the thing that is going to make classically trained journalists freak out and I'm just going to own that. How did you come to this and what were your fears around it? How did it come to be? All that.
So, I'm going to get the origin story somewhat wrong. I'd started talking to Nick Abouzid at Main Street. And if you use Twitter, you've probably gotten a sponsored tweet from him about using Main Street. Also happens to be a phenomenal guy. Love Nick. Thank you. And he was like, 'By the way, like these posts that you write on companies, you could write those on startups and I bet people would be willing to pay.' And he had just come over from Shruunk Capital to run marketing at Main Street. And he's like, 'We'll be the first ones who do this.' And I was like, 'All right, cool. Let's try it. Like I'm going to caveat the hell out of it and tell everybody right up front that it's sponsored, but like I think Main Street is really cool. So I would actually love to write about Main Street and explain and like my audience is a bunch of entrepreneurs and founders and I bet my entrepreneur and founder audience would love to make money back from the government that otherwise they might not have. And so Main Street will get you kind of your tax credits back in an easy way.'
By the way, what month was this that you're having this conversation?
This was actually pretty early in the sponsorship journey. So, this was probably also in like the August, September range.
Okay. So, still at 10,000ish Twitter followers.
Still at 10,000ish Twitter followers. My fears were obviously like this is not what you're supposed to do. You're not supposed to use a newsletter to shill. Sponsored content is a dirty word because, you know, a normal journalistic institution that has integrity, there's a wall between the people who write the actual journalists and the people who write sponsored content. And it's this thing that is like optimized for SEO and like kind of like clickbaity and like all that kind of stuff. So sponsored content like does not have a particularly great name. But I was like, 'All right, so if I do this really my kind of bar for myself has to be as high as it would be writing a normal piece and I'm only going to write about things that I'm actually bullish on and companies that I would actually invest in myself.' And this is before there was a fund or anything, but you know that I'd put my personal money into. And so that was kind of the bar that I set for myself. And I was like, you know what? I'm going to like ask the audience even like, did you hate this? Please let me know if you hated this. You know, one or two people every time I write a sponsored post is like, 'You're shilling. This is sponsored. No sponsored content, please.' But the vast majority either don't care, although the open rates are actually like fairly consistent, maybe a little bit higher on the Monday pieces, or they get something out of it. So, you know, Main Street, a bunch of people went and got a bunch of money back, so they love that. It's interesting because I serve a bunch of different audiences. When I talk to founders for Not Boring Capital now, a lot of their favorite pieces actually end up being some of the sponsored posts because I get behind the scenes access into some of these really fast growing successful startups and get to write something more detailed on them than anybody else has written before.
Oh yeah, I am an investor in Modern Treasury and I learned a lot about the company from your recent sponsored post on Modern Treasury. You know, even Ben Thompson on his podcast, I think it was back in February without calling me by name was like, 'There's somebody who writes a newsletter who does this thing where the startups actually pay him to write about them, but it's actually kind of good because he gets more information for these companies that aren't publicly available.' He was kind of saying that he doesn't write about private companies as much because he doesn't have as much material to analyze, but that if I actually work with the company, I have a bunch of stuff to analyze.
And I'm very honest with them that like I will talk about what I think isn't great if there are things and I will talk about competitors in a positive light and I will never say just like you know do a hatchet job on competitors in the piece unless competitors like a straw man like you know I talked a lot about passwords when I wrote about Stitch and that's fine because nobody loves passwords but you know as long as I keep that bar high and I'm like very honest I say upfront every time this is a sponsored post this is how it works. Here's a link to a doc that I wrote about how I choose them. People end up liking the posts. And so what I was saying was founders end up liking those because oftentimes they're either at the same spot in their journey or they're a little bit behind where those companies are. And so they're learning kind of like practical on the ground things that those companies are doing and can take lessons from that. So those actually feed in a lot of different ways really well into the fund.
I want to pause for a sec in the action movie story of the Not Boring story. I think this is a good point to talk about a few things kind of just going on in the world around you doing this. And one obviously what you're doing wouldn't be possible without all the platforms and infrastructure Substack, Twitter, all of the things that we take for granted now, but 10 years ago didn't exist. Like it just wouldn't be possible to have a solo corporation like Not Boring to be doing what you do. Even when Ben Thompson did it, he had to roll his own for so much of this. You are operating a venture fund with no other employees that AngelList makes that possible.
But it's interesting, right? Like you said a traditional media organization would have journalistic integrity and would never do this, right? Well, what is journalistic integrity, right? And like you know post 2016 and Donald Trump and everything like you know this is kind of one of those second, third order effects of the last five years in the world in this country of like well maybe mainstream journalism still has a great place but maybe it's okay to also do things differently and maybe they don't have all the truth and maybe maybe you can think differently about what journalistic integrity means. And then you kind of looked at this like ghetto of sponsored content and it truly was a ghetto. Was it a ghetto because it didn't have integrity or because nobody...
Put the work in to make it great? You know, you made it great. Yeah, there's a lot to unpack. So, first of all, the platforms like, you know, I'm all in on web 3 now. Certainly rely on web two platforms in a really big way. The most beautiful part about Substack is because they've taken such a strong stand for subscriptions and against advertising, no one on their team has ever even reached out to me. And so I've paid zero dollars for my main platform because they want to pretend like ads don't exist. And I hope they don't hear this and start charging.
They've never reached out to you.
Yeah. So that is just like kind of this happy accident where my main platform ends up being free. So people will pitch me kind of new newsletter platforms all the time and they're like bet you're pretty bummed that you're paying 10% of your revenue to Substack, right? And I'm like I actually haven't paid anything to Substack. [laughter] Twitter is free and I've written about this before, but actually I pay for Twitter Blue now just out of like a thank you. It's a garbage product so far. But just as out of a thank you for all that Twitter has done, I pay $2.99 a month for that now. So that's a cost. But you know, these platforms have been hugely helpful in making not boring what it is and a low cost.
On the other side, the point you're talking about journalistic integrity, you're catching me at a time where I'm like kind of in this mini self-proclaimed nobody cares but like kind of war against all the cynicism that's happening out there. I think everybody has incentives and motives and at least if I'm saying I am sponsored and this company is paying me right now to write about this, it is just very out in the open what I'm trying to do. Or if I say I invested in this company or whatever else, like everybody can go into the piece kind of knowing that that is the table stakes. I don't know what the incentives are for traditional tech journalists, and they're not certainly all this bad, but I think a lot of the reason that not boring works is because there's so much snark about tech out there for all of these companies that are one just groups of people not making a ton of money. And like now maybe salaries are a little bit better and all of that, but for the past decade, people at these small companies not making a ton of money and like actually trying to change the world. That's like a corny phrase, but like that is how you can recruit people to come work somewhere and not make a lot of money. Trying these new things, like taking different pieces off the shelf, going and trying to build something and then there's like snarky 50-year-old men sitting back and being like, 'Oh, no. I've seen something like this before. This is really stupid.' Or, you know, like X, Y, and Z. And this is not well thought out enough even for me to like be saying this publicly. But it feels like a lot of journalism is like left over from an era where journalism was like really needed because not everything was out in the open and like you needed journalism to expose corruption and like take down Tammy Hall and like all this stuff and then you apply all of that to like these little tech companies that have raised like $5 million and you like try to dig through the garbage.
There was an article in Business Insider on Spring Health about their work culture the other day that was like trying to be a hatchet job but there was nothing bad in there. It was like people worked hard at the company. A marketing guy said his team was working too hard and so they want he wanted to lower the goals and the CEO said, 'No, we're not lowering the goals, but I'll hire more people for you.' Like that is a tale as old as time in startups that you know there's a battle between the CEO and the marketing team about what the goal should be and the CEO sets an overly aggressive goal. And the fact that somebody think it's worth investigating for 4 months this story about this company or like the hit job that they just did on row which was like also total BS. Like you can always find someone who's unhappy in a company when you're not making that much money and when you're working a lot and then to use these people who have gotten fired as sources for these hit pieces that are poorly done and nobody believes that is just abysmal.
I think when the market turns and when we enter a bit of a bare market and tech in web 3 like it will be really easy to throw stones at me like I am unabashedly optimistic about all of this and like things are going to turn. I'm going to like you know the tide's going to go out and my pants are going to be down. I'm also totally fine with that because I do think that like the overall tone of tech journalism is like what's wrong with these companies like they're making too much money and so if somebody has to be on the other side saying like no this is awesome I'm happy to be that guy.
It's exactly what you said it's incentives and it's audiences right you planted your flag from the very beginning that you are going to be an optimist and your audience is founders and people who are also optimists about this whole industry. There's a viable audience of people who are pessimists out there and who don't like it and that's what the other media outlets can write for and but it's like nobody was doing what you're doing.
The other piece of it too is like you know I want to be optimistic because that's like naturally what I am and it goes back to doing the thing that you actually are and there's a reason I worked at a startup and even though that startup didn't do well I'm still optimistic about this because I think like a lot of really great stuff has come out of this. I also want to be realistic. So like I'm not going to just be like this is always the greatest thing in the whole entire world. My favorite kind of audience are the people who come in and they're like I was frankly really skeptical about crypto or about web 3 or about tech in general until I read this piece and it explained it really well in ways that make sense. So I still try to tie this stuff back to like business principles. I mean we're both huge seven powers fans. So I'll try to actually tie back to like what is the competitive advantage of this protocol or of this company. And so I don't want it to just be like pie in the sky optimism. So, if I can convert people who were like either pessimistic or skeptical over to at least being thoughtful about it, like that's all I'm going for is be thoughtful about it. And I think if you're thoughtful about this industry, you're going to come away at least being like, 'Wow, they've done a lot in the past few decades.'
Well, and you seem to operate under the same primary principle that we do. And David and I text ourselves this phrase all the time or text each other this phrase when one of us is straying from it. But rule number one at Acquired is assume the audience is smart. And if you assume that, the cool thing is longterm it means you'll get a whole bunch of smart people as long as you keep doing your thing and you stay true to that that'll pay attention. It comes with these interesting trade-offs where you can never allow yourself to hide the ball or else you're compromising that long-term goal. And so you always to the extent that you are assuming your audience is smart, you have to write well-reasoned stuff or else you are just going to take an enormous amount of for what you put out in the world. It's not like you can say, 'Hey, here are my incentives. This thing is sponsored.' And then write a total fluff thing with zero serious analysis in there because everyone's just going to look at it and go, 'Well, yeah, you told me that your independence was compromised and then it wasn't useful. Then it wasn't something that I enjoyed thinking about.' You can't waste people's time.
Certainly one of the tests that I always run for myself and I probably actually would have failed this test is if Theranos had come to me on a sponsored post, you know, however many years ago, chances are frankly I would have written something positive on Theranos because I assume the best and I'm not technical and so I'm not digging into that machine and being like actually do you know that the science doesn't make any sense.
It is impossible with that small of a blood sample. How could you possibly? [laughter] And that's where investigative journalism has a very valid role.
100%. There are goods to both and there are bad things to my approach and I don't know which company and probably none of them. But maybe there's a company that I've written about that ends up being a total house of cards, you know, in 5 years and I look like an idiot for writing that piece. I probably would have written about Theranos and that's, you know, that's an okay trade as long as I'm like, nobody's expecting me to analyze the science behind Theranos. If I could analyze like the business side of the business at least and do the work and maybe somebody learns something that is, you know, not just about Theranos, but about some other concept that I'm using to analyze the company, then that's okay. So, I guess that's the risk.
Well, that gets back to this, you know, frankly, I don't know if it was intentional or not, but this brilliant, you know, sort of jiu-jitsu you did with sponsored content that was a ghetto and sucked because nobody actually gave a damn, put any effort in to make it great. You've done that, but you do have to put the effort in to make it great.
100%. Yeah. The worst thing that could possibly happen is if I did one of those and wasted people's time because people would unsubscribe, people wouldn't read the next sponsored post. So the whole thing falls apart if I lose my integrity throughout this process. The lucky thing is that I've been a pretty like open optimist the whole time. So no one's like, 'That's so weird. You rip apart tech on Monday and then on Thursday when people pay you, you're like really generous to this whole industry.' So it's all consistent at least.
So I told you at the beginning this wasn't going to be all softballs. I don't want to pretend that every Thursday piece is exactly as interesting as every Monday piece because and again I think this is okay but there are a lot of Thursday pieces that the headline doesn't sound interesting to me and I end up either not reading it or just like skimming it to make sure I like didn't miss some huge piece of information where I'm like it would be good for me to know this. However, when the Monday pieces come out I'm like this could be the next great online game. This could be the next cooperation economy. And it's rare that I think that a Thursday piece is going to be that actually except for like Solana Summer that kind of was that. But I do think that that's probably in line with your sponsor's expectations is that it's going to appeal to a group of people that they particularly want to appeal to who wants to know about their company and happens to be a subset of your audience. But it's probably not going to be like, 'Hey, let's all close our eyes and pray and do kumbaya that this is exactly the same thing as the non-sponsored content.' That's totally fair.
