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Not Boring AMA
Peak of Hand-Drawn Graphics? How could Not Boring Fail? Biggest misses?
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Hi friends 👋 ,
Happy Monday! I’ve thrown a lot at you over the past few weeks.
In June alone, we covered: The Cooperation Economy, Cityblock Health, Zero-Knowledge Proofs, Cometeer, Scale, and NexHealth. We’re talking nearly forty thousand words, across a pretty wide range of topics.
Today, I want to switch things up and try something a little lighter weight for three reasons:
To give you time to catch up on older Not Boring posts :)
This is the last post of H1 2021, a perfect time to reflect.
My brain hurts.
Consider this a pre-holiday-weekend palette cleanser for all of us. If you enjoy this format as an every-once-in-a-while thing, let me know in the UserLeap survey at the bottom and we can do more.
Let’s get to it.
Not Boring AMA
Instead of a full essay this week, we’re trying something new: an AMA.
AMA, which stands for Ask Me Anything, is based on the popular Reddit format of the same name. Or, if you prefer, this is my version of Bill Simmons’ Mailbags. Either way, it’s the same: you ask, I answer.
On Saturday, I asked you for questions on Twitter...
...and you asked 127 of them.
There were way too many great questions to answer, and many of them are rich enough for full essays of their own, like web3 vs. fintech and the rise of 15 minute grocery, so those might show up in your inbox in the coming weeks and months. For now, here are ten of the most popular, most representative, or just questions I wanted to answer the most.
Looking back at the past year, what have you been most wrong about? Or what has been your worst prediction? How has that changed any of your mental models?
Let’s kick it off with some misses! Because I’ve written a bunch about public companies and crypto, which come with real-time scoreboards, it’s easy to track what I’ve been most wrong about from a pure numbers perspective.
Even after tech stocks began cooling off earlier this year, this biggest loser is… shorting bill.com.
The easy answer to how that changed my mental models is that it actually just reinforced my natural bullishness. Never short, especially in a bull market! But I don’t think that’s the right takeaway. There are three bigger lessons:
Don’t Be a Purist. I wrote that piece because I was offended by how bad bill.com’s software was for me to use, and figured that that had to spell doom for the company, too. But…
Distribution is Really Important. Even if Bill offends my delicate sensibilities, it has still built up a powerful distribution engine, and locked itself in with important customers. They’ve built Bill into their workflows, creating high switching costs, and their refusal to pay with anything but Bill creates network effects.
Understand Who the Customer Is. My biggest mistake in analyzing Bill was not fully understanding who the customer is, and how they feel about the product. Accountants and finance teams actually seem to love Bill, or at least have some Stockholm Syndrome going on. I projected my own experience onto the rest of Bill’s customers, even though I’m not actually the target customer.
Where I’ve been wrong more generally, beyond Bill, largely stems from that last point: it’s really easy to extrapolate from my own experience and viewpoint and make generalizations. I’m trying to actively bring in other points of view and perspectives to my writing process to try to counter that, but it will always be a work-in-progress.
Beyond specific companies, I think it’s too early to tell what else I’ve been most wrong about. I try not to make predictions about what will happen next week, next month, or even next year, because either no one really knows or it’s already priced in. The areas where I could be proven most wrong long-term include:
We’re Never Going Back: I don’t think that we’ll go back to a world in which nearly everyone who was working from an office 9-5, five days a week pre-COVID ends up going back to the same routine. That doesn’t mean the office is dead, or that many people won’t go back, but I think there will be more flexibility around work generally (see: The Cooperation Economy). I work for myself, from home. This could be another example of me projecting my own experience. I think it’s more than that, but I could be wrong.
Web3: Web3, the decentralized cryptointernet, is like catnip to me. Finance, innovation, community, novelty, network effects. There’s so much fascinating stuff going on that I’ve been fully ETH-pilled. But there’s a world in which centralization wins because it’s more efficient, or more performant, or the status quo, and a more likely world in which even if web3 ends up winning out, it takes longer than I expect. I will continue to hold and buy more ETH, but I could certainly be proven wrong.
Twitter: I’m incredibly bullish on Twitter - I think their issues are fixable, that they’re starting to fix many of them, and that they have some of the world’s strongest network effects and highest switching costs. You would have to pay me an astronomical sum to leave Twitter, and many people I know feel the same way. But here’s my own personal experience rearing its head again. Maybe Twitter is unfixable, people who derive less value from it than I do start leaving first, and then it becomes less valuable to people like me, and the whole thing falls apart. Maybe everyone sticks around and it just continues to fail to monetize to its full potential.
Complex Strategies: I absolutely adore a complex, long-term strategy. I call the people and companies who pull them off “Worldbuilders.” But more complexity leaves more room for error, and a broader plan means less focus on any one thing. Uber was going to be everything for everyone, and it still doesn’t produce any cash flow. Maybe simpler is better more often than I appreciate.
Startup Valuations: In Dreams All the Way Up, I argued that high startup valuations are actually warranted for the good companies because they’re priced on a probability that they can get as big as the FAAMG companies, and the FAAMG companies are worth more than ever. Startup valuations have actually held up incredibly well through the public tech stock pullback, but both as an analyst and an investor, I may be too comfortable with high prices for the best young companies.
The one big thing I’m figuring out is less on the mental model side and more on the presentation side: I remain hyperoptimistic about the future and technology’s impact on it, but as Not Boring’s readership grows, I need to be a lot more measured in how I present my bullishness. It’s never investment advice, and I’m never the expert. I’m learning in the open and willing to be wrong, but need to be sure that people understand that and don’t ape into anything just because I wrote about it.
Do you think we're going through a Gartner hype cycle for MS-paint style hand-drawn diagrams of extremely complex strategies? Are we about to launch off the peak of inflated expectations?
Short answer: no.
MS Paint is older than I am. It was first released in 1985! Back then, for the first decade of its life, it was actually called Paintbrush, but by the time I had to learn how to use it in a high school art class, it was MS Paint.
MS Paint was the Technology Trigger that ignited the whole digital hand-drawn versions of complex concepts revolution. Craig Wallace was the MS Paint King of my high school class. He could make anything funnier with MS Paint. In those halcyon days, we thought that everything was going to be MS Paint.
“All other types of illustrations are dead!” people exclaimed.
“I wouldn’t be surprised if the entire World Wide Web ended up being a series of MS Paint drawings,” predicted others.
It was the glory days for MS Paint. But we hit the Peak of Inflated Expectations and, as always happens, fell off it hard.
“These images are kind of terrible,” yelled the naysayers.
“This is too cartoonish to take very seriously,” scoffed serious business people.
We were, of course, in the Trough of Disillusionment. Things were touch and go for MS-paint style hand-drawn diagrams of extremely complex strategies.
While we were in the Trough, the hardcore illustrators kept illustrating. This happens in every trough. The weak hands are shaken out, and only the truly passionate remain. See: Crypto Winter in 2018. In this case, the passionate builder in question was NASA Roboticist Russell Munroe. In 2005, he posted his first comic to xkcd:
Over time, Munroe’s cartoons evolved to explain more complex things than a boy floating in a tub. Many of today’s illustrator/writer/complex-thing-explainers can trace their lineage back to Munroe. All-in-all, though, the early 2000s were the Dark Ages for MS-paint style hand-drawn diagrams of extremely complex strategies.
Then in 2013, a savior emerged: Tim Urban, the author/illustrator behind Wait But Why. On July 8, 2013, Urban lit the world of MS-paint style hand-drawn diagrams of extremely complex strategies on fire with his first post: 7 Ways to Be Insufferable on Facebook.
As if to announce that shitty drawings to explain things were back, before the very first word, Urban dropped this gem of a painstakingly and lovingly handcrafted illustration:
Urban was the first in the recent wave of amateur illustrator/writers… or that’s what they’d like you to think. See, when you Google “When did Wait But Why launch?” Google confidently returns “2013.” When you Google “When did Stratechery launch?” Google gets even more confident, returning both a month and a date: April 2014.
What the fuck. But wait again, it gets weirder. What do you think Thompson slid in right after the unassuming opening sentence, “I don’t know much about sailing. So perhaps it’s not the best analogy with which to launch this blog. But here goes…”
You guessed it…
This absolutely gorgeous illustration of two sailboats, signed by the artist himself, clearly brought to life on a brand new iPad app called Paper.
If there was a mini-Technology Trigger that brought MS-paint style hand-drawn diagrams of extremely complex strategies out of the Dark Ages, it was Paper. Apple launched the iPad to much fanfare in 2010, but it was somewhat of a dud until, in 2012, a ragtag group of former Microsoft employees launched the Paper app out of their new startup, FiftyThree.
Paper allowed artists to use the iPad as a canvas and their fingers as a brush. Apple chose it as the iPad App of the Year in 2012. But fingers make clumsy brushes, so a year later, FiftyThree released Pencil, its entrant into the heated race to be the digital stylus for the iPad.
Still following? Let’s recap:
2013: WAIT BUT WHY, STRATECHERY, AND PENCIL
It was on. Apple, ingrates that they are, launched the Apple Pencil in 2015 to compete with FiftyThree, the company that pretty much saved the iPad. (WeTransfer would end up acquiring FiftyThree’s assets in 2018.) This is how you charged the original Apple Pencil.
Anyway, Apple could copy FiftyThree’s products, but no one could put its impact back in the bottle. A new generation of illustrator-writers was born.
New demand attracts new supply. New writer-illustrators attracted entrepreneurs building the tools to help them. In late 2015, Thiel Fellow Dylan Field launched Figma with $14 million in seed funding. He’d been working on it since 2012, but it took three years to figure out exactly what the product was and then build it.
Today, Figma, Paper, and a Figma plug-in called remove.bg (which, as it sounds, removes backgrounds from images) power all of Not Boring’s graphics and illustrations. Not bad for only nine years’ work.
Unsurprisingly, Figma is now a Decacorn after an announcement last week that it had raised $200 million at a $10 billion valuation. (Yes I know that Figma is mainly used by real designers.)
So, back to the original question: are MS-paint style hand-drawn diagrams of extremely complex strategies about to launch off the Peak of Inflated Expectations?
No. We’re just rising up the Slope of Enlightenment and hitting that Plateau of Productivity. IT’S TIME TO DRAW!
What’s a topic that is super interesting to you, but you hesitate to address it publicly because it would run counter to the thing that you feel like the crowd expects from you?
I got a few variations of this question: What am I most bullish on that I’m afraid to put into writing?What’s the most exciting non-tech idea I’m interested in?
I actually don’t have a good answer to this one. I got a little political around the elections and got some negative feedback on that, but fuck it, I wouldn’t change that. No point trading the security of a job to work for myself if I can’t do or say what I think is right.
Overall, though, one of the most positive surprises in writing this newsletter has been that all of you have been down to go on a journey with me across a super wide range of topics. There was a period last year when I was writing a lot more about public companies, and Seeking Alpha cross-posted all of my essays, and they did well there. I think I got to #1 on SeekingAlpha four weeks in a row. And then I wrote about Stripe, and a few people on SeekingAlpha made comments like this one:
So I went back to writing about public companies for the next few weeks, before I stopped and asked myself why I cared at all what random commenters on SeekingAlpha thought. Then, I let myself get weird -- I wrote about crypto a little more, wrote an essay on Sam Hinkie, wrote an essay on Software Eating the Markets that I thought serious investors would rip apart. And the response was great!
Over the past few months, as I’ve gone deeper into web3 and crypto, I’ve been so happy that so many of you have been down to go down the rabbit hole with me. Jill and I covered Zero-Knowledge Proofs, a super technical concept, and you took the time to read and learn. Just last week, we jumped from AI to healthcare, and you came along for the ride.
In a podcast interview, and I’m blanking on which one, Patrick Collison talked about Jeff Bezos being able to make a lot of the moves he made at Amazon because he evolved his shareholder base over time to include mainly people who understood what he was trying to build, trusted him, and didn’t get concerned by short-term losses. He shook out weak hands.
I’m trying to do the same thing with Not Boring readers -- I want people who are broadly smart, curious, and a little optimistic to read Not Boring, and hopefully as we jump from topic to topic, you’ll trust that I’m exploring things that I think are going to be important. So far, so good.
Ultimately, I work wayyyy too much to not write about things I’m interested in. Plus, it’s really hard to come up with what to write every week, two times per week. I think I’d burn out and run out of ideas if I held back.
What separates great researchers and analysts from average ones? How has your research ability improved over time, and what are one or two tweaks you've made to get better?
To start: I wouldn’t say that I’m a great researcher or analyst. If I worked for a hedge fund, I’d imagine that they’d want a little more quantitativeness out of me. If I were an academic, I’d imagine that they’d want more primary research.
The research question is part of a bigger one:
The process that’s worked for me so far is:
Most often, I start by getting a sense of what people are talking about on Twitter or in group chats, particularly niches of people who are a little bit ahead of the curve. NFTs and DAOs are good examples in web3, but the same is true for public companies or startups, and is particularly true for broader trends (return to work, Power to the Person, Cooperation Economy). I just let a bunch of things hit me and bounce around in my brain.
In most cases, my job is to learn, synthesize, translate, and then add my own perspective.
Read and listen to every high-quality thing that I can on the topic. There’s so much good content and analysis out there, at least on pieces of the overall picture, that half the battle is curating the right information. I might read an analysis on someone else’s Substack (“topic” + “substack.com” is becoming a more frequent Google search for me), and if there’s something novel in the analysis, I’ll try to find other sources to back it up.
If something has been written that explains a topic as well or better as I could, and from the same angle, then I’ll move on to the next topic.
If not, then I continue to read and synthesize and refine my angle. Sometimes, that might mean remixing a few ideas into one novel idea.
Once I have a thesis, I’ll try to find people who are experts in the space to bounce ideas off of, make sure that I’m not missing anything big, and add nuance.
Most of my time is spent on research and conversations (50%+), but a surprisingly big chunk is spent just staring at the screen and thinking, trying to figure out my angle of attack. I think of it like standing at the top of a hard ski run and picking my line.
More and more, once I figure out my line, I turn to either specific people or to Twitter broadly to ask for the bear case, since I’m naturally optimistic and miss downsides.
Then, I start writing, and I keep researching as I write and realize that there are holes in my understanding or in my argument. Actually writing typically takes about 25% of the total time.
My Ethereum post, Own the Internet, is a good example of how it works. I knew I wanted to write about Ethereum, I knew largely what my bull case was, I talked to a bunch of people who know a lot more than me, asked Twitter for the bear case, and read and listened to everything I could, but I couldn’t write a single word for over two days because I couldn’t figure out my unique spin. I just sat and stared and paced. On Sunday morning, I finally made the connection between Ethereum and Excel, and everything else just started flowing.
The two biggest tweaks I’ve made to the process over the past year:
Talk to people who know a lot more about the space than I do as early as possible. This helps me figure out the current conversation in the space and avoid writing super dumb outsider takes. It’s been easier to get smart peoples’ time as Not Boring has gotten bigger, but I think that’s mostly been about me being more willing to ask. People have been generous and willing to help the whole time.
Red Team My Arguments. Understanding that I’m an optimist, I’m spending a lot more time thinking through what could go wrong and talking to people who can provide opposing viewpoints. It’s actually most helpful for me when I talk to people who are bearish on one thing because they’re bullish on another, competing thing, because then my brain treats it as a battle between two optimistic takes and I can evaluate which I think is the most realistic, or whether the two can co-exist.
All that said, I still haven’t dialed in a consistent, scheduled process. Each piece is different, and I’m equally panicked every week. That’s what makes this fun.
Which famous TV character would read Not Boring, which would pretend to, and who would look down on both?
There are a lot of TV characters who would read Not Boring. TV is full of the kind of smart, attractive, witty, successful, curious, ambitious characters that look a lot like all of you.
Here are a few examples to give you a flavor.
Sticking with film and television…
If Cameron Crowe made a movie about your life what song would be playing during the opening credits?
I wanted to pick from an existing Cameron Crowe movie, and Jerry Maguire has a special place in my heart. It was the first R-rated movie I ever saw. I first watched it in New Jersey, the home of Bruce Springsteen. So I gotta go with the Bruce song from Jerry Maguire soundtrack.
You can press a button to live forever. You’re the only one who does. Do you press it?
Jesus, no. That’s the most depressing thing I’ve ever heard. This question wasn’t close to the top 10 in likes but I had to answer it because this is something I’ve thought about way too much.
As a kid, from ages ~six to ~eight, nothing scared me more than infinity. You can ask my parents if you don’t believe me. Some nights, when I put my head on my pillow to go to sleep, the concept of infinity would pop into my head and I was done. I’d be up for hours playing a version of “OK, but then like a million years after that…” and realizing that infinity was still just getting started then, and a million years after that, and a billion years after that. Didn’t matter.
A big part of the reason infinity scared me was that I was worried that when we all died, we’d just be alone, forever and ever and ever and ever. Bringing heaven into it didn’t help. What if my mom made it and I didn’t? Even if my whole family made it, it was just crazy to me that there was no end. It just. kept. going.
Then, when I was fourteen and had mostly gotten over it, the Spielberg movie A.I. Artificial Intelligence starring Haley Joel Osment came out.
It was the most depressing movie I’d ever watched. HJO plays a sentient AI kid who loves his living family, then they have to kick him out and his “mom” puts him in the forest until he runs out of batteries. He’s revived thousands of years later. Everyone he knows is long gone. That made me so sad. Hated that movie.
Anyway, no chance in hell I’m pushing that button.
What person or publisher do you consistently go back to and read their work? Why?
There are a lot of online writers whose stuff I read often, and some whose essays I won’t miss. I don’t want to list them all here at the risk of accidentally missing someone and offending them, but I’ve linked to all of their work in Not Boring in the past.
Instead, I’ll choose someone who writes about things very different from what I do, in a form very different from what I write: Haruki Murakami.
Murakami is my favorite author. Since reading 1Q84 a decade ago, I’ve read all of his books. There’s something peaceful about his writing -- he features ordinary people, leading ordinary and often boring lives, and describes them matter-of-factly. And then, something happens, and the stories take a turn for the magical, but even the otherworldly parts are written in the same matter-of-fact way. His books are comfortingly similar in their structure and in the devices he employs; they’re so similar, in fact, that The New York Times created a Haruki Murakami BINGO card (which has been my Twitter profile header for a while).
Unintentionally, I think that combination of familiar and weird is something I’ve taken into writing Not Boring. When I write about web3, I do it through the lens of Hamilton Helmer’s 7 Powers or Clayton Christensen’s Disruption Theory. Anchoring weird in familiar lets me explore further afield without risking going so far that things no longer make sense.
I don’t actually read a lot of business books anymore. I read newsletters and listen to podcasts, but I use books to keep making me think weirder. I love Vonnegut for that reason. I recently read his first book, Player Piano, which he wrote in 1952. Seventy years ago, he predicted the unease that would come with automation and AI, not in a preachy or doomy way, but through dry wit and dark humor. I read a lot of sci-fi for a similar reason: the more out there the things I read are, the less crazy and more familiar even the wildest ideas in the real world seem to me.
If Not Boring stops being weird, I’m in trouble. Speaking of which…
How might Not Boring “fail” from here on in?
Everything is a double-edged sword.
I think that one of the most interesting things about Not Boring is that it’s not traditional, unbiased journalism. I invest. I do Sponsored Deep Dives on companies. I have skin in the game.
That’s certainly a more complex approach. Conflicts are built in. No matter how many times I say that I only write Sponsored Deep Dives on companies that I would invest in (and often do) and would write about anyway, some people will inevitably see those as selling out. This question -- how do you strike the balance between monetization vs. doing what you want? -- is a common one.
It makes the reasonable assumption that I write Monday posts about things I want to write about, and write Thursday posts about things I get paid to write about. I think that’s a false dichotomy. I feel incredibly lucky that companies I want to write about anyway are willing to pay me to do it. Sponsored posts are a way to prioritize among the hundreds of companies I want to write about and about which definitive pieces haven’t yet been written.
I love getting to tell startups’ stories when they’re still early and undiscovered, and their success isn’t guaranteed. It’s relatively easy to write a bull case for Facebook; it’s one of the most successful companies in world history, and all of its numbers are public. Plus, I’m one of ten thousand people who’s written something good on Facebook.
It’s harder to write about early stage companies -- their plans are only partially executed, they’re not willing to share many numbers, they might not even have numbers yet. Many times, when I write a Sponsored Deep Dive, I’m the first person who’s ever written a thorough analysis of the company in public. They’re paying me, sure, but getting it right is much more important than any one paycheck.
The biggest risk to Not Boring is that over time, I end up being very wrong about some of these companies, and it looks like I was too generous to them in my analysis because they paid me. The biggest risk is losing trust.
So far, so good though. Every company on which I’ve written a Sponsored Deep Dive is doing incredibly well:
Pipe is worth more than 20x today than it was when I wrote about the company eight months ago.
The list goes on.
I really do only write about companies that I think you’ll care about and learn something from, and wouldn’t accept any amount of money to write about companies for which I don’t think those things are true. But I understand that these posts remain the biggest risk and that’s why I’m as open and transparent about the process as I can be.
On the investing side, the biggest risk is that I am very publicly backing my portfolio companies in a way that not every smaller investor has to. For some, that will make me look smarter than I deserve, and for some, that will probably make me look dumber than I deserve. The truth is probably somewhere in the middle. Here, I will always disclose my investments when I write about them, and will always be fair in the way that I present companies that compete with my portfolio companies. It puts extra pressure on to back the right company in a space, but has also helped me understand the point I learned through Bill.com: companies aren’t all good or all bad; often, they’re good at different things and serve different parts of the market.
So that’s the existential, unique risk to Not Boring: letting conflicts get in the way of my analysis. Besides the potential conflicts, there are a couple of ways that Not Boring could fail that are more common to other newsletters and media businesses.
First, if Not Boring doesn’t stay fresh, if it gets too repetitive, that leaves the door wide open for someone to come in who’s a better writer and has a fresher perspective. I really feel like I need to re-earn everyone’s time with each essay, which is why I pour so many hours into this.
Second, Not Boring could fail if I try to turn this into something it’s not. People often ask when I’m going to hire a team, or add more writers, or even get a ghost writer to take off some of the load. The answer is probably never, unless there are incredibly compelling opportunities to do so or areas that I know you want to learn about that I just don’t think I can analyze well and that no one else covers particularly well.
No one wants more content. They want something unique that they can’t get anywhere else. The more I try to systematize this and bring in other people to do the creative work for me in the name of more, the faster I fail.
The fun part about this for me is that I’m just an idiot who gets to write about things that fascinate me, invest in companies I’m excited about, and meet smart people; anything that takes away from those three things in the attempt to get a little more scale seems like a bad idea.
My ask to you: if you see me fucking up on any of the above, or heading down a path towards failure, hit “Reply” on the email or reach out on Twitter and let me know!
Last one: What question(s) do you wish we asked that we didn’t?
Question: Is NYC back?
Answer: NYC is very, very back.
After a fantastic year with Puja’s parents in the suburbs, we’re moving back to Brooklyn on Thursday. We thought about moving somewhere else -- the suburbs, Philly -- but we couldn’t pull ourselves away from NYC.
Since we’re moving, and since no one wants to read on the morning after the Fourth of July anyway, Not Boring is taking a week off. I’ll be back on the 8th, recharged and ready to go even deeper down rabbit holes with you in the back half of the year.
Thanks for joining me on this fun, weird journey so far; I have a feeling it’s only going to get weirder and more fun from here on out.
How did you like this week’s Not Boring? Your feedback helps me make this great.
Thanks for reading and see you after the Fourth!