Per My Last E-mail #37

Startup Math Gone Wild

Hi Friends 👋,

Happy Monday! Between Andy Reid’s first Super Bowl win (fun fact: Reid’s daughter once asked me to dance in 7th grade), an amazing DataDay Workshop, and more phenomenal Not Boring applications, I’m coming into the week on a high. Feeling feisty, even.

My Super Bowl

I imagine that in 2013, an early newsletter writer sitting behind a laptop very much like this one first heard about a company called Juicero. He was skeptical of the company’s prospects, but he decided not to trust his gut. He didn’t want to be mean, and he thought he must be missing something. He didn’t share his opinion on Juicero with his subscribers, and he’s regretted that decision ever since.

These kinds of chances don’t come around often. Fyre Festival. Theranos. Juicero.

But they do come around, sometimes.

To whit: Gawker’s nemesis is working on a social network offering access to the rich

My heart raced as I read through Angela Chen’s article in the MIT Technology Review on a new social network called Column/. This was my shot, and…

alexander hamilton latino GIF

I’m calling it now: this is going to be a failure of epic proportions, if it even launches. It has all of the signs, right there in deck.

Some background before we go in: Column/ is a seed-stage company planning to launch in April that is building a “social network to make us all smarter.” It’s planning to do this through a Federal / State model in which smaller, organization- and influencer-led subscription-based social networks (the States) operate inside of the Column/ network (the Federal). States pay $100,000 for the right to set up their networks, and then charge members for access and split the revenue with Column/. Cool idea. Three major red flags: The Math, The Founding Columns and Launch Partners, and the Team.

/The Math

I haven’t seen every startup’s seed deck, but I feel confident claiming that there has never been a more full of shit calculation than the one on slide 7 of Column/’s.

Let’s zoom in to the “The Numbers” section.

Column/ claims that Milken Institute’s Shibboleth should generate $2.123 BILLION in annual recurring revenue. Let’s unpack that.

First, they assume that 25% of Milken’s newsletter recipients will convert to $100/month paid subscribers. That’s a pretty aggressive assumption, given that the e-mail conversion rate benchmark for media and entertainment companies is 2.68%.

Then, they use a ~*Monte Carlo Simulation*~ to determine how many people each of the original signups will invite. Using a Monte Carlo simulation in a situation like this is the definition of false precision, particularly when it gets you within a rounding error of just taking the average of 0 and 7.

To get to the advertsised $2.123 billion ARR, each signup would need to invite 3.47772 people to also pay $1,200/year, and then each of those people would need to invite 3.47772 people, for a total of six cycles. At a 100% conversion rate. That means that if I sign up, we can assume that a friend of my friend’s friend’s friend’s friend’s friend is going to sign up, too, every time. If you’ve ever asked even your closest friends to sign up and pay for something, you’ll understand why this assumption beggars belief.

That gets us a total of 1,769,168 members, each paying $100 every month. And that’s before factoring in the Constitutional Principal on slide 4 that states that “fellowships mean that half of the people don’t pay (e.g. Harvard at scale).” So really, Column expects us to believe that 3,538,336 people, equivalent to more than 1% of the US population, will sign up for the Milken Institute Shibboleth. And that somehow this is the more intimate environment that people are craving and willing to spend money for.

And that’s just one of the case studies! And not even the biggest! (That honor goes to Violet Grey, which is expected to bring in a whopping $2.9 billion)

There are 15 such examples in the deck, projected, via ~*Monte Carlo simulations*~, to generate over $4.4 billion in ARR for partners and over $3.1 billion in ARR for Column!

Not everyone is good at math, and first-time founders are often overly optimistic about their companies’ prospects, but that’s not what’s going on here. Sarah Cone, one of the founding team members, is a venture capitalist who has seen thousands of pitch decks, and whose ability to work with data is highlighted right in the deck.

She knows plenty to know how insane these numbers are.

/The Founding Columns and Launch Partners

Peter Thiel as a Committed Founding Column is a pretty great get…except he’s not. “When asked whether Thiel has committed to working with Column, a spokesperson said, ‘it’s not true.’”

As for the rest of the list, it looks like they googled “most important people and organizations” and copy-pasted the results. It’s misleading and shady, and I would imagine that there are some powerful people who are unhappy to be unwittingly associated with Column/.

It’s hard to tell at a glance, but in that whole list, only three of the names, including the VC that’s incubating the project, are actually confirmed.

(Note: I, too, need intros to Obama and Jeff Bezos for Not Boring if anyone knows them well.)

/The Team

Sarah Cone seems great. Never heard of Dr. D’Souza or Jake Lodwick, but the Gawker lawsuit and Vimeo were both fun. But only 10 days after initially sending the deck to MIT and calling D’Souza the CEO, the founding team seems to be in deep flux. When asked about D’Souza being CEO, Cone said in a statement:

Too often a woman founder and CEO is written out of the story as the media wants to focus on famous men. I am the founder and CEO of this company, and we are dedicated to fixing information incentives online, collaborating with a diverse set of people.

The media can be forgiven for its misunderstanding, given that the deck that Cone sent to the media clearly lists D’Souza as CEO and Cone as Creative Director and Board Chair.

Meanwhile, Lodwick told MIT Tech Review that he’s an advisor, not the CTO, as the deck claims. Pretty big changes in a week.

And whether Cone or D’Souza is CEO, both have full-time jobs managing other people’s money; running the bazillion dollar company that Column/ claims it will be is a pretty intense side-gig.

Why is this important?

To recap, Column/’s deck features numbers even Bernie Madoff’s investors wouldn’t fall for, a celebrity wish list that is misleading at best, and an executive team that’s already playing musical chairs.

Sounds like… a startup deck. But the thing that makes this so cringey, that gives it Fyre potential, is the fact that they’re purporting to be building this network to bring truth back to the online conversation. Column/’s CTO-turned-advisor, “the inventor of the ‘Like’ button,” built a new feature - the “Truth” button - for Column/. Those must be scare quotes.

Incentivizing people to tell the truth online is devilishly hard for even the most honest people. It’s hard to believe that the same people who created this deck are going to be the ones who figure it out.

The other tough part here is that I actually love the idea of a Federal/State structure - one large governing body that splits into smaller, more manageable, self-contained groups for improved interaction among members. Someone is going to do this and build something big. I think it’s a great way to scale community and get around evaporative cooling. But there are so many red flags with Column/ that I find it hard to trust the Federal governing body in this case.

It seems like just yesterday that people were claiming that WeWork’s downfall would lead to a more rational market. Investors wanted to see real numbers. Execution mattered. Our BS detectors were on high alert.

If Column/ is somehow able to raise a lot of money at a high valuation, it’s an indicator that we haven’t learned much, and are still willing to ignore the “Truth” in the pursuit of growth.

Links & Listens

📈 Quantifying the DTC Market | Web Smith | 2PM

Smith pushes back against the idea that there’s a shortage of exit opportunities for Direct to Consumer brands by going back in time to study Gillette, one of the largest CPG acquisitions of all-time. Both Gillette and Dollar Shave Club took advantage of changes in advertising arbitrage to produce billion-dollar exits:

Gillette Corporation achieved scale thanks to newspaper advertising, a burgeoning industrial complex, and key government contracts. Dollar Shave Club owed the company’s rise to a supply chain agreement, an overzealous investor named Peter Pham, a Youtube advertisement, and Facebook arbitrage.

Smith argues that DSC is more rule than exception, and that there will be growing number of DTC acquisitions as online retail adoption increases.

A Day in the Life of Americans | Nathan Yau | Flowing Data

Credit to Gabi and Leah for resurfacing this 2015 gem in the Data Storytelling portion of DataDay.

At the workshop, we learned how Yau used position, color, size, and shape to tell a story using American Time Use Survey data. You could express the same data with a line graph, but think about how much more easily and viscerally you understand how Americans spend their time throughout the day through this animation.

Last year, Yau created a new viz to highlight the ways that men and women spend their days, which is equally mesmerizing.

🎻 Bach and the Cosmos of Belonging | Maria Popova | BrainPickings

Bach has been coming up a lot recently, triggered by The Portal and powered by the Baader-Meinhof phenomenon. I’m woefully undereducated on classical music, but Popova quotes a section from Michael Pollan’s How to Change Your Mind that might be the push I needed to get into it.

During a psilocybin experience he did as part of the research for the book, Pollan asked his facilitator to put on a Bach cello suite in D minor performed by Yo-Yo Ma, and minutes later:

I lost whatever ability I still had to distinguish subject from object, tell apart what remained of me and what was Bach’s music… for the duration of those exquisite moments, Bach’s cello suite had had the unmistakable effect of reconciling me to death… Having let go of the rope of self and slipped into the warm waters of this worldly beauty — Bach’s sublime music, I mean, and Yo-Yo Ma’s bow caressing those four strings suspended over that envelope of air — I felt as though I’d passed beyond the reach of suffering and regret.

Here’s the Prelude from that Yo-Yo Ma rendition of Bach’s Cello Suite No. 2 in D Minor, psilocybin optional:

H/t to Mike Madonna for the article.


This week’s Product of the Week is Webflow, a no-code website building tool that I’m using to take Not Boring off of my blog and onto its very own domain.

Image result for webflow logo"

My friend Winson, who I met through OnDeck, first recommended that I use Webflow to build the site, and then took a weekend to learn it himself and build the site for me. (Thank you, Winson!)

Once I started playing around in his version, I decided to learn it for myself in order to understand how the product works and give myself the ability to evolve the Not Boring site on my own.

After about 4 hours of work, including tutorial videos, my version is already starting to take shape. Which is saying something, because the last time I tried to build my own website, I spent months and this was the result:

(I need to write a longer piece on ThrowGo one day. For now, you can play around with the site on the Wayback Machine here.)

Webflow is a part of the no-code movement that is making is possible for non-technical people like me to build fully functional, flexible websites and products without writing a line of code. It works using the same principles that an engineer would use to build a product, but abstracts away the actual code writing.

For example, if I want to add a button and format it, I can just drag in a button and tell Webflow to format it like the other button I created before and somewhere in the background, Weblflow turns my drag and drop into code. It takes 15 seconds. Those ThrowGo buttons took me days.

I’m still very much a novice, but it’s empowering to know that I can build a site myself in a weekend instead of paying an agency tens of thousands of dollars to do it for me.

If you want to learn and build your own site, the free Webflow 101 Crash Course is a great place to start. And look out for the Not Boring site in next week’s e-mail.

What’s Next?

DEBATE CLUB #3 IS HERE 🎉 Wedensday night, 24 debaters will gather on Great Jones Street for a battle of the wits. I can’t wait.

NOT BORING ACCEPTANCES 🥳 At the end of this week, we will start accepting our first members into Not Boring. This group is so important, because the first people in will set the tone for how this evolves and what it becomes. I couldn’t be more excited for the group that we’re seeding this community with - if you want to be one of the first, APPLY HERE.

Thanks for reading,


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