Per My Last E-mail #42
Are IRL Social Clubs Venture Backable Businesses?
Hi Friends 👋,
Happy Monday! I haven’t seen much amateur coverage of the Coronavirus on the news or twitter over the past week or so, so I decided to dedicate this week’s Per My Last E-mail to giving all of you my thoughts on the virus: the science, the politics, the exponential growth, etc…
Kidding! You can count on Per My Last E-mail to be a refuge from the Coronaconvo.
The one thing that I have found interesting is that a lot of people who have been talking about the future of work being fully remote have finally gotten a taste of working from home, and they’re feeling… really bored, lonely, and unproductive. My Twitter feed has been full of tweets like this one:
All the more reason that as more work becomes remote, we’ll need new ways of staying engaged, passing the time, and connecting IRL.
Speaking of which, in this week’s Per My Last E-mail, we’ll cover:
Backing IRL Social Clubs: Attempting to answer the question, “What’s the case for why IRL Social Clubs (like Not Boring) are now venture backable?”
Links & Listens: Stripe’s strategy, funding early American inventions, what Byrne Hobart thinks about everything, Peace Corps 40 Under 40, and Generation Rising
What I’m Reading: Educated by Tara Westover and The Hidden Girl and Other Stories by Ken Liu
Let’s get to it.
Back in December, I said that I was going to write a post on whether IRL Social Clubs are venture backable businesses based on this question from Erik Torenberg:
Scout’s honor, I wrote the post. But then I never published it. As someone who might want to raise venture capital for an IRL Social Club at some point, I thought that the risk of being publicly wrong was too high.
But being publicly wrong is what we do best here at Per My Last E-mail!
Plus, the more I talk to people, the more I realize that no one has figured out the answer to this question. And what better week to write about investing in IRL businesses than when everyone is retreating from in-person interactions and the stock market is going up in flames…
So I’m publishing it, not because I think I have the whole answer, but because I want to hear from people who have different parts of the answer. Being publicly wrong is the fastest way to get closer to being actually right.
This post covers two main sections:
What makes a venture backable business?
Can IRL Clubs be venture backable businesses?
My take is that not all IRL Clubs are venture backable (and certainly not all of them want to be), but certain ones can be if they focus on building companies that are anchored by physical spaces but not defined by them.
IRL Clubs have three big things going for them:
Community is in the zeitgeist in 2020.
Recurring revenue models are built in to the way they operate.
They take advantage of scarcity to drive lower customer acquisition costs.
In order to capitalize on those, they need to do two things:
Figure out ways to scale revenue beyond the four walls of a clubhouse.
Take advantage of new financing and partnership models to fund the costs directly related to building and leasing a physical space.
Read Backing IRL Social Clubs here and share your thoughts and feedback!
Links & Listens
Stripe, the payments company founded by Irish brothers Patrick and John Collison, is the most impressive startup in the world. In fact, when I interviewed David Perell last week, he cited Stripe as the best modern example of scenius. In this piece, CB Insights dives deep into Stripe's growing array of products and discusses the company’s strategy, which is best summed up by its mission to “Increase the GDP of the Internet.”
Crawford, one of the leaders of the Progress Studies movement, looks at how early American inventors financed everything from the McCormick reaper to the lightbulb to the airplane. Without institutional money available to early stage inventors, most relied on angel investments from wealthy individuals, while others self-funded with profits from previous ventures or salaries from their day jobs. The government even floated a few with subsidies and pre-orders.
I’m not sure how to categorize this wide-ranging, two-part conversation between Byrne Hobart and Erik Torenberg. The title - What Byrne Hobart Thinks About Everything - comes pretty close. The two discuss topics ranging from marriage to progress to the future of education to why you can model almost everything as an options trade. There’s bound to be something interesting to everyone in there.
This is just a proud brother post. My sister, Meghan, was selected as one of the Peace Corp’s 40 Under 40 for her work to empower entrepreneurs in West Africa, where she is currently running Ozé in Ghana. Congrats Meggles!
Yada is a Not Boring member for good reason: in addition to researching at the intersection of healthcare and machine learning, attending grad school at NYU and working at a startup, Yada recently started getting into filmmaking. Her first series, Generation Rising, launched yesterday to celebrate International Women’s History Month. In it, she highlights women and recent graduates already paving their way in tech, non-profits and education, and explores their goals and ambitions. The trailer is below, and the first episode is right here.
What I’m Reading
Educated by Tara Westover ★★★★★
Remember being in third grade and begging your parents not to make you go to school? Now, imagine the opposite. Imagine that you want to go to school, but your parents won’t let you. That’s how Tara Westover, the author of Educated, grew up.
Educated is Westover’s account of her childhood growing up in a survivalist family in rural Idaho, working in her dad’s junkyard by day and canning peaches for the end times by night. Her dad resisted sending any of his children to school, fearing that they would just be brainwashed by the government in the classroom. Despite that, she makes it to BYU without any formal education up to that point by acing the ACTs, and goes on to become a formidable academic.
One of the things about the book that struck me most was that the thing that allowed Westover to succeed academically despite her circumstances was that she arrived at college and grad school full of curiosity. She hadn’t learned to be bored by school, and had lived enough experiences to be able to connect what she was reading with things that had happened in her life. To her, education was a way to make sense of the crazy life she’d lived to that point, and because of that, she was able to do more with eight years of schooling than most do with twenty.
Read Educated for the gripping story of Westover’s wild childhood, and for a new appreciation for the power of education.
Not Boring is humming and we’re just getting started. Last week, we hosted five (5!) Dinner Parties, with more to come this week. Our Writing Club members are making their first submissions today, and our Book Club is reading The Hidden Girl and Other Stories. Next Wednesday, we’re hosting Debate Club #4, and we’re planning a group meditation and breakfast for next Friday. If you want to join the nerdy fun, apply here.
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