Turning Content into Competitive Advantage with Packy McCormick | Founding the Fund 3

How do I not just like build a generic firm with a bunch of analysts or whatever, but like, how do I build out that narrative infrastructure such that we can enhance the one thing that we're good at and just, you know, have a big right arm essentially on that.

Welcome back to another episode of The Room Podcast.

Claudia, I'm curious, do you know who the first venture capitalist was?

No, I don't actually, Matt.

I know it's kind of one of those questions that I think a lot of people take the claim for.

I think people believe it was Arthur Rock who famously actually was an HBS alum, so shout out. But he was the first check, if you can even call it that, into Fairchild Semiconductor.

Wow, that is a throwback for sure.

I feel like he wasn't even sure he was starting a fund at the time.

He literally just said, these are 8 really smart people and I probably should put some capital against this. And what was it, the 1960s, maybe even the '50s?

And really that became what we call today venture capital.

I mean, it's so funny you say that because the company that he first backed. Sounds like a story we would tell. I mean, we've been telling so many incredible founding stories of raising capital, building a team, building a business, becoming a unicorn. But there's so many parallels to that when you start a fund, if you think about it.

Yeah, honestly, it's been an opportunity of a lifetime to tell over 140 founding stories of zero to IPO companies, but we haven't taken a keen look at the investment vehicles and ultimately the startups themselves. Themselves, which are the venture firms that have taken many of these companies through that journey.

I mean, the way that AI is changing the companies that are being built, it's fundamentally changing the strategies and theses of incredible funds. When I was back as the founder of Pryve, I always found it so interesting that the questions were always on us, but I had questions about how my VC that I've built a multi-year relationship with got started. It's like quite crazy bringing billions of dollars together to put their faith into the next generation of iconic founders.

I couldn't agree more. I take for granted that I understand what things like an LPAC is, right? A limited partner advisory committee and how these decisions get made. And oh my gosh, VCs have bosses too. So in this season, we're gonna sit down with respected venture capitalists to talk not only about the companies that they've backed, but the firms they've built.

Uh, so with that, I'm excited to open the door. Rippling is one of those tools I wish I had even earlier when I was building my startup, Pryve. If you're building a startup, Every minute matters, but it's surprisingly easy to lose hours to onboarding paperwork, fixing payroll issues, or setting up laptops for new employees. We've ran into this constantly, and it's not hard work, but it's constant and it adds up. That's where Rippling comes in. Rippling is a unified platform that lets startups run HR, payroll, IT, and finance in one system from day one. Rippling's startup stack replaces disconnected tools that don't sync, Now with a fully connected platform, it lets you get back to the real reason you started your company. Right now, venture-backed startups can get 6 months of Rippling's startup stack for free. Head to rippling.com/theroom and sign up today. That's R-I-P-P-L-I-N-G.com/T-H-E-R-O-O-M to sign up for 6 months free today. Focus on what you're building, leave the rest to Rippling. Ripling.com/theroom.

Perkins Coie supports the most innovative entrepreneurs and investors in fast-moving and high-growth sectors, addressing their myriad of legal needs. But the firm doesn't just provide end-to-end legal and business counseling to its startup clients. It also facilitates introductions to key advisors and sources of capital. Perkins Coie's interactive website, Startup Percolator, offers access to programs, resources and rich dynamic content designed to assist entrepreneurs on their startup journey. To learn more, go to startuppercolator.com and perkinscoie.com. As we continue with our Founding the Fund miniseries, we sat down with an emerging manager whose origin story as a fund founder sits at the heart of our thesis for the future of media distribution and alpha. Paki McCormick is the founder of Not Boring, the widely read Substack that tells the stories of the most ambitious and complex startups as early as possible to give readers a glimpse into the future that they're working to build. He is also the founder and general partner of Not Boring Capital, now investing out of its third fund. Today, his Not Boring platform reaches over 270,000 subscribers on Substack and over 220,000 followers on X. Pahí's path to venture mirrors what we at The Room Podcast like to call people as a platform. He grew up outside of Philadelphia in a household of consultants and entrepreneurs, studied at Duke, and started his career in finance at Bank of America before joining an early-stage startup, Breather, as its first US employee. There, he rose to VP of Experience and a stint in the office of the CEO. However, when COVID hit, working at a coworking space startup did hit the brakes. Therefore, he turned to writing as an experiment, and Not Boring was born. 6 years later, that same instinct for going deep on an industry's history, economics, and competitive dynamics has become the engine behind his fund. Not Boring Capital's thesis is built on backing vertically integrated businesses, quietly taking down sometimes considered stodgy incumbents with companies like Base Power to Astromechanica and Standard Nuclear. In this episode, Paki sat down with me on a trip live to New York to share about his unique approach of content as an edge in evaluating founders by watching how they reason through their industry's idea maze. He also shares how he's experimenting with co-writing essays alongside the founders themselves, and ultimately what he's looking for in companies that are built to compound as the underlying technologies such as AI keep getting better. Let's open the door.

Paki, thank you so much for joining us today in The Room.

Thanks for having me in The Room.

We're thrilled to have you here. Uh, we'd love to start at the beginning, and we do this with all of our guests. So tell me a little bit more about where you grew up and how that shaped your view of the world.

Yeah. So I grew up in Villanova, Pennsylvania, like 30 minutes outside Philadelphia. Diehard sports fan. I think it gives you experience dealing with losing and disappointment. So that was part of it. But I mean, like, you know, great upbringing. Both my parents were consultants of different, different types.

Yeah.

Talked about business around the dinner table, all of that. Both of my siblings are are entrepreneurs. And so something clearly stuck there. Loved my middle school, high school. Yeah, the whole thing. It's been a good life.

So we're also Birds fans. I, of course, for the Seahawks, from being from Seattle, you for the Eagles, presumably. Thank you so much. We're recording this right before the Super Bowl, so we'll see how it goes.

Yeah, good luck.

It's cool to hear that you have this entrepreneurial DNA in your family. Did you personally think you would always be a founder?

I actually Uh, so I, so I worked in finance, uh, then went to a startup. I was our first US employee, so it was as close as I got. Uh, quit at the end of 2019 and was gonna found something physical space-based. Then COVID hit. I think what I, what I realized is, I think like maybe the biggest learning of doing venture for 6 years has been how good the very best founders are and like how much better they are at it than I would be. Um, and so I thought that I would be a founder, but like not with the same kind of intensity that, that these people do. And so now I think my best and highest calling is like trying to help them bend their trajectories like a tiny bit.

Absolutely. I mean, that's definitely the best VCs can actually help bring those founders into their best version of themselves. Like, what are their superpowers? What are their skills? Uh, you did not start though on the content side of things. So you mentioned finance, how you got— after you got your undergrad degree at Duke, you went into Bank of America and then ultimately found yourself in startups. Yep. Just tell us a little bit more about those early career choices and how that shaped who you are. Yeah.

I mean, I think finance was kind of the default. Most of my friends particularly graduated in 2000. For sure.

Yeah.

Most of my friends wanted to go into finance. Most of my friends did go into finance. And I did that for a few years and I realized that I was like good at it, but that my friends were really good at it. Really, really good at it.

Yeah.

And loved it. And like on the weekends, the thing they wanted to do was like read The Economist and like think through, like, you know, it's all they thought about and it's not all that I thought about. On the side a little bit, I started a party bus company that took people from New York down to—

bye—

where I go to Jersey, New Jersey. And like, it just wasn't my passion. And so knew that that was not going to be the thing. Almost went to business school and then found this company Breather on AngelList and applied to work there. Was unemployed for 4 months because I quit my job to go to school, uh, and literally just interviewed at the one company. We did on-demand meeting and workspace, and it felt like the right place for someone who had like no real skills coming from finance other than like ability to work really hard and kind of figure stuff out. And so like that experience was in the beginning, just me here running around the city begging landlords to let these like weirdos from Canada put small little office spaces in their building and let strangers in all day. Did design and operations and clean spaces myself, like the full ownership of the market. Um, which was awesome. Like I love anything, uh, where I can just kind of like hustle my way into, into doing a good job. Um, and just like work my work hard my way into doing a good job. And that felt Uh, it felt like one of those opportunities. Company grew, raised a bunch of money, hired a team, ended up being CEO for a little bit after— in the office of the CEO after we fired our CEO. Um, and VP of experience, which oversaw all of our design, construction, operations, blah, blah, blah. Uh, across our 10 different markets, we raised like $120 million. I left, uh, and then COVID hit and then we sold for $3 million. So it also gave me a bit of that up and down. Luckily I hadn't, uh, bought my equity, so. Yeah. It ended up, you know, it was a great 6-year learning experience. I'm so close with a lot of people that I worked with and learned a ton, but started writing in that process. And so that kind of became a thing.

Absolutely.

Yeah.

Some things, when things don't go up into the right, you learn more than you would otherwise.

Totally. I think like most of my life and like very, like, you know, a lot of people have like real adversity stories, but I think a lot of mine are like doing something, get knocked down the first time, then the second time it goes really well. And that like happens over and over and over again.

My version of that was not getting an investment banking internship out of Dartmouth. That was also like the de facto thing to do. And I had a JPMorgan Super Day and I remember just being absolutely crushed when I didn't get the offer and it felt like I was like not able to do the thing I was supposed to do with my career.

Totally.

It's challenging. Yeah.

Yeah. I mean, my, you know, my investment banking was— I got hired into Bank of America, interned there. 2008, and then BofA and Merrill merged. And so we came back and they're like, by the way, you're doing public equities. Oh, sure.

Yeah.

Yeah. So, uh, or sorry, you're doing, you're doing not public, you're doing munis. Uh, don't even think equities in Dallas from the book, but, um, and doing munis. And I was like, well, my career is like completely done. But like, you know, nobody's ever going to hire somebody from munis. Turns out like it was a lot of the same stuff. Uh, yeah. And then, uh, My current job has nothing to do with it, so it doesn't, doesn't matter.

Well, let's talk about 2020, an interesting year. Yeah. For many people of the world, for sure. Um, also as someone who has entrepreneurial spirit but isn't exactly sure what that's gonna look like, you started writing, um, you started Not Boring in that year. Yep. Um, and you started it with the intention of meeting more people. Uh, tell us a little bit about how you got to the stage of ready to be like, I, I, I wanna keep doing this. This is what I wanna do full-time.

Yeah. Um, so in 2019, while I was still at Breather, um, we had hired a new exec team. It was like our strategy had gotten dumbed down. The whole thing was boring. And so I had started writing, uh, took a writing course, David Perel's Write of Passage, started writing on the side, um, just to kind of keep my brain going.

Yeah.

And then left there and was kind of writing to think through the idea and like put it out there a little bit about the thing that I wanted to start. And then during COVID um, at the very beginning, I got COVID and was sitting on the couch at one point. Like, this was an in-person, like, almost Soho House for nerds. I'm so glad it didn't work out because I'd be miserable if I actually ran it. But was sitting on the couch in our little apartment in Brooklyn, doing like, putting together slides for like a trivia night or something. And my wife came into the room and like looked at me like, what are you doing with your life? And I was like, that's a totally, yeah, that's totally a good thing.

Called you on your shit.

Called me on my shit.

I don't know about this.

Yeah. And so I killed that thing because we had tried to take it online. And it was not, you know, I mean, it was a hard time.

I was a member of the wing, like, RIP. And I was really excited. I had gotten accepted in 2019. I was early in my career. I thought that was like the place, right? So I get it. It was hot.

Yeah, it was. And it aligned with what I had done at Breather. And so it was like probably too easy. And so I'm glad I got kind of knocked off that path. But when that happened, I was like, you know what, for 3 months, I'm just going to write and see if it goes anywhere. And like mostly the idea would be maybe somebody reads something that I write and thinks it's smart and that gives me a job that is better than I would have been able to otherwise. And I think kind of during that process, I made no money for the first, I think like from March to September or so is when I got paid like the first $1,000 for an ad spot. But the newsletter was kind of growing and I was getting good feedback from friends who I thought would be snarkier about it. And like people were sharing it and talking about it. And I'd grown from like 400 subscribers to like 5,000, which is nothing but good growth, good growth. And, uh, feedback felt good and it was growing nicely and better than I thought. And I just was kind of like, at some point I'll be able to turn on ads here. If I like keep growing, I'll be able to turn on ads. And so I was like, I'll just keep doing this. Cause I really enjoy what, you know, it was a perfect time to be stuck inside in the basement on your computer when everyone else was stuck inside. Totally. And so it was like kind of a, uh, it just kind of happened. Like once I started writing that it was going well enough that that's amazing.

I resonate just with the, like, what else are you going to do with your time? But you know, it was COVID when I started my job in venture and everyone had told me the best way to meet people was in person. That's how I was going to source the next generation of founders. And then COVID happened 6 weeks into my role. I was like, oh shit, like, how do I meet people? And so yapping online ended up being like a viable way to like meet founders. The barrier to entry was a little bit lower. People were down to do the recording virtually. Totally. And I got, you know, we got a few big names like Sridhar Ramaswamy, who's now the CEO of Snowflake.

Yeah.

When he was at Neva, which was his company at the time, and they were just kind, you know, they were willing to chat with us. Yeah. But sometimes in life when you capture those moments, of like weird disruption and opportunity, it can compound.

100%. Yeah, I feel very lucky. Like, even if I wrote the same exact quality stuff that I write, if I started it now, I think it'd be just a million times tougher.

Well, I mean, not to ruin the punchline, but you're at over 258,000 subscribers today. So congratulations to that. And you've also launched Not Boring Capital, which we're going to get to. But I'm curious, going back to those early days, what was that first viral piece that you were like, we have something here?

There was, it was like, there wasn't one in particular. There was one that I wrote called Shumpeter's Gale. It was essentially about like creative destruction and the Mickey Mouse Club and how sad it would be if the Mickey Mouse Club were still together all this time later. And like, it's actually good to get fired sometimes and like go and do your own thing. It was like a very optimistic take about all the job losses during COVID And it was like that and a couple of pieces where like, I can picture the friends who I thought would have been like, why is Paki writing a newsletter? Being like, this was actually really good. And so those weren't viral, but they were good. And then there were others. I wrote a piece on APIs, like, you know, APIs.

No, toot your horn. We want to hear it.

Yeah. I mean, like, nothing, nothing horn tooting. I think a lot of the pieces that do well are me being like, here's the thing that everybody's kind of talking about, but nobody knows what it means. And so let me just like go be the idiot who does a bunch of research. And so did that on the APIs piece. And a few people, I remember Patrick O'Shaughnessy sharing it and like 100 people subscribed that day or something. I was like, whoa.

Yeah, it's amazing.

Um, and there were like a few others like that, wrote about Tencent and that did really well. Like just a few kind of pieces that there's like no one turning point. It's just like a bunch of little things kind of compounding over time.

Yeah.

That end up here.

Yeah, absolutely. I often say the best time to start a content platform is yesterday.

Yeah.

So in terms of the growth, then you started hitting this inflection point and it was probably time to bring on some people. So ultimately you brought on your brother, uh, and a few other investors around the table. Um, we're going to get to the Not Boring Capital part of it, but what came first, hiring people to the newsletter or starting the fund?

So like hiring is a strong word for any of these people. My brother, I guess, was the most full-time. He came on as like a chief of staff-y type role. He was at, uh, he was at, uh, he had been at Away and then he went to a company called Parade and he knew he wanted to start something. Um, but he wasn't sure what. And he'd been editing all of my pieces for free and they're long and he's like, great. I was like, get over here. Like, you know, we'll figure something out. And like, in the meantime, you can, you can help me out over here. Um, and then he now started a company called Create that's like doing unbelievably well.

Incredible.

Uh, and so he formally, like officially kind of rolled off of Not Boring. He was writing our, we do this weekly, uh, Dose of Optimism where we write like just kind of 5 interesting, uh, optimistic stories that happen every week. He'd been writing that. That's now back on my plate because his company is crushing it. And so he's doing that full time. Um, so I guess newsletter first, but he did a little bit on both sides. And then have had a couple of kind of part-time but exceptional people work with me on the fund side as well. A guy named Elliot Hirschberg who just had a kid. Congratulations, Elliot.

Shout out.

And now works at Amplify Bio where Sunil recruited him and introduced us. And then Rahul Arana, who I spoke to this morning, was a college student. My, like, conceit with the fund and with hiring people in general is they're like really excellent people who probably wouldn't work for me full-time, but while they're doing something else would. So Elliot was getting his PhD at Stanford. Rahul was a senior at Rutgers and had written a bunch of stuff that I liked. And so they came on part-time. I borrowed their genius for a little bit. Yeah. Now they're off doing kind of bigger and better things, which is amazing.

That's incredible. Sam Lessin is still the chief intern for Jessica Lessin's The Information, and he runs his own fund. So I love that model, right?

Yeah.

Have the people around you help out and of course leverage their amazing smarts. Exactly. Well, tell us a little bit more about the thesis for Not Boring Capital.

Yeah. So I guess the, the thesis on the firm itself is that there's this one thing that I've been able to do well, which is tell the stories of kind of complex businesses that otherwise might not be understood, or like go super, super deep on, on this type of company. And that's valuable to a bunch of companies that are not legible to the market. And so really it's, you know, write checks into these companies, help them tell their stories, make them more legible to talent, to downstream capital, to, to all those types of things. So that, uh, is kind of like why we exist. The thesis of the types of companies that we invest in are these kind of complex vertically integrated businesses that are trying to take down the incumbents in, you know, name the industry they're in. So a prime example would be like a base power company that, you know, over time, right now it's doing residential batteries, really interesting company, becomes, yeah, the, like the kind of modern utility, um, or Astromechanica, which is doing supersonic planes. I think there is a path in 15 years, whatever it takes, for them to kind of like be the new, you know, the new way that we fly around the country. Like clearly the current system is breaking and crumbling in a way that like, it's not obvious that any one intervention fixes it. You kind of actually need to just like change the way that air travel works. And I think speed is a really interesting vector to play with there. And so like, that's the type of companies that we're backing.

Incredible. You're in Fund 3 now, I believe $30 million in it. And started at Fund 1, a little bit smaller. So grew into the fund size that you are at today. Who was the first person to say yes to investing in you.

Yeah. Thrive Capital actually gave me the idea. I'd been doing some SPVs and Gaurav, who was at Thrive and now runs Timeless Partners, reached out and was like, hey, yeah, yeah, if you want to start a fund, like, we would, we would write a check. And so they kind of kicked it off.

Okay. That's so exciting. Yeah. I feel like that first person really sticks with you.

Totally. We talked last week. Yeah.

Has that conviction. Yeah. So you've invested in some incredible companies. You just mentioned one. Others include Replit, Ramp. Uh, let's see, what else do I have here? Composer and many more. What are some of these subtle signals that you've like learned to discern between what this founder at the earliest stages is really interesting?

If I could figure out how to say this concisely, I think, uh, we have all— this is true. I think like more and more like the biggest thing that, uh, has improved in my investing is just the ability to like figure out who might be like one of the top 0.1% versus just like really, really smart. Like I think in the beginning, the first time I started investing at a Fund 1, everybody I met, I was like, this person's a genius, this person's a genius. And like some of them, a lot of them are very smart.

Yes.

And then there's like something else about these other folks. And so I think it depends on the company that you're running and the situation that you're in, like different attributes will be valuable. But I don't know, like I really love talking through about somebody's industry and their strategy and like why, you know, some investors are product-led. I like really love thinking about how they, uh, have decided to construct their business and why and how they think about the competitors in their industry and like all of the nitty-gritty. If they can walk you through that idea maze and like walk you through the history of their industry, walk you through like the economics of their competitors and what their strategy is. Like, I just think that says a lot about how comprehensive they've been. And then there's like the normal stuff, like they have to go fast, they have to be super smart, they have to be spiky in some dimension or another.

Yeah.

But I think that that is like just watching them reason through things I think is a valuable signal.

Well, you're comfortable and confident going deep, right? That's like the premise of your writing. And so able to tease that out on a founder who in these days there's this dynamic where you vibe coded a really cool product that's really interesting. But have you thought deeply about all of these dynamics at play?

Totally. And I haven't done very much AI investing. At all. And, you know, I think people are probably kicking my ass returns-wise because they've gotten marked up. But I do think there's a lot of just like speed and not necessarily strategy. And like a lot of, uh, you know, AI founders I've spoken to, certainly not true of, of all of them. Whereas if you talk to somebody who's building in the physical world, like the mistakes are so expensive that if you haven't thought through it and if you haven't put together the very best team that you possibly can to go after that particular thing, like the stakes are more costly. So I think people are more thoughtful. Up front. Yeah. There's certainly exceptions to that. Like you can certainly still iterate your way to, to a good solution. Um, I read about this company recently that we invested in called Somos Internet down in Colombia doing fully vertically integrated internet, like laying their own fiber, making their own, you know, like hardware.

That's hardware. Yeah.

Yeah. It's hardware. Um, and he talks about this idea of just like you do something kind of shitty and then you just like get out in the field, build a little credibility, raise some money, get better people, build a better thing and just kind of keep going. And now there's a very real claim that they have the best internet network in the world down in Medellín, Colombia. So it's not like a Colombia bet, it's a— this thing that they're doing down in Colombia might be the best version of this in the world. And they got there through iterating. Others, I think, you know, we mentioned Base. I think like they were super thoughtful about their strategy from, from day one. And so that's a different conversation where it's like, I spent a lot of time studying energy and I think all the generation stuff happening in nuclear and solar and all that is like super fascinating. We made an investment in a company called Standard Nuclear on the nuclear fuel side.

Wow.

Which is, which is doing incredibly well. I think the generation stuff is really exciting, but it all falls apart at the grid. So you need to fix the grid. And if you want to fix the grid, you need batteries. And if you want batteries, actually residential is the right place to go. And if you want residential, then Texas is the best place to start for residential batteries. And like, they went there first and owned it and now can expand from there.

Yeah.

And so like, just seeing the way that people think through that and, you know, they gave me access to a bunch of their early kind of like internal strategy memos and just like Seeing them iterate on that idea before they actually, you know, started making batteries is just like such an incredibly cool thing to get to do. I like love to nerd out about that, but I think a cool glimpse into the way that people think.

Yeah, you're really digging deep on these different thesis areas. And again, that's a part of your DNA. And when you started Not Boring as a newsletter, you know, you ultimately became a platform that is something other people can reach and find and get to know. We like to call this the people as a platform thesis, which has really popped up in emerging managers' go-to-market with LPs. I'm curious to hear a little bit more about how you thought about telling that story on the LP side of things.

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It's something that I'm still working through. There's some LPs who read Not Boring. Sure. And they just get it.

I would expect so.

Yeah. Plenty of LPs who read Not Boring, they're like, oh yeah, totally, totally get what you're saying.

Makes sense.

Others you talk to, more institutional in particular, and they're like, you're a guy with a newsletter. Like, didn't everybody, you know, didn't every person with a media platform of some sort in 2021 start a fund? You started a fund in 2021. And so telling that story is like, I think, probably a function of time and the types of companies you get to work with and returns. And like, you have to show like over time, it's not just, there's an audience, it's like, I provide this very specific, uh, value to the companies that that we work with, and it's enabled me to get into all of these great companies, and here's how they're performing and blah, blah, blah. And so I think it makes sense. I think what a lot of LPs want to see, maybe less out of the larger platform firms and more out of like the people as a platform, is something super spiky and durable and something that compounds. And they want to understand why you have a right to win deals. And for me, I think, you know, the answer, the answer is, is clearly I'm probably not beating Founders Fund 16z out to lead a Series B. But I should be able to get into a lot of things because I can provide this like one very specific piece of value. And so a lot of the way that I think about building out from here is how do I not just like build a generic firm with a bunch of analysts or whatever, but like, how do I really build out that editorial narrative?

Yeah.

Editorial narrative. Uh, I guess, sorry. How do I build out that narrative infrastructure such that like we can enhance the one thing that we're good at and just get like, you know, have a big right arm essentially on, on that.

Absolutely. There's been such an interesting shift in terms of market dynamics, particularly between LPs and VCs since COVID both because of the lower DPI than one would have hoped. And then these kind of extreme hype cycles related to both crypto, AI, and then of course the interest rates that were at zero during COVID I'm just curious to hear your perspective on how you view the overall landscape and where fund managers fit into that strategy. Really amidst what is just like a changing, shifting time for an asset class that is only 60, 70 years old.

Yeah. I mean, I think that's like, there's so many fun things about this job. One of which is that like that landscape continues to change. Right now we're at a moment in time where, you know, I just wrote about Andreessen for their $50 million fundraise, but that's like a huge chunk of the fundraising market and like the firms raising over a billion dollars or something like half of all of the dollars raised, the number of new firms raising are shrinking. And I think it's probably, probably better to have, you know, more smaller firms and those larger firms. I think, you know, I will not be the first or the last person to say like, you don't want to be in the middle and trying to like compete with those guys to do deals, but you can find stuff earlier or, you know, do a non-lead check in, in a certain category of deal or whatever. I will say there's, there are also, I think like companies and funds, there's a lot of undifferentiated stuff out there. And like, I understand why, you know, people aren't jumping to fund kind of an undifferentiated manager whose thing is like, I'm going to also find the next great AI company at pre-seed. Like, you have to have like a real— Totally credible edge to be able to do that.

I love the word edge. Also, it's just kind of interesting from a pop culture perspective, right? People like want to be a founder. They want to be a VC.

Totally.

There's a halo effect. Now, perhaps a little bit as a side effect of social media.

Yeah.

And there's a, like, learning curve of, like, well, it's actually really hard to pick great companies. If it was easy, everyone would do it. Totally. And you're clearly picking great companies, and that does take building trust with founders. And Not Boring is a platform for you to be able to do that. Do you have any great stories of subscribers and newsletter followers who have turned into real deals?

I— all of them.

All of them. One you want to highlight?

That's a good question. I mean, we were talking about Somos and I read about them. So Somos is this guy, Forrest Heath, down in Columbia, kid from North Carolina, moved down there.

Shout out Duke.

Shout out, yeah, shout out Duke. But he actually didn't go to college and didn't actually graduate high school. He graduated one credit short of high school. North Carolina has this crazy middle college program where you can get college and high school credits at the same time. He realized like, very end with one credit left in biology that he didn't need it. And so he just dropped out, tried to build a high-speed rail in North Carolina when he was like 16.

Probably useful.

Insanely like amazing. Like one of my absolute favorite founders had actually heard of me because Julia DeWaal, who runs Antares, is a co-founder there. And I did a podcast on nuclear energy together that he listened to and he read the newsletter. And so when he was raising, he reached out and a friend of ours, Christian Kyle, who just joined a16z, introduced us and we got coffee and it was just like we spoke the same language. He had read my stuff, so he knew what I was talking about. We were able to talk nuclear, which is, I knew more about than telco, and so I could judge his brain there. But that kind of story, I feel like happens most of the time. Somebody that I invest in has either read the newsletter or is introduced by somebody who has. There wouldn't be— I get a question from LPs a bunch, which is like, Well, which job do you do? Do you like write a newsletter? Are you an investor? And I would have no right to be an investor without the newsletter.

It's funny, I like to say Bill Gurley was the original newsletter writer. Have you heard his story about his faxes?

Yes.

Yeah. He used to write these faxes and he would just send them out to the Valley at the end of the week and just people could read what his thoughts were in his head. I think, I think it was called like In the Clouds or something.

He was an equity analyst, right?

Yeah.

Yeah.

It might have been that season. I can't even remember. But I think that's so fascinating that one of the most like revered geared software investors, was early on this grind of distribution.

Totally.

And Substack has been the medium of choice for you for finding this distribution to founders. And I'm curious to understand how you selected Substack because they were not a clear winner in 2020.

Yeah.

And what you've learned about that platform.

Substack is amazing. I chose it accidentally because this writing class that I took, Rite of Passage, one of our assignments was just to set up a Substack and get 20 subscribers.

Sure.

And then I just kind of stayed on. I've been until very recently, I launched a paid thing recently, but I'd been free. So I paid Substack $0 for 5 years to let me grow on top of their platform. And it's just been incredible. Like, it just takes the— I guess in the beginning the value prop was that it just made it really easy to do this thing and I didn't have to worry about setting up a website or CMS or any of that. And then over time it's been just an incredible source of of new subscribers and people finding it. I think their Substack Notes app is great. And so they've just done a really good job, I think, building on this core thing. Now they have video and other stuff, which I haven't done as much of. But I think their idea is just long-form storytelling and writing and communicating in any way needs to happen, is important. And that's just really working in a way that I would not have predicted it would be working.

Completely. I'm kicking myself for having our blog be on Medium in 2020. Rest in peace.

Rest in peace.

Don't worry, we have a Substack now.

But it's taking a while to grow. And I think in general, you know, with these platforms, there is such a moat at the end of the day for you. And for people who are thinking about starting their content platforms in today's world, what would be your tips for Substack?

I don't— I'm like really bad at these growth tips thing.

Like, I think it's so hard.

I think if you go, if you spend like, you know, a little bit of time and they've gotten the algorithm better, so it's not all this anymore. But if you spend a little time on the Substack Notes app, you'll see plenty of tips on how to like grow your newsletter and blah, blah, blah. And I think all of that stuff is like a total waste of time.

Okay.

Uh, when you should be focusing on the quality of your content. Yeah. Uh, and so to me, that's like the number one thing I think, like, in particular, I think the best advice I got from this writing course was this like idea of a personal monopoly where there's like, you might not be the best in the world at analyzing tech companies. Like that's Ben Thompson. But if you combine that with a sense of humor and I combined it with like Philly sports and whatever, you overlap enough circles and like the middle point, like should only be you. And I think for a lot of people there's like, uh, a desire to start out and be like, I'm just a generalist here. Right. And I'm gonna write about whatever. And I think it makes a lot of sense to niche down into like the thing that you can be the very best at and the people are gonna come to you with and put like a ridiculous amount of effort into the quality of your content.

Yeah, absolutely. People often ask like, what, how, you know, how do you think about content? How do you think about this? And Claudia and I talk a lot about like picking a content platform that suits your style.

Totally.

I am not short form. I do not think in short form. This is a 45-minute episode. I need the 45 minutes. Like, that is how my brain works. I was a history major. Same to you. It sounds like long form is the medium in which you enjoy, and that's allowed you to win.

Totally. Yeah. And this is, I think, one of the reasons I don't like a lot of this advice is in the beginning everyone's like, you got to do like 1,000 words. You got to put the thesis statement up top. You got to like, people don't have time. They don't want to read. My most popular piece by far last year was a 40,000-word piece on the electric stack with of like deep history and some like physics and engineering. I had to learn all of it myself to write it, but like I think had 20% more views than like anything else that I—

That's incredible. Well, I mean, this word is really floating around these days, high taste, taste in general, which I believe is a derivative of slop being something people are getting a little bit tired about. And honestly, like AI tools have helped and changed the way Claudia and I run our podcast. And as a writer, there is such a proliferation of content now. I'm curious, what are some good ways that you've enjoyed— or I guess I don't have a judgment on them, but ways that you've enjoyed using AI tools to integrate yourself and think about how you're writing?

Yeah, I think the biggest one is on the research side. So there's like a couple of different areas. One, I'll just have a bunch of conversations on a particular topic and then put it in a project, and then it's just an easier way to query the conversation that I had. And so that's like a very basic thing.

But no, no.

Um, for that piece that I was talking about on the electric stack, the amount of research that I was able to do with like Claude research and, and ChatGPT deep research, I would, you know, like read a story somewhere and there'd be a detail that I wasn't sure about. Like there was a magnetics conference in 1983, uh, where two different people from different sides of the world both announced neodymium magnets at the same time, unbeknownst to each other, like this crazy story. And so I like, Got that little snippet and then I was like, go search the internet and like tell me everything you can about this conference and this day and totally who spoke first. And so it would find sources in like Japanese and translate them, right? Because one of the, one of the researchers was Japanese.

It translated it.

And I mean, it's just like delivers it to you as if it were not. And then you click on the link and it's in Japanese, but it doesn't care what language it's in. And so that was way more well-sourced. I also used it to like kind of help me think through all the different kinds of cost curves for these things over time. Cause some like batteries, are easy and published and others like power electronics, like there's no one way to make that curve. And so they would help with that. The writing, I mean, Claude is a little bit better, but ChatGPT I find like god awful. So like for the writing, I don't use it, but for the research, it's like a better Google. Yeah.

Yeah. That's incredible. You're focused really on these physical space startups and a lot of them are able to leverage the innovation that's happening to build their companies themselves, even if they themselves are are not AI startups. Are there any companies that you're seeing inside of your companies that are really moving the needle and making a difference in terms of AI infrastructure?

That's a good question. Um, I want companies that like can benefit from AI in terms of like efficiency, of course, the ability to do the non-core stuff or whatever. But that, uh, and this is actually, this is not just an AI point. This is like a broader point. Where like, I really like companies that are systems comprised of like a few different kind of cutting-edge technologies or features where if any one of the inputs gets better, you're not wiped out. It's not like you're— so Base is the example that I use here all the time where they do battery pack assembly. And so they're not doing the cells themselves, like the piece where they're like, people are competing on new chemistry where China has the advantage. Now you're like a researcher figuring something out and scaling it away from being obsoleted.

Yeah.

They can take whatever the best cell at the given moment is, plug it into their pack, and the pack is the right point of integration for them because they need to design it in such a way that it's easy for their people to assemble quickly so they can do a lot of installs. I kind of think about AI the same way where you'd never want to be in a spot where the next generation model gets better or does something. I don't know if you saw all the legal stocks down yesterday when Claude introduced the— Right. The Claude legal assistant. But if you're a company that can like benefit every time the model gets smarter, like that is wonderful. And so that's what I look for generally in companies.

Yeah, that makes a ton of sense. Yeah. I work at Vercel now, so I have to talk about AI infrastructure and I loved your point. So I'll be circling back on that.

Yeah. I, I was spinning something up for myself and, and previewing it in Vercel yesterday.

Thank you so much.

Yeah, of course. We appreciate your business. Thank you.

Well, let's take a look forward. I mean, not boring is not slowing down anytime soon. Soon. So tell us more about what you're excited about for the company, the firm, the newsletter in 2026.

So I launched this paid thing, uh, in the beginning of the year, and the whole idea was, uh, one, Substack has this leaderboard, and if you're not paid, you can't be on it. Uh, and so—

good fun fact. Yeah.

And so I like really wanted to just be like, get on the leaderboard.

I want to be on the leaderboard.

Yeah. My competitive juices got flowing. So they got me to do it. Uh, and what's been fun about that is it's— I introduced a new format where I'm co-writing essays with founders. So instead of just me writing about the company, they'll say like, I did one with Evan Beard at Standard Bots about robotics and he has a particular take around what it's going to take to have generally useful robots. It's not going to be a big like model breakthrough, but you just have to get a bunch of robots in the fields getting good robotics data and then they learn, you get paid to learn, blah, blah, blah. These are all like insights that people either have learned by like being, you know, in the field and doing this stuff or that they're betting their career on. So like they're all biased naturally, but I think most stuff is either visibly or not biased. And so we wear the bias proudly. He has a biased bet that this is the right way to build a robotics company. And it's insights that I would never get myself. And I can pretend to be like, oh, here's what I think about robotics. Or I can just co-write the essay with Evan. I'm co-writing a few on different types of foundation models with people now that they're just geniuses that are willing to spend time with me to write these pieces and help explain kind of what their companies do. I think like they bring these great ideas. They don't spend all their time writing like I do. So I can bring that and I have distribution. And so it's like this really interesting kind of mashup of skills.

Totally.

And it's been like just unbelievably fun doing that. So on the media side, I think that's the big thing for this year. On the fun side, I think it's just continuing. Like I feel like finally after 5+ years of doing this, I'm confident in the types of companies that I like to the point that like If somebody great is leading a deal, like awesome. Done. Nobody's interested in the deal, totally fine. Um, and, uh, I just have like a particular kind of type of company that I, that I really like and can understand well. Um, and so it's just going bigger on that this year, I think.

Oh my gosh.

Yeah.

Well, that's incredibly exciting. I'm looking forward to watching and reading some of those pieces. Yeah. What's next for you on the personal front?

Two kids.

Let's go.

Uh, five and three. Uh, we're taking them to South Africa next week. It's the longest plane ride.

God, we squeezed this in.

I know. Uh, my sister lives there. Uh, runs a fintech, uh, over in Africa. And so we're going to visit her. Um, but I don't know, just like helping these little kids grow up. It's, it's like, it's the most fun thing in the world.

Is there any way our community can help you achieve some of these goals more on the professional side for this year?

Oh, if you want to come on the plane ride to South Africa and watch, yeah, you know, watch our kids.

It's such a tempting offer if you're treating to the wineries, maybe.

Yeah. I mean, the biggest thing for me is, uh, you know, I'm, I'm looking for the most interesting stories of these, like, kind of complex, vertically integrated, like, really going after trying to take down whatever the big, uh, stodgy incumbent in the category is. So if you find those, send them my way.

We're looking too.

Yeah.

Uh, okay. Let's close with our hero question. Uh, we'd love to know who is a woman in your life that has had a profound impact on you and your career?

Oh man.

We do ask it's not your mom.

What?

People always say mom. So we have to caveat that.

No, I mean, I think it's like, obviously my mom, um, and, you know, has ran her own, uh, ran her own business while we were growing up and was getting her PhD while working and raising us. And so that for sure. But since I'm not allowed to say my mom, I'm going to do the next easiest answer, which is my wife, which like, you know, I went to Duke, I worked in finance, I had this good job at a startup. And then as soon as we got pregnant, I was like, by the way, like, I'm going to be writing a newsletter and not making any money for a very long time. And she was like could not have been more supportive, uh, about that in this like weird time in the history of the world where, uh, you know, we're all stuck inside and nobody knows what the future looks like. And she's like, yeah, go for it. I think you'll do, you'll do great. Um, and continued to kind of give me both, uh, the space to do that. But then, you know, I would, I was like probably a terrible person to live with for a while because I just get obsessed and I would write 7 days a week and did that for like a very long time. And so I think all of that while raising our two amazing kids, while working herself and running her own supply chain consulting firm. So like, couldn't ask for, you know, a better partner here.

She sounds incredible.

She is.

Well, Paki, thank you so much for joining us today and sharing all of your insights here on The Room.

It has been a pleasure. Thank you.

Thank you so much for joining us at The Room Podcast. If you want more from The Room every week, subscribe to our newsletter at theroompodcast.com/newsletter. Www.ourworldindata.com/newsletter. We'll be back next week with a new episode and inspirational guest. Tuesday, 10:00 AM Eastern, 7:00 AM Pacific. See you in the room.

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