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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...

Packy McCormick @packyM

Thinking of trying something different for Monday's Not Boring... AMA. Will try to answer 5-10 questions and link to the asker's twitter. Drop 'em here:

June 26th 2021

2 Retweets112 Likes

...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?

Kushaan Shah @kushaanshah

@packyM 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? (Not allowed to say anything Ben Simmons related lol)

June 26th 2021

1 Like

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: 

1. 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… 

2. 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. 

3. 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? 

Kent @KentitoRollins

@packyM Do you think we're going through a Gartner hype cycle for MS-paint style hand-drawn diagrams of extremely complex strategies? I feel like Ben Thompson was doing this years ago, but now I'm seeing them everywhere. Are we about to launch off of the peak of inflated expectations?!

June 26th 2021

6 Likes

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. 

BUT WAIT. Look at the date on Ben Thompson’s first Stratechery post, “Welcome to Stratechery.” MARCH 25, 2013. 

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…

To read more about the MS-Paint Hype Cycle, and for eight more answers, including how I research and how Not Boring might fail…

Continue Reading Online

Thanks to Dan and Puja for editing, and to all of you for the great questions!

How did you like this week’s Not Boring? Your feedback helps me make this great.

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Thanks for reading and see you after the Fourth!

Packy