Introducing Not Boring Capital: Investing in Companies with Stories to Tell

Introducing Not Boring Capital: Investing in Companies with Stories to Tell

Not Boring Capital is an $8 million venture fund that focuses on investing in companies with compelling stories and helping them amplify those stories. With a primary focus on Seed through Series B companies, they occasionally make pre-seed and growth-stage investments. The unique aspect of Not Boring Capital is that its founder, Packy McCormick, believes that his writing skills make him a better investor, and his investing experiences make him a better writer.

Fintech is the Leading Vertical

Fintech is the leading vertical for Not Boring Capital, with six investments and a total investment of $525k. This emphasis on investing in financial technology aligns with the current market trends and offers significant potential for returns. However, it's important to note that while fintech investments have the potential to return a significant portion of the fund, there are also smaller exploratory investments and safer growth-stage investments to diversify the portfolio.

The Changing Landscape of Entertainment Value

The success of mobile video apps is not solely based on the viewing experience but also the social experience they offer. Quibi, despite its initial hype, failed to capture the market because it focused on production value without considering social value. TikTok, on the other hand, understood the importance of both production value and social value, making it a viral sensation.

The Entertainment Value Curve

The concept of the Entertainment Value Curve explains why certain platforms succeed while others struggle. It states that entertainment value is a result of production value and social value. The Y-axis represents the viewer's personal connection with the content (social value), while the X-axis represents the quality of the content relative to the highest quality in the genre (production value).

Different Platforms, Different Points on the Curve

Different platforms fall on different points of the Entertainment Value Curve. Snapchat, with its low production value but high social value, allows anyone to create fun content. Instagram's introduction of IG Stories lowered the production bar and increased the entertainment value of the platform. TikTok emphasized topical content and personal relevance, while YouTube offers a vast library of content but lacks the constraints seen in other platforms. Netflix, with its high production value, targets elite Hollywood content creators.

The Role of Social Value and Production Value

Social value, measured by the creation participation rate, plays a crucial role in the success of a platform. The more people creating content, the higher the likelihood of a connection between the creator and the viewer. Production value determines the quality of the content and its appeal to the audience. Finding the right balance between social value and production value is key to achieving product/market fit.

Lessons from Quibi and TikTok

Quibi's downfall was its focus on short-form content without considering the social aspect that makes content shareable. It failed to optimize for the Entertainment Value Curve. In contrast, TikTok understood the importance of snackable, shareable content and created a platform that encouraged both creation and consumption. By breaking down the wall between the audience and the creator, TikTok fostered a sense of community and engagement.

Actionable Advice

1. Embrace the social aspect: When creating a product or content, consider how it can be shared and foster a sense of community. Social value plays a significant role in the success of any platform.

2. Find the right balance: Strive to strike a balance between production value and social value. High production value alone may not guarantee success if social value is lacking.

3. Simplify the creation process: Make it easy for users to create engaging content. Lowering the barriers to entry encourages more people to participate and increases the likelihood of connection between creators and viewers.

Conclusion

Not Boring Capital's unique approach to investing in companies with compelling stories aligns with the changing landscape of entertainment value. Platforms like TikTok have shown the importance of both production value and social value in creating successful experiences. By understanding the Entertainment Value Curve and incorporating actionable advice, entrepreneurs and content creators can enhance their chances of success in the evolving entertainment industry.