The Generalist: Year Two
A look back at the highs, lows, and lessons of running a media company.
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If you only have a few minutes to spare, here's what investors, operators, and founders should know about The Generalist’s second year of operation.
Pushing on product. The Generalist made significant strides forward across its various products. Our writing has become sharper, the website is cleaner, and we have a well-produced audio format. We’re continuing to invest in raising our bar.
Slower growth, higher engagement. We didn’t grow as quickly as last year, but still managed to add a decent number of new readers. Encouragingly, as we grew, our engagement actually improved. This was a strength of The Generalist’s historically but is now a real differentiator.
A business model unlock. Last year, we made most of our revenue from subscriptions. While we continued investing in this business line, the introduction of sponsorships has been extremely impactful. It now makes up the majority of our revenue.
Running a company with your spouse. I brought aboard a game-changing COO this year. She happens to be my wife. Working together was not a decision we took lightly, but has proved to be a great one.
Looking ahead. The Generalist is in a better position than ever. We have the capacity to support a team and invest in our future growth. To that end, I’m extremely excited to share that we’re hiring a full-time writer to join us.
If you only take one thing away from this briefing, let it be this: we are hiring our first-ever writer at The Generalist. Come join us on our mission to build the most thoughtful tech publication in the world.
The other night, I watched an episode of Only Connect, the diabolically tricky British trivia show. One of the contestants professed they had thrown themselves a party when they turned 10,000 days old. Of course, it made me wonder how many days old I am (12,081) and, a few days later, how old this publication is: 846.
It feels like a tiny number. And yet, about a month ago, being a writer for The Generalist became the job I have served in the longest. (I was an intermittently good, often frustrated, always restless employee.)
As we reach the end of 2022, it is a good chance to look back on these last 846 days, particularly those that have made up this year. It has been a year of evolution and formalization, noticeable improvement and running-in-place, great disappointment and illumination. Though there have been hard times – perhaps more this year than last – I couldn’t be more excited about where The Generalist is as a publication and a business.
As long-time readers will know, The Generalist has a history of building in public. We shared our first “launch” deck on Twitter, posted quarterly reports in our early days, and recapped our first year of operation. Today’s piece is in keeping with that theme: a report and analysis of the past twelve months, both the good and bad.
Why share all of this? I hope that it gives readers a view into how we work and what it takes to run this business. Aspiring writers may also find its tactical elements useful. Moreover, concerted reflection is helpful for my improvement and the progress of The Generalist. More than ever, I believe are in the early days of building something meaningful and impactful. I hope to have many more days to give to this company and many more words to write.
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Product: Real improvement
When I look back at this year, I’m incredibly proud of the improvements we’ve made on the product side. For clarity, it’s worth outlining what is captured by this category. It includes:
Briefings. The actual pieces we write and publish.
Artwork. The cover illustrations and other images.
Podcast. The audio versions of our articles.
Website. The destination for our work and projects.
Community. The private home for Generalist supporters.
The Generalist has meaningfully improved on each of these dimensions.
Firstly, the briefings themselves. It’s always tricky to judge your own work, but when I look back at the pieces I wrote in 2021 or 2020, I see a substantial difference. This year’s briefings are sharper, better researched, and better written. More than two years of forced study have improved my analytical abilities, and the looming weekly deadline has encouraged cleaner and more expressive wordsmithing. I have more context and a better understanding of core technologies. As The Generalist has grown its audience and presence, I’ve also been better able to access experts or company leaders, adding richness and texture to the pieces.
The result is a 2022 series I feel extremely proud of. In particular, I think the following pieces are engagingly written and thoughtfully analyzed: Softbank: Twilight of an Empire, Flexport: How to Move the World, Union Square Ventures: The Thinkers, Vanta: Securing the Internet, TSMC: Semiconductors and Borders of Light, Endless Media, Kavak: The Drive to Conquer, Anduril: The Business of Defense, Coatue: An Agile Colossus, WorkOS: Enterprise’s Great Equalizer, The Casino and the Genie, The Business of Barcelona, and Y Combinator: The Institute of Innovation.
At a high level, I think they are noticeably better than earlier work and will likely possess long shelf lives. In a few years from now, readers of the USV or Flexport pieces, for example, will find them valuable. This enduring quality is an explicit goal of mine and is why I often devote plenty of ink to a company’s origins, evolution, and culture. Even as the business changes, these attributes often persist. (My assessment is entirely subjective, but I think some engagement figures we’ll discuss later partially validate the claim.)
I subscribe to the Alain de Botton quote, “Anyone who isn't embarrassed of who they were last year probably isn't learning enough.” Which means that I hope I feel similarly next year. Indeed, that’s why we’re so excited to be hiring our first-ever writer. I do not doubt whoever joins us will force me to step up my game.
Beyond the actual words, we have made efforts to improve the overall quality and accessibility of our pieces. One shortcut to describe The Generalist I’ve used is “The New Yorker for tech.” While “X for Y” analogies almost always are too facile, it does communicate the quality of writing we aspire to, the cultural power we want to earn, and the elevated sensibilities of the publication. This is a place for intelligent people with taste to learn about the future – every aspect of the work should reflect that, including each briefing’s artwork. Starting early this year, we began to work with illustrators to create beautiful covers for each briefing. Here are some of my favorites:
(Ok, I like a lot of them!)
Though this has undoubtedly increased our burn, it is worth it. It pushes us closer to the feel I want The Generalist to have and the quality bar I increasingly want to adhere to in everything we do.
Another place we invested in quality is via our podcast. Earlier this year, I started recording audio versions of each piece. After a few trial runs, we brought in an editor to level this up, improving the production and sound quality. Barring the past week, during which my voice has been muddled by a cold, we’ve gotten onto a good publishing schedule. Every Wednesday or Thursday, we release our audio edition. (If you haven’t added it to your feed, you can do so on Spotify or Apple Podcasts here!)
The audience is small compared to the email list but it’s been worth making. We’re off to a decent start, especially since we’ve only very lightly mentioned the podcast (many of you may be learning about it for the first time). We want to do much more audio content in the future, and this has given us a way to experiment and learn.
We have also made huge improvements to the website over the past year. While we had a decent landing page and mediocre article pages in 2021, I felt that the overall browsing and reading experience wasn’t what it should be. It was hard to navigate the library, and once you landed on a briefing, it could feel a little clunky.
We made functional and stylistic changes to address these problems, including introducing search, categories, and featured pieces. We updated our fonts, treatment of block quotes and lists, and introduced Dark Mode. The result is a product that feels pretty elegant. You can easily find previous pieces, explore by categories like “VC,” “Fintech,” or “Crypto,” and enjoy a smooth reading experience.
It’s better, but it’s not perfect. For one thing, search is limited to briefing titles. I’d like us to introduce a much richer function that pulls in body text, author, and other elements.
An additional update for the website is the domain itself. We officially nabbed generalist.com – a process that took over a year to conclude. It was another cost, but it will pay dividends over time, fortifying our brand and increasing legitimacy. For those interested, you can find my lessons on the process in the Twitter thread below:
Finally, The Generalist’s private community. Though we are short of incandescent product-market fit here, it continues to deliver value to members and has become a more robust offering over the last twelve months. That’s primarily been achieved by giving members more ways to connect and learn.
Our most popular program is the monthly introductions service. We started organizing opt-in introductions late last year, usually themed around a specific topic. We continued that this year, making it a more frequent occurrence. Every month, members can sign up to connect with someone else from the community to talk about investing, building, or some other aspect of their professional lives. We’ve had people make friends and valuable connections through this service, often justifying the cost of membership through a single meeting. The NPS for our most recent round of matching was 92, which is encouraging. (Though we’ve been running these throughout 2022, we only started measuring NPS the last couple of months, so the sample is still limited.)
We have also hosted frequent in-person and virtual events this year. New community lead Eli Kamerow has facilitated meet-ups worldwide in San Francisco, Singapore, London, Bangalore, Washington D.C., Seattle, Toronto, and New York. These have been incredible opportunities for community members to meet and get to know one another; I’ve enjoyed getting to hang with many of you in London and New York.
Along with more casual fintech and crypto jam sessions, we’ve welcomed some fantastic guests for virtual fireside chats, including Josh Wolfe (Lux), Katherine Boyle (a16z), Ho Nam (Altos), Sean Summers (Mercado Libre), Ann Miura-Ko (Floodgate), and Fabrice Grinda (FJ Labs). Each has been an opportunity to learn from an extremely thoughtful tech practitioner; I find myself mentally referring back to these conversations often. We have a fantastic roster coming together for 2023 that we’ll be announcing soon. If you’ve ever considered joining the private community, there’s never been a more compelling time.
The aspect of the community I’d most like to improve over the next year is the level of interaction between events. When we started the community, we opted to use Circle, an asynchronous platform. While the asynchronous format has advantages, it also introduces friction — it feels more effortful to create a new post and the lack of live chat makes even relatively large groups feel quiet. An additional issue is that Circle is not widely used, unlike Slack or Discord. We may change platforms at some point, but there is no perfect solution. Each option has its tradeoffs. I’m excited to keep iterating.
Ultimately, I feel terrific about The Generalist’s product right now. We made meaningful strides and are in a better position than ever to push forward.
Growth: A steady grind
Things have been less rosy on the growth front. Though I felt a slowdown in the summer of 2021, the year ended with an influx of new subscribers that softened my anxiety. Twenty-twenty-two brought it back and forced me to live with it long enough that I have ceased to be the subscriber-count-checking obsessive I used to be and learned to think on longer timeframes.
So, what are the numbers?
Exactly a year ago, The Generalist had 51,105 subscribers. Today, we have 64,193, representing a growth rate of roughly 26%. That’s certainly not bad, but it’s a much slower clip from the 159% uptick we saw the year prior. This was from a lower base, but 2022’s approximately 13,000 new subscribers lagged behind the previous period, even in absolute terms. For context, all of our growth has been organic – except some very, very small experiments in paid over the last month.
What can we attribute this slowdown to? I’ve thought about this a lot and believe there is a combination of sectoral and idiosyncratic factors at work:
Change in consumption patterns. The Generalist benefitted from the pandemic’s effect on media consumption. It helped power our growth in 2020 and early 2021. As the world Returned to Normal™, demand for newsletters has softened.
Change in the macro environment. Last year featured the hottest venture capital market in decades and an all-time crypto run-up. The internet was fascinated with topics we cover, and demand for novel breakdowns felt ravenous. As markets have crashed, interest has declined, especially in crypto.
Neglected growth opportunities. We left obvious growth boost opportunities on the table. For example, in previous years, The Generalist benefitted from launching legacy properties like The S-1 Club on Product Hunt. It is a no-brainer for us to launch The Generalist itself on the site. Why didn’t we? Bandwidth got even tighter this year, and we prioritized other projects.
Fewer collaborations. While I always enjoy working on collaborations, they tend to be more time-intensive and harder to orchestrate. However, they can open your work up to new audiences you might not reach otherwise. Again, for bandwidth reasons, I decided to write mostly solo this year. Our “What to Watch” series in crypto and AI were exceptions; the fact that they were consistently popular demonstrates the value of this approach.
Lower efficiency in converting from social. Two of our biggest subscriber spikes last year came from articles on Red Bull and Tiger Global going mini-viral on Twitter. Though several pieces were widely shared, including TSMC, Barcelona, and Generalist Capital, none seemed to convert as efficiently. Have we saturated our local Twitter audience? I’m not sure, but social media is now a slot machine that pays out much less regularly.
These factors are not intended to be excuses, nor are they exhaustive. They may explain why we didn’t grow as much as last year, but they don’t factor in the growth we could have had by pursuing new strategies.
For example, as mentioned earlier, The Generalist has only just begun to explore paid advertising. As a test, we’ve spent a few hundred dollars on different platforms. I think it’s reasonable to say that we were much too slow in beginning this process. If we want to grow to the scale I think we can, we will need to understand channels beyond organic.
A greater miss came from moving off of Substack. Writers on the platform have seen torrid subscriber growth via its recommendations feature, sometimes in the tens of thousands. How amazing would that have been for us? To be at 75,000 or 90,000 instead of 64,000? Even without The Generalist leveraging Substack, we received 1,000 subscribers thanks to recommendations from friends like Clues, Not Boring, Investing 101, Technically, Daily Consumer, Erik Torenberg, Exponential View, Newcomer, SatPost, Digital Native, Fintech Blueprint, and others. While there’s a question mark over the quality of recommended subscribers (will these readers stay? engage? convert?), it seems to be net-beneficial.
I’m thinking a lot about this at the moment. Substack is building some clever flywheels into its product that may produce compounding advantages for writers, and The Generalist needs to ensure it does not miss future waves. Balancing this desire for growth with our quest to create a beautiful, original reading experience is a subject for a different piece.
In retrospect, my performance as CEO as it relates to growth merits a C+. Just about satisfactory, but nothing special. (I did better on other aspects of the job.) We didn’t compensate for the growth opportunities we deprioritized (launches and collaborations), failed to find an alternative to social media, and missed the most significant wave of the year (recommendations). One of my goals for next year is to step up here, implementing a better, more robust approach to growth.
Now, for some good news. While we may have grown less than we wanted, we strongly overperformed when it came to reader engagement. The Generalist’s open rates have always been strong. Last year, we averaged 49.9%, which put us in an elite company. This year, we increased our open rates to 58% with five million emails sent. One consultant that works with newsletter businesses remarked that The Generalist had the highest open rate they’d ever seen.
Improving engagement has been especially impressive since the audience has grown, even if it has done so more modestly. We haven’t had to purge inactive members or run win-back campaigns. Readers genuinely like what we’re creating and look forward to reading. Though imperfect, I think this is a solid proxy for product quality – or at least product-audience fit.
Business model: An unlock
“Half-baked” was how I described The Generalist’s business model last year. Though revenue had exceeded my expectations, it didn’t feel like an optimized machine. Most of our income came from subscriptions, while it was becoming increasingly clear that sponsorships were a much larger opportunity than I’d anticipated.
In January 2022, we made a change. Rather than pay-gating articles, we decided to make all content free, supported by sponsorships. Paid membership granted access to the private community but not any special briefings. Existing members got to keep lifetime access to their preferential pricing or request a refund.
It was a nerve-wracking shift to make. We still needed to fully test sponsorships as a revenue channel; we worried about membership churn. With the benefit of hindsight, it was the right move. Not only was churn extremely low (thank you to everyone that has stayed, truly), the more focused membership offering enticed newcomers to join. As part of the shift, we more explicitly outlined the benefits of the community and invested in a clearer landing page. It resulted in a net win on the subscription side and unlocked considerable sponsorship revenue. Here’s a rough breakdown of how our revenue mix has changed as a result:
On the sponsorship side, we rolled out two offerings:
Weekly Spotlights. These are advertisements you see at the top of our Sunday emails and articles. For example, if you scroll to the top of this piece, you’ll find a message from today’s supporter Vauban from Carta. Over the past year, we’ve worked with companies like Masterworks, WorkOS, Composer, Rows, Sardine, Stytch, and others.
Deep Dives. These are longer pieces, usually 5,000 words or more. Like our Sunday briefings, these aspire to tell a company’s definitive story, explaining what makes it interesting.
Working with sponsors has also been a net benefit from a product perspective. It’s no accident that several partner Deep Dives number among my favorite pieces of the year. Getting to study companies from the inside offers a different vantage and more detail. We spend months pulling these Deep Dives together, interviewing founders, employees, customers, and investors, and combing through internal documentation and collateral. As part of this program, we’ve written about impressive organizations that are worth knowing. That includes Sardine, Vanta, Dune, Clair, Levels, Check, Elenas, TDK Ventures, WorkOS, Phantom, and Sturgeon Capital. We have some fantastic companies lined up for next year.
There are downsides to an advertising model. Long-time readers of The Generalist will know we did a three-part piece on FTX in 2021. While these pieces were not sponsored by FTX – I wrote them because the company seemed to be growing rapidly – a year later, they approached us about purchasing some Weekly Spotlights. We only ever work with companies we trust and believe in and have turned away several potential advertisers we were unsure about. But FTX’s recent fallout illustrates that our filter is insufficient and doesn’t protect against bad actors intent on committing a brutal fraud. Even if we have strong convictions in a founder and business, we are capable of being fooled.
At the moment, we’re still thinking through a better solution. Should we steer clear of crypto in its totality? What about other investment products? None of these hard and fast rules feel quite right. It seems confused to write deeply researched briefings on companies in crypto, investing, and consumer sectors, for example, but prohibit partnerships with (what we believe are) the best companies building in them. Additionally, one of The Generalist central goals is to make it easier and more fun to play around at the frontier of what is possible. I believe we benefit from thinking about where our world is headed and our place in its progression. Often, the best way for this exploration to occur is by trying a relevant product.
One option is to emphasize the risks of emergent technologies and sectors. Though all of our pieces end with a note explaining our work is not investment advice, it may be beneficial to highlight this more explicitly. By and large, The Generalist audience is very sophisticated, with a high percentage of professional investors and founders, meaning this might be a redundant reminder for many. Still, there may be value in keeping it top of mind.
A final weakness of a more sponsorship-heavy model is that The Generalist’s revenue is less reliable. We are vulnerable to changes in the advertising market, which has weakened over the past year. As tech cools, companies tend to spend less on growth, which has the potential to affect our earnings. We navigated 2022 without incident, but it seems likely that 2023 will be more demanding. To date, we have relied heavily on inbound interest; as we continue to scale, we’ll need to develop a strong outbound strategy, too.
Though not without its flaws, the shifts we have made over the past year have been positive, putting The Generalist in a much healthier financial state. We have the potential to support multiple salaries and invest in future growth.
Operations: From creator to company
I am happy to announce that The Generalist grew its headcount 100% year-over-year from one full-time employee to…two! In October of last year (after our last annual update), I brought aboard a COO: Alessandra Troute.
As many of you know, Ali is not only The Generalist’s COO but also my wife. More than a year into working together, I can comfortably say that convincing her to come aboard is the best decision I’ve made as this publication’s shepherd. Ali has improved every aspect of The Generalist, turning it from a chaotic one-creator shop into a structured, process-oriented business. Her management unlocked the product upgrades mentioned earlier and facilitated the shift to a sponsorship model. She’s also the one that has done the things I never did: making sure we have payroll, health care, a formal content calendar, and buttoned-up finances. The only reason I feel confident bringing aboard new team members is because of the structure Ali has put in place.
Working with your spouse is a topic that can provoke strong opinions. Some people see it as an absurd liability, a move that puts relationships and businesses at risk. Others argue it strengthens both. While I can’t pretend to know how other couple-co-founders operate, I thought I’d share a little about Ali and my journey for those considering teaming up with a significant other.
Ali started as The Generalist’s number-one fan and copy editor. She was always extremely supportive of me spending almost all of our Saturdays and Sundays writing this newsletter, even though it meant less time together. She was also the only person that read pieces before I published them, pointing out my typos, poorly worded sentences, and undercooked ideas.
I relied on Ali for more than just simple feedback, though; I turned to her for strategic advice. In part, that was because of her background. Before joining The Generalist, Ali worked in a series of production roles at charity: water. For those unfamiliar with the non-profit, it’s a remarkable organization. Among its impressive qualities, charity: water is exceptional at media and storytelling. Over the years, the NGO has produced a New York Times best-selling book, incredible, viral documentary shorts, clever web campaigns, and a rich VR experiences. Like no other non-profit I’ve come across, charity: water tells big, impactful stories in modern formats. As the Director of Production, Ali was intimately involved in these hits. She managed dozens of different stakeholders, ran efficient processes, and brought audacious creative visions to life.
The other reason I asked Ali for her advice is obvious: I trust her judgment. That’s not necessarily true of everyone I’m close to. There are friends and family members I love dearly but wouldn’t ask to weigh in on a business decision, even if they had the requisite context. Ali has always struck me as someone with outstanding judgment. That's particularly true in difficult circumstances. One of the things I’ve learned about her over the years is that she is pretty close to unflappable. In moments of crisis or stress, she thinks and acts clearly – much more so than I do.
Ali also thinks in an extremely process-driven way. Again, that’s a fair bit different from my modus operandi. Although I am reasonably organized and a structured thinker, I don’t break things down with Ali's level of granularity. I was recently reminded of this difference when the two of us were thinking about a potentially important business decision requiring substantial effort. My initial response to the challenge was along the lines of: “That’s not going to be too hard, I can’t imagine it’ll take more than a week. Let’s just get started and see!” At which point, Ali walked me through the dozens of steps required to pursue the path suggested, only a handful of which I’d considered.
It's always poetically tempting to emphasize the differences between partners, the yin and yang. In truth, there is some of that counterbalancing between Ali and me. If I try to analyze myself semi-objectively, I’d say that I spike on generativeness (high rate of new ideas per day), learning speed, instinctive decision-making (fast, two-way door decisions), and high-level thinking. Meanwhile, I would say that Ali spikes on focus, concerted deliberation (critical for important, one-way-door decisions), process construction, execution rate, and granular detail.
For all these reasons, I started to feel increasingly sure that I wanted Ali to join me as COO of The Generalist. It had become clear that I couldn’t scale the business without help and that the highest impact use of my time was on content creation. Though we’d joked about working together for a while, we started to seriously consider it in the summer of last year.
It wasn’t a decision we made lightly. We spent months discussing how it might work, where The Generalist needed help, and what we would do if it didn’t go to plan. What if it was a disaster? What if we didn’t work well together? What if it hurt our relationship?
We also talked about how a partnership might fit our goals. One of the reasons it felt like such a fit was because the areas Ali most wanted to develop in were also ones in which The Generalist badly needed support.
In the end, we needn’t have worried. Or at least not nearly as much as we did. From the very first day Ali and I started working together (October 10, 2021), it has felt pretty close to effortless. We communicate and collaborate easily. In previous jobs, it was easy for something to get lost in translation. Or for someone’s sour mood to create festering friction.
What’s remarkable about working with a partner is that there are so many communication shortcuts and such considerable understanding that you seem to comprehend one another at a much faster speed. Compared to many of my previous roles, it feels as if I graduated from 3G to broadband. Whenever we have a disagreement or some friction in the air, it’s easier to resolve it. As partners, you have years of experience in dispute resolution.
One fear I had going into Ali and I working together was that it would colonize our personal lives. That our real existence, our real relationship would shrink as the business devoured more and more of our attention and energy. In practice, it’s rarely, if ever, felt like that. While we work hard and spend some of our free time discussing The Generalist, it isn’t a burden. Instead, it feels fun to be in the midst of this challenge and tackling it together.
Initiatives: Foxes and Generalist Capital
One of The Generalist’s fundamental principles is to learn by doing. To understand how technology is changing our world, you need to experiment with it and collaborate with those building it. Both Philosophical Foxes and Generalist Capital are manifestations of that theory.
Technically, both are separate entities without a formal connection to The Generalist. In practice, they emerged from the work we do here.
Philosophical Foxes originated from my research into OpenSea and the NFT movement. I was interested in how these digital assets could be used as narrative objects, potentially spawning a wave of crowdsourced IP. In that respect, it felt like an extension of my Multiplayer Media thesis, executed on the blockchain.
To continue playing with these ideas, we launched a “genesis” collection of Philosophical Foxes in October 2021, followed by a larger collection in February 2022. Though many were excited about the project, it wasn’t universally popular. Some readers and Twitterers were upset that I was leaning into NFTs, which some considered pointless. Interestingly, of all of my work at The Generalist, NFTs have been the most polarizing subject we’ve written about.
Though Foxes has seen 679 ETH in volume traded, we expect to earn no financial benefit from the project. We have not taken salaries and are investing Foxes’ revenue in development. That is despite the fact that we have worked on the project regularly for more than a year. We have shipped drops, commissioned incredible artwork, initiated a bounty program that produced amazing new tools, managed a community, and started a collective lore-building program. I’m especially psyched about the last of these, spearheaded by Red, our Storyteller-in-Residence. These past couple of months have seen some fantastic mini-creative writing pieces emerge from the Foxes skulk.
Operationally, Foxes has been complex to navigate. Crypto is still an extremely immature and confusing ecosystem, making payments and tax preparation convoluted and expensive.
As many readers will know, the last year has been savage for NFTs. The hype of 2021 has worn off, cratering volume, floor prices, and interest. We are no exception. Managing Foxes has been a challenge at times, partly because of this volatility and norms in the NFT space. Anyone can collect a Fox, and they may have any number of reasons for doing so: patronage, speculation, access, or something else. Some may be trying to double their money in a couple of days, while others hope to engage over a longer period. That can make community management difficult, exacerbated by the fact that most Discord participants are pseudonymous, lowering the barrier for snark, spam, and fraud.
While freezing market conditions have been a headwind, there have been some benefits. Those that stuck around are not looking for a quick flip but are engaged in the process. I feel extremely grateful to the many holders that stayed, whether out of a will to keep building, a desire to support this initiative, or a wish to see the story through. I've met some incredible, thoughtful, generative people through the Foxes community. They have been essential to making it a warm, kindhearted, and open-minded project. People like Red, Hannibal, Laguna Lacuna, and Destined for Fame have been vital. I’m psyched to keep building out the world of Foxes, finish the roadmap, and conclude the current epic together.
The second major initiative of the year was Generalist Capital. In July, I announced that I had raised a fund to invest in a small number of epic companies. While the initial target was $10 million, after bringing on a few community members that applied to invest after the piece went live, we landed just a tick above $15 million.
I had high hopes going into this new phase. I knew I liked venture capital from my work in the field before starting this publication, and I felt I had cultivated a distinctive advantage thanks to our work at The Generalist. It is extremely early, but so far, I would say that Generalist Capital has exceeded my expectations. Not only has it been extraordinarily fun, but fulfilling. I’ve loved meeting founders slightly earlier in their journey and partnering with a small number of them.
To date, we’ve invested in six companies at a rate of roughly one every five weeks. In total, I hope to work with between 15-20 founders, keeping the portfolio small so that I can provide genuine attention and help. It’ll be up to the entrepreneurs I work with to say whether I’m doing a good job on that front, but I feel good about my contributions so far. In particular, I think I’ve been useful in making connections to potential customers, being a sounding board for strategic decisions, and helping with messaging and narrative. In some cases, I talk with Generalist Capital founders nearly every day.
From the initial announcement, I would say that I’ve made a few tweaks to the overall strategy. One is that I’ve decided to focus more heavily on Series A businesses. I’ll invest in companies on either side of that round, but I think this best fits Generalist Capital’s strategy. The other is that while I am still optimistic about opportunities in crypto and will back companies in the space, I’m not sure it will be as large a percentage of the portfolio. There are likely to be some meaningful headwinds in the near-to-medium term that could make life harder for companies in the sector.
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Hard things: Wrong in public
This has been both an easier and harder year from a mental perspective. Easier because I have not had to do it alone. Ali has improved everything we do and built structures around the business. Harder for…many reasons. Some stem from crypto’s painful, embarrassing reckoning, others from The Generalist’s increasing scale, and others from my limitations.
If I were to give an award for the worst part of this year, it would undoubtedly go to FTX and Sam Bankman-Fried. As I wrote in The Casino and the Genie, I considered FTX one of the highest quality tech companies and Bankman-Fried an exceptional founder. Though we spent a combined two to three hours together, I left our few interactions impressed by his intelligence and ostensible operational skill. Until the moment Bankman-Fried tweeted that Binance was buying his business (a deal Binance reasonably backed out of), I would have been certain that this was a legitimate enterprise run by a substantive entrepreneur.
Discovering that I was not only wrong but so wrong has been a painful experience. On an analytical level, I’m frustrated that I saw the potential for conflict between FTX and Alameda but ultimately considered it a diminishing risk. As Bill Gurley outlines in his recent post, Venture Capital Red Flag Checklist, this should have set off a louder alarm. Set-ups of this kind rarely end well, and the opportunity for fraud is simply too great. I allowed the other parts of the business that seemed to be working well to distract from this concern. I also allowed my interactions with Bankman-Fried, and the enthusiastic endorsements of others, to assure me this was a transitory conflict, a mostly innocuous remnant of FTX’s founding. Instead, Alameda was essential in enabling Bankman-Fried’s layer cake of fraud.
While I’m upset that I missed this issue from an analytical perspective, perhaps the more enduring aspect has been emotional. Sure, I didn’t spend much time with Bankman-Fried in the grand scheme of things, but I thought it was long enough to get the measure of him. To be honest, I always suspected that I would feel it if I came face to face with a con man, someone capable of committing sociopathic damage. Some dark shiver or bitter vibration would tell. Right?
The fact that I felt neither has left me with lingering unease. It’s also caused me to distrust my own judgment and question the motives of others. Such developments are unpleasant and maladaptive. Some skepticism is healthy, but I don’t like looking at life out of the side of my eye.
Though FTX is a special case, it cemented a feeling I had been having about crypto more broadly. This is discussed in detail in The Casino in the Genie, but at a high level, I believe I was too optimistic about the sector’s short-to-medium-term prospects. I underestimated the prevalence of fraud, scams, and Ponzi schemes; over-extrapolated the near-term success of fast-growing projects or technologies; believed too wholeheartedly in the sector’s ability to remake the financial world at a record pace. Though I think a lot of what we have written about crypto and prominent projects remains valuable, some of the fundamental assumptions I made now feel off. My interest in the sector remains strong, but it is tempered with a more pragmatic bent that I think will make me a better analyst and investor.
I did not limit my errors to crypto; I have a broad capacity for wrongness. There are plenty of other articles I might craft or freight differently with the benefit of hindsight and experience. For example, after writing an article applauding Tiger Global’s skill in adapting to market conditions, Chase Coleman’s shop embarked on the worst run in its history. I think you can see my immaturity as an analyst in these examples. Though I believe I am a strong writer and thinker, I have been in this game for a couple of years. My experience in tech on the operating and investing side coincided with a miraculous upswing that celebrated high valuations, growth above all, and rapid-fire dealmaking. This past year has shown the value of less-heralded aspects like corporate governance.
Perhaps every investor or commentator needs to live through a prolonged bear market. However, I think we should be intelligent enough to learn from history – I have read enough about the dot-com crash to have calibrated better. “Only a fool learns from his own mistakes,” Otto von Bismark said, “The wise man learns from the mistakes of others.”
All these things boil down to a fundamental point: it is painful to be wrong in public. Every week, I express some kind of opinion, often several. These usually center around a fast-evolving company operating in a volatile sector. If you were devising a recipe for wrongness, it might look like this.
It is also an unavoidable part of this job, meaning it will happen many times. I do not look forward to this, and yet, I also know that if I am not wrong on several occasions over the next year, it will mean I have probably written boringly, timidly, adding nothing to the conversation.
Being wrong has gotten harder lately. As The Generalist and my social media following have grown, the volume of unkind, demented, or spurious responses has increased.
To be clear, these are still very much a minority. I feel extremely fortunate to have a readership of which the vast majority is thoughtful and supportive. That does not mean all of you agree with me each week – but if you don’t, you communicate your disagreement decently. Often, these are my favorite interactions. I do not pretend to know everything and am grateful for the chance to learn from many of you.
But there is perhaps 0.01% (maybe less) of the subscriber base that intermittently chimes in with something that ruins my day. It is strange that someone can have this kind of power over my mental well-being. Something about my mind (perhaps many of our minds?) glosses over compliments and grabs onto criticisms. The result is that even after a few dozen lovely emails or tweets, a single foul emission sticks with me. Even when I know they are senseless, they stick.
It’s in moments like these that I start to feel very tired. I have been running at pretty close to maximum utilization for the past two years. I work seven days a week at an intense pace. Occasional vacations typically involve some amount of Generalist activity. I don’t mean this as a complaint – I love building this company – but as an explanation. When I’ve been grinding on a piece for days or weeks, and then some nasty comment comes my way, the tiredness hits me all at once.
Even excluding its aptitude for delivering insults, Twitter has begun to feel like an increasing mental strain. Though it is useful for The Generalist’s distribution, I don’t enjoy it. Indeed, usage seems to be negatively correlated with many qualities I’d like to cultivate over my life: focus, nuance, civility, equanimity, and depth.
After observing and engaging on the platform for the past few years, I believe it primarily rewards facile controversy, reposted content, and the lowest-common-denominator thinking. Very rarely do conversations of any depth break out; if they do, it is by accident. John F. Kennedy once said, “Show me a man with a great golf game, and I’ll show you a man who has been neglecting something.” The modern adaptation of that sentiment might be, “Show me a person with a large Twitter following, and I’ll show you a person who has been neglecting something.”
As someone with a (relatively) large Twitter following, I’d like to increasingly step away and discover what I have been neglecting.
Future: Ambition unconstrained
Time for a key change.
Yes, there have been unpleasant parts of this year. But taken together, this has been another amazing twelve months. We proved we could raise the bar on product, continue growing (albeit at a slower pace), optimize our business model, streamline operations, and keep experimenting with new initiatives. My conviction in The Generalist and drive to build something (much) bigger than myself have grown. I am ferociously motivated to keep improving my writing and analysis and level up my abilities as a fledgling CEO. When speaking about AWS, Jeff Bezos famously referred to the market size as “unconstrained.” While media does not benefit from the same tailwinds as cloud computing, I can say that my ambition for The Generalist is unconstrained.
So, what can you expect from us next year?
First, a new writer. It’s clear that if we want to augment and improve our content, we need another extremely talented person to join us. (If you think that might be you, read more about the role here.)
Adding firepower will also free me up to think more strategically about The Generalist’s future and take several new projects from zero to one. While it's premature to share details, I can say that we’re exploring ways to add valuable coverage beyond our Sunday briefings. That may take different formats but will fundamentally seek to try and deliver thoughtful insights on understanding, building, and assessing the technological frontier.
Beyond adding talent and content, we will also invest in our growth. One of my goals for this year is to develop a solid paid advertising practice. While I would like us to explore new unpaid channels (including finally launching on Product Hunt, for example), true scale will require a financial commitment. Great modern newsletter businesses like Axios, Morning Brew, and others have leveraged these channels effectively.
My final goal next year is to achieve a new level of freedom in my work. Though I will hang onto this year’s lessons – and hope to learn from the mistakes of others rather than my own – I do not want them to cow me. I would like to learn to better deal with being wrong in public and decrease the impact negative comments have on my mental health. I may achieve some of that by putting greater distance between myself and social media, but I suspect some of it will require a shift in mindset that I’m not yet sure how to achieve. I am motivated to figure it out.
It remains the greatest professional joy of my life to write this newsletter. The opportunity to learn, think, and write every day is a gift I do not take for granted. Thank you to all who read, support, enjoy, and share this publication. We have so much to do.
The Generalist’s work is provided for informational purposes only and should not be construed as legal, business, investment, or tax advice. You should always do your own research and consult advisors on these subjects. Our work may feature entities in which Generalist Capital, LLC or the author has invested.