Packy McCormick from Not Boring on Opendoor $IPOB

Episode Summary

Executive Summary: Andrew Walker interviews Packy McCormick about the strategy behind his "Not Boring" Substack, which blends long-form analysis of big tech with public investing in startups through a syndicate. The conversation centers on how Packy monetizes through ecosystem-building, why he remains bullish on tech compounding effects, and a deep dive into Opendoor and Zillow as competing iBuying models with huge market potential but meaningful execution risk.

Main Topics: The Not Boring model and audience ecosystem (Priority: 5/5): Packy explains that Not Boring is more than a newsletter: it combines writing, public memos, community participation, and syndicate investing to create a broader business ecosystem. Big-company strategy writing as a niche (Priority: 5/5): He discusses how he moved from avoiding strategy writing to analyzing major tech companies like Google, Tencent, SoftBank, Zoom, and OpenDoor by tracing their backstories and long-term compounding advantages. Public syndicate investing and startup storytelling (Priority: 5/5): Packy describes how writing about small companies can lead to public investment rounds, helping companies recruit customers and investors while giving the community access to deal flow. Tech optimism and compounding advantages (Priority: 4/5): Both speakers argue that large tech platforms may be undervalued because markets underprice future growth, network effects, and the durability of scale advantages. Opendoor’s iBuying thesis (Priority: 5/5): A detailed discussion of how Opendoor prices, buys, repairs, and resells homes, with emphasis on its proprietary data, local operating scale, and potential for add-on services. Zillow vs. Opendoor and the iBuying war (Priority: 4/5): They compare the two companies’ management, cost structure, funnels, and market strategies, debating whether Zillow can catch up or whether both can coexist by serving different parts of the funnel. SPACs, valuation, and public market access (Priority: 3/5): The conversation closes with a broader discussion of SPACs, irrational market pricing, and whether public investors should be able to access high-growth private-market opportunities more directly.

Key Arguments: Not Boring is intentionally more than a monetized newsletter; it is being built as a media-investing-community flywheel with writing, syndicates, and public memos reinforcing each other. Packy’s background in finance and operating at Breather gives him credibility to write about both large public companies and early-stage startups. Long-form analysis of big tech is valuable because it connects early company decisions to long-term outcomes and highlights compounding advantages that markets often miss. Tech companies can be rationally viewed as value investments because markets frequently underweight their future growth and defensibility. Opendoor’s advantage comes from data, operational scale, contractor relationships, and pricing precision built over many transactions. The iBuying market could support multiple winners, especially if Zillow serves as top-of-funnel education and Opendoor wins on execution and conversion. Pricing in iBuying is not about offering the lowest price; it is about identifying the highest price that still preserves target margin. Packy believes Opendoor may eventually monetize adjacent home-related services, treating home-sale margins as CAC to acquire a customer for title, mortgage, cleaning, and other services. Zillow’s brand and search dominance may help normalize iBuying for consumers, even if Opendoor captures more of the economics. SPACs are creating unusually direct access to private-growth companies, but they also raise questions about investor protection and market exuberance.

Data Points: Not Boring initial subscriber growth: 0 to about 800 subscribers - Packy describes the newsletter’s early organic growth before committing full-time. Breather funding raised: over $120 million - Packy cites his startup experience from the company he worked at for six years. Breather application process: 4 months - He says it took four months to get hired after applying. Not Boring syndicate investments mentioned: 3 investments - Composer, Ozay, and Swaype are named as completed deals. Swaype merchant signups: 60 to 100 merchants - Andrew says the post helped accelerate merchant recruitment, with Packy noting 100% of those companies were closed. Opendoor market footprint: 20 markets - Packy says Opendoor is not yet nationwide and operates in about 20 markets. Opendoor Phoenix share: 4% of the Phoenix market - Used to illustrate how concentrated and local their presence can be in a core market. Opendoor housing market volume: $1.6 trillion - Packy references annual U.S. housing transaction volume as the addressable market. Opendoor investor view: $4.8 billion deal value at $10 SPAC price - They discuss the original SPAC valuation and how the market later repriced it much higher. Opendoor market cap discussion: about $10 billion at $17 share price - Andrew estimates diluted market cap after warrants when discussing upside/downside. Zillow iBuying margin: -2% margin - Andrew references Zillow’s negative margin in iBuying. Opendoor iBuying margin: 1.9% after interest - Andrew cites Opendoor as being slightly positive on iBuying unit economics. Home price elasticity example: 2% liquidity premium, 0% to 6% costs, 0% to 6% premium - Packy explains how Opendoor may charge both service costs and liquidity premium when buying homes. SPAC trust value: $10 in trust - Andrew notes that many SPACs are effectively backed by about $10 per share in trust value.

Pivotal Quotes: "I think it's the most interesting of the sub stacks that we're doing." — Andrew Walker: Andrew opens by explaining why he wanted to interview Packy and why Not Boring stands out. "I'm such an optimist that, like, once I dig into a company's story, I'll see the bull case way more easily than I'll see the bear case." — Packy McCormick: Packy explains his investing style and why it works better in bull markets. "Pricing isn't about having the lowest price. Pricing is about knowing better than anyone else the highest price that you can pay and still make the margin that you want." — Packy McCormick: Packy defines Opendoor’s pricing edge and why data quality matters in iBuying.

Implications: The episode suggests that media, investing, and community can be fused into a durable business model, while iBuying may become a major real-estate category if execution and data advantages compound. It also underscores how public-market investors may increasingly chase private-market growth through SPAC-like structures.