Jul 24, 2024 · 1h 8m · sourcery
John Coogan, EIR at Founders Fund, Founder of Soylent & Lucy · Sourcery with Molly O'Shea
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of 'Sourcery', host Molly O'Shea interviews John Coogan, Executive in Residence at Founders Fund and co-founder of Soylent and Lucy, about the science and regulation of nicotine, CPG startup execution, and modern tech media trends.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Molly holds 12.2% of the talking time here. How this is scored →
Molly as informed peer 3.8 Guest teaching 4.9 Guest disagreement 1.9 Molly pushing back 1.4
speaking balance: gold is Molly, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 37:50 Dismissing the tech-bro nicotine nootropic hype
John aggressively rejects the tech-elite framing of nicotine as a genius-level cognitive enhancer, flatly calling the claims ridiculous and scientifically baseless.
Hardest push from Molly ▶ 40:03 Challenging the COVID vs. smoking comparisonMolly directly challenges John's equivalency between peak annual smoking fatalities and COVID deaths, pointing out the distinction between chronic cumulative exposure and an acute viral outbreak.
Biggest teaching moment ▶ 34:00 Unpacking the Master Settlement Agreement shadow economyJohn explains how state governments securitized tobacco settlement cash flows into municipal bond derivatives, leaving the host stunned by the perverse financial architecture surrounding tobacco control.
Molly holds their own ▶ 1:04:40 Identifying Tamagotchi PMF for AI hardwareMolly demonstrates sharp consumer product intuition by extending John's Rabbit R1 thesis, pinpointing the nostalgic Tamagotchi parallel and explaining why kids ignore AI latency.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Molly as informed peer | Guest teaching | Guest disagreement | Molly pushing back | Why |
|---|---|---|---|---|---|---|
| Becoming an EIR at Founders Fund | 3 | 3 | 1 | 1 | Molly opens with a cordial question asking about the definition of an EIR role at Founders Fund. John casually explains the firm dynamic and his background speaking at Hereticon and making tech breakdown videos. | |
| YouTube as a Serendipity Engine | 3 | 5 | 1 | 1 | Molly prompts John to share the founding journey of Soylent. John provides an extensive narrative detailing their early YC days, viral growth stunts, over-raising mistakes, and the eventual realization of DTC supplement market saturation. | |
| Founding Lucy and Regulatory Moats in CPG | 4 | 5 | 1 | 1 | Molly asks how Lucy navigated the multi-year FDA regulatory lag. John outlines how entering prior to the 2016 cutoff permitted ongoing sales while developing pouches to compete against Zyn. | |
| Public Perception, Youth Initiation, and the Juul Story | 4 | 6 | 2 | 1 | Molly asks about misconceptions in the nicotine space. John details the rise and fall of Juul, youth marketing blunders, the EVALI crisis misattribution, and the statutory background of the 2009 Tobacco Control Act. | |
| FDA Policy, Public Health Incentives, and the Master Settlement Agreement | 2 | 8 | 2 | 1 | Molly asks if tobacco regulations are stymied by lobbying. John explains the Master Settlement Agreement, municipal tobacco settlement bonds, and the public health incentive structure, leaving Molly amazed by his deep domain mastery. | |
| Debunking Nicotine Myths and Harm Reduction | 5 | 6 | 4 | 4 | Molly brings up nicotine found in potatoes and asks to separate myths. John dismisses the potato factoid and tech-bro 'limitless pill' claims, while Molly offers light pushback questioning his comparison of acute COVID deaths to chronic lifetime smoking mortality. | |
| Managing Business Complexity in CPG | 4 | 5 | 1 | 1 | Molly asks how to construct and scale multi-product CPG businesses. John provides a clear operational framework on managing dimensional complexity across SKUs, geographies, and channels using Vita Coco as a case study. | |
| B2B Storytelling and Competing with Big Tobacco | 3 | 4 | 2 | 1 | Molly touches on consumer storytelling mechanics. John contrasts tech journalism hype with grassroots influencer advocacy, noting that Big Tobacco incumbents suffer from severe talent degradation. | |
| Trade Marketing vs. Online Startup Hype | 4 | 4 | 1 | 1 | Molly and John discuss trade marketing and convenience store distribution economics. John emphasizes prioritizing cash flow and simple P&L metrics over vanity startup KPIs. | |
| Reflecting on Soylent's Cultural Legacy | 4 | 4 | 3 | 1 | Molly asks for John's tech hot takes. John critiques the social media outrage cycle around the Apple iPad commercial, arguing tech founders should log off and pay attention to real-world policy shifts instead. | |
| Algorithms, Outrage, and Content Fatigue | 6 | 4 | 3 | 2 | John shares hot takes on the Rabbit R1 as a toy for kids and criticizes VCs for demeaning profitable ChatGPT wrappers. Molly builds on this, highlighting the Tamagotchi comparison and product-market fit. |
Statements from this episode (25)
Founders Fund operates autonomously with few people running their own companies
“It's a really, really tight knit firm. It was like 30, 40 people and everyone's kind of off doing whatever they want. A lot of people run companies.”
Coogan: YouTube videos brought inbound outreach from Congress and hires
“Like I've had like Congress people reach out, like all sorts of different people that we've hired to work with us. Lucy You know, startups and obviously lots of founders and stuff”
Coogan: Coinbase gave users a full Bitcoin for signing up during YC
“Actually Coinbase was in our batch. At YC and was giving anyone who signed up a full Bitcoin, which is insane. It was like five dollars back then. So it was like their signup reward.”
Soylent hit $60M revenue before bad hires ruined the company
“Grew to, like, sixty million dollars in, like, a few years in revenue and then just, like, over-raised and, you know, brought in bad team, and it was just, like, a disaster, and then everyone just laughed, and then the company sold for, like, not a great outco…”
Coogan: Nicotine Replacement Therapy Category Generates Under $1B in Revenue
“And it wasn't really like a growing category, like the overall NRT spaces is called nicotine replacement therapy. That whole space, Is, you know, under a billion dollars revenue.”
Coogan: Nicotine pouches became Lucy's primary growth driver against ZYN
“We like almost immediately started working on on pouches and products that could kind of directly compete against Zen. And so that's been like the major, major driver of growth.”
Coogan: FDA nicotine regulatory pathway takes five years and millions
“Creating new products that would go through the regulatory pathway and we wouldn't start selling them to from for five years or something. But we haven't really moved the needle on that. Cause it's a big investment. It's like millions and millions of dollars. …”
Altria bought 30 percent of Juul for $13B at a $60B valuation
“At their peak, I think they were valued in like 60 ish billion dollars and Altria bought 30% of the company for like thirteen billion dollars. And so the majority of that went to pay a dividend to the investors and employees.”
Coogan: Lucy intentionally avoids TikTok and aggressively age-gates products
“So from day one, we were just like, okay, how can we like age gate more aggressively, like advertise to even older people?... So like we've never advertised on Tik Tok, any of that stuff.”
EVALI lung injuries were caused by illicit cannabis vapes, not Juul
“There was this thing called EVALI, the e-cigarette and vapor acute lung injury, like fiasco. It was identified by the CDC. And I mean, people died, like there were multiple people that, that, that actually died. And everyone thought it was because of Juul. It …”
Coogan: FDA Authorized Swedish Match to Label Snus as Less Harmful
“And so since then the FDA has actually approved one of those moist snuff products, which was actual tobacco leaves that has carcinogens in it and nitrosamines in it. They approved it as what's called a modified risk tobacco product, which allows The company th…”
US states securitized Big Tobacco settlement payments into tradable bonds
“Like states have actually, like every state got a payment because they have the local hospital systems. And so these states were able to take these revenue streams and then create derivatives against them and like sell those as bonds and then like pull all tha…”
Nicotine itself does not cause lung cancer despite common public perception
“The biggest, you know, cognitive dissonance publicly still remains just the idea that like nicotine is what gives you lung cancer, which is just not true. And the government's, you know, acknowledged this, everyone's acknowledged this, but it just, Hasn't, it …”
Daily nicotine use builds tolerance rather than offering cognitive superpowers
“Nicotine builds up like a really, really quick tolerance. And so if you're using it every day, it's very much like, don't talk to me until I've had my coffee. Like you're really not getting some incredible benefit from just like having a, you know, a nicotine …”
Coogan: Smoking caused more US deaths than COVID during peak pandemic
“More people died of cigarettes and smoking related, you know, diseases during COVID than from COVID. Like, I think the peak COVID deaths were 430 430,000 that year and smoking killed 460 that year.”
Coogan: Regulators should double taxes and age limits on cigarettes
“We should have a tilted playing field and everything that you do for like to that continuum risk, like everything that you, every reg, every new regulation that you put on the industry, you should just double it and put that on cigarettes. Like cigarettes shou…”
Coogan: All direct market competitors above Lucy are owned by Big Tobacco
“Literally all of our, all of the competitors that are directly above us are owned by big tobacco.”
Coogan: Big Tobacco quality has degraded as top talent chooses tech
“They are not well run. They are not hiring the best people, really, really sharp people. They go to work at SpaceX and Meta. They are not going to big tobacco anymore. And so the quality of the companies has really, really degraded.”
Niche retail magazines drive more CPG sales than TechCrunch features
“So yeah, now, now we just focus on, on like effectively like storytelling to like retailers. So more than like a TechCrunch article, like we were, I saw we were on the cover of some like retail distribution magazine that no one outside the industry has ever se…”
Coogan: Category-specific VC funds launch too late after power law winners emerge
“Trey Stevens partner at Founders Fund and co-founder Vanderell just posted this good essay in Pirate Wires about how, like by the time that there's a market trend that you can like build a VC fund around, like it might be too late because the power law company…”
Coogan: Online backlash over Apple's iPad ad will not affect sales
“Like the stock didn't move, you know, it's like, it's not, it is, isn't like a real thing. Like, I don't think it'll affect sales.”
Coogan: Algorithmic content optimization poisons creators over time
“Content the algorithms, it just like, it kind of poisons you after a while. Like it's very, very disheartening.”
Coogan: The Rabbit R1 is well suited for kids
“I have a hot take about that rabbit R one. I really think that would be good for kids.”