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Launch HN: Substack (YC W18): Paid email newsletters made simple
124 points by cjbest on Feb 7, 2018 | hide | past | favorite | 88 comments
Hi HN, we’re Chris Best and Hamish McKenzie, the founders of Substack (https://www.substack.com). We’ve built a tool that makes it simple for a writer to start a paid email newsletter. Sign up, connect to Stripe, and go. Our first publisher, Bill Bishop, writes a newsletter about China (https://nb.sinocism.com) and got to six figures of annual revenue on his first day on Substack. Bill had been publishing Sinocism as a free newsletter for five years and had 30k subscribers. Now he can make a living from it.

Hamish is a journalist who has done everything from writing about indie music in Hong Kong to being lead writer for Tesla. We bonded over our shared love of reading when he worked at Kik, where Chris was the technical co-founder. Last summer, Chris was taking time off and asked Hamish to read an essay he was trying to write about the incentive structures of social media for writers, and how growing outrage and polarization was making it hard to have reasonable conversations. At the same time, we both loved Ben Thompson’s newsletter, Stratechery, which was doing really well off paid subscriptions. We wondered: what if it were easier for writers to start something like that? That felt more like a company than an essay, and so one thing led to another...

An example of a Substack newsletter you might enjoy is Versioning (https://versioning.substack.com), a daily reading list for web developers and designers. We also recommend Mallory Ortberg’s The Shatner Chatner (https://www.shatnerchatner.com) and Helena Fitzgerald’s Griefbacon (https://griefbacon.substack.com).

The product is still in a pretty early phase but we’ve just launched our self-serve beta, where anyone can create a newsletter, free or paid: https://www.substack.com/beta-signup. At this stage, it’s completely free until you start charging, in which case we take a fee: 10% for people who start during the beta.

We know a lot of folks on HN care about this stuff too, so we’re keen to hear your feedback. Also: if you know any writers you’d be happy to pay to read (or if that’s you), we’d love to hear about that too.

Very cool idea Chris & Hamish A friend of mine runs "what happened last week?" (http://whathappenedlastweek.com/). She's got a journalism and economics background, and has a subscriber list of about 2,800 people, but has been struggling to find a way to monetize it. Would something like that be a good fit for your platform?

Oh awesome! I see

> Stay well-informed about the world each week with clear and concise summaries of important news ...

That sounds like an exactly perfect fit for Substack. We've seen that if you have a committed newsletter following (look at open rates and reader comments) that loves it, up to 10% of your list might pay pretty quickly if you just asked them. Depending how they think they could price it could be worth over $1000 month to start. Of course, this depends on the audience etc.

If they want to do it, it's a simple as signing up, connecting Stripe, and importing the existing list. They can send out a 'free' post saying that the newsletter is going paid, and it will go to that list, and come baked with calls to action to subscribe and stuff.

We've done a couple of these now and would be happy to help. Feel free to point them to 'chris' or 'hamish' at substack.com

>That sounds like an exactly perfect fit for Substack. We've seen that if you have a committed newsletter following (look at open rates and reader comments)

It would be good if you could put a list of supported features on the signup page. As of now I do not see it. Will let signuppers know what they will get.

I am going to sign up and try it anyway.

Thanks, that’s good feedback. And glad you’re signing up!

We’ll continue to make it better as quickly as we can.

> If they want to do it, it's a simple as signing up, connecting Stripe, and importing the existing list.

Quick question: when "importing the existing list", what type of confirmation/verification -- if any -- do you require from the recipients?

Let's say, for example, I have an "existing list" and I want to move to your platform for my free newsletter.

Okay great; I'll point her your way. Her name's Sham :)

Great, thank you.

This highlights one of my favorite things about the newsletter format: sometimes it can be worth more to you to get less content. If the goal is to stay informed, a writer that can do it in a shorter, less frequent email adds more value to your life :)

This is a cool idea, I tried to sign up but her signup button 404s

You should come on Indie Hackers and do an interview in a few months. I'm constantly telling friends to start newsletters. Would love to see how this works out and learn the details behind the scenes wrt to marketing and growth.

Oh we would love that!

> in which case we take a fee: 10% for people who start during the beta.

Why take a cut from the publisher? Why not instead open up access to the publishers via a marketplace on your site so people/companies can sponsor the mailing lists? You can take a cut from the sponsor for having given the opportunity to introduce them to publisher(s) that cater to their market. It's a win-win-win for the potential sponsors(advertisers), the publishers as well as Substack. As a sponsor, I would have immediate market access through these publishers who cater to my niche. As a publisher, I would have outsourced the task of attracting sponsors and managing sponsor timelines to Substack so I can focus more on creating content and expanding my mailing list. As Substack, you wouldn't have to annoy your publishers by taking a cut and instead carry over your fee to be paid by sponsors/advertisers. A bonus would be allowing your publishers to carry over their existing sponsors to use your system which would possibly attract a huge populace of publishers who are currently manually micro-managing their existing sponsors and timelines instead of focusing on creating content.

Hey, this is Hamish from Substack. Thanks for this! We think this is a great idea and it's certainly something we're considering for the future. But in the meantime, the point of a 10% cut is that it specifically does not annoy publishers. In fact, it aligns our incentives with theirs – we only make money when they make money. When we established Substack, we wanted to get away from an ad model in which publishers had reason to favor ad-centric content strategies over reader-centric ones. We're attempting to create an environment where writers no longer have to worry about doing things that please advertisers. They should be focused only on doing things that please their readers. To us, that's a better way forward for the media. Taking a 10% cut is a substantial ask, but it is one that writers have so far been receptive to.

Ah sorry! Yes you are right! Now that I re-read your text, I realized I misunderstood your business model. Maybe my suggestion sits well with those who are running free newsletters on Substack (who will have some form of regular income through sponsors). I notice that you are taking a fee from those who are running paid newsletters. That makes complete sense.

Thanks, much appreciated. Yes, free newsletters don't have any charges. No subscriber limits, either.

Do you have a "Powered by Substack" somewhere in your free/paid newsletters?

Our product is also exposed to our customers' customers, so this has been a huge growth driver for us. Similar story for Statuspage, Intercom, etc.

Just as a link in the footer. Substack is also in the domain name, though. Thanks for the advice!

So every newsletter is sent through the same domain? Aren't you afraid of one newsletter affecting the reputación of another one?

Thanks, love this. We think Ben Thompson is right about a lot of stuff, and he is definitely a big inspiration.

How easy is it to export your subscribers if you do choose to leave? I have a few hundred people on my list and have learned (the hard way)to not migrate without knowing this

The actual hard part when switching from something like this is migrating user accounts (users will be forced to reset their passwords, which is lame), order history, and active subscriptions so that you can seamlessly continue billing your paying users.

And at 10%, you're definitely going to want to migrate at some point if you succeed, so keep this in mind.

One click. The way we see it, you have a direct trusted relationship with your subscribers.

We let you import them so it’s only fair :)

Consider connecting Substack to other payment providers too, if not now, after you get to some sales and profitability, since Stripe is only available in some countries as of now. This is a common and perennial issue with many startups, whether US-based or other. I'm aware that it can be a lot of work, due to different and complex government regulations and legal paperwork needed for different countries, but it can lead to growth of the startup too.

Second this. While I love Stripe's API, Braintree/Paypal driven checkouts have higher conversions just because of Paypal.

Thanks, that makes sense. Definitely once we get to a certain size.

Would have liked to see a "gallery" of writing that I can subscribe to. Sort of like how ecommerce platforms have a list of stores that were built on this platform.

On a side note, I like how you have written the body of this post. Not to mention a very useful product.

Thank you very much. Yes, good suggestion. We are thinking about how to do something like this. Any ideas?

I think subdomain user accounts are going to be an issue over the long term.

Also, you guys should make a better blacklist for account names. I was able to claim "blog.substack.com". (It's ok to delete that account).


Ahh thanks. I hope you don’t mind if we boot that one.

How do you foresee sub domains being a problem otherwise?

SEO will see each account as a separate domain, so your primary site ranking will be low. Further, there's too many ways for user subdomains to be mistaken or conflict with company products and promotions. It's usually best to reserve subdomains for company needs — you never know what you'll need 5-10 years from now.

It's also a potential cross-domain attack vector if you let your users insert arbitrary code. See, for example, why github pages was switched from `.com` to `.io`: https://github.com/blog/1452-new-github-pages-domain-github-...

All really good points. Thanks for the feedback.

I also ended up with "mail.substack.com" (along with mail@substack.com) while testing. I couldn't see an admin site, but I did get a confirmation email.

Please delete the account (and my apologies for the hassle).


If one can grab "admin", "webmaster", or one of several others, she can also get SSL certificates for the domain.

It looks like basic https://substack.com link doesn't work without the "www" prefix.

Yes. This is our dns provider not bending the rules to work nicely with Heroku, which doesn’t play well with apex domains (but is handling our SSL.)

Would love a tip if anyone knows an easy way to fix this properly.

You really should just switch to a DNS provider that does ALIAS-style apex domains like Route 53. GoDaddy as DNS provider will be a mistake you will almost certainly eventually regret, given enough time.

Oh wow, GoDaddy for authoritative DNS?

Yeah, seriously, spend $1/month and use Route 53 or somebody -- anybody -- else.

Looks great! I just signed up and connected my stripe account. After reading the welcome email I tried disconnecting my stripe account from the dashboard so I could start out with a free newsletter. I couldn't figure out how to do it so I ended up revoking access in my stripe dashboard. Now it just says Stripe account: <loading..> on my substack dashboard.

I'd like to start writing but I want to be sure that I can connect my stripe account again in the future. Any ideas?

Ahh that’s a really good point. You may be the first to disconnect Stripe. I will make sure this works.

Email me your account details if you’d like. Chris at Substack dot com

I really like the simplicity of this. I think it doesn't really need more "killer" features. What's the vision in the long run aside from growth?

Thanks! We’ve had (paying, highly engaged) users report that they like there is nothing to think about.

One thing in future that’s really exciting to us is the idea of building community, and using the paid barrier as a way to solve a whole bunch of the problems that normally come with that. Some writers have slacks, and people who follow a niche writer often delight to meet each other.

Need to find a way to keep it just as simple though.

congratulations on the launch.

I love the fact the product is so minimal at the moment, that it opens doors for real user feedback; I've been wanting to make something similar for a long time now, but was always stuck in the feature loop.

would be great, if others could comment on the MVP or Launch Early nature of Substack.

Yes, thank you, we love this feedback. We are trying to keep the product as simple as possible.

i'm not seeing any mention of trials for users.

let's assume i'm using this and churning out valuable content every week / day / whatever.

Someone hears about my thing and thinks "that sounds nifty. Not sure it's worth $x a month though"

I'd want some way for folks to be able to "try before you buy" let them get some specified number of newsletters before the system says "hey, you've been reading this newsletter for Y weeks now but we're at the end of your trial. <compelling message from author> To keep receiving this letter please <initiate payment process>."

Thanks, that’s a good idea.

The way we try to handle that now is by having an option for writers to write free posts - which are visible to anybody, and get emailed to non-paying subscribers. That way you can get a sense of the writing before committing (and regular readers are the ones who subscribe anyway...)

You’re right that that doesn’t let you “preview” the paid content though. We’ll think about that.

yeah, free posts is ok, but with many newsletter topics they can quickly become dated and irrelevant and authors are unlikely to go back and regularly update them if they're also regularly writing a newsletter.

overall i really like the idea and i agree with one of the other commenters who says you don't really need many more features.

Always a good idea to mention why the name of the product.

We are a Stack for Subscription publishing.

Got it now, thanks.

This is a great idea.

Hey Cris, I really like your product/idea. I was thought about it year ago when I found https://www.getrevue.co. Which is a plataform for create a newsletter from curating content from Web. So, if you implement it on Substack, I'm sure it will be huge plus for the product, since multiple influencers could generate more income with their "weekly bookmarks" or something like that.

Revue is awesome! Thanks for making it.

Looks interesting, but 10% is really steep to me.

That’s just going to heavily incentivize your most successful users to bail. I run a five figure paid email service and I’m using a membership management service that charges flat fee plus 2%, and it annoys me every month. I’ll be replacing them this year. Membership billing plus a synced email list on Mailchimp is really commodity at this point. Doesn’t make any sense to pay a percentage of revenue.

If it was 10%, I’d replace them this week.

I may get pushback because there’s a contingent of people on here who basically seem to think that ever worrying about price for software and services is the wrong move. I think that’s pretty stupid when you’re a small company. It’s stupidly easy for a lot of small companies who are paying hundreds or thousands per month in recurring subscriptions to shave 20-30% off. If you’re a solo founder, that’s a huge increase in your personal bottom line.

EDIT: I'm probably coming across as too negative here, so let me add a few thoughts:

1. You built something useful, launched it, and have paying customers. That's HUGE and puts you ahead of 99% of "startups" so congrats :)

2. I strongly believe in the power of paid publishing and email marketing (it drives almost 100% of my income these days), and I think more cool tools and platforms in this space is excellent. This is the kind of thing that I would use.

My only real issue is just that I think what you're doing with the pricing model is shooting yourself in the foot (since it incentivizes people to switch away) AND it's unfair to users (since switching away is REALLY hard, and you probably know that and are counting on it to some extent).

Maybe charge flat + fee up to a cap? It'd be really comforting to know that I'd never pay more than $495 / month for this or something, and that would only be once I hit $10k / month in revenue or whatever.

You're also (I presume) an engineer. Most writers don't have the skills to build something like this.

One way to look at it is "I'm losing 10%". Another way is "I'm now making 90% I couldn't have otherwise made."

You don't have to build this. There are tons of membership management plugins and platforms out there, pretty much all integrate with Stripe, and most of them will keep a mailchimp list in sync so you can easily send emails to just your paying members.

EDIT: I also hate the logic of "meh, fees don't matter, my revenue would be zero otherwise!!" It's not true (you have other cheaper alternatives), but even if it was, doesn't that mean you should be fine paying 99% in fees to platforms and credit cards and whoever else? After all, 1% is better than 0%!!!"

There's actually a pretty interesting behavioral economics point to be made here. From a purely rational standpoint, you would choose to make 1% over 0%, because it's 1% more than you otherwise would have made. In practice, humans have a "fuck you" threshold above which they feel taken advantage of and refuse to cooperate. Check out the idealized economics experiment version of this which is called the Ultimatum Game: https://en.wikipedia.org/wiki/Ultimatum_game

I do find this super interesting as a pure behavioral economics question, but this situation is a bit more complicated. There's actual work to be done for this revenue, other costs you have to manage, opportunity costs for any capital you have invested, and the risk that you'll actually make enough at the end of the day for it to be worth it :)

You can also download an install an IRC server or Jabber server to run corporate chat, yet tech companies happily use the paid version of Slack. Not managing the thing you aren’t good at or interested in doing is the value prop.

You’re absolutely right. But how many of those services charge 10% of revenue? Zero.

And if 10% of revenue uncapped isn’t too much “because not interested”, why not 20% or 50%?

You’re obviously welcome to pay 10%, I just think it’s foolish once revenue hits a certain point.

Edit: think of it this way: you already have $20k per month of paid newsletter revenue and you need a new membership billing provider. Other options are $20 - 100 per month and won’t go up any more. Would you even consider one with the same or fewer features that’s $2000 per month (and will take 10% of every marginal dollar from there)? I really doubt it. I love sleek, simple, elegant tools, but I won’t pay any price for them.

> But how many of those services charge 10% of revenue? Zero.

I am not discounting the points you've made. I understand that there are definitely cases where 10% might be too high. Hell, it might even be applicable here.

Respectively, I disagree with your quoted comment. Are you sure its zero? Uber Rush delivery drivers make 75-80%. Where do you think the rest of the delivery fee goes? This was just from my first Google. I am sure you can find more examples of this being not the case.

Going back to the topic at hand. For a dev like me, I think 10% is high but agree with the points made. There are 100s of posts online of people writing shit for free. I am sure you can even find a dozen of subreddits alone for writing. From their POV this can be seen as a secondary source of income.

Most people who are GOOD writers - at a point where anyone would buy their 'product - have been writing for many years. They could even be doing this as a profession (think book writers). For them, do also see 10% being a high fee?


> I just think it’s foolish once revenue hits a certain point.

including your edit are home run!

Uber Rush delivery, the App Store, and other similar platforms are different because they're providing the platform, and more importantly, they're often bringing you the customer. It's much more reasonable to pay a fee that's a percentage of revenue in that case. I was responding to the person who suggested that Slack charging for chat was analogous to what Substack is doing.

> There are tons of membership management plugins and platforms out there, pretty much all integrate with Stripe, and most of them will keep a mailchimp list in sync

Which membership management would you recommend?

True, and we hope that if we do a good enough job we can provide more value for the 10% than you get by switching even as you grow.

We’ve seen writers doing this report that they spend up to 40% of their time messing around with the platform - if we can improve on that by a chunk and let them focus on writing it adds up!

I'm positive that that's true when you're making $1k / month. When you're making $10k or $20k or $50k per month? No way.

There is no way that it's a better use of your time and money to pay thousands of dollars per month vs. just switching to a flat rate provider. You're not providing much more value for someone making $10k / month vs. someone making $1k / month (the email sending costs here are super negligible), so why am I paying 10x as much?

So again, it's just an incentive to switch as soon as you start making real money.

I agree with you.

I just think it’s the right challenge for us to solve for: how do we continue to deliver that much value (or as much as possible) vs. being the lowest cost option for email + payments + website.

Have you considered charging 20%? Think of the value you'd be forced to provide! :)

In all seriousness, this is a good attitude to have, except that switching from you guys to someone else is going to be genuinely painful. The provider I use now has an API and provides full CSV and JSON exports of everything, and then all the actual payments live in Stripe. Switching should be a snap, right?

But it's still a pain to migrate over the user accounts, force users to reset their logins, setup new subscriptions with the same different billing amounts (prices have changed over time), discount codes, and billing dates, ensure that everything continues smoothly so I keep getting my money, switch over all the integration points with my site and analytics, etc, etc, etc.

It's such a pain to switch that many just won't bother to pay that big upfront cost in order to save money every month going forward and will just put it off, which is why I find this pricing model to be particularly aggravating. They wouldn't have signed up for it in the first place had they known, but they didn't know and now they're "trapped".

I hope you're just underestimating the difficult of switching away and not counting on it!

I got your point from the beginning, and your other comments have made it clearer on why customers could get upset with this percentage cut. The way I see it, a lot of it is basic human psychology.

That said, I wonder what YC is bringing to the table here, since this is marked as YC W18. Shouldn't there be some experienced people advising on pricing and such while a venture is being launched? From the OP's responses, it seems like YC wasn't involved. Or it's highly likely that I don't understand the significance of YC W18 here.

I'm wondering since you mentioned it.

When does it make sense that the 2% is worth it? Or is it in your eyes, that there should never be an extra fee?

Have you thought about it from the other perspective? That they are giving you the cheaper price at a cost to themselves, hedging the bet that the 2% will make them whole?

The 2% is worth it when the revenue base is small, but increasingly less so. When I hit $10k / month I'll be paying this provider $200 / month for something that I can get for $200 - 300 per year from other providers. And it won't just keep going up as I make more.

And yeah, maybe the loss leader thing is their pricing strategy, but it's about to cost them a customer and I doubt I'm the only one.

> service that charges flat fee plus 2%

The 2% is for card charges. The service charges a flat fee, probably tiered based on audience size (delivery requirements).

Nope, that's on top of Stripe fees.

Neat idea. As a reader, I would also find it useful as a discovery tool for interesting newsletter.

Thanks! That's a great idea, especially now that people can create lots of these.

I wonder what would be the ideal format for that? It could give you a list of newsletters and their descriptions, with some popularity signals or something.. It might be better to surface the free content though. Maybe "here are some recent free issues by newsletters you might enjoy." Just thinking out loud...

>I wonder what would be the ideal format for that?

Don't start with what might be the ideal format. Think of something, read comments here and in other places you announced this, consider them, and add a feature, then iterate on it based on experience and feedback.

But try to be somewhat canonical and orthogonal (not 100%). That often helps, IME. I sometimes see startups missing out on these principles, maybe because of the rush to get something out.

My 2c.

Take a look at medium.com. I think their homepage is too heavy with content, but is comparable to your biz model.

What if you let authors tag their newsletters with topics and then let readers browse by topic?

That’s a great idea. Could help existing readers find things similar to stuff they already like. Thanks!

I'm currently building an app for this. Very good idea.

I love this. Anyway one can embed the subscription form in their website? Branding reasons.

Oh that’s a great idea. I will put it on our roadmap.

Currently you would need to link to the main page which has a subscribe form, but doing and embedded form would be much better.

Honest question: do people actually pay for reading a newsletter?

Fair question. The short answer is "hell yes." We already have writers on Substack making a lot of money with their newsletters. For instance, our first publisher, Bill Bishop, told the WSJ that he's making more money from his newsletter than he ever made from a corporate salary (he's a former exec and serial entrepreneur). Ben Thompson of Stratechery has many thousands of subscribers paying at least $100 a year. We can't share the private data of other publishers, but we have enough info to confidently state, that, yes, many people are happy to pay for newsletters.

The creator of browserify is gonna hate your name

I wonder if they'll have twitter hand the name over. Twitter certainly isn't above doing that.

Chris and Hamish,

Do you have anyone using Substack for a 'news aggregation' sort of newsletter? I am curious.

I have written software that makes it simple for me to curate ice hockey news and place links and article summaries on http://HockeyBias.com every morning. I have been thinking of providing the data in an email newsletter as well.

Thank you.

Ooh hockey!

Curation with commentary can be very valuable. That's a lot of what Bill Bishop does with Sinocism (https://nb.sinocism.com/)

If you can do a roundup that lets people stay up to date in a way they find valuable, it could definitely be a good idea. I'd encourage you to try it as a free newsletter on Substack and see if you can get people reading it regulary!

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