Here's how this plays out. The successful writers on Substack will eventually leave the platform for more control over their audience and lower fees (there's a reason Ben Thompson isn't on Substack).
As this happens, and as the honeymoon PR period dies off, the journalists will turn on Substack, just as they do on every single thing Silicon Valley puts out (see Lambda School).
Prior to taking on a16z riches, Substack was a cool indie brand. Now they're officially "big, evil tech." The fickle journalist twitterati just haven't realized it yet.
Inevitably as more non-influencer writers head to Substack they'll start to see, like with Patreon, that only a small minority of creators will ever generate enough income to make a living.
This, combined with competition from Patreon, Podia, Memberful, Ghost, Revue, the next indie platform darling, etc. will spell doom for a16z's growth goals for the platform.
My guess is 3-7 years from now, after more funding rounds, they get acquired by Patreon for roughly the same amount of money investors put in. Employees will get nothing, founders might get Cush jobs and possibly a minor payout, VCs would have done better investing in the S&P.
This is the type of business that works better bootstrapped IMO.
Interesting that "The Browser" is on Substack (one of the top 5 newsletters) but the affiliated and more recent "The Viewer" is on Ghost.
Of course Ghost still has a relatively small ecosystem compared to Wordpress which I think is why Ben Thompson still expressed a preference for a Wordpress based setup.
We're still in relatively early stages with our memberships and subscriptions features (they're officially still 'beta') but we're shipping updates and new versions every single week, and working toward making the product easier to get started with and less technical to setup.
We'll have a larger release later this year, but Ghost is already powering many thousands of paid memberships in the wild.
This doesn’t really seem true. Journalists “turn on” every single thing SV puts out? Do you think the reporting on Lambda school is dishonest? Or do you think that journalists reporting on a SV company is in and of itself somehow wrong?
Nothing is ever as good or as bad as journalists on twitter think it is.
You can watch this pattern in literally every piece of consumer technology of the past 100 years. For some recent examples:
1999: The internet is going to change everything!
2001: The internet was a scam
2008: Smartphones are our savior!
2018: Smartphones and screen time are ruining everything
2010: Social media is going to connect the world!
2016: Social media is evil
2006: Google is the greatest, most innovative company in the history of the world!
2020: Google is an evil monopolist bent on world domination
2018: Zoom is the best video conferencing tool ever!
2020: Zoom is a massive Chinese conspiracy
2018: Lambda school is going to fix education!
2020: Lambda school is a giant scam
Except the entire model of substack is based on writers not having access even to their audience's mail addresses.
Is that correct as of today?
“References and supplemental video content available on my website at ...”
Getting paying subscribers to change their subscription method is huge friction and risk of churn, the more revenue you already have established on substack the bigger the risk cost of trying to move away, aka the boiled frog business model.
The name "Substack" was co-opted from James "Substack" Halliday , a well-known hacker in the Node.js community. It wasn't an indie-brand-turned-corporate; it's a person.
The way substack.com has used VC money to take over someone's identity and feed off their reputation is incredibly scummy.
Substack the company was founded in 2017 . At that point Substack the person was already a household name in open source — with 76.000 GitHub stars to his name his projects' popularity were on par with the likes of Mozilla .
Naming an upstart company after a household name that isn't protected by copyright is incredibly clever. You get to use an established and trusted name, but can't get sued for using it.
: https://web.archive.org/web/20170115065014/http://git-awards... — GitHub stars aren't a perfect metric, but it's the best I can come up with to convey the degree of name recognition back in 2017
I view it simply as a catchy name and nothing more.
That's why I like HackerNews, because users can recommend someone unrelated to the community purely for their content.
Substack kind of reverses the incentive here, because there's no money to be made in sending visitors off their platform. So either, it'll be a little echo chamber where Substack users only link to other Substack users, or even worse it creates an incentive for Substack's "creators" to copy content from people who didn't join.
But if it's narrowly focused, the value is proportionally less. If someone does really good curation of obscure Soviet aerospace technology, i'm interested, but that's no more than 5% of my reading.
But then, i am a generalist, and fairly stingy. It seems like a repeat of a very old story to say that niche curators will have to find either price-insensitive generalists ("whales"), or focused obsessives.
"Pay money to support the creator" can work - Patreon is doing around $50M in revenue annually. Bundling can obviously also work with many big and established examples. But it strikes me that the two models attract a very different customer, so those who subscribe to a specific Substack newsletter may or may not be enthusiastic about buying a big bundle of them down the line.
I've toyed around with the idea of creating a Substack, but I can't get paid over Stripe.
The only asset a newsletter author has is his audience - with substack they won't even have that, in fact their publisher agreement explicitly prohibits the authors from asking any sort of contact information from their readers.
What I don't enjoy about newsletters is the e-mail clients themselves. They're bulky, filled with features I never use. I wish there was a way to hook my newsletters subscriptions up with Kindle. I can customize the fonts, sizes, spacing for my best reading experience, and the writer can forget about styling and just can focus on the writing.
Which makes me fantasize myself creating a subscription based reading platform with its own device :)
There used to be services a bit like this. Instapaper used to be able to send a digest of saved web articles to your Kindle, like your own magazine. eg . It sometimes did badly due to web page formatting, but with newsletters you'd have more control layout.
I think you can still deliver the .mobi files to a @free.kindle.com address and the reader won't be charged for WiFi-only delivery. They have to whitelist your email address in their online Kindle account, which might be a usability issue. It's a while since I looked at .mobi, but I don't think it's much different from a single HTML file.
It's not a service I would use, because I love email, and I worry about market size... but it's an interesting idea.
One use case of that is that you can feed RSS feeds to your calibre's news feature and schedule them to be sent to your @kindle.com email address at a specified day / time of the week. Essentially DYI magazine filled with whatever blogs you want.
On the bright side, Kobo at least makes a distinction between a book and an article, while Kindle just treats everything as a book.
I don't necessarily see the nascent bundling as a problem. Newspapers, which were the workhorses of writing, were bundled geographically which makes less sense now. Bundling by interest makes a lot more sense.
Hopefully the writing supported by this paid model can be as creative as cable TV used to be, compared to network TV.
(Ditto e-books or similar information products, by the way.)
Turning to the question of paid newsletters: I'm socially constrained from pointing at examples, both because in some cases I have non-public information and in some cases I would be perceived as having non-public information, and because there are heady professional considerations, but: there are definitely, definitely some people who sell information professionally who break the top end of the pay scale for people who are generally described as writers in more traditional media jobs.
Another way to put it is "I'm pretty sure I could sell 1,000 subscriptions at $20 a month within 6 weeks if I wanted that to be my job", which is not competitive with other things to do with my time but probably clears most reasonable bars for stable professional options. I think I'm very far from having the largest collection of people who'd pay to read my writing, the best writing, the most engaged userbase, the most lucrative decision points that users routinely apply my advice against, etc.
A big open question for the business model is whether one thinks there are hundreds, thousands, tens of thousands, or hundreds of thousands of people who could hit that bar (and, I suppose, whether one could tempt them from other options). Hundreds feels clearly wrong to me as an upper bound.
I suspect that lack of interest or skill in marketing is much more the limiting factor that sets an upper bound on how many people can pull it off to derive a realistic income this way.
Someone, and I'm forgetting who it was, suggested that paid subscriptions is the natural monetization strategy for people who are a) public intellectuals and b) do a lot of their work on Twitter, and in that sense you're doing marketing with a sort of cycles which might not read as "intentionally doing marketing work." (I think as the community distributes the technology of running these businesses, like the technology of running e-book businesses has been distributed, this will get easier, too. One thing all newsletter authors should be doing ~constantly is hitting up podcasts in adjacent spaces, because it gets juices flowing for writing and because every time you talk to 10,000 people you'll sell N new subscriptions.)
Time will tell which one will work better.
I already subscribed to writers on Substack (all of them write about blockchain/DeFi).
Haven't we learned anything from Medium?
The difference is the offering towards the audience. What are readers willing to pay for? Content published on a blog or in a newsletter isn't inherently different: it's short pieces conveying thought, opinions, observations,... So, why would anyone be more willing pay for newsletter content rather then content posted on the Web?
There's the simple convenience of having content you subscribed to delivered to your inbox, rather then having to invest time and effort scouring/curating it yourself from the Web (bookmarks, closed platforms where you need to register, etc.). Content just lands at regular intervals in your mailbox, end of story.
There could be a perception that your Inbox is your own personal space as opposed to the Web as this foreign place with inherent dangers to which you have to expose yourself just to get to the good bits. Authors to newsletters become your guests, whereas you are their guest when you visit their websites. So, I think a sense of agency and being in control are big drivers here.
The sense of exclusivity of being part of a fledgling tribe of readers to a small publisher who knows how to appeal to that sense. Receiving an e-mail in your Inbox is as different from visiting a website, as is receiving a personally addressed snail mail is from going out and reading newspapers in the library.
I'm also curious as to how the e-mail / newsletter model impacts Substack's operations. Unlike 'traditional' social media, millions of visitors don't flock a central platform 24/7/356 which comes with hard infrastructure problems. I'm well aware that there will be different challenges that need to be met, but pushing content to individual mailboxes is, in essence, a hybrid form of decentralization and distributed publishing combined with a centralized platform for curation and subscription.
Another assumption I'm going to make is that revenue isn't spread evenly across all publishers on the platform. I suppose it's more of a long tail with a typical Pareto kind of distribution. 20% of the writers account for 80% of the revenue and then there's a sharp drop off. Thing is, I suspect inactive publishers don't consume much if any resources: e-mails in an Inbox have a rather short half-life as opposed to the (perceived) need of keeping content available over HTTP which brings additional running costs with little to no added value.
It's interesting to note that Substack isn't the only offering in this space. A direct competitor came to my mind: https://www.getrevue.co/
Personally, given the pre-dominant promotional nature of newsletters, I'm pleasantly surprised how this mode of writing/authoring has been adopted, once again, by budding writers and publishers. After all, journalling via mail has a long historical pedigree. It's great to see how the analogue concept finds traction in the digital age as well.
I saw the bundling mentioned in the Digiday article with the "Everything" brand, and I unsubscribed since I just wanted the business analysis and not other topics (like productivity advice) mixed in. Maybe bundling is okay for other readers.
I have to check out what Substack offers in terms of analytics and email design templates. Personally, I'm interested in series-based newsletters for storytelling that's pubdate agnostic (everyone gets the same first issue). I'm going to look closer at ConvertKit and BareMetrics.
I'm actually using an RSS newsreader more (NetNewsWire on my iPad). For me, it's a much better experience.