7 ms·

Substack

106 points by sethbannon 7y ago

simonebrunozzi 7y ago
Long, nice (and a bit too verbose) article about the media space, and why A16Z has invested in the series A for Substack. I am personally very excited to see how Substack will evolve. I think that they are trying to solve a very compelling problem, and I also think the founders have managed to build a straightforward, polished product. Side note / rant: I wish the large majority of the "crypto" crowd would take note of how "solving a problem" should trump any "cool tech stuff" when you want to build a company. (and no, I don't want to name any names here, you can find plenty of examples, even specific to the media industry, just by googling for a few minutes).
- seibelj 7y ago
  The model of cryptocurrency is nothing like a traditional business. In one sense, it is arguably the most fair way to pay developers for their work - the more useful a coin / token, the more it's worth, and the majority of overhead goes straight to developers for their work on the software. This conversation is extremely complex and I'm not sure why you related investment in substack to crypto.
  - simonebrunozzi 7y ago
    I owe you some clarification, as I probably bridged the two in my mind, but clearly not in my comment :) I think that Substack focused very nicely on product effectiveness, and as a result its business is now doing so well that A16Z decided to invest. Most crypto projects in the media space tried to offer similar features, but instead of focusing on a great user experience, they mostly focused on "cool technical stuff" that had nothing to do with adding value for the user. Perhaps it is more clear now? I hope so. You also say: "[crypto] it is arguably the most fair way to pay developers for their work". I think that we don't need a cryptocurrency to pay for a media subscription. Also, we don't need crypto for micro-payments - you can simply handle it with a credit system (e.g. you pay 1$ and you can then use $0.01 to pay media content 100 times using your credit).
    - seibelj 7y ago
      I was meaning something more along the lines of 0x (https://0x.org/ https://0x.org/) where the token powers a decentralized exchange protocol, and the more the protocol is used the more the protocol token is worth. It's more akin to the creator of SMTP making money for every email ever sent. Instead of selling data or being advertising powered, you charge access inherently every time the protocol is used. It is simply a different business model and time will tell if it pays off.
- andrew_null 7y ago
  Verbose = fitting for announcing news about a newsletter startup, no? :)
- cjbest 7y ago
  One of the Substack founders here. Thanks! We definitely aim to “build something people want”
  - simonebrunozzi 7y ago
    Great job! Happy to provide specific feedback or suggestions if interested. simone dot brunozzi at google's famous email service.
dawhizkid 7y ago
Surprised something like a simple platform for paid email newsletters would be something that catches the eye of VCs hoping to find the next unicorn. The best case scenario feels like Medium, which to my knowledge has changed course dozens of times and doesn't seem to be going particularly well. The current subscriber figure I've seen is around 50k paid subscribers across all newsletters. I think even in a best case scenario of having 1m subscribers pay $10/month, that is 1m x $10/mo x 12mo x 10% = $12m in revenue/year (at 20x the current subscriber rate). Unclear how that translates to a VC-sized unicorn biz.
- tonystubblebine 7y ago
  FWIW, Medium launched their subscriber program two years ago and hasn't changed course since. I think Medium's move is a winner and as a result, I started three profitable publications there. But... I'm worried about getting squeezed down the road. Right now Medium passes all their subscriber revenue on to the authors & publishers. But eventually they'll have to take a cut and the size of that cut will be balanced out by what other opportunities authors and publishers have. So I think it's great that the ecosystem for paid writing is growing (Substack & Patreon). And I think paid is a great model now that we've seen what the mature version of free looks like (IMO, very bad). As an occasional writer, it's refreshing to just write the best piece I know how without trying to hack in virality and upsells.
  - dmix 7y ago
    Does medium provide you with free traffic? Would it be worth it for them to take a cut?
    - tonystubblebine 7y ago
      They do a lot of work, not just traffic, so yeah, there's a lot of room for them to take a cut and for it still to be a good business. Just at the surface level, they're probably bringing about 50% of the traffic to a new article. Then, Medium is also a network of authors. And so those authors tend to submit articles to the most visible publications and Medium handles paying those authors. They've really created a nice situation where people like me who are interested in the content side of publishing can run a publishing business without having to do the business side of publishing. It might not last forever (nothing does), but they're on the upswing. We were their first external partnership and then did two publications a few months ago. I think they're about to announce deals with about 20 publications from the community. That's good since there's been a lot of noise about pubs leaving. The ones that are staying are pretty happy.
ChristianBundy 7y ago
I don't have any strong opinions on the product being built by Substack Inc, but I do feel weird that they swiped the name "substack", which is a handle that's been used by open source hacker James Halliday for at least a decade. [0] It's been his handle on GitHub, Twitter, Hacker News, YouTube, Reddit, etc., and it makes me uncomfortable to see a startup try to turn his name into a corporate brand. [0]: https://web.archive.org/web/20091113043728/http://substack.net/about https://web.archive.org/web/20091113043728/http://substack.n...
- lioeters 7y ago
  This was my immediate association as well. I've followed the open-source work of substack for many years, and continue to use many of the modules he published. https://github.com/substack?tab=repositories https://github.com/substack?tab=repositories I doubt it was an intentional move by the company, since these kinds of name clashes are inevitable in the global scope..
- jasode 7y ago
  >they swiped the name "substack", which is a handle that's been used by open source hacker James Halliday Did they use the "substack" name because JH made it famous? I've heard of the word "substack" before but I've never heard of James Halliday. "substack" was in use for several decades before 2006: https://books.google.com/ngrams/graph?content=substack&year_start=1800&year_end=2008&corpus=15&smoothing=3 https://books.google.com/ngrams/graph?content=substack&year_...
  - ChristianBundy 7y ago
    I don't mean that they used Substack because JH was using it, but a quick web search of the company name would make it obvious that there was a naming conflict.
- Vekz 7y ago
  Same feelings here. This implies that. 1. The founders of the corporation were not aware of the established personal brand James Halliday had built under the handle, or didn't preform a google search to find out. 2. The founders were aware and just didn't care or lacked the creativity to construct a unique brand. Both make me disinterested in whatever they're shilling.
npollock 7y ago
If you want to understand the appeal of Substack to journalists/writers, there's a great interview on the BOC podcast with one of the more successful authors on the platform, Robert Cottrell (formerly of The Economist) https://podcasts.apple.com/us/podcast/this-indie-newsletter-generated-over-10-000-paying/id1339451218?i=1000438126489 https://podcasts.apple.com/us/podcast/this-indie-newsletter-...
taurath 7y ago
I don't immediately understand what this solves over say patreon, which has a lot lower fees (10% + 2.5% for CC fees... holy crap). Whats the value add here? And for publishing text? Is there DRM involved? It feels like you're just charging for a paywall and a mailchimp list... maybe thats enough, but given the amount of failures in the space, it feels like just another to go on top of the pile. Maybe its the right mix, and they have some big plans? One issue from the Terms - if you post something publicly, they can keep it published and licensed to them forever, even after you delete your account. I'd think for such a high price, and a high emphasis on content creator control, you'd not take away the legal rights to delete public posts. Also pretty disappointed at the arbitration agreement and unilateral terms of use updates (they can update them at any time, and if you don't agree you will be kicked off the platform). [edit: its certainly easy to see the value of something like this existing - just trying to understand why this is different than the others]
- jpalomaki 7y ago
  Network effect? They could promote your newsletter to people who are already paying for something related. If people are already registered on Substack and have payment method in place then onboarding is smooth.
- chipotle_coyote 7y ago
  Is there any site that doesn't allow for unilateral terms of use updates? I'm not being snarky; I genuinely haven't seen one, and I'm not sure what the alternative would be. "We're changing our terms of use, but if you don't agree with our changes, you can keep following the old rules you originally agreed to" sounds like it'd be a nightmare to keep track of in practice.
  - taurath 7y ago
    I think its more important when you're putting something on a platform that is publishing your work. Having control of your work is paramount - this is what they're saying is one of the benefits of the platform. That they can effectively change the "license" to creators work at any time and kick them off the platform if they disagree seems like a large amount of rights to give away. They could for instance have a generalized terms of service that does NOT cover works licensing, and works licensing be its own agreement which is not subject to change except with more proper controls than an auto-agree if you use the platform any time after they unilaterally update. Who owns the audience and content at the end of the day? Legally, its still the content creators copyright, but with an unlimited irrevocable license Substack de-facto is co-owner. The audience is entirely built on their platform - the email list looks like it'll be owned entirely by Substack since its through their platform - no mention of this in the ToS. I doubt there'll be an export feature. They may legally protect their rights to "your" subscribers.
onemoresoop 7y ago
https://substack.net https://substack.net
- futureastronaut 7y ago
  Even worse than having Golang replace your Go language!
random023987 7y ago
I can't wait to see the flood of posts in 12 months about "why I'm leaving substack"
deleted 7y ago
[deleted]
tschellenbach 7y ago
People are willing to pay for educational content, most of the content on Substack is news. It's hard to get people to pay for news. Interesting to see another play in this space though, hope someone gets it right.
- tonystubblebine 7y ago
  Isn't News the current big winner in paywalls for articles? The NYT digital service grosses $700M.
  - vuln 7y ago
    It’s also interesting that the NYT is the only online news site to almost always have at least one article on the front page of HN.
    - jumbopapa 7y ago
      WSJ is on the front page a lot too.
merpnderp 7y ago
Am I the only one who saw the name and thought this would be about the Node.js prolific module author?
shay_ker 7y ago
Substack seems like a not-horrible acq target for Medium, if Medium has the funds to buy it. Many content creators appear to trust Substack and trust the potential to earn money on it. The acquisition would be worth it for the trust alone. The model for paying content creators seems interesting, but I'm really curious what the market opportunity here is. My guess is that it's not that high... so it seems likely that Substack would consider inserting ads into the free newsletters. However, if they pivoted to other mediums like video, then maybe there's something here. People will pay really little for a blog post emailed to them each week, but they'll pay a ton more for great video content.
- cjbest 7y ago
  > People will pay really little for a blog post emailed to them each week You'd be surprised.
  - shay_ker 7y ago
    Compared to Netflix tho? Individually there may be outliers, but I'm wondering about the market as a whole
ihm 7y ago
This needs an editor badly. You have to make it through 4 long paragraphs of grandiose posturing before learning what the post is even about.
rorygibson 7y ago
Substack is cool - but it's kinda expensive. I wrote a short blog a few months ago about how to get most of the benefits it offers with way less cost (and without being tied to a single platform) - plugging together Mailchimp and Trolley with a static website and a l'il bit of Zapier. https://trolley.link/2019/03/03/paid-email-newsletter.html https://trolley.link/2019/03/03/paid-email-newsletter.html (Disclosure: https://trolley.link https://trolley.link , which I've used for the payment elements in this example, is my product)

106 points by sethbannon 7y ago

Long, nice (and a bit too verbose) article about the media space, and why A16Z has invested in the series A for Substack. I am personally very excited to see how Substack will evolve. I think that they are trying to solve a very compelling problem, and I also think the founders have managed to build a straightforward, polished product. Side note / rant: I wish the large majority of the "crypto" crowd would take note of how "solving a problem" should trump any "cool tech stuff" when you want to build a company. (and no, I don't want to name any names here, you can find plenty of examples, even specific to the media industry, just by googling for a few minutes).

seibelj 7y ago
The model of cryptocurrency is nothing like a traditional business. In one sense, it is arguably the most fair way to pay developers for their work - the more useful a coin / token, the more it's worth, and the majority of overhead goes straight to developers for their work on the software. This conversation is extremely complex and I'm not sure why you related investment in substack to crypto.
- simonebrunozzi 7y ago
  I owe you some clarification, as I probably bridged the two in my mind, but clearly not in my comment :) I think that Substack focused very nicely on product effectiveness, and as a result its business is now doing so well that A16Z decided to invest. Most crypto projects in the media space tried to offer similar features, but instead of focusing on a great user experience, they mostly focused on "cool technical stuff" that had nothing to do with adding value for the user. Perhaps it is more clear now? I hope so. You also say: "[crypto] it is arguably the most fair way to pay developers for their work". I think that we don't need a cryptocurrency to pay for a media subscription. Also, we don't need crypto for micro-payments - you can simply handle it with a credit system (e.g. you pay 1$ and you can then use $0.01 to pay media content 100 times using your credit).
  - seibelj 7y ago
    I was meaning something more along the lines of 0x (https://0x.org/ https://0x.org/) where the token powers a decentralized exchange protocol, and the more the protocol is used the more the protocol token is worth. It's more akin to the creator of SMTP making money for every email ever sent. Instead of selling data or being advertising powered, you charge access inherently every time the protocol is used. It is simply a different business model and time will tell if it pays off.
andrew_null 7y ago
Verbose = fitting for announcing news about a newsletter startup, no? :)
cjbest 7y ago
One of the Substack founders here. Thanks! We definitely aim to “build something people want”
- simonebrunozzi 7y ago
  Great job! Happy to provide specific feedback or suggestions if interested. simone dot brunozzi at google's famous email service.

dawhizkid 7y ago

Surprised something like a simple platform for paid email newsletters would be something that catches the eye of VCs hoping to find the next unicorn. The best case scenario feels like Medium, which to my knowledge has changed course dozens of times and doesn't seem to be going particularly well. The current subscriber figure I've seen is around 50k paid subscribers across all newsletters. I think even in a best case scenario of having 1m subscribers pay $10/month, that is 1m x $10/mo x 12mo x 10% = $12m in revenue/year (at 20x the current subscriber rate). Unclear how that translates to a VC-sized unicorn biz.

tonystubblebine 7y ago
FWIW, Medium launched their subscriber program two years ago and hasn't changed course since. I think Medium's move is a winner and as a result, I started three profitable publications there. But... I'm worried about getting squeezed down the road. Right now Medium passes all their subscriber revenue on to the authors & publishers. But eventually they'll have to take a cut and the size of that cut will be balanced out by what other opportunities authors and publishers have. So I think it's great that the ecosystem for paid writing is growing (Substack & Patreon). And I think paid is a great model now that we've seen what the mature version of free looks like (IMO, very bad). As an occasional writer, it's refreshing to just write the best piece I know how without trying to hack in virality and upsells.
- dmix 7y ago
  Does medium provide you with free traffic? Would it be worth it for them to take a cut?
  - tonystubblebine 7y ago
    They do a lot of work, not just traffic, so yeah, there's a lot of room for them to take a cut and for it still to be a good business. Just at the surface level, they're probably bringing about 50% of the traffic to a new article. Then, Medium is also a network of authors. And so those authors tend to submit articles to the most visible publications and Medium handles paying those authors. They've really created a nice situation where people like me who are interested in the content side of publishing can run a publishing business without having to do the business side of publishing. It might not last forever (nothing does), but they're on the upswing. We were their first external partnership and then did two publications a few months ago. I think they're about to announce deals with about 20 publications from the community. That's good since there's been a lot of noise about pubs leaving. The ones that are staying are pretty happy.

ChristianBundy 7y ago

I don't have any strong opinions on the product being built by Substack Inc, but I do feel weird that they swiped the name "substack", which is a handle that's been used by open source hacker James Halliday for at least a decade. [0] It's been his handle on GitHub, Twitter, Hacker News, YouTube, Reddit, etc., and it makes me uncomfortable to see a startup try to turn his name into a corporate brand. [0]: https://web.archive.org/web/20091113043728/http://substack.net/about https://web.archive.org/web/20091113043728/http://substack.n...

lioeters 7y ago
This was my immediate association as well. I've followed the open-source work of substack for many years, and continue to use many of the modules he published. https://github.com/substack?tab=repositories https://github.com/substack?tab=repositories I doubt it was an intentional move by the company, since these kinds of name clashes are inevitable in the global scope..
jasode 7y ago
>they swiped the name "substack", which is a handle that's been used by open source hacker James Halliday Did they use the "substack" name because JH made it famous? I've heard of the word "substack" before but I've never heard of James Halliday. "substack" was in use for several decades before 2006: https://books.google.com/ngrams/graph?content=substack&year_start=1800&year_end=2008&corpus=15&smoothing=3 https://books.google.com/ngrams/graph?content=substack&year_...
- ChristianBundy 7y ago
  I don't mean that they used Substack because JH was using it, but a quick web search of the company name would make it obvious that there was a naming conflict.
Vekz 7y ago
Same feelings here. This implies that. 1. The founders of the corporation were not aware of the established personal brand James Halliday had built under the handle, or didn't preform a google search to find out. 2. The founders were aware and just didn't care or lacked the creativity to construct a unique brand. Both make me disinterested in whatever they're shilling.

npollock 7y ago

If you want to understand the appeal of Substack to journalists/writers, there's a great interview on the BOC podcast with one of the more successful authors on the platform, Robert Cottrell (formerly of The Economist) https://podcasts.apple.com/us/podcast/this-indie-newsletter-generated-over-10-000-paying/id1339451218?i=1000438126489 https://podcasts.apple.com/us/podcast/this-indie-newsletter-...

taurath 7y ago

I don't immediately understand what this solves over say patreon, which has a lot lower fees (10% + 2.5% for CC fees... holy crap). Whats the value add here? And for publishing text? Is there DRM involved? It feels like you're just charging for a paywall and a mailchimp list... maybe thats enough, but given the amount of failures in the space, it feels like just another to go on top of the pile. Maybe its the right mix, and they have some big plans? One issue from the Terms - if you post something publicly, they can keep it published and licensed to them forever, even after you delete your account. I'd think for such a high price, and a high emphasis on content creator control, you'd not take away the legal rights to delete public posts. Also pretty disappointed at the arbitration agreement and unilateral terms of use updates (they can update them at any time, and if you don't agree you will be kicked off the platform). [edit: its certainly easy to see the value of something like this existing - just trying to understand why this is different than the others]

jpalomaki 7y ago
Network effect? They could promote your newsletter to people who are already paying for something related. If people are already registered on Substack and have payment method in place then onboarding is smooth.
chipotle_coyote 7y ago
Is there any site that doesn't allow for unilateral terms of use updates? I'm not being snarky; I genuinely haven't seen one, and I'm not sure what the alternative would be. "We're changing our terms of use, but if you don't agree with our changes, you can keep following the old rules you originally agreed to" sounds like it'd be a nightmare to keep track of in practice.
- taurath 7y ago
  I think its more important when you're putting something on a platform that is publishing your work. Having control of your work is paramount - this is what they're saying is one of the benefits of the platform. That they can effectively change the "license" to creators work at any time and kick them off the platform if they disagree seems like a large amount of rights to give away. They could for instance have a generalized terms of service that does NOT cover works licensing, and works licensing be its own agreement which is not subject to change except with more proper controls than an auto-agree if you use the platform any time after they unilaterally update. Who owns the audience and content at the end of the day? Legally, its still the content creators copyright, but with an unlimited irrevocable license Substack de-facto is co-owner. The audience is entirely built on their platform - the email list looks like it'll be owned entirely by Substack since its through their platform - no mention of this in the ToS. I doubt there'll be an export feature. They may legally protect their rights to "your" subscribers.

onemoresoop 7y ago

https://substack.net https://substack.net

futureastronaut 7y ago
Even worse than having Golang replace your Go language!

random023987 7y ago

I can't wait to see the flood of posts in 12 months about "why I'm leaving substack"

deleted 7y ago

[deleted]

tschellenbach 7y ago

People are willing to pay for educational content, most of the content on Substack is news. It's hard to get people to pay for news. Interesting to see another play in this space though, hope someone gets it right.

tonystubblebine 7y ago
Isn't News the current big winner in paywalls for articles? The NYT digital service grosses $700M.
- vuln 7y ago
  It’s also interesting that the NYT is the only online news site to almost always have at least one article on the front page of HN.
  - jumbopapa 7y ago
    WSJ is on the front page a lot too.

merpnderp 7y ago

Am I the only one who saw the name and thought this would be about the Node.js prolific module author?

shay_ker 7y ago

Substack seems like a not-horrible acq target for Medium, if Medium has the funds to buy it. Many content creators appear to trust Substack and trust the potential to earn money on it. The acquisition would be worth it for the trust alone. The model for paying content creators seems interesting, but I'm really curious what the market opportunity here is. My guess is that it's not that high... so it seems likely that Substack would consider inserting ads into the free newsletters. However, if they pivoted to other mediums like video, then maybe there's something here. People will pay really little for a blog post emailed to them each week, but they'll pay a ton more for great video content.

cjbest 7y ago
> People will pay really little for a blog post emailed to them each week You'd be surprised.
- shay_ker 7y ago
  Compared to Netflix tho? Individually there may be outliers, but I'm wondering about the market as a whole

ihm 7y ago

This needs an editor badly. You have to make it through 4 long paragraphs of grandiose posturing before learning what the post is even about.

rorygibson 7y ago

Substack is cool - but it's kinda expensive. I wrote a short blog a few months ago about how to get most of the benefits it offers with way less cost (and without being tied to a single platform) - plugging together Mailchimp and Trolley with a static website and a l'il bit of Zapier. https://trolley.link/2019/03/03/paid-email-newsletter.html https://trolley.link/2019/03/03/paid-email-newsletter.html (Disclosure: https://trolley.link https://trolley.link , which I've used for the payment elements in this example, is my product)