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I’d rather have sites more like SA than more Reddits, Twitter, FB, etc. that is and it’s a bit of a pity the business model never really panned o
by JohnBooty 5y ago
I’d rather have sites more like SA than more
Reddits, Twitter, FB, etc. that is and it’s
a bit of a pity the business model never
really panned out at scale.
It doesn't have to pan out at scale, though. That's the thing that I've always loved about it.
By charging directly you can stay smaller. For example, suppose you're charging $5/month. You can achieve $100K revenue with 1.7K paying users. You don't have do it "at scale", or to put it another way: you can do things at a scale orders of magnitudes smaller than those going the ad-supported route.
There have always been businesses quietly succeeding with this business model. They don't make the news because they're making "only" hundreds of thousands or several million dollars profit. But that's potentially a nice living for a small team of people.
One recent successful example is Defector.com; formed by ex-Deadspin writers. They hit their 1-year anniversary and recently disclosed that they're profitable and doing well.
The main problem with this model is that, essentially, you kind of have to bootstrap it. I don't know if there are investors actually funding this kind of revenue model, because the revenue ceiling for this sort of model is probably laughably low by SV standards. I don't envision Mark Cuban hankering for a piece of some business that could well be profitable but isn't likely to ever crack $1mil revenue.
I’d rather have sites more like SA than more
Reddits, Twitter, FB, etc.
I feel like it is a logical next step, but I also felt that way ten years ago and there wasn't exactly an explosion of them. My reasoning was: as things consolidated at the top, folks would stop even trying to focus on the top. Even in 2010 the barrier to entry for becoming the next FB/Amazon/whatever was unimaginable.
- banannaise 5y agoRemember that SA was a one-time payment of a fairly nominal amount. The primary purpose was not revenue. It was a combination of giving the users a stake in the community, and making it expensive to post maliciously (since you would burn through accounts).
- jychang 5y agoI think that's the market Substack is trying to tap into, although not quite the same obviously.
- capableweb 5y agoNo, I don't think you can put Substack in that same bucket. Substack has raised a total of $82.4M in funding over 4 rounds. Their latest funding was raised on Mar 31, 2021 from a Series B round. Their investors are gonna want to get that money back, and how do you think that'll happen? Substack is aiming to scale way beyond SA ever had the ambition to, and probably dreaming about ending up like Twitter, Facebook et al.
- nefitty 5y agoI think they meant that Substack is about giving people the tools to do the niche stuff. It's not doing niche stuff itself.
- syshum 5y agoVenture Capital is where good idea's go to die.... Substack is a good idea, but venture capital will ensure they devolve into another Twitter, Facebook, etc... which is not good....
- FranksTV 5y agoSubstack is trying to be a platform to let people build those kinds of businesses, the way Shopify let's any retailer build an online store.
- Breza 5y agoI agree with you. One reason you don't hear about this kind of company is the owners don't want competition. "Oh yes, my hobbyist website/forum is clearly struggling... no need to launch a new website in the same space. Ignore my 700k house and paid off Model 3."