15 ms·

Substack is laying off 14% of its staff

131 points by jdp23 4y ago

paulpauper 4y ago
https://archive.ph/UB59U https://archive.ph/UB59U obligatory paywall bypass
paulpauper 4y ago
damn..I thought they were doing well. Substack faces a lot of possible problems, imho: does not scale that well, limited audience size, writer burnout https://greyenlightenment.com/2022/06/22/substack-worth-1-billion-likely-not/ https://greyenlightenment.com/2022/06/22/substack-worth-1-bi... I think what substack needs is better content/writer discovery. There seems to be no good way to find related substack blogs adjacent to the ones I already follow. Medium .com at least got that part right. I can go to the home page of Medium and find huge assortment of articles that interest me. That's not the same with Substack. Also, the the pop-up prompt to subscribe on mobile is annoying and does not go away. It should be disabled via cookies if you decline to subscribe.
- moviewise 4y ago
  I agree that Substack needs a better content/writer discovery mechanism, like having categories or tags per article/post so that readers can find related articles by subject/genre/type to the one they enjoyed reading. Unfortunately, Substack wants to do an internal reference or "recommendation" system that basically mimics a closed clique. Those that know other writers may get a friend to "recommend" their newsletter, but it will very likely not be anything that the readers of this friend are interested in since the recommendation may have nothing to do with the content, or the merits of the recommended writer, it's just who they know. I think people are interested in the content, in a subject, or a genre/type of writing, like humor, advice, reviews, etc. They may want to spend more time with a subject rather than being given irrelevant recommendations based on who the writer reads.
- synergy20 4y ago
  That's true, I'm a subscriber at Medium, often times it suggests something that is of interests to me, I gifted its membership to a friend this year after find it definitely worth $50 a year.
  - hiyer 4y ago
    Medium subscribers get free access to the entire library of pragmatic programmer's publications [1]. That alone makes it worth the money in my book. 1. https://medium.com/pragmatic-programmers/directory-of-pragmatic-programmer-books-on-medium-6a5cbadbd4b4 https://medium.com/pragmatic-programmers/directory-of-pragma...
    - synergy20 4y ago
      not known this, thanks!
- x0x0 4y ago
  I think the bigger issue is what is their competitive moat? I can't think of a single thing that isn't going to be replicated elsewhere. Unless they start cross advertising between their different newsletters or something to create some type of network effect.
  - svnt 4y ago
    The cross-marketing was clearly the plan but I wonder how many established-writer stans are like “This wasn’t so I could talk to my hero, I was also waiting to pay some unknown person for their food ideas.” My guess is the conversion numbers on that are terrible.
  - burkaman 4y ago
    It has already been replicated. Ghost is one example I know of that is very explicitly competing with them: https://ghost.org/vs/substack/ https://ghost.org/vs/substack/ One newsletter I'm subscribed to recently switched from Substack to Ghost, and as a reader it was completely seamless and I might not have noticed if they hadn't mentioned it. They were able to transfer all their paid subscribers and article archive, so it doesn't seem like these services have any real moat.
- skybrian 4y ago
  It's an important feature that I can subscribe to the blogs I like without hearing anything at all about the ones I don't like. Get rid of the separation and you basically have Twitter or Reddit. People will complain about the stuff they don't like, and the next thing you know, Substack will need to hire an army of moderators. Don't cross the streams. Not on Substack itself, anyway. The recommendations can happen via other websites like Hacker News and the occasional author link.
EddieDante 4y ago
Substack is the Medium of newsletters; the content is neither rare nor well-done. I'm not surprised they need to dump staff; their business model was never sustainable. Why should I pay to read some wanker's opinions in my inbox when I can read a whole bunch of other wankers' opinions for free using their RSS feeds, without having to worry about whether any of these wankers are selling their mailing lists to make a little extra cash on the side? Real writers have day jobs.
- PaulHoule 4y ago
  The last thing I want is to get another email list. For me email is a big ball of stress, there is always a huge amount of spam to delete, even if I keep up on unsubscribing from lists and blocking addresses that send me spam. When I am reading email I am generally trying to get some specific task done and having email newsletters get in the way means I'm going to skip over the newsletters and never read them. What the world needs is an RSS reader which is like that Talking Heads song Psycho Killer: "See something once, why see it again?"
  - stonogo 4y ago
    You would probably be better served by fixing your damaged relationship with the techology rather than declaring it to be the wrong answer a priori. Perhaps a middle ground, like Thunderbird or Vivaldi's RSS readers, would suit you. Don't use the clients for mail, just try it out as a feed reader only, to avoid the negative expectations. One of the big advantage of the mail-style presentation is the client indexes the content and gives you full-text search of the stories you've read. Once you get used to that it's hard to go back.
- jjtheblunt 4y ago
  > Real writers have day jobs. What a great quote!
- bachmeier 4y ago
  > Real writers have day jobs. Alternatively, if I care what you have to say, you're probably not a professional writer. Maybe there's a better way to do it than we've seen so far, but I have yet to watch someone go that route without overhyping every little thing, stretching the truth, and then outright making stuff up.
AzzieElbab 4y ago
They probably overpaid for bunch of ppl to join
- MisterBastahrd 4y ago
  I think they paid that much just to get comic book creators to join.
  - AzzieElbab 4y ago
    I did t even know there were comic books on substack
    - MisterBastahrd 4y ago
      I suppose the closest analogue would be the LIV tour in golf. Substack came calling and tried to pull away a number of big names from DC, Marvel, and Image with promises of pre-payments for creator-owned projects and full editorial control. I think some of them are starting to realize that self-publishing is far more expensive independently (given that you are responsible for paying the artists, letterers, etc) than finding a publisher for your work.
11101010001100 4y ago
$9M in revenue in a year when many people had plenty of time to read? Oof.
kwertyoowiyop 4y ago
How could a company with $9M revenue, that I would guess isn’t profitable, ever be valued at $650M?
- dqpb 4y ago
  On the flip side, how does a blog platform cost more than $9M per year?
  - tempestn 4y ago
    I would guess mostly marketing—building the brand and the audience. Also recruiting writers to the platform.
    - meheleventyone 4y ago
      Doh, cross-posted the exact same thought!
  - meheleventyone 4y ago
    You pay writers to come to your site and all the other marketing gumph.
  - rchaud 4y ago
    One big difference. Substack is push, blogs are pull. Managing the reliable sending of millions of subscriber emails is expensive.
    - gowld 4y ago
      How much? Mailchimp charges $12K/year for 150K contacts and 180 emails/contact/year. (Above that is "call us" pricing.) At that rate, it is about 10c per contact per year. Substack has 500K paying reader-subscribers, 10-20x that in "total readership", whatever that means, and "millions" of readers (but I believe those are web viewers). https://backlinko.com/substack-users#how-many-paying-subscribers-use-substack https://backlinko.com/substack-users#how-many-paying-subscri...
Barrera 4y ago
> Substack, which takes a cut of its writers’ subscription fees, generated about $9 million in revenue last year, The New York Times reported. That means the funding discussions valued the company at a hefty premium relative to its financial results. Substack was said to be valued at $650 million last year after the company closed a $65 million funding round. By any yardstick, a price/sales ratio of 72 is ludicrous. It's the kind of thing that can only happen within the safety of a financial bubble.
- submeta 4y ago
  Look at what happens here in Germany. A job portal for students just closed 45million Euros in Feb this year. They have raised 95m in 7 years. Their revenues in 2019 were merely a couple of million Euros. I can only guess their valuation.
- roflyear 4y ago
  No it is not. Not when you consider growth.
  - azemetre 4y ago
    What is the point of growth if you can't make a successful business? Legitimate question here. I always had a hard time understanding, especially in regards to companies that are still not profitable or just barely after 10 to 20 years. Seems incredibly risky and not strong enough to weather any economic downturn. Are companies just copying the Facebook mantra from 2005ish? Didn't FB become immediately profitable once they started selling ads? That was pre ipo.
    - roflyear 4y ago
      Yeah but you're changing the subject. Obviously if the business is garbage it is garbage. I'm not saying these businesses are good. I'm just saying you absolutely cannot make a blanket statement like "valued at 72x rev is bullshit" if my business is growing even 2-3x a year, it could be ok. In a few years (6-7) if I keep that up my revenue will outpace even my original valuation. It means nothing to look at revenue and valuation alone.
AlbertCory 4y ago
re "reading some wanker's opinions": I keep waiting for someone at Substack to start an aggregate of a whole bunch of wankers (some of whom are good), with consistent editing, advertising, and publish dates. Sell it at one reasonable price. They could call it, I don't know... A "magazine" [tm]
- rchaud 4y ago
  I've thought the same about both Substack and legacy media. I recently cancelled my NYT subscription, but I would happily pay a one-time fee for a nicely packaged, printed copy of their journalistic scoops. I think their last big one was about the impact of drone bombings in civilian areas in Afghanistan and Pakistan. That's an important piece of research that deserves a permanent home. No such option exists. And unfortunately, I'm not going to pay $20/mo CAD for what appears to be 50% opinion columnists, often writing columns about the same thing week after week.
  - AlbertCory 4y ago
    Yeah. Very, very few writers are compelling every single week. But take a group of 40, and it's almost guaranteed that at least one hits it out of the park in any given week.
- burkaman 4y ago
  There are curated magazine-like things on Substack, but they are organized by writers' collectives, not Substack itself. One example: https://www.discourseblog.com/about https://www.discourseblog.com/about
Spartan-S63 4y ago
$9M in annual revenue with possible fundraising valuing Substack at $750M-1B? Wow, even when the markets were hot and valued growth, that's a really aggressive valuation. We're talking 100x revenue, which is insane to me. Sounds like they're doing what they should be by trying to run off revenue, plus some cash in the bank. I think the days of hyper-growth startups are over — at least until markets improve and/or the Fed returns to QE policies.
- danielmarkbruce 4y ago
  There seems to be more of these than most folks(incl. me) realized. High 100's of millions to a billion valuation for companies doing high 100s of thousands to single digit millions of revenue. This, fast, a few others I've heard of privately.
- hiyer 4y ago
  I know of a company that was valued at ~6 billion at 40 million revenue, and is now valued at ~11 billion at just under 100 million.
  - vasco 4y ago
    I know of a rock in my street that is worth trillions, since carved a tiny bit of it for €5.
    - disgruntledphd2 4y ago
      Does it keep tigers away?
spamizbad 4y ago
Not surprised. A ton of political writers who got slurped up into Substack all compete over the same niche audience who definitely aren't paying $10/month or whatever for 15 different writers doing basically the same "heterodox" takes. That swarm effect works on "free" mediums like the blogosphere back in the day or Twitter, but it doesn't really scale to paywalled newsletters.
- moviewise 4y ago
  A lot of people want to support those writers in a Patreon-like model, which is the role that Substack plays for readers who want to help writers have an online presence where they are free to honestly write about different subjects.
  - rchaud 4y ago
    A Ko-Fi button and a sign-up page on a blog could achieve that. I suspect Substack writers are hoping to get elevated to the 'paid writer' status that big names like Andrew Sullivan have. That's the only network effect I can think of with their product.
- deleted 4y ago
  [deleted]
WesleyLivesay 4y ago
I wonder what the future of Substack looks like, I have seen that they have been trying to push into the podcast space recently. I wonder if they continue to broaden the content they support and just slowly morph into a Patreon type site where instead of featuring just newsletters it is built for any type of content that allows paid subscriptions.
pastor_bob 4y ago
Sad to feel sorry for a company that smugly told people from Twitter not to apply
- jonny_eh 4y ago
  Had to look it up, seems kinda gross: https://www.newsweek.com/substack-rejects-twitter-employees-considering-quitting-over-elon-musk-1695313 https://www.newsweek.com/substack-rejects-twitter-employees-...
  - weezin 4y ago
    Substack's founders have been vocal about supporting free speech[0]. So it makes sense to me why they wouldn't want people holding the exact opposite views to the point of quitting. [0] https://on.substack.com/p/substacks-view-of-content-moderation https://on.substack.com/p/substacks-view-of-content-moderati...
    - jonny_eh 4y ago
      There are reasons to not want to work for Elon Musk other than disagreements over free speech.
      - weezin 4y ago
        Yeah I think that is completely fair but the tweet states "If you’re a Twitter employee who’s considering resigning because you’re worried about Elon Musk pushing for less regulated speech… please do not come work here."
      - pessimizer 4y ago
        I find Musk vile, but I haven't seen many other reasons cited; all I hear is that he was threatening to let the "actual nazis" run wild.
  - FeepingCreature 4y ago
    I think it's funny and relatable.
klelatti 4y ago
They have lost some prominent and apparently successful publications to competitors with lower fees and apparently better service (I can think of two at least who have moved to Ghost). Will be hard to build scale and profitability when your best writers have an incentive to move elsewhere.
walterbell 4y ago
What's the value of their subscriber list?
- rchaud 4y ago
  $0, because they don't have an advertising platform.....yet.
andreyk 4y ago
Some more details: "Substack laid off 13 of its 90 employees on Wednesday, part of an effort to conserve cash amid an industrywide funding crunch for start-ups. Substack’s chief executive, Chris Best, told employees that the cuts affected staff members responsible for human resources and writer support functions, among others, according to a person familiar with the discussion. Mr. Best told employees on Wednesday that Substack had decided to cut jobs so it could fund its operations from its own revenue without raising additional financing in a difficult market, according to the person with knowledge of the discussion." So to be fair to Substack, while their valuation is crazy it's not like they are burning through VC money with wild abandon. Nice to see some restraint instead of a CEO feeding delusional hype.
- rchaud 4y ago
  The newsletter hype cycle is over anyway. Substack was the name on everyone's lips when they were buying off big-name writers like Andrew Sullivan. That's faded, they have yet to land any big hitters organically. People are having to tighten budgets and cut gym memberships, newspapers, Netflix and Spotify subscriptions. Substack isn't even in the mix there.
- jonny_eh 4y ago
  I'm kinda surprised that a 13 employee layoff at a 90 employee company is newsworthy enough for the NYTimes.
  - de_keyboard 4y ago
    Direct competition for labour. If writers can earn more on Substack then NYT input costs rise.
  - Negitivefrags 4y ago
    Journalists at the NYT are probably feeling some schadenfreude about it because substack is often positioned as a kind of anti-mainstream-media website.
  - jsemrau 4y ago
    Thank you for pointing that out. The US economy is still excepted to grow at 2.5% in 2022. So I am not understand the narrative here. While everyone who is relying on cheap funding to grow their business will be suffering, companies that have solid unit economics should thrive. [1]https://www.oecd.org/economy/united-states-economic-snapshot/ https://www.oecd.org/economy/united-states-economic-snapshot...
rahimnathwani 4y ago
To the folks saying the revenue multiple is crazy: remember that the $9MM revenue is substack's cut, not GMV (gross merchandise value: the amount subscribers paid). If you're comparing substack with a non-marketplace business, you probably want to compare gross profit between the two, or compare substack's GMV with the other company's revenue. Also consider growth expectations.
- paxys 4y ago
  Most startups that Substack is competing with for funding (mostly SaaS services) get to keep 100% of their GMV. So using $9M as their revenue number is the right way to value them. Cost of goods sold is always deducted before reporting revenue, otherwise companies like Uber, Lyft, Doordash, Amazon, Stripe, Square that pass through most of their receipts would all seem 10-100x bigger than they actually are.
  - gowld 4y ago
    > Cost of goods sold is always deducted before reporting revenue According to whom? Did you mean "Gross income", not "revenue" ? https://www.investopedia.com/terms/c/cogs.asp https://www.investopedia.com/terms/c/cogs.asp > COGS is deducted from revenues (sales) in order to calculate gross profit and gross margin. Higher COGS results in lower margins. > Amazon https://www.wsj.com/market-data/quotes/AMZN/financials/annual/income-statement https://www.wsj.com/market-data/quotes/AMZN/financials/annua... In $Billons: Sales/Revenue +469 Top line COGS incl. D&A -272 Reductions Gross Income =197 SG&A Expense -172 (leading to $25-$50B bottom line income depending on which reductions you care about)
- adam_arthur 4y ago
  The potential "capturable" net income from operations is what matters in the end. Retail tends to have large revenues and tiny margins. I can say Amazon retail should be worth more based on their revenue, but when their margins are 0 or negative, that would be dumb
tootie 4y ago
I'm sure the NYT editors were cackling at this story. It wasn't too long ago that there was a huge worry that paid newsletters were going to subsume a huge portion of the subscription market for professional newsrooms. Substack was offering guaranteed contracts to writers worth more than their subscription revenue could justify in order to bootstrap a network effect. The classic VC strategy of selling dollars for fifty cents. That ultimately backfired because they were indiscriminate about who they let on their platform which raised hackles from some writers who saw it as a platform for unsavory opinions.
- rchaud 4y ago
  Substack offered contracts to a tiny sliver of writers. Most journalists can look at the names they gave contracts to and could figure out that what those names provide is commentary, rather than journalism. Journalists usually prefer the latter.
- pessimizer 4y ago
  > Substack was offering guaranteed contracts to writers worth more than their subscription revenue could justify That isn't what I read. Their big payments (which weren't structured as advances but as guarantees for which writers had to forgo X months of subscription revenue) to big name writers ended up being lower than the standard author cut of the subscriptions those writers generated. So much so that this might account for a significant part of the $9MM.
  - tootie 4y ago
    I'm only going off a few media reports from what was disclosed, you're technically correct but the guarantees were in excess of what they would likely have earned from subs. https://www.nytimes.com/2021/04/11/business/media/substack-newsletter-competition.html https://www.nytimes.com/2021/04/11/business/media/substack-n... This writer had 18k subs at $50/yr ($90k/yr revenue, of which Substack would take 10%) but was paid $430k for 2 years. Maybe they grow their reader base to close some of that gap but it's still a loss leader to build reputation. It's possible some other writers took less favorable deals but I haven't seen the details.
40acres 4y ago
Interesting to note that a decent chunk of this 9M goes directly to Stripe. SS has all these writers and subscribers but is making peanuts.
- rchaud 4y ago
  A much bigger chunk is probably going to AWS. Doesn't Substack use Amazon SES?
  - jacobobryant 4y ago
    mailgun
- Destiner 4y ago
  Selling picks and shovels to those who sell picks and shovels is a lucrative business, huh?
deleted 4y ago
[deleted]
lcnmrn 4y ago
Subreply is laying off its only employee. :)
r0m4n0 4y ago
They must still be hiring engineers because I had a recruiter hounding me Monday
KerrickStaley 4y ago
On a recent episode of the Odd Lots podcast [1], they discussed an interesting phenomenon where hot startups won’t want to raise when markets are down, even if funding is available, because they don’t want to do a down round. Doing a down round marks the company to market and shows up as a materialized loss in the VC’s fund, whereas they can keep the old valuation if they don’t raise. [1] https://www.bloomberg.com/news/articles/2022-06-23/the-behind-the-scenes-mess-now-facing-the-vc-industry?srnd=oddlots-podcast https://www.bloomberg.com/news/articles/2022-06-23/the-behin...
- samsonradu 4y ago
  Much like a non-liquid stock, stop all the trading and the company valuation will (on paper) be computed using the last trade’s price.
- __derek__ 4y ago
  Coming from this side, I was surprised that Joe and Tracy were unaware of that phenomenon, especially Tracy given her background covering debt markets during periods of low liquidity.
- gbourne 4y ago
  Like most VC questions, the answer is in Silicon Valley (tv show). "Why the f* didn't anyone tell me I could take less?" https://www.youtube.com/watch?v=hsmmznL9sFg https://www.youtube.com/watch?v=hsmmznL9sFg
nonrandomstring 4y ago
I am trying to care, but despite thinking Substack sounded like a great idea when first launched I have sadly not been able to read their articles since they reject my browser and choice of privacy technologies for read-only access.
999900000999 4y ago
Substack is close to an amazing business model, but literally one or two engineers can make this. What's their to scale ? It feels like a really over engineered solution to a basic problem.
- gowld 4y ago
  Running a business is more than just engineering.
  - 999900000999 4y ago
    I guarantee you they had more than 2 engineers on this thing. It's as if you need to hire to prove growth, even if people aren't doing much
russellbeattie 4y ago
Coinbase, Bird, Redfin, Netflix, Tesla, Unity, Niantic and now Substack have announced layoffs in just the past few weeks, and Meta and Intel are in a hiring freeze. I think the next tech winter might be upon us. Is the return of FuckedCompany next? https://en.m.wikipedia.org/wiki/Fucked_Company https://en.m.wikipedia.org/wiki/Fucked_Company
gowld 4y ago
What a terrible business name. "substack" -> "subscription stack", a cool product to help people sell subscriptions. OK, that's great. But then to go to the paying customers with that name? It's like Walmart calling themselves "Efficient Logistics", or Microsoft calling themselves "StableABI"

131 points by jdp23 4y ago

https://archive.ph/UB59U https://archive.ph/UB59U obligatory paywall bypass

damn..I thought they were doing well. Substack faces a lot of possible problems, imho: does not scale that well, limited audience size, writer burnout https://greyenlightenment.com/2022/06/22/substack-worth-1-billion-likely-not/ https://greyenlightenment.com/2022/06/22/substack-worth-1-bi... I think what substack needs is better content/writer discovery. There seems to be no good way to find related substack blogs adjacent to the ones I already follow. Medium .com at least got that part right. I can go to the home page of Medium and find huge assortment of articles that interest me. That's not the same with Substack. Also, the the pop-up prompt to subscribe on mobile is annoying and does not go away. It should be disabled via cookies if you decline to subscribe.

moviewise 4y ago
I agree that Substack needs a better content/writer discovery mechanism, like having categories or tags per article/post so that readers can find related articles by subject/genre/type to the one they enjoyed reading. Unfortunately, Substack wants to do an internal reference or "recommendation" system that basically mimics a closed clique. Those that know other writers may get a friend to "recommend" their newsletter, but it will very likely not be anything that the readers of this friend are interested in since the recommendation may have nothing to do with the content, or the merits of the recommended writer, it's just who they know. I think people are interested in the content, in a subject, or a genre/type of writing, like humor, advice, reviews, etc. They may want to spend more time with a subject rather than being given irrelevant recommendations based on who the writer reads.
synergy20 4y ago
That's true, I'm a subscriber at Medium, often times it suggests something that is of interests to me, I gifted its membership to a friend this year after find it definitely worth $50 a year.
- hiyer 4y ago
  Medium subscribers get free access to the entire library of pragmatic programmer's publications [1]. That alone makes it worth the money in my book. 1. https://medium.com/pragmatic-programmers/directory-of-pragmatic-programmer-books-on-medium-6a5cbadbd4b4 https://medium.com/pragmatic-programmers/directory-of-pragma...
  - synergy20 4y ago
    not known this, thanks!
x0x0 4y ago
I think the bigger issue is what is their competitive moat? I can't think of a single thing that isn't going to be replicated elsewhere. Unless they start cross advertising between their different newsletters or something to create some type of network effect.
- svnt 4y ago
  The cross-marketing was clearly the plan but I wonder how many established-writer stans are like “This wasn’t so I could talk to my hero, I was also waiting to pay some unknown person for their food ideas.” My guess is the conversion numbers on that are terrible.
- burkaman 4y ago
  It has already been replicated. Ghost is one example I know of that is very explicitly competing with them: https://ghost.org/vs/substack/ https://ghost.org/vs/substack/ One newsletter I'm subscribed to recently switched from Substack to Ghost, and as a reader it was completely seamless and I might not have noticed if they hadn't mentioned it. They were able to transfer all their paid subscribers and article archive, so it doesn't seem like these services have any real moat.
skybrian 4y ago
It's an important feature that I can subscribe to the blogs I like without hearing anything at all about the ones I don't like. Get rid of the separation and you basically have Twitter or Reddit. People will complain about the stuff they don't like, and the next thing you know, Substack will need to hire an army of moderators. Don't cross the streams. Not on Substack itself, anyway. The recommendations can happen via other websites like Hacker News and the occasional author link.

EddieDante 4y ago

Substack is the Medium of newsletters; the content is neither rare nor well-done. I'm not surprised they need to dump staff; their business model was never sustainable. Why should I pay to read some wanker's opinions in my inbox when I can read a whole bunch of other wankers' opinions for free using their RSS feeds, without having to worry about whether any of these wankers are selling their mailing lists to make a little extra cash on the side? Real writers have day jobs.

PaulHoule 4y ago
The last thing I want is to get another email list. For me email is a big ball of stress, there is always a huge amount of spam to delete, even if I keep up on unsubscribing from lists and blocking addresses that send me spam. When I am reading email I am generally trying to get some specific task done and having email newsletters get in the way means I'm going to skip over the newsletters and never read them. What the world needs is an RSS reader which is like that Talking Heads song Psycho Killer: "See something once, why see it again?"
- stonogo 4y ago
  You would probably be better served by fixing your damaged relationship with the techology rather than declaring it to be the wrong answer a priori. Perhaps a middle ground, like Thunderbird or Vivaldi's RSS readers, would suit you. Don't use the clients for mail, just try it out as a feed reader only, to avoid the negative expectations. One of the big advantage of the mail-style presentation is the client indexes the content and gives you full-text search of the stories you've read. Once you get used to that it's hard to go back.
jjtheblunt 4y ago
> Real writers have day jobs. What a great quote!
bachmeier 4y ago
> Real writers have day jobs. Alternatively, if I care what you have to say, you're probably not a professional writer. Maybe there's a better way to do it than we've seen so far, but I have yet to watch someone go that route without overhyping every little thing, stretching the truth, and then outright making stuff up.

AzzieElbab 4y ago

They probably overpaid for bunch of ppl to join

MisterBastahrd 4y ago
I think they paid that much just to get comic book creators to join.
- AzzieElbab 4y ago
  I did t even know there were comic books on substack
  - MisterBastahrd 4y ago
    I suppose the closest analogue would be the LIV tour in golf. Substack came calling and tried to pull away a number of big names from DC, Marvel, and Image with promises of pre-payments for creator-owned projects and full editorial control. I think some of them are starting to realize that self-publishing is far more expensive independently (given that you are responsible for paying the artists, letterers, etc) than finding a publisher for your work.

11101010001100 4y ago

$9M in revenue in a year when many people had plenty of time to read? Oof.

kwertyoowiyop 4y ago

How could a company with $9M revenue, that I would guess isn’t profitable, ever be valued at $650M?

dqpb 4y ago
On the flip side, how does a blog platform cost more than $9M per year?
- tempestn 4y ago
  I would guess mostly marketing—building the brand and the audience. Also recruiting writers to the platform.
  - meheleventyone 4y ago
    Doh, cross-posted the exact same thought!
- meheleventyone 4y ago
  You pay writers to come to your site and all the other marketing gumph.
- rchaud 4y ago
  One big difference. Substack is push, blogs are pull. Managing the reliable sending of millions of subscriber emails is expensive.
  - gowld 4y ago
    How much? Mailchimp charges $12K/year for 150K contacts and 180 emails/contact/year. (Above that is "call us" pricing.) At that rate, it is about 10c per contact per year. Substack has 500K paying reader-subscribers, 10-20x that in "total readership", whatever that means, and "millions" of readers (but I believe those are web viewers). https://backlinko.com/substack-users#how-many-paying-subscribers-use-substack https://backlinko.com/substack-users#how-many-paying-subscri...

Barrera 4y ago

> Substack, which takes a cut of its writers’ subscription fees, generated about $9 million in revenue last year, The New York Times reported. That means the funding discussions valued the company at a hefty premium relative to its financial results. Substack was said to be valued at $650 million last year after the company closed a $65 million funding round. By any yardstick, a price/sales ratio of 72 is ludicrous. It's the kind of thing that can only happen within the safety of a financial bubble.

submeta 4y ago
Look at what happens here in Germany. A job portal for students just closed 45million Euros in Feb this year. They have raised 95m in 7 years. Their revenues in 2019 were merely a couple of million Euros. I can only guess their valuation.
roflyear 4y ago
No it is not. Not when you consider growth.
- azemetre 4y ago
  What is the point of growth if you can't make a successful business? Legitimate question here. I always had a hard time understanding, especially in regards to companies that are still not profitable or just barely after 10 to 20 years. Seems incredibly risky and not strong enough to weather any economic downturn. Are companies just copying the Facebook mantra from 2005ish? Didn't FB become immediately profitable once they started selling ads? That was pre ipo.
  - roflyear 4y ago
    Yeah but you're changing the subject. Obviously if the business is garbage it is garbage. I'm not saying these businesses are good. I'm just saying you absolutely cannot make a blanket statement like "valued at 72x rev is bullshit" if my business is growing even 2-3x a year, it could be ok. In a few years (6-7) if I keep that up my revenue will outpace even my original valuation. It means nothing to look at revenue and valuation alone.

AlbertCory 4y ago

re "reading some wanker's opinions": I keep waiting for someone at Substack to start an aggregate of a whole bunch of wankers (some of whom are good), with consistent editing, advertising, and publish dates. Sell it at one reasonable price. They could call it, I don't know... A "magazine" [tm]

rchaud 4y ago
I've thought the same about both Substack and legacy media. I recently cancelled my NYT subscription, but I would happily pay a one-time fee for a nicely packaged, printed copy of their journalistic scoops. I think their last big one was about the impact of drone bombings in civilian areas in Afghanistan and Pakistan. That's an important piece of research that deserves a permanent home. No such option exists. And unfortunately, I'm not going to pay $20/mo CAD for what appears to be 50% opinion columnists, often writing columns about the same thing week after week.
- AlbertCory 4y ago
  Yeah. Very, very few writers are compelling every single week. But take a group of 40, and it's almost guaranteed that at least one hits it out of the park in any given week.
burkaman 4y ago
There are curated magazine-like things on Substack, but they are organized by writers' collectives, not Substack itself. One example: https://www.discourseblog.com/about https://www.discourseblog.com/about

Spartan-S63 4y ago

$9M in annual revenue with possible fundraising valuing Substack at $750M-1B? Wow, even when the markets were hot and valued growth, that's a really aggressive valuation. We're talking 100x revenue, which is insane to me. Sounds like they're doing what they should be by trying to run off revenue, plus some cash in the bank. I think the days of hyper-growth startups are over — at least until markets improve and/or the Fed returns to QE policies.

danielmarkbruce 4y ago
There seems to be more of these than most folks(incl. me) realized. High 100's of millions to a billion valuation for companies doing high 100s of thousands to single digit millions of revenue. This, fast, a few others I've heard of privately.
hiyer 4y ago
I know of a company that was valued at ~6 billion at 40 million revenue, and is now valued at ~11 billion at just under 100 million.
- vasco 4y ago
  I know of a rock in my street that is worth trillions, since carved a tiny bit of it for €5.
  - disgruntledphd2 4y ago
    Does it keep tigers away?

spamizbad 4y ago

Not surprised. A ton of political writers who got slurped up into Substack all compete over the same niche audience who definitely aren't paying $10/month or whatever for 15 different writers doing basically the same "heterodox" takes. That swarm effect works on "free" mediums like the blogosphere back in the day or Twitter, but it doesn't really scale to paywalled newsletters.

moviewise 4y ago
A lot of people want to support those writers in a Patreon-like model, which is the role that Substack plays for readers who want to help writers have an online presence where they are free to honestly write about different subjects.
- rchaud 4y ago
  A Ko-Fi button and a sign-up page on a blog could achieve that. I suspect Substack writers are hoping to get elevated to the 'paid writer' status that big names like Andrew Sullivan have. That's the only network effect I can think of with their product.
deleted 4y ago
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WesleyLivesay 4y ago

I wonder what the future of Substack looks like, I have seen that they have been trying to push into the podcast space recently. I wonder if they continue to broaden the content they support and just slowly morph into a Patreon type site where instead of featuring just newsletters it is built for any type of content that allows paid subscriptions.

pastor_bob 4y ago

Sad to feel sorry for a company that smugly told people from Twitter not to apply

jonny_eh 4y ago
Had to look it up, seems kinda gross: https://www.newsweek.com/substack-rejects-twitter-employees-considering-quitting-over-elon-musk-1695313 https://www.newsweek.com/substack-rejects-twitter-employees-...
- weezin 4y ago
  Substack's founders have been vocal about supporting free speech[0]. So it makes sense to me why they wouldn't want people holding the exact opposite views to the point of quitting. [0] https://on.substack.com/p/substacks-view-of-content-moderation https://on.substack.com/p/substacks-view-of-content-moderati...
  - jonny_eh 4y ago
    There are reasons to not want to work for Elon Musk other than disagreements over free speech.
    - weezin 4y ago
      Yeah I think that is completely fair but the tweet states "If you’re a Twitter employee who’s considering resigning because you’re worried about Elon Musk pushing for less regulated speech… please do not come work here."
    - pessimizer 4y ago
      I find Musk vile, but I haven't seen many other reasons cited; all I hear is that he was threatening to let the "actual nazis" run wild.
- FeepingCreature 4y ago
  I think it's funny and relatable.

klelatti 4y ago

They have lost some prominent and apparently successful publications to competitors with lower fees and apparently better service (I can think of two at least who have moved to Ghost). Will be hard to build scale and profitability when your best writers have an incentive to move elsewhere.

walterbell 4y ago

What's the value of their subscriber list?

rchaud 4y ago
$0, because they don't have an advertising platform.....yet.

andreyk 4y ago

Some more details: "Substack laid off 13 of its 90 employees on Wednesday, part of an effort to conserve cash amid an industrywide funding crunch for start-ups. Substack’s chief executive, Chris Best, told employees that the cuts affected staff members responsible for human resources and writer support functions, among others, according to a person familiar with the discussion. Mr. Best told employees on Wednesday that Substack had decided to cut jobs so it could fund its operations from its own revenue without raising additional financing in a difficult market, according to the person with knowledge of the discussion." So to be fair to Substack, while their valuation is crazy it's not like they are burning through VC money with wild abandon. Nice to see some restraint instead of a CEO feeding delusional hype.

rchaud 4y ago
The newsletter hype cycle is over anyway. Substack was the name on everyone's lips when they were buying off big-name writers like Andrew Sullivan. That's faded, they have yet to land any big hitters organically. People are having to tighten budgets and cut gym memberships, newspapers, Netflix and Spotify subscriptions. Substack isn't even in the mix there.
jonny_eh 4y ago
I'm kinda surprised that a 13 employee layoff at a 90 employee company is newsworthy enough for the NYTimes.
- de_keyboard 4y ago
  Direct competition for labour. If writers can earn more on Substack then NYT input costs rise.
- Negitivefrags 4y ago
  Journalists at the NYT are probably feeling some schadenfreude about it because substack is often positioned as a kind of anti-mainstream-media website.
- jsemrau 4y ago
  Thank you for pointing that out. The US economy is still excepted to grow at 2.5% in 2022. So I am not understand the narrative here. While everyone who is relying on cheap funding to grow their business will be suffering, companies that have solid unit economics should thrive. [1]https://www.oecd.org/economy/united-states-economic-snapshot/ https://www.oecd.org/economy/united-states-economic-snapshot...

rahimnathwani 4y ago

To the folks saying the revenue multiple is crazy: remember that the $9MM revenue is substack's cut, not GMV (gross merchandise value: the amount subscribers paid). If you're comparing substack with a non-marketplace business, you probably want to compare gross profit between the two, or compare substack's GMV with the other company's revenue. Also consider growth expectations.

paxys 4y ago
Most startups that Substack is competing with for funding (mostly SaaS services) get to keep 100% of their GMV. So using $9M as their revenue number is the right way to value them. Cost of goods sold is always deducted before reporting revenue, otherwise companies like Uber, Lyft, Doordash, Amazon, Stripe, Square that pass through most of their receipts would all seem 10-100x bigger than they actually are.
- gowld 4y ago
  > Cost of goods sold is always deducted before reporting revenue According to whom? Did you mean "Gross income", not "revenue" ? https://www.investopedia.com/terms/c/cogs.asp https://www.investopedia.com/terms/c/cogs.asp > COGS is deducted from revenues (sales) in order to calculate gross profit and gross margin. Higher COGS results in lower margins. > Amazon https://www.wsj.com/market-data/quotes/AMZN/financials/annual/income-statement https://www.wsj.com/market-data/quotes/AMZN/financials/annua... In $Billons: Sales/Revenue +469 Top line COGS incl. D&A -272 Reductions Gross Income =197 SG&A Expense -172 (leading to $25-$50B bottom line income depending on which reductions you care about)
adam_arthur 4y ago
The potential "capturable" net income from operations is what matters in the end. Retail tends to have large revenues and tiny margins. I can say Amazon retail should be worth more based on their revenue, but when their margins are 0 or negative, that would be dumb

tootie 4y ago

I'm sure the NYT editors were cackling at this story. It wasn't too long ago that there was a huge worry that paid newsletters were going to subsume a huge portion of the subscription market for professional newsrooms. Substack was offering guaranteed contracts to writers worth more than their subscription revenue could justify in order to bootstrap a network effect. The classic VC strategy of selling dollars for fifty cents. That ultimately backfired because they were indiscriminate about who they let on their platform which raised hackles from some writers who saw it as a platform for unsavory opinions.

rchaud 4y ago
Substack offered contracts to a tiny sliver of writers. Most journalists can look at the names they gave contracts to and could figure out that what those names provide is commentary, rather than journalism. Journalists usually prefer the latter.
pessimizer 4y ago
> Substack was offering guaranteed contracts to writers worth more than their subscription revenue could justify That isn't what I read. Their big payments (which weren't structured as advances but as guarantees for which writers had to forgo X months of subscription revenue) to big name writers ended up being lower than the standard author cut of the subscriptions those writers generated. So much so that this might account for a significant part of the $9MM.
- tootie 4y ago
  I'm only going off a few media reports from what was disclosed, you're technically correct but the guarantees were in excess of what they would likely have earned from subs. https://www.nytimes.com/2021/04/11/business/media/substack-newsletter-competition.html https://www.nytimes.com/2021/04/11/business/media/substack-n... This writer had 18k subs at $50/yr ($90k/yr revenue, of which Substack would take 10%) but was paid $430k for 2 years. Maybe they grow their reader base to close some of that gap but it's still a loss leader to build reputation. It's possible some other writers took less favorable deals but I haven't seen the details.

40acres 4y ago

Interesting to note that a decent chunk of this 9M goes directly to Stripe. SS has all these writers and subscribers but is making peanuts.

rchaud 4y ago
A much bigger chunk is probably going to AWS. Doesn't Substack use Amazon SES?
- jacobobryant 4y ago
  mailgun
Destiner 4y ago
Selling picks and shovels to those who sell picks and shovels is a lucrative business, huh?

deleted 4y ago

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lcnmrn 4y ago

Subreply is laying off its only employee. :)

r0m4n0 4y ago

They must still be hiring engineers because I had a recruiter hounding me Monday

KerrickStaley 4y ago

On a recent episode of the Odd Lots podcast [1], they discussed an interesting phenomenon where hot startups won’t want to raise when markets are down, even if funding is available, because they don’t want to do a down round. Doing a down round marks the company to market and shows up as a materialized loss in the VC’s fund, whereas they can keep the old valuation if they don’t raise. [1] https://www.bloomberg.com/news/articles/2022-06-23/the-behind-the-scenes-mess-now-facing-the-vc-industry?srnd=oddlots-podcast https://www.bloomberg.com/news/articles/2022-06-23/the-behin...

samsonradu 4y ago
Much like a non-liquid stock, stop all the trading and the company valuation will (on paper) be computed using the last trade’s price.
__derek__ 4y ago
Coming from this side, I was surprised that Joe and Tracy were unaware of that phenomenon, especially Tracy given her background covering debt markets during periods of low liquidity.
gbourne 4y ago
Like most VC questions, the answer is in Silicon Valley (tv show). "Why the f* didn't anyone tell me I could take less?" https://www.youtube.com/watch?v=hsmmznL9sFg https://www.youtube.com/watch?v=hsmmznL9sFg

nonrandomstring 4y ago

I am trying to care, but despite thinking Substack sounded like a great idea when first launched I have sadly not been able to read their articles since they reject my browser and choice of privacy technologies for read-only access.

999900000999 4y ago

Substack is close to an amazing business model, but literally one or two engineers can make this. What's their to scale ? It feels like a really over engineered solution to a basic problem.

gowld 4y ago
Running a business is more than just engineering.
- 999900000999 4y ago
  I guarantee you they had more than 2 engineers on this thing. It's as if you need to hire to prove growth, even if people aren't doing much

russellbeattie 4y ago

Coinbase, Bird, Redfin, Netflix, Tesla, Unity, Niantic and now Substack have announced layoffs in just the past few weeks, and Meta and Intel are in a hiring freeze. I think the next tech winter might be upon us. Is the return of FuckedCompany next? https://en.m.wikipedia.org/wiki/Fucked_Company https://en.m.wikipedia.org/wiki/Fucked_Company

gowld 4y ago

What a terrible business name. "substack" -> "subscription stack", a cool product to help people sell subscriptions. OK, that's great. But then to go to the paying customers with that name? It's like Walmart calling themselves "Efficient Logistics", or Microsoft calling themselves "StableABI"