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Substack hasn’t really figured out a business model. They took $86 million of VC money at the height of the boom and used it for exorbitant payouts to writers,

by pavlov 3y ago

Substack hasn’t really figured out a business model. They took $86 million of VC money at the height of the boom and used it for exorbitant payouts to writers, creating the illusion of success. Last year Substack failed to raise another VC round and ended up trying crowdfunding instead. Notably they refused to answer any questions about how much money they’re losing and if they ever expect to be profitable — a weird look when you’re soliciting investors: https://www.theverge.com/2023/3/28/23660473/substack-retail-investors-revenue-profit https://www.theverge.com/2023/3/28/23660473/substack-retail-... Personally I’d give Substack less than 20% chances of survival. This kind of information-free crowdfunded investment round is a mark of high desperation.

keiferski 3y ago
That can all be true, while the post is still bad. Substack isn’t perfect (as I said) but I think their issues are VC-hypergrowth inflicted and not due to a problem with the fundamental business model.
jzl 3y ago
Exactly. And although Substack has done a good job of building their brand, on the technical side they have pretty much zero "moat". The service they provide is incredibly simple. It never made sense as a VC-funded massive growth business. It would have been better off as a self-sustained private company, almost along the lines of Craiglist. Patreon finds itself in a similar boat.