A few weeks ago, we hosted a discussion thread in which we asked writers what features they’d like to see in Substack. We got hundreds of responses, asking for everything from image captions to a mobile app. We were energized by the discussion, and just a little intimidated. To build something great, we have to stay focused and say no to a lot – there’s no way around that. But on top of that, we’re a team of just three people –
Well this is great for you and reassuring validation for Substack. But I'm starting to develop an allergic reaction to VC-backed media companies. I'm willing to be proven wrong on my fear that the desire for growth will blind you to maintaining the alignment of incentives. But that is the fear. Can you write about you're thinking about making this a *sustainable* as well as profitable business? Can you keep showing us that you have the alignment of the readers and writers front and center, and not your next round of funding or potential exits?
Hi Amir, thanks for this comment and these questions. I completely understand your skepticism, or uncertainty... or need for extra reassurance. I've had those same feelings since the very day we started Substack. In my past career, I was a reporter at PandoDaily, a site that covered startups and VC, and I focused a lot on media tech startups. I've seen a lot of media-related startups come and go, a lot that have come close to succeeding but fallen just short, a lot that promised a lot and delivered nothing, and a lot that took on too much venture funding and imploded, spectacularly or otherwise.
Any skepticism about the impact of venture funding on the media is warranted. There have been some horror stories, especially recently. I've had many friends affected – through layoffs, company closures, tightened competition in the freelance market, exploitation of writers' labor, and so on. (Lots of writers on Substack have experienced these things first-hand.) I've seen startups, flush with cash, come in and promise the world to writers, only to take it all away because of a change in business model, or a decision to chase a bright new thing, or because a grand plan didn't work out.
So, why should anyone trust us to be any different? Well, for a start, we're not owed anyone's trust, and we don't expect to just be granted it. It's something we have to earn and then keep proving that we deserve. We are still a very young company and there will be lots of challenges ahead. We can't just say "trust us!" and hope for the best, so all we can do for now is show that we know what the pitfalls are, and that we'll do everything in our power to avoid them. Time will tell how successful we have been in staying true to that (and you can come back to this post and call me out on it!).
But in the meantime, we've had a business model that works from day one. We only make money when Substack writers make money. It's in our interest to help writers thrive. For Substack, the business model has always been fundamental to what we do. Even on day one, we were hell-bent on not being a "get users first and figure out how to monetize later" kind of company. That dynamic has been corrosive to media.
We've also been anti advertising since the start. That's the reason we built Substack – to provide an alternative to the model that dominates today, one that's based on dominating attention, on addiction, on scale, on aggregation and advertising, and one where only the tech platforms can be kings. Subscriptions align incentives between Substack, writers, and readers. With subscriptions, your product is quality. And with subscriptions, millions of writers covering millions of niches can make meaningful income without having to have giant audiences.
Finally, Substack is a platform for writers to build on. It is not a media company. We build tools to support many, many publishers rather than create content to distribute. The business questions for a platform company are very different to those faced by a media company. We're a lot more like Shopify than the New York Times. Having this funding will help us build more tools that are directly in the service of helping writers. Helping writers succeed is not a choice for us – if we stop doing that, we lose the right to exist.
That's what youtube thought it was..a platform. It is of course. But what if your platform is what allows actual neo nazis to spread their word, as well people who get labelled 'nazis' when they are in fact just loud mouthed and annoying..or just not suitably progressive. What if the mob come for you and try to hold you accountable for harbouring and profiting off such "undesirables"?
I hope you can navigate such challenges as Substack clearly has the right intentions.
Congratulations--I am in line with Bill Bishop that it's obvious the worth you are creating and thus, foolish for an SV company such as a16z not to see it; but, I am both nervous and excited to have this much SV cash supporting my pub's foundation. Please keep being the realiable team of dudes and a dog whose balance sheet leans more toward principles than principals.
Congratulations! From the perspective of you guys as founders, it's a HUGE accomplishment to be recognized in this way, and hats off for all of your hard work on building this really,really good product that "just works" for content producers. I've recommended Substack to at least three other people so far as a way to write newsletters, and am excited about the growth of the community.
From the perspective of a paid newsletter writer (and, as such, stakeholder in the company's success), however, this gives me enormous cause for concern, knowing what Silicon Valley in general and venture capital specifically tend to do to content businesses over time (Tumblr, Digg, Reddit, etc.).
I believe you guys strongly believe in no ads/no algos ethos, but I'm not sure that the pressures of the VC money will allow you to continue to act that way in the long term - of course I'm always optimistic! I realize there's nothing you can specifically say to assuage some of these very vague concerns (yet), but I did want to voice them initially as something that immediately came to mind upon reading the announcement.
I'm hopeful that all my fears will be baseless and that the money will allow you to continue to grow your team and keep building up the product (and give the three of you some breathing room! :).
We're totally sensitive to this concern. I agree that there's probably nothing we can say to assuage this, but hopefully there is something we can do: continue to build a company that serves writers and readers well, and has a model that works. We'll give it our all.
The "just works" comment: YAS! Offering services or products that just freaking work is so wonderful and often under appreciated until you experience it. My sentiments exactly. :-)
Y'all, I spoke with your CEO some time ago about our Asian American newsletter that has since gone defunct, though it may have had life had Substack been around when we started it :) I'm so glad for your success and hoping for the best for the future.
Very well done guys! Competing in this media environment is brutal and access to capital is a must if the company is to survive long term. It's a fantastic product you've built and a first rate community. Big congrats.
Congratulations! I really enjoy using Substack for my newsletter (and just started the paid option for people) — looking forward to seeing what comes next!
Congrats y'all! (I'm from Georgia :) Seriously, this is wonderful news and it's nice to see that kind of money going to help a company that's doing something as worthwhile as what you guys are building. Excited to see what the future holds.
Congratulations! I know that taking VC investment always has pros and cons. But, it gives me confidence that the funding will provide you with a lot more runway to continue to develop and grow Substack. It makes me feel great about choosing you for my newsletter!
My suggestion is that the three of you use this $15 million to buy some shoes.
How will the shoes help writers?
We rely on you guys and can't afford to have you on medical leave for avoidable foot injuries.
In that case, a pre-emptive action is necessary, I'll recommend #HappyFoot twice a month. Health they say, is wealth. :)
Burn. LOL
And design while running?
Well this is great for you and reassuring validation for Substack. But I'm starting to develop an allergic reaction to VC-backed media companies. I'm willing to be proven wrong on my fear that the desire for growth will blind you to maintaining the alignment of incentives. But that is the fear. Can you write about you're thinking about making this a *sustainable* as well as profitable business? Can you keep showing us that you have the alignment of the readers and writers front and center, and not your next round of funding or potential exits?
Hi Amir, thanks for this comment and these questions. I completely understand your skepticism, or uncertainty... or need for extra reassurance. I've had those same feelings since the very day we started Substack. In my past career, I was a reporter at PandoDaily, a site that covered startups and VC, and I focused a lot on media tech startups. I've seen a lot of media-related startups come and go, a lot that have come close to succeeding but fallen just short, a lot that promised a lot and delivered nothing, and a lot that took on too much venture funding and imploded, spectacularly or otherwise.
Any skepticism about the impact of venture funding on the media is warranted. There have been some horror stories, especially recently. I've had many friends affected – through layoffs, company closures, tightened competition in the freelance market, exploitation of writers' labor, and so on. (Lots of writers on Substack have experienced these things first-hand.) I've seen startups, flush with cash, come in and promise the world to writers, only to take it all away because of a change in business model, or a decision to chase a bright new thing, or because a grand plan didn't work out.
So, why should anyone trust us to be any different? Well, for a start, we're not owed anyone's trust, and we don't expect to just be granted it. It's something we have to earn and then keep proving that we deserve. We are still a very young company and there will be lots of challenges ahead. We can't just say "trust us!" and hope for the best, so all we can do for now is show that we know what the pitfalls are, and that we'll do everything in our power to avoid them. Time will tell how successful we have been in staying true to that (and you can come back to this post and call me out on it!).
But in the meantime, we've had a business model that works from day one. We only make money when Substack writers make money. It's in our interest to help writers thrive. For Substack, the business model has always been fundamental to what we do. Even on day one, we were hell-bent on not being a "get users first and figure out how to monetize later" kind of company. That dynamic has been corrosive to media.
We've also been anti advertising since the start. That's the reason we built Substack – to provide an alternative to the model that dominates today, one that's based on dominating attention, on addiction, on scale, on aggregation and advertising, and one where only the tech platforms can be kings. Subscriptions align incentives between Substack, writers, and readers. With subscriptions, your product is quality. And with subscriptions, millions of writers covering millions of niches can make meaningful income without having to have giant audiences.
Finally, Substack is a platform for writers to build on. It is not a media company. We build tools to support many, many publishers rather than create content to distribute. The business questions for a platform company are very different to those faced by a media company. We're a lot more like Shopify than the New York Times. Having this funding will help us build more tools that are directly in the service of helping writers. Helping writers succeed is not a choice for us – if we stop doing that, we lose the right to exist.
Thanks, Hamish, couldn't have asked for a better response. I'm excited for Substack and the joy and value you will unlock with it.
That's what youtube thought it was..a platform. It is of course. But what if your platform is what allows actual neo nazis to spread their word, as well people who get labelled 'nazis' when they are in fact just loud mouthed and annoying..or just not suitably progressive. What if the mob come for you and try to hold you accountable for harbouring and profiting off such "undesirables"?
I hope you can navigate such challenges as Substack clearly has the right intentions.
This is a great question I’d like to hear your thoughts on, too.
Congratulations--I am in line with Bill Bishop that it's obvious the worth you are creating and thus, foolish for an SV company such as a16z not to see it; but, I am both nervous and excited to have this much SV cash supporting my pub's foundation. Please keep being the realiable team of dudes and a dog whose balance sheet leans more toward principles than principals.
"Balance sheet leans more toward principles than principals."
Thats actually great sentence. (Saved)
Congratulations! From the perspective of you guys as founders, it's a HUGE accomplishment to be recognized in this way, and hats off for all of your hard work on building this really,really good product that "just works" for content producers. I've recommended Substack to at least three other people so far as a way to write newsletters, and am excited about the growth of the community.
From the perspective of a paid newsletter writer (and, as such, stakeholder in the company's success), however, this gives me enormous cause for concern, knowing what Silicon Valley in general and venture capital specifically tend to do to content businesses over time (Tumblr, Digg, Reddit, etc.).
I believe you guys strongly believe in no ads/no algos ethos, but I'm not sure that the pressures of the VC money will allow you to continue to act that way in the long term - of course I'm always optimistic! I realize there's nothing you can specifically say to assuage some of these very vague concerns (yet), but I did want to voice them initially as something that immediately came to mind upon reading the announcement.
I'm hopeful that all my fears will be baseless and that the money will allow you to continue to grow your team and keep building up the product (and give the three of you some breathing room! :).
Thanks!
We're totally sensitive to this concern. I agree that there's probably nothing we can say to assuage this, but hopefully there is something we can do: continue to build a company that serves writers and readers well, and has a model that works. We'll give it our all.
The "just works" comment: YAS! Offering services or products that just freaking work is so wonderful and often under appreciated until you experience it. My sentiments exactly. :-)
So happy to be part of this journey :)
Y'all, I spoke with your CEO some time ago about our Asian American newsletter that has since gone defunct, though it may have had life had Substack been around when we started it :) I'm so glad for your success and hoping for the best for the future.
Bring it back!
Very well done guys! Competing in this media environment is brutal and access to capital is a must if the company is to survive long term. It's a fantastic product you've built and a first rate community. Big congrats.
More money is better than less money. Congratulations and hope the new guy works out.
I hope so!
This is huge, I'm so thrilled for y'all, you have a wonderful product and delighted you folks have the accelerant!
Congratulations! I really enjoy using Substack for my newsletter (and just started the paid option for people) — looking forward to seeing what comes next!
Congrats y'all! (I'm from Georgia :) Seriously, this is wonderful news and it's nice to see that kind of money going to help a company that's doing something as worthwhile as what you guys are building. Excited to see what the future holds.
I totally love the dog. What is his or her name?
Thanks! Her name is Cassie, and she is a very good dog.
Boop boop!
Great news congrats and please checkout my newsletter https://trendslates.substack.com where I cover commerce daily from Amazon to Zulily.
This is huge! Such a big win and confirmation for the power of editorial newsletters.
Congratulations! I know that taking VC investment always has pros and cons. But, it gives me confidence that the funding will provide you with a lot more runway to continue to develop and grow Substack. It makes me feel great about choosing you for my newsletter!
What is the money going to be used for?
More seriously: hiring a few people so we can build stuff faster. Looking for more ways to help writers get started and continue to grow.
Shoes, according to @Judd's comment