The Hard Truth

Why Substack’s model isn’t viable

Photo by CHUTTERSNAP on Unsplash

Paul here. When Nilofer and I first talked about starting a Substack about a year ago, we were both curious and excited about the possibilities: Building a more direct relationship with readers! Exploring the concepts of Onlyness in real-life situations. Substack making it financially viable. 

But this third part never came together. 

Yes, the response to Nilofer’s writing has been positive. Many of you pay us for our work, for which we are thankful. And we’ve hosted several Zoom calls which had grown men crying. The questions we’ve explored have really shown us the barriers to new ideas. 

The problem is scale, and growth. Neither of which Substack helps with. 

Instead of helping content creators find and build an audience, they are monetizing existing audiences, spending their recent funding round of $65 million on recruiting writers with mass followings from other outlets. This is called their “Pro” model but it is actually the core of their business. 

When they invest in writers who are anti-trans, or expressive of polemical viewpoints, they make the social problem of hate a net benefit for their business, in that it draws attention and interest to the platform. And if (really, when) it ever truly devolves into something that goes beyond offensive and insulting to inciting physical violence, they can then enter the world of moderation and banning, to draw even more attention to themselves as a home for controversy and readers who can’t look away from it.

The question isn’t really, as the New York article I linked to above posits, whether Substack is a scam — it’s not (though some do believe it is, and they make some strong points even if I disagree with their thesis). The question is whether great writing can succeed here, where it is economically viable for both the platform and the creator. 

I’m not convinced it can.

Nilofer here: Hey Paul, let’s make this more valuable by sharing with our community the economic specifics, no?

Before we joined up to do this @work column, Nilofer had about 2,000 people who regularly followed her writing, along with 100,000 on Linked In and 50,000 on Twitter who intermittently read her work. We thought that by doing a more directed column, we could get people to stick around, given that when her work is published in Time or HBR, she regularly drive 500,000 views easily. We thought we could convert people who followed periodically to being more regular readers. 

But we didn’t.

(That big jump in the middle is from an import of Nilofer’s core email list to Substack.)

And then, we expected some percentage would invest in and subsidize the work. 

Interestingly enough, despite only having 2,000ish regular readers, we have 150 subscribers.

That’s 7.5% of the base, right in the middle of Substack’s estimate of 5%-10%, which I’d guess they inflate slightly to make the figures sound more attractive. So despite being beloved, with great content, it means @work is currently grossing about $8k in annual revenue — and split amongst two contributors. 

It’s no way to run a railroad. 

Partly that’s because content is generally undervalued. Partly because people are hesitant (for good reason) to give money to Substack. And of course, we own our part in not asking for your help earlier to drive growth. 

And, just so you know, I’ve asked Substack about the Pro program, and whether they would consider supporting someone who is not a hater but a lover. Someone with multiple awesome books to her name, someone who is a ranked management thinker, someone who cares about solving real problems. Someone who is not a polemicist but a true radical about changing how work works, to realize the latent capacity of 50-70% of workers. 

But we’ve heard nothing back. 

And this gets to the core issue of Substack. We thought Substack could help us drive growth, lending us their megaphone for a moment — front page promotion, tweets, etc. so that @work could become a viable, self-supporting, value-add to their ecosystem — and a sign to other creators that they still *can* grow an audience on this platform and be rewarded with a seat at the table, a chance to use this platform’s tools and levers to grow even further.

But the truth is, Substack benefits from replicating the system of inequality existing in the media world rather than improving upon it. 

This is not a surprising outcome, but certainly a disheartening one. And one that reinforces the fraught nature of relying on the attention economy to deliver income — for every winner, there is a vast army of those toiling away, but not in service of their own security or stability, it turns out. Rather, in service of the platform’s.

Building a business is hard, and no one has a right to success. But good content is not enough on Substack, as it turns out.

I definitely wonder if there is a way where writers can earn enough  from their ideas. But this particular platform — Substack — is not viable, at least not for me. So it's time for me, Paul, to move on. 

What does that mean for this column? That's an open question. Is it time to leave Substack? Do you feel like being a guest editor? All of this and more are things Nilofer wants to explore with you. 

I'm sure you'll want to join me in keeping Nilofer's important work going. But, this is me saying thank you for letting me be a part of your @work journey.