81 Comments
Apr 26, 2022·edited Apr 26, 2022Liked by Tomas Pueyo

I appreciate the different view on this, BUT as far as replacing the NYT, the comparison might make more sense when talking about its op-ed section for analysis, not so much with news. News gathering is a different animal and unless authors made enough to have a support system for investigative journalism, including legal, money for FOIA, travel, etc., it seems like it might not work out so well.

Expand full comment
author

I will write about this in this week's premium article!

Expand full comment
Apr 29, 2022·edited Apr 29, 2022Liked by Tomas Pueyo

Further reflecting on all of this (including reading @pravious comment below) -- there is another important distinction perhaps between the NYT op-ed and Substack that shouldn't be discounted and which shows a potential weakness for the latter. NYT holds the writers to certain journalistic standards whereas perhaps Substack -- especially if we see it as a business tool vs. a for-profit entity with a mission of "all the news that's fit to print" -- that credibility lies solely with the author. At least NYT has a process that seeks to hold its authors to a specific factual standard whereas a Substack writer may have that OR may have the standard of writing what its perceived audience wants to hear as a means of generating cash, political purposes, etc. If Substack were to replace the NYT, in particular, the op-ed analysis part of things, without basic principles of journalism, we as a society may be in trouble. In theory, such a marketplace of ideas, the best ones (hopefully most truthful) would win out, but as we've seen throughout world history that's not always the case. I'd argue without holding its writers accountable to some standard either centrally OR as a community, Substack cannot fully replace the value a NYT and other journalistic organizations bring to society.

Expand full comment
author

My experience with the NYT was really good. Very, very professional, and did all the right due diligence. They pushed me. So I agree with that take.

I also don't think the piece was more insightful because of it. It was more accurate, but took 5x the time I would have taken alone.

It was worth it, especially because the data team is spectacular.

But as a collaborator it made much more sense than if I had to do that every day.

Unfortunately the NYT has lowered its standard for what it's true, from what I have heard.

Expand full comment

Quite a few of us at Substack HQ are 👀 👀

Expand full comment
author

I'm curious about your thoughts too!

Expand full comment

I'm one of the Substack founders. Lots of really strong thinking in here, thanks for writing it!

One of our more radical ideas that I would add: the second order effects of good incentive design matter a great deal.

If we do our jobs well, Substack is not just an alternate way to make money from your writing. It lets you choose to work in a structure where the kind of work you do to succeed is qualitatively different and better. Because your goal is to earn and keep the trust of people who deeply value the work, instead of trying to get clicks or please the algorithm, you want to make something deeply valuable for your most invested readers. For many writers - and we would argue the best writers - that means doing the kind of work you believe in and getting rewarded for it.

We think this model can disproportionately attract the *best* writers, and set up a system that rewards quality and trusted long term relationships. And, we think that we can build network value in a way that builds on and reinforces the value of those relationships instead of undermining them. We think this has the potential to create a renaissance of great writing, thought, and culture that brings a lot of value to the world and winds up being a huge opportunity, even as the writers necessarily keep the lion's share of the money.

Expand full comment
author

Thanks Chris. I agree.

I haven't touched on the revenue model yet—I hope to cover it on another article—but if I understand what you're saying, you're referring to:

1. Ads vs. paid by readers

2. Within payments by readers, subscriptions vs. one-offs

3. Within subscriptions, per writer vs. bundled

1. I agree wholeheartedly with the 1st one: it incentivizes impressions rather than self-perceived value from readers. Impressions push for emotional / viral /click-baity content. And ads are misaligned with the content itself nearly all the time. Self-perceived value is superior, and subscriptions capture that.

2. I agree that subscriptions are better than one-offs. They incentivize a long-term relationship rather than hit pieces, and provide a stabler income to writers. Enabling both options increases cognitive load in readers that would need to decide which option to choose. And my experience from my previous company tells me that rev would be small anyways compared to subs.

3. This is where I'm torn. On one side, bundles are a no-brainer value prop for readers. I assume you, or others, will enable that at some point. On the other, there's an issue of attribution here. If there are 10 writers in a bundle, who decides which author gets what? If you do it per impression, you're back to the problem in 1. Interestingly, this is Medium's issue, since they attribute rev per share of impressions I believe (like Spotify).

I want to believe this attribution can be solved in a different way without falling into the engagement trap. Maybe some other proxy for perceived value: likes/reads/shares/subs per view?

Expand full comment
Apr 29, 2022·edited Apr 29, 2022Liked by Tomas Pueyo

Completely agree with this. I currently don't pay for any substacks but would pay big bucks for a bundle.

Like you said a bundle is a no brainer win-win value proposition for readers and writers. I'm sure Substack can think of ways to divide the revenue fairly while letting writers keep a direct relationship with readers.

As I see it, there's a spectrum of options:

- Encourage more publications like The Dispatch where writers can bundle themselves without substack's help, and decide on their own how to split revenue.

- Make a tool within Substack for authors to create bundles. Maybe Tomas and two other writers agree to promote a bundle with the three of them. They can decide on the price and revenue share (which could maybe be dependent on which writer sold the reader?)

- Make a "Substack+" sub where you gain access to all writers which opt in, with the revenue programmatically split according to impressions, shares, likes, reader decides, etc. I'm sure you guys can come up with something fair! In this case the user could give their email to each writer they want in their inbox (and the writer would own that email).

Expand full comment

I write the Hockey IQ newsletter on Substack… can we get a tip jar to go along with our subscriptions? Seems reasonable, someone likes the piece or changes their life for the better.. give a tip for that specific piece!

Expand full comment

I believe another often overlooked advantage that you at Substack have is its potential to disrupt Google's SEO advertising business. Substack already allows readers to subscribe directly to creators via email and provides them with a chance to make payments. While these things can be easily replicated on self-hosted sites or on Ghost, Substack has elevated the game with its Notes feature, enabling email subscribers acquired via SEO to become part of the network of creators. Consequently, even if SEO experts initially engage in Substack blogspam, over time, their subscribers are likely to shift away and move upward within the quality subscriber chain discovered via network.

Expand full comment
Apr 26, 2022·edited Apr 26, 2022Liked by Tomas Pueyo

Hey Tomas, Do you have anything set up were I can make $ contributions to you on an individual basis? There have been several times when I finish something of yours and want to fork over $ just because of that article. That's how I roll, I'm like a guy strolling down a street with buskers around me and I pause and listen and if I like, I put $ in their guitar case. Can you put out a guitar case or a hat? If you can set up something like this, it picks up people like me who are more motivated on a per article basis. You lose something in $ regularity but gain in realtime feedback, people vote quite accurately with their wallet, it's evolutionary (my dear Watson)

Expand full comment
author

Hahaha very graphic. OK let me think about it. It adds complexity of operation and decision-making to readers, which makes me reluctant. But it's an interesting idea.

Anybody else interested in that?

Expand full comment
Apr 26, 2022·edited Apr 26, 2022Liked by Tomas Pueyo

Tomas, I figure I owe you $10 for Hammer/Dance stuff, another $5 each for nice look into China/Han and for why Russia must watch the plains, that one about the Nile, how seas are like deserts etc. So, there’s a lot of $ riding on this. Think of it as an additional income stream, like your bundling argument but needs a cool name- “Tip Jar”

On a more serious note, Tomas you cannot discount the power of your writing and message and it’s concurrent emotional effect- you want to capitalize on that quality.

Expand full comment
author

That is very kind, thank you.

Capitalizing is one thing, which I'm not against.

Impact resonates more (why no COVID articles have been under paywall).

I'm game for ways to achieve that.

Expand full comment

I love the idea, because I avoid subscriptions like the plague. But I love your content and and I love to pay from time to time.

Expand full comment
Apr 28, 2022Liked by Tomas Pueyo

Thomas, I have no see any comment for a voluntary payment (with an annual reminder for example) for non Premium readers with probably some suggested amounts of payments. With a such period you have enough perspective to value the consumed material/articles and to support a long term relationship, not necessarily based on fixed and constraining fees. A summary of consumed material by the Reader with the annual reminder could help. It could work as an Extra and unexpected payment from the free Readers, who are majority (by 9x ?). Consequently, even a small payment from the many of them could be significant and you take advantage of the gap existing between the fixed fee allergic Readers which are obliged to read once they have paid (not having always time to consume all the material) and the total free Readers with a good experience along the year.

Expand full comment
Apr 26, 2022Liked by Tomas Pueyo

I think there are a things few like this, Patreon maybe not so good in this case (I think subscription based) but things like https://www.buymeacoffee.com/ ... or turn on Tips on your Twitter Profile ('edit profile' on mobile only I think, not desktop)? Not sure about what you can integrate into your Substack articles though.

Expand full comment
author

I should be able to. My main concern is that we had this in my previous company, and the per-unit rev was an order of magnitude smaller, and added lots of customer friction (customers need to think which method to use). But I'll share the idea with Substack, see if other authors are in that boat.

Expand full comment
Apr 27, 2022Liked by Tomas Pueyo

I can imagine. I guess for those who want to, they will make the effort. Even just a link at end of article for the time-being? "Click [link] If you liked this article and want to leave a one-off tip."

Expand full comment
Apr 28, 2022·edited Apr 28, 2022Liked by Tomas Pueyo

I'm a Substack reader and subscriber, and spend up to $15 a month on subscriptions here. That's about my limit, I'm discovering, in a world of subscriptions for online magazines, blogs, and software that can take as much as $2,000 a year out of my pocket, if I let myself go (I haven't, so far, and I don't think I will, nor will others.)

The problem for you content providers is my sort of behavior. When it all starts feeling like money drip, drip, dripping out of my pocket, I pause my Substack subscription. And if I feel like reading someone new, I switch, hopping around, over the various Substack blogs. And sometimes, I get nervous about the cash outflow, and cancel, if the topics are not of interest in any particular month.

That makes for less security for you folks. Those $50k/month subscription bases and readerships are not going to last forever. And you are going to feel the pressure to keep going on your hamster wheels, which you have to keep spinning, to justify your subscriptions to your readers.

That will lead to burnout.

I just don't see Substack as a threat or stable long term competitor to legacy media, unless the formula gets changed for all parties. Less cost of subscription for subscribers, better pay than traditional media for writers, less silo-ing of opinion based content.

Expand full comment
author

I feel like people like you are in fact one of the sources of stability for the platform. If enough people are like you, that's an influx of people and cash that moves around, creating more liquidity in the market, and also giving authors a sense of when what they're writing becomes stale.

I believe many more people will become like you than people who will stop being like you. That will be good for the business!

Expand full comment

I agree, there's nothing wrong with the magazine/newspaper model of bundling. Magazines created an opening for substack by:

- underpaying star writers

- "cancel culture" (for lack of a better term), firing star writers like Andrew Sullivan for wrongthink (in spite of them bringing in readers)

I would pay $300/year (6x The Atlantic!) for "Substack Magazine," an ideologically diverse group of incredible writers. But like you I can't spend $300/year on just three writers, no matter how good they are.

Expand full comment
May 3, 2022Liked by Tomas Pueyo

Yeah, but you can rotate your subscription. 1 month Pueyo, then Scott A., then Khan, then slowboring, then a talented newbie for a heads-up, then a break - repeat ... .

If every free sub (like me) paid just once a year for just 1 month - that is a 100k $, if you have 10 k "free subs". Many probably already subscribe that way. I probably will. Simply not that income now to go steady for several great substacks. With so much excellent free stuff around. And the big names making good money - which they very, very much earn! I am very happy about serious rewards for great writing! Michael and Britney might have fared better with less. - Still: 10$ can buy a book. Or two. - I use Scott's blogroll a LOT. Maybe there could be more incentives to put you best co-writers on a blogroll? - And seeing in the comments that you are an author too, will make me click, a sec after posting. ;) Great feature!

Expand full comment
Apr 27, 2022Liked by Tomas Pueyo

Hi Tomas, Thank You for this through provoking write-up. Way-back, 2012, Bruce Sterling introduced the concept op Stacks, check-out https://suspendedjudgement.tumblr.com/post/33293065193/on-bruce-sterlings-stacks-and-ibm-smartcamp

Your write-up makes good arguments why perhaps Substack may emerge as THE Stack for (quality) written(?) material. Stacks that figure-out how to operate whilst benefitting 'all' inside the Stack instead of treating folks as cattle may well be on to something. Have Fun!

Expand full comment
author

Interesting, thx!

Expand full comment

This article has great insight, I actually started on medium but felt it lacked somehow and then read a couple articles on substack and then decided to move here. The Bundling idea is very interesting, i think i would be more inclined to subscribe if there were bundles as well. Thanks for article!

Expand full comment
May 29, 2022Liked by Tomas Pueyo

A month after reading this, a question pops up in my mind : if one was to start from scratch on a topic today, how would you balance user acquisition vs retention?

Would you start publishing on Medium till you get to a sizable audience, and then move to Substack?

I'm not a fan of Medium's way of controlling things, but it might be the best way to start for a writer.

Expand full comment
author

I would do it indeed.

In fact I would probably cross-publish and push all the subscriptions to substack

Expand full comment

So just put all your posts on both platforms at the beginning, and advertise your Substack in every Medium post ?

(I doubt Medium allows it, but maybe they wouldn't see it right away ^^)

Expand full comment
author

No. Now Medium is following Substack and allows for people to subscribe to you. Medium gives you their emails. You can just import to Substack your medium email addresses every week.

Expand full comment

Oh that's great then ! Best of both worlds !

Do you think Medium might completely copy Substack and offer a similar newsletter tool (a bit like Meta did with Bulletin) ?

Expand full comment
author

They can’t easily change the business model to giving payment ownership to every writer. So I’m not sure they will fully pívot.

Expand full comment

Thanks so much for the education. You provided clarity and a reality to my hunches!

Expand full comment

As a new Substack user who is considering just using Medium (which I have an account for) when I want to write something that it totally off of my niche here, this is a fascinating piece. I just moved over here from Wordpress.

Expand full comment
May 1, 2022Liked by Tomas Pueyo

great article @tomas Pueyo - thank you

Expand full comment

I'm new to all of this, and started with zero subs. I've been publishing on Substack since January, and on Medium since March. My honest take so far? It's much easier for me to get engagement on Medium than Substack. I think Medium is a better fit for people trying to grow an audience, where Substack is the better choice if you already have a following.

Expand full comment
author

Indeed. That's the point of user acquisition I was talking about. Especially now that you can gather emails.

Expand full comment
Apr 29, 2022Liked by Tomas Pueyo

The problem with this take is that the vast majority of substacks don't do any actual original reporting. The big money maker substacks are just analysis and opinion. There is value in actually getting the facts.

Expand full comment
May 3, 2022Liked by Tomas Pueyo

But news are everywhere. Which might change after newspapers die out. Though simple ads seem to finance online only news-websites well enough. - And there will always be BBC and others, generously financed by taxes/forced fees.

Expand full comment
author

And news agencies like Reuters do have a viable business model

Expand full comment
May 3, 2022Liked by Tomas Pueyo

You know, I just guess. My mom's newspaper is mostly retelling Reuters/dpa. The papers do not make the news, for sure. I just thought: The papers might be important buyers - so Reuters might have find itself in trouble, if they all go down the drain. - Good to hear, that's not the case. - Just checked the numbers, 2012-2022: non-local German papers lost half their sales. Again. https://cdn.statcdn.com/Infographic/images/normal/10376.jpeg

Expand full comment
author

Global / national news are better adapted to an ads business.

When you spend the $ to gather the news, you need to distribute that as far and wide as possible to recoup that cost. That entails broader (not specialized) audiences, and also means ad-supported.

The more specialized you are, the less you can do that, but more you can charge.

Eg local news or specialized newsletters / magazines will continue to work under subscription thanks to their specialized / non-commoditized content

Expand full comment

Great article!

I think Substack should go down the bundling route you suggest but slightly differently.

They should offer the option to subscribe to 1/2/5/10/20 newsletters at a discount the more your subscribe to. So 1=$5, 2=$9, etc. Subscribers are then free to add/remove subscriptions as they go along, with the usual month's notice.

Authors can opt out of this if they want to charge more but hopefully, on average, they would receive more because more subscribers would be willing to add them to their bundle.

The burden of any loss in revenue due to a large bundle at a cheap price should be taken by Substack because again, hopefully they will be making more anyway by encouraging subscribers to spend that little bit more.

Expand full comment
author

I like it! This could work. It would solve the issue of attribution

Expand full comment
May 3, 2022Liked by Tomas Pueyo

I like this idea, too, but with a slight modification. Instead of charging a fixed rate for a certain number of newsletters (1=$5, 2=$9, etc), they could offer a fixed discount for a certain number of newsletters (2=10% off, 5=20% off, etc.) That way, writers could continue to choose what they want to charge their subscribers.

Expand full comment
Apr 26, 2022Liked by Tomas Pueyo

You didn't mention RSS and RSS reader apps as a way for authors and readers to meet. I'd be interested to learn where you think this fits into your model.

Expand full comment
author

I haven't thought enough about it. Let me think out loud and you tell me what you think.

1. You don't send paywalled content over an RSS feed easily. This is problematic, because free content is basically content marketing to paywalled content, which is the product. The purpose of content marketing is to send customers to premium content. But if you can't bundle them, what's the point? You need a custom RSS feed for premium content, which is not straightforward

2. If a company doesn't control the client, it doesn't control the cross-promotion (because there's no digital real estate that can be reused to highlight other authors' articles). So there's not a strong incentive in supporting these RSS feeds, because it eliminates the possibility of having network effects.

3. The author doesn't control the user experience as much. For things like comments, or more advanced experience in the future, by definition a network protocol like an RSS feed will be slower to adapt than a company, so can't adapt to innovative UX fast

WDYT?

Expand full comment
Apr 27, 2022·edited Apr 27, 2022Liked by Tomas Pueyo

Yes, thank you for reminding me that podcasts are delivered over RSS and they are monetized using a variety of platforms with the pros and cons described in your article and in Ben's articles.

Expand full comment
Apr 27, 2022Liked by Tomas Pueyo

Um, I haven't tried to monetize any content, I just have experience reading several RSS feeds with a reader app. I expected you to reply that it was difficult to monetize RSS feeds except by directing to longer-form medium or substack articles. I agree that RSS doesn't offer network effects, the only recommendations I've ever seen are those made explicitly by authors in articles. I agree that the reader app controls the UX. Sorry I don't have more to offer.

Expand full comment
author

Don't apologize! I don't know much more than you. It seems like the reasons I gave make it weak as a monetizable option, hence why only a few people do it, and they tend to be elite creators rather than companies.

I know Sam Harris has one, for example. Ben Thompson talks more about RSS feeds in the context of Podcasts. You might find this relevant:

https://stratechery.com/2021/spotifys-surprise/

Expand full comment
Apr 26, 2022·edited Apr 26, 2022Liked by Tomas Pueyo

Thank you, Tomas, for another highly-useful article. I have a basic question: I have a significant amount of notes on various topics that I'd like to organize into articles. But I keep procrastinating. For example, I am paying for hosting a blog, but after posting the first two articles I have not visited it.

I am far more interested in generating novel ideas than in the volume of articles or readers. And I don't need additional income, although it would be nice.

My topics are interest include:

- what to do about cognitive biases such as those described by Kahneman in "Thinking, Fast and Slow" (I have some novel ideas adapted from my past career in engineering)

- relationships between Kahneman's ideas in TFaS and in his new book "Noise"

- relationships between decision-making, mental models, and habits

- my numerous running commentary on the margins of the physical books I read

Given that I don't have an audience or many articles, where would you recommend me to start publishing:

- in my own blog?

- in Medium?

- in Substack?

Thank you in advance!

Victoria

Expand full comment
author

I'll write an article on my methods in the future. It sounds like your #1 goal here is audience gathering.

If your goal is to build an audience, I would write the articles and post them somewhere, and then promote on social media.

POSTING ARTICLES

Medium, under paywall, will give you a few readers for free. Usually it's just a handful though. As my article explains, it was usually 5-40% of the total, but it's a nice thing.

With Medium, you can now gather email addresses so it might not be bad.

As I mention in the article, Substack is starting to have recommendations across authors, so it might be good to be there instead. Personally, if you have time, I'd probably post on both, only promote one (Substack?) and extract the emails from the other every few days / weeks after you write an article.

Owning your audience's email addresses is the single most important thing you have to do.

PROMOTING ON SOCIAL MEDIA

You want to build your audiences on social media and funnel them to your newsletter/blog.

The content you mention fits LinkedIn and Twitter. I would probably focus on these. If you have a big network on FB, you can start there. FWIW I have ±10k followers on LI and FB and 85k on Twitter, but I get only 1 reader from Fb and 1 reader from LI for every 2 Twitter readers.

WORKFLOW

It becomes:

1. Write the articles

2. Post them on either Medium or Substack. Ideally both and you then consolidate

3. Send to your networks over email / whatsapp / whatever

4. Pick your social networks and repurpose the content to make it appear there. Don't go crazy. 1-2 networks at most. 3 only if you can just copy-paste content.

5. Post on these social networks and funnel all the audience back into your newsletter

If you're starting, a better way to build an audience is:

1. Guest posts where ppl are already writing. If you have quality content, it's a hustle but you can place it in different publications.

2. Responding to existing social media personalities with thoughtful comments, so you can kick-start your own audience

Hope that helps

2.

Expand full comment

Of course, it helps, Tomas!

1. In the article you are planning to write on your methods, please also include suggestions for those who are just starting out or otherwise are different from you, e.g., in our topics, social networks, availability of time, need for money, etc.

2. Your advice is well taken. But I know myself: I have a minimal social network presence and if I aim to build up my social networks, I'll procrastinate for another 5 years. And so the main take-away for me is just to write and publish in Medium and Substack.

3. Are there Intellectual Property rules preventing one from posting the same articles in several places, e.g., in one's own blog, in Medium, and in Substack?

4. You wrote "Medium, under paywall, will give you a few readers for free." Would these be paying Medium subscribers who will stumble on my articles?

5. Is it better to start with the longest and most interesting (in my opinion) articles -- to try to make a splash? Or with the shortest and easiest ones -- to show progress?

I greatly appreciate your answers. If you would rather incorporate them in your upcoming article, I will wait. An excuse to procrastinate is priceless.

Expand full comment
author
Apr 26, 2022·edited Apr 26, 2022Author

Noted.

Your focus should be on quantity.

Assume nobody will care about your first 100 articles. That should free you, because it means you can publish anything you have in your hands, no matter what the quality level is.

These 100 articles will give you naturally an audience, a good sense of what works and what doesn't, and will help you find your voice.

The best thing you can do there is commit to publishing with a certain frequency, no matter what. I started with 1 article every 2 weeks and it worked for me.

Social media is a plus. You can post or not.

Plus your content seems evergreen. You can always post nothing early on on social media, and if one day you feel like it, repurpose some of your articles on social media. So no pressure there.

Don't worry about IP. As long as you don't make money off of it and you don't plagiarize, nobody is going to bother you early on.

Publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish Publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish Publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish publish

Expand full comment

Thanks a million!

Expand full comment