Some Thoughts on Substack
Substack was recently in news because they raised about $15M from a16z.
Substack helps writers to send newsletters/content to readers in a simple way and helps to monetise out it. Sending a newsletter is as simple as publishing a blog on Substack. They leverage the email channel to reach people but offer a way for writers to monetise this.
Once you publish your newsletter, it gets hosted in Substack like a blog. It can be easily discovered by any search engine. They also provide a discussion platform for that blog.
Chris Best, CEO of Substack says that: “Substack helps every writer to build their media empire”. Earlier, it was under the control of a few publishing giants and newspapers to do these things. Substack democratises it.
What makes me more hopeful about Substack is this: They are a true alternative to a local newspaper. I really want to know more about the news in my city or my district, I want to know what is cool, where to go and how are the people doing interesting this and so much. There are a few local newspapers in Chennai doing that but they fizzle out time again. They don’t have a sustainable business model with the ad-supported newspapers.
If there is a local beat reporter whom I really respect and like her work, I would be glad to subscribe and support for the content. Imagine that there a newsletter that you really look forward with content much more relevant to you. I would not hesitate to pay and support it.
I work for a SaaS business. I know the power of a subscription based business. Marc Andreessen famously quipped many years ago, “Software is eating the world”, but I believe now, “Subscription is eating software”. (I need to riff more on this in a separate post). But Substack is definitely a great business model for individual writers and content creators.
There was a comment from @haideralmosawi, which I thought was quite interesting and worth elaborating. I go on a long rant on this because I am a product manager in the Martech space, who spends a lot of time thinking about marketing automation and email marketing. IMO Substack is truly a Silicon Valley company innovating in a market which is huge, crowded, old and ripe-for-disruption.
Question from Haider: I recently launched an email course on productivity, and Substack was recommended to me as a channel to host the email course. But I didn’t see what advantages Substack would have over ConvertKit (or MailChimp). Is there something I’m missing?
Short answer: Usability & Bundling/Unbundling.
Long answer: MailChimp and ConvertKit are for a fairly different set of audience, who wants to send marketing communication or set up a drip-email campaign (like you are doing for your course) or just reach out to huge set of people to sell something. To monetise out of that you have to set up a different systems like Stripe or Gumroad. I think Substack solves this core problem. How do individual writers or bloggers, distribute and monetise from their content.
Jim Barksdale has a famous quip: “Bundling and Unbundling are the ways you do business”.
Substack bundles the newsletter, podcast, discussion forum and a blog in a single and simple platform. The usability is so good anyone who knows to compose an email in Gmail or post a blog can publish and make money with a newsletter on Substack.
Substack also has unbundled this entire product for a micro-segment of users from the heavy marketing automation platforms like HubSpot or ConvertKit. Yes, many marketers with sophisticated use case will find Substack limiting but they may not be the audience for this platform.