As newsletter upstart Substack emerges from a stellar year, co-founder and CEO Chris Best said he wants the platform to become a one-step shop for writers — and to continue being a space for freedom of the press.
Substack aims to allow writers broad editorial freedom — as long as the company’s broad content guidelines are respected — while getting support for legal threats. The 4-year-old company’s hands-off approach to moderating content is inherently different from social media platforms like Facebook and Twitter: Substack’s customers are choosing to pay for a newsletter or read it for free. Yet earlier this year, the company faced some criticism after some users pointed out that it was hosting and paying advances to authors regarded as anti-trans and anti-women. Some writers ultimately chose to leave Substack over the issue and migrate their work to competing platforms.
“We want writers to have a wide leeway to do the things they believe in, so our content moderation policies are deliberately designed to support that freedom of the press,” Best told TheWrap. “There’s some things in there that are that are off-limits, but we take a very broad support in general. We cast a wider net.” (Some forbidden material includes porn, plagiarism, promoting “harmful or illegal activities,” and hate speech toward “protected classes.”)
That freedom has led to experienced exponential growth both in the size of Substack’s writer network and subscription profit.
Together, the top 10 publishers on Substack currently rake in more than $20 million a year, and some of the top performers each make more than $1 million annually. Substack said it would not share this list because the publishers can fluctuate.
The site is already home to big-name writers and creators, including Glenn Greenwald, Michael Moore and Andrew Sullivan — some of whom have quit their full-time media jobs to start paid newsletters on Substack. Many writers see the appeal to penning their own newsletters, being their own bosses and (for some) even making six-figure salaries.
Substack takes a 10% cut of those subscription dollars, and Best credits that strong retention as a big reason why the San Francisco-based company recently nabbed a $650 million valuation and projects to double its growth in the next year. The company’s success — chasing subscription dollars rather than ad revenue of traditional media companies — has led Facebook, Twitter and others to launch their own newsletter services and sign up their own stables of content creators. (Facebook’s service is free for writers to use for the time being, while Twitter’s Revue service takes only a 5% cut off of subscription fees.)
“The only thing worse than people copying you is no one copying you,” Best said. “But the reason that other people are building, taking inspiration from what we’re doing is because they can see that the model is working.”
Throughout this year, Substack acquired subscription app Cocoon, debate platform Letter and community management consultancy People & Company. With these additions and new teams, the company plans to develop more initiatives centered around its writers, such as workshops, training sessions and ways to facilitate connections with their readers and with other writers.
In his conversation with TheWrap, Best discussed the company’s interest in expanding features, such as a cryptocurrency payment system through OpenNode, and how they are investing in services that support independent writers and continuing to strategize around acquisitions to make the service stronger.
Where did you and your co-founders get the idea to start a newsletter platform?
Before Substack, I was a co-founder at a company called Kik, which was a messaging app. While I was there, I met my co-founder Jairaj Sethi, who is like the best engineer I’ve ever known, and Hamish McKenzie, who had written some of the smartest stuff about the space and worked with us a little bit before he was went on to be a lead writer at Tesla for a bit.
After I left Kik, I was taking a year off. I started writing what I thought was going to be an essay or a blog post or something detailing my frustration with the current way that the media ecosystem has evolved online with all of these big social engagement monsters. The Facebooks and the Twitters and the TikToks and YouTubes, all of these things in the world that create by maximizing engagement end up basically driving us crazy, by my estimation. The goal of Twitter is not give you the best things to read. It’s to keep you scrolling addictively through Twitter, and the effect of that on people’s minds and on society seems to me quite bad.
The thing that we couldn’t get away from is, if you want to make a better incentive structure, a better sort of universe for how media and culture work on the internet, you need different laws of physics. You need a different underlying business model. This model of everyone goes on this platform that they use for free, and then it serves ads to everyone is kind of the root problem in our estimation. If you want to change it, you have to sort of strike in that red. There needs to be a different underlying business model that actually values this great writing that values readers time and attention.
What sort of services are you developing for writers?
Some of that is technology. Some of that is how to set up a website or payments or whatever. But some of that is other stuff. We had people doing good local journalism, who were getting basically bogus legal threats, like some local politician or business person would have their lawyers write a really scary letter on legal letterhead saying, “You must not write negatively about me, or I’ll sue you.”
So it’s great for Substack to be able to have the thing that makes this easy, that gives you the right path. The Substack legal defender program was born from that. A lot of these services are like that. I think that’s what sets us apart from a company that’s just providing a set of software tools. We see the set of software tools and the services we provide, and everything else is kind of like a means to this end of making this path possible for writers.
The way that we are thinking about these services is we eventually want to offer them as broadly as we possibly can. We start them off with a small group, so that we can figure out how to make it work. Once we have that formula working, we’ll open it up to a broader set. The eventual goal is to make it available to anyone who needs it. Right now, the way that it works is you apply to us and say what you need, and we accept some of those and put them through a program that connects them with either legal defense or health.
Was it your intention to build something that allows writers to quit their jobs and write on Substack full-time?
I think the real fundamental insight of Substack is that it’s not just a way to make money differently doing the same thing. It’s that way you have this different model; there’s different laws of physics. The kind of stuff that can get made is different and better. Part of the appeal was there’s this grandiose vision of creating new laws of physics for the internet and spark this cultural Renaissance — where people can create better things and writers are valued. And on the other hand, there’s this really simple idea that’s just let a writer do a website and newsletter and make money from it. Just make that really simple.
My biggest concern was almost that it’s too simple. We are just going to make it really easy to make a website and newsletter and take money. That seems like if it was that easy, that should already have happened, right? It seems like too simple to be a thing, but we couldn’t talk ourselves out of it. So we tried it, and we started with one writer and grew from there.
How does being a Substack writer differ from a traditional journalism job then?
The things that are really different are they get complete editorial control, but they get to decide what to write. Something that I hear from writers sometimes is (they are) finally doing the work that they really believed in. I couldn’t do it at another place or my old job, because either my editor wouldn’t let me or didn’t fit with the business model, or it wasn’t the right thing. Writers get kind of that editorial independence to basically take that decision under themselves and get to make the bet on themselves and on the work that they believe in. The other thing that matters is they get ownership of all the work. They own the relationship with the audience, the email list. They get the upside. If you can get to 1,000 people paying for your Substack, there’s really usually not a reason you can’t get to 2,000, 4,000 or 5,000. So if you’re making something that’s great, you get to kind of keep the upside from that, and then the incentive structure is better.
It also means that it’s an opportunity for people who might never have gotten a job in media and might never have been a writer to make this their vocation. That last category is the one that’s probably the most exciting to me in the long run, is the people who have something to give the world as a writer, but never saw that as a real career opportunity for them — where they’re just like, “I don’t know how to get into this. I can’t do this unpaid internship. I’m not part of the right set. Maybe I don’t come from a rich family, or I can’t afford to do this.” But because of Substack, I can start this thing and build it up and make something that lets me do it as a job. Therefore, more great writing comes into the world. That’s the most exciting piece that we see people who are tremendously successful on Substack who weren’t writers before.
Why are you interested in supporting cryptocurrency payments?
That’s kind of a long-term and philosophical interest. If you think about writer independence and putting readers and writers back in control, one of the things that could potentially stymie that in the long run is the banking and credit card system. It becomes a single point of failure, so we’re philosophically aligned with the idea that in the long run, taking back control and using crypto as a way to do that is a good thing. I don’t think that tomorrow it’s going to be the biggest way that people pay for things on Substack, but many of the writers on Substack believe in it and something that we believe in too.
Substack recently acquired subscription app Cocoon and debating platform Letter. What is your acquisition strategy?
Each of these acquisitions are teams of people who have proven that they’re kind of world-class at building things and have some relation to the subject mission. In the case of Letter, this mission of letting writers collaborate with each other and providing a way where the whole can be greater than the sum of the parts. One of the things that we believe is that going independent shouldn’t have to be going alone, or it shouldn’t be like you’re off on this island. Ideally, being on Substack makes you part of this kind of vibrant, intellectual scene where you’ve got other people, and they just have this proven ability to kind of like bottle that magic.
Then the Cocoon team, I think the thing that I would point to there is this idea of putting readers back in charge of how they want to spend their attention, how they want to spend their time treating them with respect — not trying to make something that just maximizes engagement, but makes their actual human lives better to a point that it’s worth paying for. That is actually the exact mission that it was founded on, for a different vertical. (Cocoon’s) thing was close connections with friends and family. Our thing is connections with writers. They have that core mission of respecting the end user and consumer and making something that’s great for them.
Are you worried about the competition?
The only thing worse than people copying you is no one copying you. But the reason that other people are building and taking inspiration from what we’re doing is because they can see that the model is working, and they want to be a part of this thing. I think that many, not all of the people, that are that are doing that kind of missed the point. Sometimes they look at the service details, and they say it’s all about having this website and or publishing this list or getting the payment in this way.
I think that the deeper thing is doing everything the writer needs and really believing in the writer and understanding where they’re at. And what they need is the ultimate thing. That’s what we shoot to do at Substack. To the extent that other people want to do that, we’re kind of glad. We want there to be more great writing in the world, we want writers to have options. One of the great things about Substack is that you can leave at any time. You own the content you own, you’re not trapped here. We don’t want to trap you here. In general, we think that the fact that so many people are entering this space is kind of a cause for optimism for us.
Substack is different than other social media companies in terms of content. How are you tackling content moderation?
On Substack, we’re not foisting stuff on you. But rather, you’re coming in deciding who you want to sign up for. The whole point of Substack is putting writers and readers in charge, giving you independence and editorial freedom. I believe in taking a really strong stance in favor of freedom of the press. We want writers to have a wide leeway to do the things they believe in, so our content moderation policies deliberately designed to support that freedom of the press. We have very narrowly defined prohibitions and things you can do. There’s some things in there that are that are off-limits, but we take a very broad support in general. We cast a wider net. We’re going to allow it in the gray areas of moderation. We err on the side of freedom of the press because we want writers to know that they can come and have that control and independence. That is the reason they join Substack, and because the readers are choosing and signing up for it. We think there needs to be a really, really high bar before we should intervene in that.
What else is ahead for the company in the next year?
We’re building the team rapidly. We’re just doing more of all the things that help writer go independent, all the things that help them get started and then become successful. Helping readers take back their mind, helping readers find writers that they fall in love with, and then do that job and giving them a real alternative way to spend their life and attention that they value more. We’re hiring especially in product and engineering and in all the writer-facing things, people helping writers.
Another area we’re looking at is comics. We’ve done an interesting launch with a bunch of really amazing comic book authors, who basically saw the Substack model and thought this could be a really powerful thing for them. We’ve had some early success with people who registered in podcasts. There’s a lot of writers want to have a podcast. In general, the things that the writers want to be successful we want to help with, and there’s just a lot of that.
