Last modified: December 8th, 2022 at 12:39 pm
Michael Moore joined Substack the other day. So did Dan Rather, Alison Roman, and even Edward Snowden. They join Andrew Sullivan has joined Substack as have Glenn Greenwald, Cheryl Strayed, Patti Smith, Jeff Tweedy from Wilco, Matt Taibbi, Marianne Williamson, David Farrier, Emily Writes…who all joined over the past year.
Substack is booming.
If you haven’t heard of it, Substack is a publishing app that enables writers, podcasters and vloggers to send their content directly to their audience over email and webpage. The audience either pays a subscription fee to support the writer, or enjoys the work for free.
Whatever the combination, the result is that Substack, founded in July 2017 by Chris Best (CEO), Jairaj Sethi (CTO) and New Zealander, Hamish McKenzie, is currently valued at $NZD900m. You can measure its strong growth by the booming careers listings, the 65 staff, or the retinue of famous writers jumping aboard.
The numbers are impressive:
- Over 500,000 people are paying subscribers to writers on Substack
- Substack’s revenue comes from a pretty reasonable 10% fee taken out of subscription income (if the writer has paid subscriptions enabled)
- The top 10 publishers on Substack collectively make more than $20m USD ($28m NZD) a year.
McKenzie (who grew up in Alexandra in Central Otago) spoke with theBit, via Google Meet, from his new home in San Francisco. He told us how Substack is “trying to unbreak the media ecosystem” by “putting writers at the centre of the platform and promising them a path to financial success – or at least a decent income.” McKenzie also asked theBit to say the polished words in the interview are not a ‘precise transcription.’
Kia ora, Hamish. Where am I chatting to you specifically?
Our office is brand new, it’s in San Francisco’s financial district downtown. Just around the corner is Twitch. Superhuman, the email client, they’ve been a couple of blocks away.
What are your thoughts on the fluctuating worth attributed to the writing profession?
We think there’s been a huge market failure. The last 30 years in particular have undervalued great writing. A part of that is because the advertising model – specifically online advertising – can’t fully realise the value of online writing. So what we’re setting out to do is restore the value of online writing and to trigger a renaissance with lots more writing than any time in history. Making the market correction is critical to doing that. We’re making our bet that the market is wrong.
How did you meet your Substack co-founders?
The reason I left Tesla was to write a book about the electric revolution. While I was writing that book I took half time job working for Kik, a major messaging app (which has since failed.) I’d become friends with CEO Ted Livingston. I worked with some of Kik’s top ppl. I worked with Chris and Jairaj, got on extremely well. We enjoyed thinking through problems together. Substack started after I finished writing the book… Chris and I talked about problems in media and what there was to address those problems.
What has your technical upskilling been like?
I’m very much a writer, a journalist, or a former journalist. I’ve learned a tonne but I’m not technical at all. I see everything through the writer’s lens. My whole focus has been to bring the best writers in the world to the platform and give them a playbook on how to be successful with our model.
In the early days, I was doing the comms, marketing and business development.
You were a writer for Tesla from January 2014 to March 2015. Why did Tesla take on a Kiwi to become their writer instead of an American?
I don’t think Elon fixates too much on nationalities. He was looking for people aligning with the mission and willing to make tremendous sacrifices to align. I was writing for PandoDaily. I’d written about SpaceX and Tesla. A UK publisher got in touch asking if [I was] interested in working on that. I tracked down his mother’s email address and asked her for advice on how to approach him. He knew who I was, we talked on [the] phone, [he] didn’t know about book but asked if I could come work on a broadly-defined role as [a] writer. My job was blogs, marketing, emails, press statements, quarterly earnings reports.
Do you think there was ever a Golden Age for writers, in which they got paid well and also reached big audiences?
“In NZ in particular in 2012, when newspapers were still going strong at that point, online advertising was bringing in decent money. For the world, generally, Tom Wolfe and Hunter Thompson, writing for Vanity Fair, edited by Tina Brown when magazines had big budgets, and when newspapers had a monopoly before [the] internet blew things to smithereens – the 80s and 90s, that was a golden era. I think there are better times ahead once Substack kicks into gear.
What is different about Substack compared to, say, Medium? Or Mailchimp?
Substack doesn’t put itself between the writer and the reader. Substack isn’t mediating traffic and payments. Writers control those things. Substack can only succeed in that well. Some of Medium’s processes are opaque. At Substack, we sit in the background and serve the writers. Writers own their IP, their contacts, they can take that with them.
With Substack, we publish great writers where email is as important as the web. Substack itself is a category: some people call it a newsletter, but that’s a shorthand to make it understandable: it’s a hybrid between email and the web, where neither has priority over the other. There is an option to pay to have a closer relationship with the writer you love and trust. …It’s like a one-click media empire.
Which countries have Substack had the most profound impact in? Is it all English-speaking countries with large population bases where Substack has had the most sign-ups?
Strong bias in North America because we’re based in SF. A lot of the attention comes from the US. It’s not that we don’t value the other places, it’s the path of least resistance. It’s where we are, where we play.
For a start, we’re doing English-speaking markets because it also takes time to adapt to payment providers in individual markets because Stripe (payment processor) isn’t available everywhere.
Did Elon Musk or Tesla support Substack at all? Who have your notable supporters and investors been?
Early in the life of Substack we went through Y-Combinator, one of the best-known accelerator programs. The CEO of Twitch is one of our investors, and we’re supported by Andrew Chen, who’s a partner at Andreessen Horowitz.