The Case For Substack
How a vocal Substack critic ended up here anyway
This post is for paid subscribers. In it you'll learn:
why I chose to use Substack despite having criticized both their finances and their business model
the best use cases for Substack, and when to choose a competitor
why Substack cannot replace email marketing software
how Substack's ecosystem shapes writer and subscriber incentives
and more
A quick upgrade will get you full access, my gratitude, and the opportunity to submit questions for the Brain Trust business coaching and advice column!
When I announced that I was going to test Substack for Think Piece, a got a lot of questions:
Had I changed my mind about Substack's business model?
Was I going to keep using my email marketing software, ConvertKit?
Did I think insert your personal brand or company here should be on Substack, too?
I am also fully capable of building a custom paid newsletter solution, or using any of the number of prebuilt ones that don't take 10% of revenue.
Yet, I'm using Substack. Why?
I like it! I genuinely, despite my best efforts, like using Substack.
I like the software. The UX is clean and simple and the editor is appealing. It feels like a place for writing, not building or tinkering.
I have spent most of my online business career carefully managing the customer environment. I like things to look they way I want them to look. I want customers to move through experiences the way I want them to. I want the brand vision and voice to be explicit, like you're stepping into a world that I have created. I have spent many hours carefully duct taping together the Internet to do exactly what I want it to do.
I can do none of that on Substack. And this is a feature, not a bug.
The design limitations of the platform are a boon when you are supposed to write, not change your brand font for the 50th time. There are strong guardrails and a strong point-of-view. Like many restrictions, this creates its own freedom. The software clears your excuses. There is only one thing to do.
As a reader, I like it, too. Last year I realized that I was reading more and more on Substack. I started using the app at some point, and like that as well.1 It’s the most seamless experience for readers and writers that I’ve found.
It's all so simple.
Outsourcing The Time Suck
Substack shines for paid newsletters, which makes sense since that is the primary purpose of the platform.2 A writer is able to send a single newsletter and Substack will automatically change the buttons, add a paywall, and change email headers and footers based the recipient. A free subscriber will see an upgrade button on an email where a paid subscriber will see a checkmark and text saying they are subscribed. This newsletter online will show someone who is not subscribed at all a "subscribe" call-to-action on the same button. It's a fancy bit of interface that makes the reader experience that much better, and the writer has to do nothing in order to make it happen.
I've built custom versions of this before, and for someone of my limited skillset, this means doing that kind of formatting manually and sending multiple emails. That labor is fairly minimal, but it does take time. Instead, I just write. As of now, that tradeoff is worth it.
I also intimately know how complex and overwhelming it can be to manage a subscription business. At its height, my online education product had over 400 active users. I was able to automate and delegate much of the customer support, but there was always some tech issue or some subscription confusion that needed my attention. Cancellation requests, payment pauses, lost passwords: all of it required a human to do something.
When I started to imagine that workload for what I hope will be thousands of paid subscribers, I balked. That was part of why it took me so long to even start taking payments for the newsletter. My membership was, at 400+ people, generating over $250k ARR. I could hire someone to manage customer support. This newsletter would need nearly 3,000 subscribers to hit that revenue. That's a lot of potential support emails before I could afford to hire help.
Substack manages all of this for writers. They handle the subscriptions, the failed payments, the complaints. While I'm sure some of this will come my way, most of it will not. I find that to be a relief.
When business strategists and coaches talk to founders about "buying your time back," they're usually referring to hiring. At a certain business stage, it's worth paying someone to do the formatting of emails or the customer support so the founder can do the things that generate revenue. Substack offers this in a way: the 10% they take is an opportunity for the writer to buy their time back. By letting the platform run the tech, customer support, and subscription management, writers can just write.
If I were trying to scale a media company, that wouldn't be worth it. If I were trying to grow a newsletter in service of another project or product, it may not be worth it. But I just want to write and get paid for it. That changes the calculation significantly.
Substack Attracts Writers
Substack did a very smart thing when they started to grow: they paid online-savvy journalists to join the platform. This was controversial because:
It disrupted the myth of meritocracy on Substack.
Some publications that were funded post content that is considered incendiary by some writers and readers, particularly transphobic content.
But it was smart. It made Substack a household name, at least on Twitter. It made other writers feel more comfortable trying it out. And, critically, it opened up Substack's possibility for network effects. Substack has several referral and feature programs that leverage audiences and Substack's own reach to promote publications. Some of this is as simple as the badge a publication receives when they hit certain paid subscriber numbers, or writer on the platform opting to recommend other platform newsletters. Other features include a publication being automatically displayed in the app search bar, on leaderboards, and being interviewed by Substack.
The features are nice. It’s too soon to assess how effective they will be for Think Piece in added growth.3 But a big turning point for me was realizing that most of my favorite internet writing was happening on Substack. The writers I admire are here. That doesn't mean they'll refer me or that we'll become friends or anything like that. But it does make me want to participate in the space, to be part of what is being created instead of critiquing from the sidelines.
Substack Attracts Readers
Substack is going to attract subscribers who want to read. This is one of the more challenging things about the pivot I've been making for the last year. A lot of my audience (👋🏻 hi love you) wants business coaching. That's great, I offer that! But that's not necessarily the same as wanting to read longform essays or deep software strategy dives like this one. The potential network effects of Substack naturally bias towards people who like to read newsletters. And I want more people who want to read newsletters and pay me for them. It makes sense for me to invest my time in a platform that is likely to reach the right people for my work at this stage.
Substack Is Not Email Marketing
Let's back up.
If you're not technically inclined, or haven't been in a position to source newsletter software yourself, the difference between Substack and an email marketing software may not be immediately clear. You may think you can use Substack to email your mailing list about your products and sell your offers.
You cannot.
Substack is a publishing platform. The primary way that people receive what is published is via email, but that does not make it an email marketing software.
Email marketing software is designed to send mass promotional emails easily while maintaining anti-spam compliance. The old version of this is bcc-ing a whole bunch of folks, which is sketchy on the spam front and a huge pain. Email marketing software like ActiveCampaign, ConvertKit, Mailchimp, and Flodesk facilitates complex automations and segmentation so you can be responsive to subscriber behavior, like visiting a specific page on a website,4 or sending an email sequence when someone completes a purchase.
Substack does none of these things, and it's not supposed to. In fact, using it exclusively for marketing purposes is against the Content Terms of Use:
Substack is intended for high quality editorial content, not conventional email marketing. We don’t permit publications whose primary purpose is to advertise external products or services, drive traffic to third party sites, distribute offers and promotions, enhance search engine optimization, or similar activities. Brands and commercial organizations publishing on Substack may be subject to additional verification.
While in practice many people do promote off-platform offerings, that cannot be the primary purpose of the newsletter. This is, of course, because Substack only makes money from paid subscriptions. If you are using it to get paid off-platform, Substack loses. Taking paid subscriptions for your newsletter off-platform is specifically prohibited in the Publisher Agreement.5
Substack has some direct competitors itself, most notably beehiv and Ghost. Both of those softwares charge flat rates rather than the percentage on revenue that Substack does, and both can be good options for companies.
I am partial to Ghost since it aligns with my preference for open source software. I also like that you can fully customize the look and feel.6 If I were truly starting out from scratch and needed a website as well, I might choose Ghost.7 I have colleagues who really like beehiv as well. If I were starting a media company, I would consider either of these.
(A quick aside: ConvertKit is hitting the uncanny valley between publishing and email marketing two right now. CEO Nathan Barry just announced a full suite of new features, including a CRM and an ad management platform. I like ConvertKit, and would be happy to see them pull this off. ConvertKit launched their Creator Network referral system earlier this year, which was a clear attempt to fight off Substack. I'm concerned that their attempt to compete with beehiv and Substack might make the software less usable as an email marketing tool, which is where it shines. ConvertKit is pretty robust for most digital businesses that aren't running complex funnels;8 I would hate to lose a well-priced option to a futile attempt to be it all.9)
Substack Does Not Solve All Growth Issues
Substack is not (yet, at least) the place to build an audience from scratch. This seems to be the biggest issue for most Substackers: they believe the hype that the company promotes that “anyone can do it.” While Substack does have a referral system as I wrote earlier10 and their Twitter-ish Notes feature, discoverability appears to remain low for many publications. The vast majority of readers engage with Substack newsletters via email, and many of the discoverability features are web or mobile app based.
Some scrolling through Notes shows many writers expressing frustration at their slow growth. I don't know that Substack will solve an audience size issue. I think that it is primarily a way, much like Patreon before it, to monetize an existing audience. However, through Substack's features, referrals, and other parts of the product, I do think the platform can help to build an existing audience. The tl:dr is that almost everyone who is very successful on Substack already had a large audience.11 If audience growth is the primary goal, Substack cannot be the only tool.
The platform itself creates interesting incentives for both writers and readers. A traditional email marketing software charges usage fees: a list of 100 emails costs less than a list of 10,000 emails. That's not true for Substack, and the number of subscribers that a newsletter has is part of how the platform markets it. A writer can opt-out of sharing that number, but it’s shared on the publication landing page and on the writer's personal profile by default. Substack brings the email list size, formerly a private number, into the public sphere. Similar to social media followers, this offers social proof for the writer: readers may be more likely to subscribe if they see that so many others have already done so.
As a longtime online business owner, this is a little funny. I have always culled my mailing list to avoid paying an email marketing software for emails that are "cold," meaning they are not opening emails for some period of time. The incentive on Substack is the opposite: more emails are good. This feels very much like earlier Instagram days when buying followers was common and effective. Fast growth and a large audience conveyed authority. For writers on Substack, this can have other professional ramifications as well. Agents and publishers take social media followings and email lists into account for book proposals. I am sure there are publishing industry denizens combing Substack as I type looking for writers with the right mix of skill and list size to approach.
Media Companies Should Go Elsewhere
Substack is not the best choice for a media company. It may sound like a somewhat arbitrary delineation, but there is a difference between trying to grow a company, and trying to get paid for your writing. There are media companies on Substack, but as I wrote earlier, most were paid to join the platform and are not necessarily representative of what is possible on Substack or who Substack is really best for.
If I were trying to grow a media company, I would probably go elsewhere. The 10% fee is a huge amount for a company that likely has the resources to hire support and build on top of Ghost or create a custom solution. The inability to control the user experience and customize it for the brand is a huge loss for a media company that will likely thrive on vibes as much as its cultural production.
For other companies like SaaS or physical products, Substack's best possible role is as social media. Crossposting from the company blog or having key team members write newsletters could be beneficial and enable the company to leverage the network effects. There would be no reason to have paid subscriptions in this context; it would be pure content marketing.
With the introduction of social media features like Notes, Substack is probably prepared for this. Any time a person or company with a large digital footprint joins the platform, Substack benefits, even if they don't get direct revenue from that publication. A given company will need to discern whether or not their audience is on the platform. If you're selling to writers, they sure are! Crafters, fashion folks, policy wonks, and recipe hounds are all well represented. But Substack is not anywhere near the size of social media platforms at this point, and a given audience is not guaranteed to be using it.
Here, For Now
Substack is, in some ways, the last man standing from the newsletter boom. The fact that they have survived so far12 may demonstrate that they have what it takes for longevity. But any online software platform is liable to decay or die. The questions right now are: can it help you to achieve your immediate goals, and can it support your longterm ones?
For me, that's a yes. I am getting paid to write through the platform, and since that is my core focus, Substack is where I want to be. But I don't know what the future holds, and I want to be clear: Substack is a tool, not a sure thing.
Though I strongly prefer the desktop reader. I wish the app would default to your to-read inbox rather than your feed but alas, that's the social media way
Substack takes a 10% cut of revenue on all paid subscriptions, otherwise the software is free to use.
and it should go without saying,
did not offer me an advance though if they want to I'm ready and willing give me some money please.very useful for e-commerce since they can email you when you visit an item page and don't buy
This only matters if you're trying to get around the 10% fee while using the platform. Substack's terms are very clear that you own your content and your list, and that you can leave at any time. This is a good thing.
I started teaching myself Handlebars to adapt a Ghost theme last year which was a fun challenge that I ultimately never used. See my earlier statement about Substack’s guardrails.
I have a WordPress website that I design and manage.
for that, ActiveCampaign remains the best
I am a still a ConvertKit customer. I removed most of my list so I could downgrade my payment while maintaining access to their Creator Network which sends me 400+ leads per month. When I run courses or group programs, I will use ConvertKit to send emails.
I get far more through ConvertKit but this may just have to do with my audience being business owners are more likely to use that software, and I'm quite new to Substack
though their finances still make me nervous:
