If you allow technology to be applied, it makes things better and cheaper. As everybody gets richer, as more things happen, the things that are not touched by technology just get more expensive and take up a bigger and bigger share of the economy. Then you can ask, okay, so what is AI and technology going to do to media? It's as AI slop and AI entertainment takes over the entertainment piece of media, the part that gets more valuable is learning what to want, learning who you want to be, and curating your information sources. And in that humans play an outsized role. If we could go with the 10 to 20 year time frame, I would say this is going to be looked at as the chaos era. This is a moment of transition between major periods in technology, in culture, in the media, creating a ton of volatility, a ton of power redistribution and chaos that is ultimately going to lead to a new kind of order and something better. But in the moment feels messy as hell.
Hey, I'm Mario and this is the Generalist podcast. You might have heard the saying, 'The future is already here. It's just not evenly distributed yet.' The mission of this podcast is to host deep conversations with the founders, investors, and thinkers who are living in that future to help you see it earlier, understand it better, and capitalize on it. Today I'm speaking with Chris Best and Hamish McKenzie, Substack's CEO and chief writing officer. Substack is arguably the most interesting media company in the world right now. It's become a transformative force in the landscape, creating a new economic engine for culture. With over 5 million paid subscriptions and tens of millions of active readers, Substack is building something that I consider truly revolutionary: a platform where creators own their work and make money directly from their audience through paid subscriptions. In our conversation, we talk about Chris's grand unified theory for how AI will influence content creation, the inside story of Substack's clash with Elon Musk, and why the ceiling for great writing and culture might be much higher than we're currently imagining. Given my work at the Generalist and love for writing, these are all topics that I was extremely excited to talk about with Chris and Hamish and loved hearing their perspectives. You'll walk away with practical insights about the new media landscape, creator economics, AI, and what great information and writing looks like in the 21st century. This is a new podcast, so if you like it, I hope you'll consider subscribing and joining us for some of the incredible episodes we have coming up. Now, here's my conversation with Chris Best and Hamish McKenzie. This episode is brought to you by Vanta. Warren Buffett once said, 'It takes 20 years to build a reputation and 5 minutes to ruin it.' For today's digital companies, those 5 minutes have shrunk to milliseconds. This asymmetry is why trust isn't just earned, it's demanded. If you're building a business, you likely know that proving compliance is needed to win bigger deals, enter new markets, and deepen trust with customers, but that it can cost you real time and money. By automating up to 90% of the work needed for SOC 2, ISO 27001, HIPAA, and more, Vanta gets you compliant fast, opening doors to next level growth opportunities. Not only does Vanta save you time, it also saves you money. A new IDC white paper found that Vanta customers achieve $535,000 per year in benefits and that the platform pays for itself in just 3 months. Over 10,000 companies like Atlassian, Factory, and Chili Piper use Vanta to manage risk and prove security in real time. My listeners can get $1,000 off Vanta at vanta.com/mario. That's vanta.com/mario for $1,000 off. This episode is brought to you by Brex. Fred Adler, the influential venture capitalist of the 1970s, was known for displaying decorative pillows in his office that featured a signature business philosophy: 'Corporate happiness is positive cash flow.' In today's post-ZIRP environment, Adler's wisdom feels particularly relevant as founders need to make every dollar work harder. That's exactly what Brex delivers. Their modern finance platform was built specifically for startups like yours and designed to help extend your runway when capital efficiency matters most. With Brex, you get global corporate cards with up to 20x higher credit limits and no personal guarantee required. Their banking solution has no minimums and no transaction fees while letting you earn high yield from day one with same-day liquidity. Best of all, Brex knows you were born to build, not juggle spreadsheets and finance tools. Their AI-powered platform brings cards, banking, expense management, and travel all in one place. It's simple, scalable, and designed to get you back to what you do best: building. More than 30,000 companies, including one in three US venture-backed startups, trust Brex to help make every dollar count toward their mission. Join them at brex.com/mario.
Chris, Hamish, it is fantastic to have you on here today. Thank you so much for being here. I am so excited to talk about Substack and the future of media, things that all three of us love to chat about. And maybe to begin, I'd love to just start with a little introduction about Substack, the vision behind it, the mission that you're building, the scale it's at today, because I think that I would imagine almost everyone who's listening has interacted with Substack in some way, but they may not know it. So, Chris, maybe you could start us off.
So, Substack is a new media app. And the big version of this, we see it as we're building a new economic engine for culture. And so, if you're somebody who has something to say, a writer, a podcaster, a video maker, a publisher of any kind, Substack is kind of like your personal media empire in the palm of your hand. It lets you do all of that, own your work, and make money through paid subscriptions. And for if you're somebody who wants to subscribe to the best media in the world, Substack is a tool that lets you do that. We've been growing for years. I think we can announce, this is going to be relatively new when this airs that we've passed 5 million paid subscriptions.
Oh wow. Amazing. And you know, tens of millions of people actively subscribing to Substacks. Amazing. Well, we're going to talk a lot today about the future of media and the future of Substack. But to begin and set the stage a little bit, maybe we can go back in time and hear a little bit about how Substack started and why this was a mission that spoke to you. And I know that Chris, you were sort of the person who looped it in with Hamish. So I'll let either one of you jump in there, but yeah, I'd love to hear a little bit about that.
Well, I'd done another company before this. It was a messaging app called Kik Messenger. I met Hamish and Jay, who's our other co-founder, there. And after I left that after working on it for eight years, I was taking some time off. And I've always been an avid reader. I've always believed that the things you put into your brain, the things you read and listen to and watch are not just a form of entertainment. They shape how you think, how you see the world, and ultimately who you are. And so great media is valuable. And the people who make great media are basically heroes. Not to put too much shine on you, Mario, but I think the thing that you're doing here, yes, it's a podcast, yes, it's a newsletter, yes, it's a media business, but I think the stuff is important, right? It changes how people think. It changes how they understand the world. And yet, a lot of the current internet, this is in 2017, didn't feel that heroic. The state of the legacy media was then and remains in shambles. We have these massive ad-supported social media platforms that have tremendous business models and work really well for them and for advertisers but are not necessarily aligned with the people making or the people consuming the culture. And so I was taking some time off after my last company and I was like, I should be a writer. How hard could it be? And I was writing, you know, you have that good programmer's hubris. You're like, I know how to read. I know how to type. Should be great. And I actually started writing what was going to be like an essay or a blog post or a screed kind of just complaining about all this stuff. I was like, the newspapers are dying and maybe Facebook is bad, blah blah blah. And I sent it to my friend Hamish, who's actually a writer, and he let me down gently, or as he tells it, he gave me some notes basically saying, 'Yes, it's okay. Listen, we know it's 2017. Maybe the legacy media business models are in trouble. This is not the shining new insight you imagine it is.' But the more interesting question is, let's say all of that is true. What could you do about it? How could this be different? And that conversation turned into the original idea for Substack, which is actually the same idea we're pursuing today. And it was both a very grand idea and a little bit grandiose. We were kind of like, we're going to reinvent media on the internet and make a thing for culture and put people back in charge of their media diets. But also we were like, okay, but there's this initial incarnation of this thing that people would want tomorrow that we could build that's kind of like this very simple humble seed of that thing, which was let anybody start a paid email newsletter. And that was both a very practical, doable piece, but it was also like the thread at the start of this grand thing.
Now, Hamish, Chris mentioned that you had worked as a writer. You were a journalist for many years. You'd written books of your own. When you look back at the media landscape that Chris was writing his screed about in 2017, if you had to trace back the original sin, where do you see that coming from? If you could whisper in the ears of a young Mark Zuckerberg, is there something that you could have set us down a different path, or the creator of the very first listicle? Where do we start?
Yeah, it all ended with the black and gold dress. No, the... Exactly. Well, I think these problems are not to do with any one actor or the intention of any one person who started a new business on the internet. I think these are structural things. The internet came in and essentially laid waste to old business models that had traditionally supported media. And so it started with Craigslist kind of, you know, they took out the classified business that newspapers relied on so heavily. And then Google and Facebook came along and YouTube a little bit later and just were much better vehicles for the kinds of advertising that used to support other media businesses, even more so than classified. And so it was always going to be difficult for the traditional media businesses to recover from that. And it wasn't because Mark Zuckerberg was evil or hellbent on destroying the media and building something in his image. And then later on actually the streaming services have come along, they've made it even harder for the existing television businesses, the TV news business, cable news, etc. So these old business models that were designed in the 20th century, maybe even the 19th century, are being attacked from multiple angles by some of the greatest media technologies that the world has ever known. And they're great in the sense of being extremely effective. They've got goods and bads and highs and lows with them. And so by the time 2017 rolled around, the physical illness that traditional media had was already well and truly set in and the body of that whole institution was getting weaker and weaker. And social media, which was physically very strong, had a business model that was really, really working, maybe too well, and bringing in billions of dollars for those companies that got to own the benefits of it. It was sort of introduced into a world or starting to reflect kind of a mental illness where people were struggling to understand each other and seek to solve important problems together and instead were kind of engaged in this fight for attention, which the incentives of social media tend to encourage. And so the things that you would do on these major news feeds, whether it's Facebooks or Twitters or Instagrams or whatever, were nothing to do with seeking truth or looking to understand each other, but a lot to do with reactivity and really heightened emotion and kind of divisive type of engagement and community type stuff. So by the time 2017 came along, things were looking pretty grim for anyone who was considering a future in journalism or the media or as a writer, and no one was looking at writers as a potential customer base to hold up the next era of giant technology companies.
Yeah, that didn't feel like an obvious bet for anyone, but I really love what you guys are saying around that it felt like such a big idea in some ways. You're playing with the grandest possible canvases of billions of people connecting around culture and creating it together, but also you managed to find this thing that I would guess felt really small to a lot of venture investors when you started pitching it. And so I'm curious both how you landed on that first insight around no, it should be helping newsletters run subscriptions, and two, what the conversations were like with those first VCs.
Well, there were existing examples. There was Ben Thompson who had built Stratechery. There was Andrew Sullivan who had done The Daily Dish. And so there were some existing examples of people who had what we considered kind of shockingly good businesses. We did some napkin math and guessed that Ben Thompson was making over a million dollars a year from his bedroom in Taiwan writing this email newsletter. That's amazing. But it's still just two folks at the very tip of the spear. And it's not like there are huge businesses, right? But here's the thing: when you're starting out making something very ambitious, you try to make something for the entire eventual audience of it, that usually doesn't work. It's pretty hard. Sometimes you can get really lucky, but in my estimation, it's almost always better to start with something that's like the greatest thing in the world for literally three people if there's a way that you can then take that and expand it to be 10 people and then 100 people and then a thousand people, etc. Because if you start with something that's kind of pretty good for a million people, it goes nowhere. And it's not just that we took this on faith. We were thinking through why this was happening. Why would people pay for one of these things? What are the currents in the world that are causing people to realize that their money is no longer their scarce resource? Their attention is. They're not happy with the media diet they're getting. The deal that creative people across the whole internet are getting is getting worse and worse in a bunch of ways. You have to be able to look at a thing that exists today that some people will buy, but then also try to accurately make a bet on where the winds are blowing, where the world is going. And if you can get both of those things right, I think that's how you make change.
Hamish, was that something that felt like it landed with the first sort of cadre of investors that you spoke to, or did it actually take a lot of matchmaking to find folks that really resonated with that?
Yeah, first we had to make it land with a few writers. And I remember in the early days we were saying you can use Substack to start your paid subscription publication, and it was just confusing enough that people weren't quite getting it. It was like, 'Oh, do you mean like an academic journal? Do you mean like a magazine or something like that?' And we're like, 'No, no, we didn't know what a Substack was yet.' The idea of a Substack was waiting to be introduced to the world. And we eventually decided to simplify it and just say, 'Well, it's just like a paid newsletter' because there's this email element and there's a web element, but you don't have to know all the bells and whistles before you start. And once we settled on the idea of saying we make it simple to start a paid newsletter, it meant we could go to all these other writers who were already doing newsletters on services that were designed for email marketing in many cases and not for writing, not for editorial, and say come over and use this thing. It's better and you have the option to get paid by direct subscriptions, and we think this model can work really well for you. Once we had that story nailed, then it's a story we could tell investors. And some immediately got it and saw the potential, and some were like, 'Who's going to pay for newsletters? How many Ben Thompsons are there in the world?' And I think you don't need every investor to say yes. You need some people to get it. And a couple of people early on, I remember Mike Karns at Churning Group was one of the early believers, and Andrew Chen became an early believer later on. And that's all we needed. And yeah, I think it feels like a small thing. Start a paid newsletter, get paid for writing stuff from the audiences who care enough about it to pay. But that is actually a major thing. That is a big transition. The idea that you can have recurring payments for this work that you consider important and that the people who can get it will not just sort of begrudgingly pay for it, but they'll be happy to pay for it. They'll be in this game with you. And once that becomes possible and proven, then all sorts of things are newly possible. There's a version of Substack I could totally imagine that is like a much smaller but sort of thriving indie business, sort of like the widgets to tip a creator or buy a cup of coffee or whatever those things. We totally should have done that.
Yeah, it sounds like it would be so much easier. Was there a moment where you had to kind of kill that lighter weight version of things to really pursue the mission, or was it always just, no, we're going as big as we possibly can with this?
I'd had a taste of this thing at my last company where we kind of got to that hundreds of millions of people using it, and I'd say that experience maybe increased my ambition of what's possible. And so for me personally, the fact that I felt like we were on to something potentially quite big and transformative was the thing that made me want to work on it in the first place. If somebody wants to make a tool for tipping on websites and it's a cool lifestyle, that's a great thing to build. It's interesting. It's fun. I could see why that would be a worthwhile thing for somebody, but it wasn't what made me pour my life into this thing. For me, there's kind of a moral impulse as well. If we felt like this could work for Bill Bishop, the first ever Substack writer, that's really interesting. If it works with Daniel Larry, a totally different sort of profile to Bill Bishop who's writing for librarians and not business people, that's even more interesting. And then maybe this could work for lots of writers. Maybe this could work for all types of creators. That's super interesting. That's kind of profound. That means that we're sort of unlocking energy from the universe that was previously hidden. And once you discover that, if that's true, I feel like it's incumbent upon us to sort of see how maximal that truth can be because that kind of thing can have a really meaningful effect on the media ecosystem, which in 2017 and today still really is in a pretty dire state.
Yeah, we weren't wrong about our assumptions. The idea that the internet was driving us crazy, we haven't become less convinced by that in the 8 years since. And so it's like you should go as big as possible and maybe someone comes along and crushes you and does it better or takes it over along the way, but otherwise there wasn't like a long line of people waiting to come and help writers at that time or help the media at that time. It was actually a lot of tech companies had come and gone, had spent a bunch of money and tried different approaches at it and had failed. And the common wisdom at that time was just that content isn't really a good business. There's no billion dollar tech company to be built on content.
I hate when people call it content. Even the word content feels so unpromising, right? It feels so... calories. Begs the question. It's just what is it? Oh, it's the thing that's contained. What are you talking about? The only good use of content I've seen is I'm sure you've seen Patrick Collison's LinkedIn page that says 'content strategist,' which is just a content strategist. Yes, it's much better. That's very good. I love the way you said this, Hamish, of unleashing energy from the universe. And today when you look at Substack, it does just feel like this incredible energy has emerged from it, this incredible creativity has come from it. It's almost, I think of it sometimes like a city where you have these different neighborhoods: you have the food folks, the culture folks, the business folks. And actually those people sometimes cross over, sometimes they stay where they are. With that metaphor in mind, I don't know how good it is, but which were the neighborhoods that you were really shocked to see pop up in the Substack City, and which are the maybe the empty lots where you have an eye on them and say actually we could really see something amazing happening here?
I mean, I'll tell you early on there was a real question that investors and even we had was: is this going to work for anything beyond business? Because it struck, I mean, you've got Bill Bishop, we had a bunch of people who were making kind of things that you could pay for that could help you with your work and that you could conceivably put on a corporate credit card, and that felt like a pretty well established thing. But it came as a not a surprise but sort of a pleasant development to us that actually a lot of that stuff is still doing very well on Substack today, but it's a minority of what's on the platform. There's a lot of stuff that's working really well. I guess there's more, I kind of think of Substack as an index fund of culture. For everything that there's somebody out there that's really into, there's usually something. And people are into more stuff than I would have been able to think of or list. One thing that I do think we wish we were stronger on, and I think there's people doing it and they're doing good work, but I think the platform could do a better job of, is just fiction in general. I think fiction is really important. I think the idea of serialized fiction is well-developed and could work well. And I think the overall proponents of fiction on Substack, if we could crack the code on it, could be higher.
I might have seen my eyes sort of light up when you said that. One because I know you're the son of an English teacher, so that's your background doing excellent work there. But two because I think that feels like such a big opportunity that no one has really nailed. I really enjoyed the article the Substacker L. Griffin wrote about, I think it's called 'No One Will Ever Read Your Book,' and it sort of breaks down the state of the publishing industry especially for fiction and how just very, very tough it is for anyone to crack it. And she's since crowdfunded a book successfully on her Substack. I just invested, so I'm a small participant, but yeah, it feels like there's such an interesting opportunity there. What do you think the right way to sort of cultivate that further looks like? Maybe Hamish, you can tell us a little bit about that.
Going to make us write some checks here that we can't promise on cashing in the immediate future. Well, we've already had people serializing books on Substack to some success and then get traditional publishing deals at the end of that serialization where the book becomes this physical memento, this monument to the work, and that gets exposed to new audiences in that way. We've had people who write their draft in public. A lot of Jonathan Haidt's 'The Anxious Generation' was first published on Substack for his Substack after Babel. I think there's kind of interesting ideas around community participation in a book where you publish chapters or you publish as you write and you get feedback from people and keep on adjusting the narrative in response to the feedback. I think there's ways that the product could evolve to more perfectly suit this style of publishing, but already what you've got is enough for something super interesting. I'd love to see books live on the web in the future as well. I think it's kind of criminal that books don't live on the web. You can't have a website version of your book. Something like Substack allows for that because if you want to make money from selling the book, you can still put certain chapters behind the paywall and then have it read out to you by the AI voice that's really high quality. So, I think there's tons of room for experimentation and exploration within the Substack model, within the Substack platform for books. We've already seen plenty of success cases and I think we're going to see a lot more and we'll keep evolving the product to perfectly suit those needs, won't we, Chris?
I'm not trying to pin you down to anything in particular, but you mentioned how it's worked for different books and I've seen some really interesting projects over the past few weeks in particular when I've been learning about this a bit more for fiction in particular. Do you think there are certain things that are required? You mentioned writing in conversation with your audience. I always think of Andy Weir and 'The Martian' where he sort of wrote bit by bit on his blog and then that has since become a massive hit. Yeah, wondering if that type of storytelling in particular requires different tools.
I do think there's some practical stuff that we could improve. One thing I think about a lot is because Substack started in and still has a major component that is email based, a lot of our metaphors are sort of email driven, right? It's like you get a new thing when I subscribe to somebody, I get a new thing in my inbox, the new one's at the top. And I've read fiction on Substack before. And the problem that happens to me is I'll start reading it. I'll read the first chapter, I get the second chapter, read the second chapter, I'll get the third chapter, and I'll like not read it immediately. And then next thing I know, I'm getting the seventh chapter. And so my new email is like, here's the seventh chapter. And I'm like, oh wait, I gotta go find the third chapter. Or like, where am I in this thing? And the fact of getting the serial like in slices is not actually the ideal way to get it. And if we were solving that problem, the thing I would imagine is, you know, I might have one updating, that thing should actually be grouped into one logical story. It could update as it goes. It could bump up when there's a new one, but it would remember me as the reader where I am and help me kind of go through it in the right order. I think that would actually go a long way.
Yeah, I really believe there will or can at the very least be a future in just the same way that you have Netflix and Amazon that wins Oscars. Maybe there will be a National Book Award winner that was first published on Substack. Sure. And you could publish a TV show on Substack too now by the same token, right? And you would want it to work the same way. You want it, if I go to the Netflix show, it remembers where I am. It remembers what episode I've watched, I could pick up where I left off. That's just what people expect now. And I think it's more important for fiction because reading it in order is more important and reading it in a timely fashion is less important. That's really true. You mentioned with TV shows and one of the things that I think you guys have done so interestingly over the years is sort of progressively expand into different mediums. You have podcasting now, video chat, short posts. Each of those mediums sort of has their own strengths and weaknesses, you might say their own little flavors. How have you thought about managing potential tensions or trade-offs between those different mediums while trying to retain the parts of Substack that make it unique and make it special?
One way I put this is that a lot of other platforms that you might think of got built up around a format. Instagram was pictures, Snapchat was disappearing pictures, TikTok was short form, and so on. And Substack is not built around a format. Substack is built around you. It's built around the subscription relationship that you have. And being able to unlock that to be every format that you want to use is a design challenge, right? It's hard to make an app that has all of these different short form social media-ish posts and long form articles and podcasts and videos, short form videos and maybe other like chat. There's all these things. It's hard to put all those together into one package in a way that's coherent. And I actually think we still have a lot of work to do on that. We've built a bunch of these things. They're all kind of working. It's exciting. And then sometimes when you open the Substack app, you're like, 'Oh my god, what's happening here?' There's so many different things. So I think we have still some work to do to kind of bring it together into a simple package. But listen, our thing ultimately is you should be able to create in every format that you care about and reach your audience. And you shouldn't be limited to, oh, I've got a subscriber on this platform, so I can only ever make videos. I can never write or vice versa. And in the world of all of these new AI tools that are coming online, it's getting easier and easier to get creative leverage, right? The idea that you could have an AI that you talk into your phone and sort of magically turns it into a usable artifact is possible now. You can already read, listen to things that are written in the Substack app with a great AI voice that sounds awesome. All of these things are becoming easier to translate from one medium to another to sort of make highly produced stuff in audio and video without having to hire a team of nerds every time. It's a new world. It's exciting. I certainly want to talk more about AI at some point. But Hamish, I'd be curious for your take on the fact that Substack was certainly created in response to the fact that we have spent our attention pretty badly over the past decade plus on short social media, short videos. Is there ever a worry as a writer yourself that as that starts to come into Substack because it's so addictive or because our minds seem wired to want to consume this, that actually short video ends up taking time away from people reading the great piece of fiction or George Saunders' Story Club, whichever these great pieces of culture that are on Substack, shifting that focus a bit?
I'm actually really excited about what's possible when you get that short form feed and discussion and discovery in the context of Substack where everything is based around deep relationships that leads people when these things are like the front door opening up to a path that leads people down to a subscription or a kind of relationship with a creator or a writer who they really care about. I think what we've seen so far is that those kinds of technologies, the Twitter feed, the Facebook newsfeed, Instagram, YouTube, etc., are extremely powerful. People are going to spend their time there. TikTok is the latest one. And they're going to spend their time there whether we like it or not. I'm going to spend my time in lots of those places. A lot of that time is for my snacking time, my relaxed time, my casual browsing time. Even though I love to read books, even though I love to watch documentaries. And given that that is true, and it's very obviously true, these are the platforms that culture is happening on to a large extent, and there's billions of people using them, wouldn't it be interesting to see what happens if you rip the ads out of them and give them the job of maximizing these deep relationships instead of maximizing how much time someone spends doom scrolling? And I think what we've seen in the Substack network is that that can create something pretty interesting and a different type of experience in those feeds where when you leave the Substack feed, you don't come away feeling dirty. You don't come away feeling like you misspent your time. And you've actually likely started a bunch of interesting relationships either by casually following a creator or actually fully subscribing, maybe even paying to subscribe to a creator who you might not have known about otherwise. So that's really exciting to me because I think it lessens the grip that those other platforms have on society's mind and it strengthens and gives power to the types of creators who are doing quality work and just need some help finding those audiences who are going to deeply appreciate that work.
Anecdotally, I will say that you phrased that perfectly. When I use Notes, for example, which is the sort of Twitter equivalent on Substack, I don't feel dirty. And I'm not really sure why. I haven't really totally cracked why it feels like a different experience. Maybe it is the absence of ads. Maybe it's just like Elon's not on there yet. He's not on there yet. I will say he's probably somewhere on there.
I will make the subtle distinction. It's not just the absence of ads, although personally I hate seeing ads. It's annoying to me to have my experience interrupted by ads. But the ads warp the incentives. The ads change the advertising being the business model that makes those whole companies run. That means that they have to point the algorithms for their feeds at the things that serve the advertisers, not the things that serve the people who are consuming the culture who want to connect with great creators and consume great video, audio, text, whatever. And so it's like the difference between an internal combustion engine car and an electric car where they kind of look the same, right? But the experience of driving an electric car where there's no gear shifting and there's just pure smooth instant acceleration and torque distribution is so much nicer and so much better than driving an internal combustion car which is predicated on all these explosions happening under the hood of your car. And the externalities, the external outputs are also completely different. The gasoline car pollutes the atmosphere and electric cars are much friendlier to the environment. Same with the Substack feed versus the other feeds. The other feeds end up polluting your mind. And the Substack feed maybe can even cleanse your mind.
Can even cleanse your mind. That's a new tagline. Cleanse your mind. Yeah, it might be an over, but you don't come away feeling so polluted. Let's leave it at that. Yes, absolutely. And I think it's interesting from a pure business strategy perspective. I think Notes is such an interesting and intelligent addition to the platform because it is this top of funnel, but as you said, the pipeline is working in your favor as a writer or a creator rather than against you. Certainly on Twitter and X, you can go viral, let's say, and I would very carefully chart how many subscribers did that create and how many paying subscribers did that create, and it could be a really tiny number because it's just such a diffuse pipeline. So that's such an interesting thing from a creator's vantage. It also brings up the conversation of the internet of beefs, the battle royale between Substack and X. For those who maybe didn't follow that chapter closely, can you explain why there is some degree of intense competition there and how creators maybe got caught in the crossfire a little bit?
Sure. I'll tell the original story. Elon Musk bought Twitter a couple years ago and one of the things that he had his eyes on early on was bringing Substack into the Twitter fold more. He actually thought that these companies could work really well together. And on the face of it, it seems like they do complement each other. Lots of people discover Substacks through Twitter and then go on and pay to those creators on Substack. And I think Elon's view was probably like, well, Substack is effectively acting as a paywall for Twitter, that these two things should just be together. And so he tried to convince us that we should join forces in this way. We actually have a different vision of how this all should play out. And we like the more integrated system that Substack has where there's not an ad-based feed that has sometimes competing interests with the deep relationships feed or the deep relationships platform. And so we were not eager to do that. And in the meantime, we launched our social networking type feeds, the Notes product, gave Elon a courtesy heads up about it the night before, well the day before we did that. And then when it came out the next day, people on Twitter freaked out and said, 'Here comes the Twitter killer, Substack's got the Twitter killer,' which is not how we were positioning it. You can't just instantly make an amazing social network on day one. It takes time to build that ecosystem up. But didn't matter to Elon. He saw it as a direct shot across the bow and muted Substack from Twitter. Essentially, immediately cut us off from their API, suppressed all the links that were going to Substack publications. Even for a couple of days, you couldn't search for the word Substack in Twitter. It would just return results for 'newsletter.' He accused us of stealing data in the meantime, which is totally false. We were just using the API in a normal way. But that created the impression that there was this big beef going on. But to us, it was kind of like we're Ukraine and he's Putin. He just decided to start bombing us and we're like, why are we getting bombed? We're just trying to build this ecosystem. And it hasn't hurt. Way to take the temperature down by using a neutral metaphor. Sorry to all the Russia fans. But we just continued. Twitter was already becoming a less important share of traffic for Substack publications. It was really painful for a few, but it was a good thing to happen for Substack ultimately because it forces Substack to continue building the kinds of things that help writers and creators on the platform grow without making them dependent on these capricious and volatile social networks that don't really have the creators' interests at heart. They're mostly focused on their own platforms and the advertising. So that is basically what happened. And I think Elon's interest has moved on to other things at the moment. So maybe that beef has become like a small medallion on the corner of his vast plate.
Yes, his very vast plate. When you mentioned that there was some point where there was the discussion about how you guys maybe would work together, did you ever get to the stage of thinking, actually, maybe there is a way to do that in a deep partnership or even an acquisition? Did it ever get to that sort of level of conversation?
It's not something that we were keen on. We've always wanted to build Substack as a successful sort of independent endeavor. We think we're building something wholly new. And when there's been conversations about, hey, should we join this or that company? I think in general it would break the thing that we're trying to accomplish.
Yeah, philosophically these are such different businesses, right? And it's not, I think it would just be hard to make the thing that we're trying to make in a context like that. And we're seeing, I mean, we are...
I think that's a perfect place to pause. We'll pick up there after the break.
Seeing this now, we've been working on the Substack app and this network concept for years and years because we knew it was going to become critical. In the early days of Substack, when Elon did that, he thought he could kill Substack. We thought we were wholly dependent on it. Although it was very painful for many Twitter users who had Substacks, from a systematic level it was basically a rounding error by that point. But there was a time in 2019 where that actually was true. Everything on Substack was downstream of Twitter. You could tweet out a link and everybody would see it, and you could get a ton of subscribers. A lot of our early growth was driven by that effect, but we knew there were two problems. Number one, you're still downstream of the Twitter incentive structure. If your whole business depends on top of funnel coming from another network, you still have to play that game. And the other part is practical: they don't care about your business working. In fact, maybe it's a negative. We saw this not just from Twitter—they blocked us, but since then all links are deprioritized. I don't think Substack even gets special treatment anymore. Meta went through a period where they didn't allow any political content. Fair enough, but if you're a political journalist or podcaster, what does that mean for you? We want people on Substack to promote their work everywhere—put it on YouTube, Twitter, TikTok—but you don't want to be wholly dependent on any of those things. You want at least one place where people can discover your work in a way that wants them to find it and go deep. That thing working is a big part of why you can feel this way now. You have this sense that there's a whole set of stuff out there to find because of the discovery piece where people proactively come to Substack to keep up with what they love and find new things. You mentioned the tension between short form and long form. By adding the Notes feed, is there a trade-off? I can see where that comes from, but in practice the reverse is closer to true. If we built Substack to be the eat-your-vegetables platform with only ultra-long-form dense works, the net effect would not be more long-form stuff; it would be far fewer people using Substack. It would be harder to make money. As we've built the discovery feed, we've seen again and again that when you make a change that really works, you get across-the-board wins: people see more things, read more long-form posts, discover and subscribe to more, retain better, and pay more money. You don't have to be a monk to read interesting stuff on Substack. You show up, see a quote from a really interesting article, click into it, and read the next one. You can make a universe that helps you go deep and become a better version of yourself. We're such magicians that we can trick you into reading quality writing. It's good enough for us.
I remember when we were chatting back in 2023 when we wrote a case study on Substack, you guys talked about how you think of the company as a tool, a network, and a destination. I think what you're saying is that network and destination piece really helps every other publication on there. You need it to be a destination to drive people in, and then those people find great pieces of content even if they also engage with shorter-form things. A great example of one such platform is YouTube—not only a giant business but a place for quality stuff where people are bound in relationships.
I actually think there's lots of room to improve on YouTube because those relationships are still ultimately controlled by the platform itself, and the monetization is primarily based on advertising, which sets terms for who can be successful and what gets made. The Substack version of YouTube is based on deeper relationships and direct subscriptions that directly support the creators. I think that's going to create something pretty special, and we've just seen the beginnings of it.
