On today’s episode of Decoder, I’m talking to Chris Best, co-founder and CEO of Substack, the subscription newsletter startup that’s taken the media industry by storm over the past few months. High-profile journalists like Glenn Greenwald, Andrew Sullivan, Matt Yglesias, and Anne Helen Petersen have left their jobs at traditional media companies to start paid newsletters on Substack. Casey Newton recently left The Verge and launched a Substack newsletter called Platformer, which is great — you should subscribe to it.
The appeal of running your own newsletter is obvious and simple: instead of working for a boss, you can work for yourself. Instead of having your salary determined by management, you can make more money just by getting more subscribers. And most importantly, instead of feeling like you’re chasing clicks in an ad-supported business model, getting paid directly by subscribers theoretically incentivizes a different and better kind of journalism.
That’s a lot of promise, but there are a lot of details in making that promise real, and I wanted to talk to Chris about all of it. I also wanted to start with the basics: it’s so tempting to treat hot startups like they’ve already got it all figured out, and that’s never really true. Nine years ago, The Verge itself was a media startup, and we’ve built a lot of things that worked and a lot of things that failed. Substack has a long way to go — it’s not yet profitable — and I realized I didn’t know much about the company itself.
So I tried to ask Chris the simplest questions about running a media company that I could think of: how Substack makes money; how it’s going to make more money; how he plans to manage costs as Substack offers more and more services like editors and legal protection to writers; and how he’s thinking about content moderation, which every platform that works with independent creators has to deal with eventually.
And, of course, how many newsletters anyone can really read in a day?
This transcript has been lightly edited for clarity.
It seems like Substack as a whole is having a moment. And it’s a startup, and you’re a new CEO, so a lot to talk about with you. Give people the short version of your background and how Substack started.
I’m sort of a programmer and technologist. Before Substack, I was a co-founder of a company called Kik Messenger. We made a messenger that’s kind of like WhatsApp that went through a wild ride. After I left there, I was taking some time off and figuring out what to do with my life, and seeing friends and family, and all that stuff you never get to do when you’re starting a startup. And one of the things that had been on my mind for a long time was a general dissatisfaction or terror at the state of [the] internet media ecosystem. I had this idea that what you read really matters. It shapes who you are, how you see the world. And when the internet came along, it was this magical, revolutionary technology that made it instant and global and free to distribute writing and there’s more great things to read for free than ever before in history, or that you could ever handle.
And yet, everything we read is dictated by the economics of social media platforms that have gobbled up all of our attention in the first phase of internet adoption. And we also killed a lot of the business models for traditional media, right? Craigslist killed the classifieds, Facebook and Google took over the internet advertising industry. And so we now live in this weird in-between time where everything should be really great, and yet, a lot of us feel like the things we read are kind of breaking our brains. And I was just complaining about this. I was just like, “Oh, woe is me. Social media is maybe bad in some ways.” And I was talking to my friend Hamish, who’s a writer, and he’s like, “First of all, you’re not very original for saying that maybe social media is bad. This is not as hot a take as you think it is.”
But also, “If you’re so smart, how could this even be different, right? What is the alternative to having our hyperaddictive Twitter feed determine everything we read?”
And we started talking about that and the conclusion we came to is that it’s not something you can fix from within those platforms. It’s not like you can tweak the Twitter algorithm and make all of our online discourse lovely because the way that it works now stems from the underlying economics of how those platforms work. The only way to make a real change is to change the underlying laws of physics that apply, change the rules of the game, change how people are making money, have a new and better business model for independent writing and make that thing work. We just started arguing about this, basically, and we came to this really simple nugget of an idea: what if we just made a dead-simple way for a writer to go independent?
Start a blog, an email newsletter, have people subscribe directly to somebody you trust. You own your content, you own your audience. Even a few thousand people paying five or 10 bucks a month turns into a real business very quickly, and it completely upends the economics of writing on the internet. And we started talking about this and we couldn’t talk ourselves out of it. I’m sort of a product nerd, I guess, and Hamish is a writer and sees things totally differently. And we just couldn’t get the idea out of our heads.
These past few months in particular have really accelerated for Substack. What was the beginning of that and has that tailed off? Or is it still accelerating?
It’s really funny because everyone has this impression that Substack has somehow leapt to prominence in the past few months. And to us, it feels like we’ve been steadily working and growing for the past three years. We’ve been putting in that effort, we’ve been helping writers every way we can, and it has been plugging along and growing geometrically. And COVID accelerated things a little bit, but didn’t fundamentally change it. I think we’ve just hit a size now where people are starting to notice.
You’ve obviously had the wave of bigger names come in. Was that a purposeful push or was it when they were ready, the platform happened to be there?
I think it was both. I mean, we’ve always put an effort into going and manually trying to convince people who would do well on Substack to come and take the leap. And I think we’ve always been going out and trying to recruit writers, and as the profile of the company grows, it’s just gotten easier.
I ask every CEO about decision-making frameworks. You’re a new CEO with a new kind of company and a new business model. In this time of change, what is your framework? How has it changed?
One thing that might be interesting here that I think about as CEO is: what are you optimizing for? What do you need to optimize for, for the company to win? And I think this goes into: what is the right culture for your company?
Because there may be many valid company cultures and it’s less like one is right and one is wrong, and maybe one is just better adapted to the thing you’re trying to do. For example, I think if you’re Apple, it’s really important that you ship beautifully, finely tuned products that are right the first time and can make bold bets and whatever. There’s some set of things that if you’re Apple, you need to be great at.
And then if you’re making a system that involves people, you’re making something that is a network of people that are interacting, and the way that those people interact ends up being the value of the product, you have a different set of needs, which is why the right culture for Facebook is different than the right culture for Apple and Apple’s never been able to do social well… potentially.
And I think for us, the way that I think of that is we need to optimize for our rate of learning. We are creating this new model and we’re helping a bunch of real human beings come together and build things and pay each other and create new types of careers and all of this stuff and it’s all sort of new, and it’s not clear exactly how it should work. And so the speed at which we learn over the long haul is going to determine whether we succeed or fail, much more so than, “Was any individual release perfect that time?” or any other kind of concern.
You said winning. What is winning for you?
I think for us, if we can help bring this model, this different model for how writers should get paid on the internet and make it a massive part of how we create internet culture, that’s what we strive to do. We want to help massively grow the size of the market for great writing, so much more of it can be created.
You said speed of learning, which is great. I emotionally understand what you mean. But speed implies a rate. How do you learn? It’s a ridiculous question, I understand, but what does it mean for you as a company — not you as a person — for you as a company to have learned something?
In order to learn, you have to have some opinion or have some idea. You have to get contact with reality, right? You have to have real people interacting with that idea and sort of feel the road a little bit, have something where people are actually trying to do the thing and see if it works. And then you have to get that information back, both in quantitative ways — data — and in subjective ways, through talking to people. And then draw the right conclusions from that, or at least draw useful conclusions from that and put it into the next iteration.
So to me, you can’t learn by sitting in the office and having long philosophical debates about what the right thing is, you learn by having a philosophical debate and then testing the philosophy and being like, people are asking for this, people want this thing, we think this would help them.
We’re going to try that. We’re going to see what about it works and what doesn’t work. We’re going to actually get that feedback from them and we’re going to let that shape our thinking, and the length of time that it takes to do one of those cycles really influences your speed of learning because ideally, every time you’re actually going to change. The next thing you build is going to be different based on what you learned from that contact with reality. And so we focus a lot on tight iteration cycles, basically.
What’s the most surprising thing that you’ve learned?
There’s been a few good ones. One thing that was really counterintuitive is that on Substack, when you’re a paid writer, you’ve got a subscription publication and you’re asking people to come and pay, your intuition is very much “I’m going to take my best stuff and I’m going to put it behind the paywall because my paying readers need to be paying for something.”
And there’s some truth there, you do have to put stuff behind the paywall, but actually a good rule of thumb is you should take your best — or at least your most accessible — stuff and make a lot of it free even when you’re paid. It’s nice because that’s actually what a lot of writers want in the first place — a lot of writers want to reach the widest audience possible — but it also makes sense just from a marketing perspective. That is your marketing funnel, right?
People find out that you’re a writer that they trust and has good ideas, and they want to invest the time and money to subscribe and pay. And the only way they’re going to do that is if they get to read real, good things that you’ve done. So “make your best stuff free” is a counterintuitive thing that we didn’t expect and it runs counter to a lot of writers’ intuition.
Let’s talk about Substack itself. One thing I’ve noticed in the coverage and even the way that you’re talking about it, it’s very natural to skip to what we all think the end is going to be: Substack is massively successful, there’s a new business model for journalism on the internet that will have ripple effects through the media industry.
It’s very tempting. I assure you, I did not fully resist the temptation; those questions are at the bottom of this outline. But I don’t really have a sense of your business. It doesn’t feel like anyone’s really pushed you on your business at this moment and I think, for a startup, that’s important. So I’m going to start with the most basic business question I can think of. What are Substack’s assets and what are your liabilities?
What are our assets and what are our liabilities?
Yeah. Like for [Vox Media]: we’re a traditional media company. We own a bunch of brands, we make a lot of stuff, we own that stuff, we monetize it in 12 different ways, I’m told, and then we franchise that stuff out in other places. Those are our assets. And then obviously we have to pay everybody and so on. In that structure, the most basic profit and loss structure, what are your assets and liabilities?
I think our asset is the platform that we’re creating. Because we don’t own media properties; we’re not a media company. Our goal is not to be a publisher that has a bunch of stuff. The whole point of Substack is that as a writer, you can use Substack to go independent, and we are spawning a million media companies. And so our asset is the platform that people are using to do that, and the set of tools that we’ve created to help writers go independent, that they’re willing to pay us for in the form of rev share. And so some of those things are software, some of them are like, it’s a platform where you can publish that’s really easy. Our goal was we wanted to make it so that you could type into this box and if the things you type are good, you’re going to get rich.
As opposed to before Substack, there were still ways you could host a blog and charge money for it, but there’s a lot of fiddling you had to do. We want to make that whole thing really simple. Some of that is software. Some of it is programs that we’re running. We have something called Substack Defender, which is connecting writers with legal help, because something we noticed was a lot of local — especially local — journalists were getting bogus legal threats where it’s like, “I’m doing some critical reporting of a local politician and because I’m the only one covering them, they figure if they can shut me up, they actually won’t have critical press. And so I get this scary looking letter from a fancy lawyer that says, ‘you’re not allowed to write about this.’”
It’s bullshit, is frankly what it is. And if you’re an independent writer, it’s hard to fight that. And so we were like, hey, we as this platform — we can help with this coordination problem, right? We can make it easy to get the legal resources to effectively fight that and continue to do the journalism. And because we’re in a position of doing this for many, many writers, we can even help fund it and pay for it in some cases, because we will then help create a climate that is more favorable to the journalist in that [situation]. Where the local politician doesn’t think that they can shut someone up just by sending them a threatening thing because there’s actually this Substack Defender program that’s going to come and vigorously oppose, and so you can’t get away with a bogus legal threat.
That’s on the far end of the spectrum of not being all about software, but still providing a platform that creates value for writers that grows as the number of writers that use it grows.
How many employees do you have?
We have about 20 employees right now.
I’m just asking you the most basic business questions I can think of. Who is your competition?
I think there’s a few avenues of competition. One is do-it-yourself. Like when we started, we looked at Ben Thompson, who already had a great paid newsletter blog and what he’d done, he had WordPress and Memberful and Stripe and MailChimp, and you tie a bunch of services together and build it yourself. And that’s, I think, always a compelling option for people that have the desire and ability to do that. And if you’re someone that really wants to tinker with every part of your setup and be able to have ultimate customizability, that’s pretty compelling. So for some set of people, I think that will always be a good option. And then with Substack, the whole point is that it’s one place that’s simple and makes it easy.
There are more people that are coming up to try to do this. I think Ghost added subscriptions after they saw what Substack was doing. I think Squarespace is copying the subscription — or if not copying, doing something that is along the lines of the subscription thing. I think lots of other people will try to re-create the software tool part of it. And then there’s other platforms that are — you can say that Patreon is kind of a more diffuse thing, that’s a smaller part of the stack, but for a much wider variety of creators, of which writers are one. I think those are the ones I would list off the top of my head.
That seems like the right list. I mean, ultimately what we’re talking about is people should pay for good things. I think there’s a lot of companies that are enabling that business model. Those feel like orthogonal competitors, maybe not direct competitors. Do you feel like you have a good direct competitor?
If you don’t think that those are direct, I’m not sure there’s anybody that’s more direct than those. And I think we’re going to see a lot more startups in this space because it is such a compelling — this model is incredibly powerful and its time has come, basically. And so I think there’s going to be a bunch... Maybe our most direct competitor is one that we don’t know about yet.
Just some other basic stuff. You’re a startup, you’re pretty new. I’m assuming Substack is not yet profitable?
We’re not profitable.
Do you have a runway? When do you think you will become profitable?
The way that I think about this is through the YC [Y Combinator, a startup accelerator] framework of “default dead, default alive,” which is, if you continue on the track you’re going, growing revenue at the rate you’re going, and looking at your expenses, one of two things has to happen first. Either you’re going to become profitable or you’re going to die. And if you’re default dead, you’re actually in a very bad spot because unless you can raise money, the company is going to end. And that’s a hard situation under which to raise money.
So our focus has always been on being very comfortably default alive, which we currently are. Basically, if we continue to grow at our current rate, we would become profitable quite quickly if we didn’t grow expenses. And then it becomes a choice of: given that we’ve got some money in the bank, do we want to grow expenses anyway because investing in the product is going to pay off returns in the long run? And what that means for me in practice is I want to be in a position where any money we’ve ever raised, we’ve treated it as the last money that we raise, so we can say, “if we never raise money again, this company is going to work and we have a healthy margin to do it.” And under those circumstances, the only reason you ever raise money is because it’s going to help you accelerate and you’re in a position of strength.
That implies you’re looking at becoming a strong, successful, independent company, which is great.
[Laughs] That is what I would like to imply.
We’re talking the day after the Slack and Salesforce deal was announced, and I just have a level of sadness about it, that another great independent company went away. So if that’s where you’re going, that’s great. But there are obviously always rumors. There was a rumor about Twitter acquiring Substack a while ago. I think you shot it down immediately. Where did that come from?
I feel like somebody at The [New York] Times printed that, and then Hamish just did a tweet being like, “This isn’t going to happen.”
We think that if we sold Substack, the chances that we could do the thing that we set out to do would be greatly diminished. Sometimes acquisitions work out really well and it’s great, but as you know, by far, the rule is it kills the baby.
We’re really attached to our baby and we think that it can be a strong, independent company. So we’re putting all of our efforts into that, and we have no intention to sell.
As we were talking about what your assets are, you talked a lot about your platform, you talked a lot about growing it, investing into it in a way that’s sustainable.
One thing that has always struck me about Substack, which I think is a little bit misunderstood, is that the writers and their distribution lists that use Substack — they’re not among your assets. They can just leave and they can take their lists with them.
That is somewhat precarious. They’re ultimately the value of the platform. How are you thinking about managing that?
This is actually a key part of how we think about building the company, back to that idea of how do you create a better business model on the internet and what does that actually look like.
We’re big believers in the idea that you can’t really say, “We’re going to, over the long run, be really virtuous and do things that aren’t great for the business, but are good because we think they’re good.” It’s possible to do that, but it’s not actually a very good strategy to accomplish good things in the world as a company. What we want to do instead is construct our business model in such a way that in order to be successful, we have to do the right thing, that we’re as aligned as possible with readers and writers.
One of the ways that we do that is we set up the way that our payments work — it’s free to publish for any size, and then once you start charging, we take a percent. And so we only make money when you make money, so there’s no multi-level marketing thing where we’re making a bunch of money off a writer who believes they’re going to make money but doesn’t.
Another way we do that is we mean it when we say we’re helping writers go independent, and they own their content and they own their contact point with their audience, which means that you can leave. If you’re a writer and you build up your following and your subscriber base on Substack, you can take it away. Which in turn means that we have to provide value for you to stay and we can’t treat you badly, or it’s actually not going to help us.
So, writers... I manage a few. I know a few who are on Substack. Writers, as a rule, are a pretty finicky bunch—
They require a lot of care. Usually a software company does not spend a lot of money on customer service, on dealing with a writer who is freaking out, on legal defender programs. How are you thinking about growing that cost? Because that cost does not scale the way that software scales. You ship one feature, you pay the cost to engineer that feature once and you get value out of it, again and again and again. A lawyer is pretty fixed-cost, [in] that you just have to keep adding more lawyers.
Yeah. Well, I mean, it is and it isn’t.
Part of the answer there is we don’t consider ourselves only a software company. We’re not only making a software tool that effortlessly scales. We’re trying to create all of these programs that give a writer everything they need to go independent. And some of those do just... the costs scale up, and we’re going to have to find a scalable way to pay for that stuff.
Fortunately, by the time you’re a very successful writer on Substack, it’s a hell of a business. And so there’s a real business model that can come in and back some of these things you need, as opposed to other platforms that see the content creators as their free labor, and that’s a cost center to be minimized. [Whereas we’re] like, “Oh, geez, we’re making 10 percent of this very large amount of money this writer’s making. We better be spending a good fraction of that on things that are adding a lot of value for them.” Because, again, we’ve put ourselves in a position where that’s the thing that’s going to help us succeed.
With that said, some of these things scale in ways that you wouldn’t always expect to begin with, right? So for example, Substack Defender: if people continue to get legal threats at the same rate and we have to hire a lawyer for each of them, yes, that’s bad scaling. But there is an effect where if we can go to bat very vigorously and very publicly for a few people that are the subject of bogus legal threats, and we can help publicize that we’re there as a backstop for writers and that these kinds of threats are actually quite costly to make, that can scale up because people overall will be less likely to make those threats to begin with.
No. As a person who gets those letters and vigorously defends them, defamation attorneys do not say, “We shouldn’t send a letter because they’ll defend it.” I just promise you, what you’re going to get is — you’ve got some rich VCs backing your company, you’ve got a lot of money in the bank, you’ve got some famous names. My experience is the target just gets bigger. I’m very curious to see if it plays out the way that you think it will. But The New York Times does not get less letters, it gets more over time. The Verge has gotten more letters over time as we’ve gotten more prominent and more defensive of ourselves.
Yeah. I imagine it gets more over time. It’d be interesting to know if it gets more per subscriber over time.
Oh, that’s interesting.
There must be some level of where it’s like, I’m some podunk attorney, I either just realize that it’s not worth my time. Or I guess you get the cranks anyway, but you can find some way to deal with the cranks at scale.
I want to catch up with you over time as Substack grows. The next time we talk in a few months—
In a few months, I’ll have aged 10 years. I’ll be huddling under a blanket.
You’re the CEO. That’s the price of success.
You’ve been paying writers to come on. Those have been advances, right? You’re not just throwing people bonus checks.
Yeah. We’ve experimented with a handful of things. Basically the premise with all of them is it’s a way to help kickstart your independence. And so it’s like an advance or some deal — we’ve been experimenting with stuff like that. And it’s always, you end up in the same place. You own your audience, you own your content. You have a direct subscription relationship.
And if they don’t pay back the advance, you’re not going to go chase them down for it? This is a question I hear from writers all the time.
The way that it works— there’s been a few things we’ve tried. Specifically the advances, it’s basically like, yeah, we’ll help shoulder some of the risk. And so if you do the thing for the period of time of the advance, even if you don’t make the money back, you don’t owe us the money back. The only way you owe it back is if you quit before the end of the period, right? If you take a book advance and don’t write the books, often you’ll end up owing some part of that back.
Between the advances to get started and grow, you’ve offered some people ability to buy health insurance out of a pool, you’ve made it easier to do things that you generally need a company to do. And then you have Defender, the legal program you’ve mentioned several times. That feels like the beginning of the infrastructure of a traditional media company, right? You take a job at The Verge, we pay you a salary, you get health insurance. There’s a whole lot of — the lawyer thing is very funny to me. We have a lot of lawyers. And we help you publish and create a platform. Where does that infrastructure stop for you?
Where does that infrastructure stop?
Anne Helen Petersen said she was getting an editor from you guys. The infrastructure of journalism is starting to appear inside of Substack. Where do you stop being a media company and say, “we’re just a platform”? Or when do you become just a full-on media company?
For us, making it possible for a writer to go independent is the point. Some of the problems that prevent a writer from going independent are like, “I don’t have a good piece of software to do this.” But some of it [is] those things, right? It used to be harder to go independent because you had to work at a company to figure out how to defend bogus legal claims. Or you had to work at a company in order to figure out how you’re going to get your family health care. And those became barriers where even if you wanted to go independent and strike out on your own, you were prevented from doing it.
And Substack, the platform, our mission is to remove those barriers, to make it so that you can go independent and still not be the subject of bogus legal threats. And we don’t see those as being contradictory at all.
We see those as being basically, how can we make it possible for more and more people to go independent, even if they are human beings who need health care, even if they don’t have big savings that they can use to draw down. Even if all of these things, if they want to do it, that’s what they choose for themselves and they have the capacity to do it and have an audience. We want to remove every barrier to doing it, and that’s what our platform exists to do.
I was looking at the blog post you all wrote about the Defender legal program — it’s a big one, right? In terms of the risk of going independent, there’s “I need some cash in the bank before my revenue goes up,” [and] there’s “I’ve got a family and I need health insurance.” Those are the reasons people have jobs.
“I’m a writer and I might irritate some big corporation or some spiky executive, and they’re going to sue.” That’s not a manageable risk for any individual, as far as I know. Maybe if you’re very wealthy.
So I’m just going to read this to you because I have some questions about it. The Legal Defender Program is for “writers with paid newsletters who publish work that may attract unreasonable legal pressure, such as abuse of copyright laws, assault on First Amendment rights, and spurious defamation claims. Upon acceptance to the program, writers can use a form to request help for specific cases. Substack will make the ultimate choice on who is accepted in the program and which cases to support. Once a case is taken on by the program’s lawyers, Substack, at our discretion, will cover fees up to $1 million. In exceptional cases, we may cover even more.”
There’s a lot of discretion for Substack in that program.
You can get rejected from the program as a whole. You can get accepted and have your case turned down. You can be accepted and run up to the million-dollar limit and then be out of money. There’s just a bunch of outs there for Substack as a company.
If I was doing something very risky, I would say I don’t know if I can depend on this. It’s there, but it’s not there in a way that I would personally rely on it if I’m doing something particularly risky. Is that a conversation you’ve been having?
I mean, I think it’s worth pointing out that this is the early, first iteration of the program. And to me, the end goal is to make this stuff available to as many people as physically possible. The way that we usually start is we start with a much smaller version of that, where it’s like, “We’ll make it opt-in or we’ll make it application-only for a few people, and we’ll figure out how to do it and then we’ll expand it over time.”
With these services in general, our goal is to make it as scalable as possible and make the economics of it work at scale in such a way that it’s available to anybody who wants it. And it may be a case where some people have to, in the eventual version of the program, maybe it’s available for purchase for some people that don’t already have a large, successful thing, but want to buy into it.
It’s less about [that] we’re necessarily going to bankroll everybody’s legal thing, and more like we want to reduce the friction to the lowest possible amount. So if you are just a writer and you want to go independent, you don’t know how to navigate all this stuff about getting a defamation lawyer, or an editor, or whatever, we give you the smooth rail to do it.
What’s the criteria for acceptance into the program?
Right now, we’ve been just doing it on a case-by-case basis of people that we think are likely to be subject to a lot of these [legal threats]. The thing that we set out to do in the very first version is, we had a couple of people who had just gotten absolutely egregious, nonsense, bullshit threats and we were like, “We would just love, in these cases, to cover this stuff, because it’s so ridiculous.” And so we started out trying to handle a couple of those, people that are local journalists, stuff like that. So people that are obviously doing totally legit journalism and are under the subject of totally nonsense threats. It’s just the clearest case where we can help at the outset.
I would only push back on you there because we live in the time that we live in, and say that the phrase “obviously legit journalism” is wildly up for debate.
So what is your criteria for obviously legit journalism?
I mean, in this case, it’s really we know when we see it, and in practice it’s been, “I’m a local journalist, that’s writing something about the corruption of a local politician or a local business person that’s of clear public interest,” and is well-supported and this kind of thing.
So do you have editors who are looking at the work and evaluating it? Who’s making the decision?
In the earliest iterations of the program, it’s basically some legal counsel that we have, and us, the founders.
And then once people are in the program, how do you decide what cases to take? Have you had cases yet or is it mostly just letters?
Yeah, it’s mostly just been these nonsense things.
So someone gets a letter, they say, “Help me out.” You dispatch a lawyer to send a letter back and say, “Go away”?
How many times has that happened?
I don’t have that at the tip of my tongue.
And then have you actually had a lawsuit through this program yet?
And then the mechanics of it are, you’ve just hired outside counsel, right?
Yeah. We have some counsel.
The lawyers aren’t in-house?
So one question I have — I’m an editor, I run a very similar kind of business, I can hold things from being published before they go through defamation review. Every feature that we’ve published, where we think there’s a risk, we hit stop. Our in-house counsel reads it.
We make our changes to make sure we’re totally airtight. If we think it’s even more controversial, we will have our outside First Amendment counsel read it. We’ll make sure, but we don’t publish until then.
You cannot tell a Substack writer not to publish. You’re starting out behind the eight ball.
Well, I mean, the point of independence is we can’t tell them what to publish and what not to publish, and ultimately it’s their content and it means that they’re the ones taking the risk. And so for the people who are like, “I think this is a risk and I want some help with that,” we want to give them the tools they need, but ultimately that’s what being independent means here. It’s their media company basically. It’s their thing.
So I just want to keep pushing it, because the Defender program — you’ve talked about it a lot. I think you’re rightfully very proud of it. There are not a lot of other platforms that say, “We will engage defamation counsel on your behalf.” So that is very interesting. But the mechanics of, you’ve published, but for one sentence—
Part of the Defender program is handling the letters, but part of it is also, once you’re accepted, you can ask for pre-publication review on stuff. So if you’re like, “Hey, I’m doing this thing, but I’m worried that I’m treading into some ground here and I’d like to have someone give me some legal advice on whether this is legit or not, because I’m deciding whether to take the risk of publishing this,” that is something that we provide as well.
Okay. And is that your cost or is that the writer’s cost?
As we scale the program that will probably evolve. Right now, I think we’re paying for a chunk of it for people that are accepted, just as we’re in the early stages.
There’s a reason I’m asking what to me feel like the simplest questions. “Who pays for it” is the simplest possible question, but I’m curious how that will grow, because I know what our cost structure looks like, and I think you have a new business model and your cost structure — there’s a world in which it evolves to look exactly like ours. It looks like a media company’s cost structure. But I don’t think that’s your goal.
I think it’s more likely that there will be many publications on Substack that are similar to a media company. And there are pieces that are going to be the same and you need writers and you need things, but there are pieces that could be pulled out into the platform. You don’t have to build all of your own software, because we have this great platform that you can use. Maybe you don’t have to build your legal team until much later because we have this turnkey thing that you can either use for free or pay a bit to use it, that gets you to that next stage and lowers the barrier of becoming one of these things.
So that leads me into my next theme, which is just how you give tools to creators.
When I went and asked a bunch of people on Substack, “What do you want me to ask Chris Best?” — by far, and I was not expecting this, by far the No. 1 thing they asked for was design customization. One person specifically told me to ask you, when you will support drop caps?
When will you support drop caps? Is that on the roadmap?
I didn’t even consider drop caps, but now that you’ve said it, I love that idea.
Put it to the top of the Trello, man. Let’s get it done.
So design customization, you’ve rolled out some web tools, people can have custom URLs. It feels like you’re going beyond newsletters into publication territory. On the scale of things: WordPress and Squarespace are over here, and Medium is all the way over there, where do you think Substack falls?
I think it’s somewhere in between, naturally. Newsletters has always been a shorthand for us. The thing that’s magical about a newsletter is that it’s the one place you can have a direct relationship with your readers and get a push notification onto their home screen, without having to go through the Facebook algorithm and without having to get them to download an app. That’s why email newsletters have become this important thing.
So customization is definitely on our roadmap and something that we’re very excited about. And our goal with it is to let you customize as much as we possibly can while keeping our core principle of being really easy to use for a writer, where you don’t have to be a developer. You don’t have to write a bunch of code. You don’t have to wrangle a bunch of different software together to make the thing work.
And so as much customization as we can give you that makes it completely your brand, completely feel your stuff without having to make you into managing your own software platform, that’s basically where we would want to go over time.
I hear what you’re saying about newsletters being a shorthand, and I think they work for a reason. You can escape the distribution funnels of social networks. But as you become more of a web property, you do start to think about things like search engines and discoverability and social media.
Are you envisioning a world in which your writers have built big web properties and they start asking you for the tools to do the other things, or you’ve created the incentives to do the social media marketing that you started in opposition to?
The social media marketing we started in opp— I think the thing that we’re in opposition to is having a business model that primarily depends on clicks, or eyeballs, or engagement.
Because we think that what that does is creates this perverse incentive, and over time and with an efficient enough market, it creates this race to the bottom where everybody is trying to fight to get the incremental eyeball from the algorithm, and you end up creating stuff that’s not the best work that you set out to do.
And it’s not necessarily the thing the reader would choose for themselves if they were stepping back and making an informed choice, but it might still be the thing that they click on in their feed, because that’s what it’s optimizing for. So making a post that performs well when people share it on social media is definitely not in opposition to our strategy. That’s something that we do for people. We want that to work well. When you write public stuff on Substack, part of the benefit is that it can spread widely and it can be the place that people find out about your little startup media empire that you’re creating.
Right now, the best marketing for Substack is, “If you like these tweets, have you thought about paying me for longer tweets?” Right? That’s very much your funnel. I read in Columbia Journalism Review that you have a score for Twitter engagement that drives whether you offer people an advance. Is Twitter still your biggest and best funnel?
It is a major one, yeah.
What’s your best one?
Really? Because that leads into the question of discovery. You have a leaderboard. It seems like you’re reticent to build discovery features because that leads to gaming the discovery features. We’ve seen that over and over and over again.
What’s your plan there? Or is it to just hold back and say, “We just want a lot of creators here”?
I think we can and should do discovery, and it’s just important for us to do it in a way that takes advantage of the model that we have, and of the fundamental promise of Substack.
Because the whole value of Substack is the direct relationship between readers and writers. If we did discovery in some cheap way that might be like, what would work best on YouTube, it would be easy for us to blindly violate that and kill the thing that makes Substack good. Whereas if we can keep that relationship, if we can respect that relationship but still provide a way where, again, being on Substack and using the Substack platform gives me a benefit as a writer that accrues and grows as more and more writers and more and more readers join the platform as a whole, where more people, more readers can find my work, fall in love with me as a writer, and then decide that I’m someone they want in their media diet to the point where they’re willing to pay me?
That’s a wholly good thing, and it’s something we’re definitely excited to do. And we have some exciting stuff coming up along those lines.
What kind of discovery are you looking at?
What kind of discovery are we looking at? Here’s one thing: I do think that — again speaking of newsletters being a shorthand for a thing — something that I really miss is proper reader apps, proper RSS readers. I think the death of Google Reader was a big, sad thing.
And something that we think about a lot is readers tell us, “Hey, I’m subscribed to six different Substacks now, and I want to read them all, and it sucks that they’re in my email inbox along with all my other stuff,” and email presents a whole host of things. “And wouldn’t it be nice if there was one place where I could go and see all of these direct connections that I have, and that I’m paying for in many cases?”
That’s something that we’re keenly interested in.
It was important for me to talk to Chris about content moderation on Substack, and that means we have to talk about Section 230. If you’re not familiar with Section 230, it’s the law in the United States that says platforms aren’t liable for what their users publish. It is very controversial even though it is remarkably simple. And I feel it’s important to ask every platform CEO how they feel about it. So I did.
I have to ask you about content moderation.
You build the platform, you bring on the writers, you defend them from lawsuits. The next thing that every platform has to deal with, and ideally you’ve started thinking about this from the start, is content moderation. We just see it over and over again. You have attracted a wide swath of writers. I would say the ones you’ve gotten the most attention for are fairly controversial: Glenn Greenwald, Andrew Sullivan.
Do you currently have a content moderation policy in place?
We do have a set of content rules.
In general, I do think it’s absolutely a real thing and it’s something that we contend with and think about what the right way to do this is. We do have a major advantage over other people that struggle with that just because of how Substack works, because it’s a thing where you as a reader are directly subscribing to somebody. You’re going there and saying, “I want to subscribe to your newsletter. I’m going to get your stuff. I’m going to see it.”
If you don’t like the stuff that you’re seeing there, you have this really good remedy, which is [to] hit the unsubscribe button. A lot of the worst problems that content moderation addresses on other platforms is the spread of content that is bad, because basically your algorithmic feed is serving as an editor, whether you think of it that way or not. And I’m getting bad crap in my Facebook feed because some uncle of mine liked it or because it’s getting engagement.
That problem doesn’t exist on Substack in the same way. And so while there are categories of things that even if you’re just off in your own little world sending newsletters to people that are willing for it, we’re still not going to allow that on the platform. Those things exist. There’s things that are illegal.
What’s on the list?
I’ll pull up the list, but I think— pornography, super illegal stuff. There’s a short list of really tightly construed things. In general, we’re very pro-freedom of the press and extending that freedom to as many writers as possible. And because the model works the way it does, we can be quite strong on that while still, of course, having a basic policy that doesn’t allow absolutely everything.
Who runs your content moderation team?
Right now, it’s the founders.
Are you thinking about growing that team, hiring a head of policy, all the things that platforms have to do?
I’m sure, eventually.
The day we are talking, there’s a lot of noise about reforming Section 230 yet again. Have you had a chance to consider what your policy is on 230 reform?
I’m not a lawyer. I don’t know about this deeply, but my impression is it would be a pretty big disaster if it got majorly changed.
To me the test case of this is Wikipedia. If we’re going to change the law in a way that would kill Wikipedia, I think that would be a really bad idea. And it would destroy a lot of what we take to be good on the internet. That’s sort of my take on it.
A long time ago, I interviewed Brad Smith, the chief legal counsel of Microsoft. And I interviewed him right after Microsoft had kicked Gab, which is a social media platform that extremists use a lot, off of Azure, their cloud service. You don’t think of Azure as having a content moderation policy, but it turns out they do. And it turns out it got invoked, and it turns out they kicked an entire service off of their platform. [Ed. note: Microsoft threatened to kick Gab off Azure if certain posts were not deleted in 48 hours; the posts were deleted and Gab remained on Azure.]
Again, I think that’s one end of the spectrum. Way on the other end is what you’ve been describing at Facebook — we’re going to turn down the crazy uncles. Where, on that spectrum, do you think your moderation efforts have to lie?
I think closer to the Azure end. Not necessarily all the way but, again, because of the nature of how the network works and the fact that we’re a service for writers, who are sometimes incendiary and controversial, and we think that that’s an important property and an important thing to enable, we want to have a really strong default of allowing people to exercise their freedom of the press.
You probably know more about this than I do, but my understanding of Section 230 is [it] allows you to do some content moderation without giving up your status as a platform that is not liable for the things on it. And so, if that’s the case, if you changed it dramatically, what you might end up doing is making it impossible for Azure to kick Gab off because if they did that, then they would become liable for all of their things. Maybe I’m confused about that. You explain it to me.
No, it’s the other way around. You would make it — you would turn up the amount of moderation.
The conversation around Facebook and Twitter is extremely unsophisticated, but in the world that we’re in, it’s the most sophisticated because we talk about it the most.
On the infrastructure side — Cloudflare, Azure, AWS — we haven’t had a lot of those conversations, but those platforms have taken moderation decisions. And it sounds like if you want to be closer to them, then the amount of work you’re doing building the infrastructure for journalism, takes you away from it.
Like: AWS doesn’t have a legal defender program. It’s just servers in a place, and you can sign up for them, and off you go, but they still moderate. Whereas you have editors, right? You have editors supporting your writers, you have lawyers, you have some design. It sounds like drop caps are coming tomorrow.
Drop caps are subject to strict moderation rules.
[Laughs] But that stuff, it winds you toward a place where people will ask you to moderate in a way it is not natural to ask AWS to moderate, regardless of the law.
The law is pretty simple. The law is the platforms can do what they want. They have First Amendment rights and they can have whoever they want on them. But your moral obligation — as you do more things for writers, your perceived moral obligation does increase. So, I’m wondering where you think the line is before you’ve offered so many services to writers that you’re still saying, “We’re still just more like Azure. We’re MailChimp.” We don’t ask these things of MailChimp.
I wonder if we do ask those things of MailChimp?
Listen, we take a pretty strong stance that we want to promote freedom of the press and extend it to as many people as possible. That’s not coming from a political nowhere — that’s a belief that we hold.
And I think that that’s something that continues, even if we’re like, “Do we have an obligation to let somebody publish something we don’t like, but we should withhold help.” Like, don’t let them buy health care, that doesn’t totally make sense to me. I think that we believe in the principle that people should have wide freedom of expression, and that’s actually a good thing.
One thing that I think gets lost in this debate is the reason that Facebook has to moderate so hard to avoid things turning into a dumpster fire — or in an attempt to avoid things turning into a dumpster fire — is because the whole model they have pulls them in a direction where things are... We have words in the lexicon like “hellsite” and “doomscrolling” for a reason. The reason that Facebook is bad is not that they just haven’t been moderating enough, and that doing some more heavy-handed moderating will suddenly make it into a great place.
It’s that you have a model, a whole incentive structure, that’s pulling things in a bad direction.
And as we see increased moderation, I think what we’re going to end up with is the worst of both worlds. We’re going to end up with still a hellsite. And, now, a very censorious hell site that sees it as its job to kind of shape what opinions and what voices are acceptable. I’m not sure that’s anybody’s idea of a great solution. And I don’t think that looking at Facebook and saying, “Hey, Facebook is doing some bad things. And therefore we need to push everyone into more censorship,” is the right solution to that problem.
One of the questions on my list was, “how are you going to break my heart?” I feel like I should ask that to every CEO.
How are you going to break my heart?
How am I going to break your heart? I’m not sure if we’re actually going to do drop caps soon.
Here’s the nightmare scenario for you that I came up with. Maybe it’s not true, but I’m curious for your thoughts on it: Substack is constructed right now as kind of a long tail business. You have a lot of writers, you get 10 percent of all their money. You’re going to make a lot of money if you have a lot of volume, that’s great.
There’s another world in which you have one or two writers who generate all of your revenue, and that long tail doesn’t generate anything meaningful. And then, your No. 1 writer does something and people say, “Hey, you got to kick ‘em off your platform.” You can see that coming — with some of the names on your platform, that day is coming for you. What happens when you have to make a moderation decision that threatens your revenue that directly?
I mean, I think first of all, in order to be in the business we’re in and to realize the vision that we’re working towards, yes, people are going to come at us, and ask us to remove people that we’re going to have no intention of removing. And we’re going to have to just be comfortable with that. And whatever our content moderation policy is — it could be as restrictive as you like — and there’ll still be people on there that people are asking to remove.
One thing that’s interesting is we don’t have any one writer that’s some huge fraction of our revenue, although there’s concentration among the top — the top 10 people on Substack make $10 million a year collectively.
Over time, we actually see the long tail as being very valuable to the business, not because they’re making all the money right now, but if the Substack model succeeds the way we think it is, all the people that are making the majority of the money on this happy path, five years down the road where we’re massively successful, a lot of those people aren’t going to be people who are famous writers today.
Substack is a great place if you’re a famous writer today, but it’s also a place where you can go from obscurity, and build something up, and create a viable business out of nothing. So the long tail, for us, is not just a cost center of like, “Oh, well, they’re not making us any money, but we’ll help them out to be nice,” although we appreciate getting to be nice. The long tail is there because a lot of those people who are in the long tail a year, or two years, three years from now are going to be massively successful writers. And we have to give them a path to go all the way.
I see it as an obligation that we have, to defend the right of these people to their freedom of the press, not just for the top earners, but for the long tail as well. I don’t want to be in a world where we’re like, “Oh, well, we’ll kick you off the platform because you’re not making us a lot of money.” That shouldn’t enter into it. We should have a broad swath that we apply fairly consistently.
That connects into discovery and this Google Reader app you’re building, where you can promote some of those writers.
Yeah. Either where we can promote it, or where it’s possible for the promotion to happen through the network of people that we’re already trusting. Something that we’re already seeing is writers promoting each other: linking out to each other’s newsletters, doing guest posts, doing cross deals, stuff like this. That’s something we’re seeing on the platform. That’s the thing that we feel most bullish about: I get my recommendations from human beings that I’ve already decided to trust, who specifically decided to recommend something to me, that’s the most powerful model that we have. Building the platform where everyone can do that more is the most exciting version of that to us.
We’re going to do a lightning round on growth. How many newsletters do you read every day?
Probably like 10.
How many do you pay for?
Is there a limit, an upper bound, to how many newsletters you think an individual will subscribe to and pay for?
What’s the upper bound?
Higher than you would expect.
I’m getting into the proprietary information at Substack, right?
A little bit, yeah.
Higher than you expect. Is it higher than 10?
It’s higher than you expect, and it varies per person. A lot of people will never pay for any newsletter. A lot of people will pay for one to three. Some people will pay for a bunch. Some people will pay a great deal for one that they value a lot.
Is that spend from a consumer — is that out of the same pool, do you think, as the money they spend on Netflix and Disney Plus and whatever else? Or is that a different pool?
I don’t know if it’s the same pool, but it’s not the exact same motivation. On Substack you’re not paying for content. And sometimes people will pay more for one writer for a weekly newsletter than they’ll pay for all of Netflix because you’re not paying to get more email, you’re paying to have this trusted voice and to have that access to that writer to help you curate your worldview and your diet, and get something that you can’t get anywhere else. It’s the signal-to-noise ratio is the thing you’re paying for.
The most obvious thing people say to me about growth for Substack is, “They’re eventually going to do bundles. It’s obvious. They’ve got to do bundles. Pay us 15 bucks a month, you get the four newsletters you want.” Are you going to do bundles?
I think it’s very likely that we do bundles. If we do bundles, it will be bottom-up and not top-down. So, it’ll be writers choosing to bundle themselves rather than us coming and somehow forcing a bundle on people.
How are you going to manage the payment split, if writers choose to bundle?
I don’t know. [Laughs] Fairly.
Fairly. All right, I’ll take it. I mean, learning at speed.
As you build the creator tools, bundles, apps, those things are a moat that can help growth. Moats are kind of creator-unfriendly. The joke I always tell about YouTube and Instagram is the inflection point of every creator’s journey on YouTube is the video that they make about how mad they are at YouTube.
Everyone does it. It happens to all of them. As you build those tools and make those walls, and if it feels like people are working for Substack, or [they’re] on Substack and there’s not a good competitor platform, how are you going to manage the tension with creators?
I hope that by setting up our business model in a way that aligns readers, and writers, and Substack, that will help with that a great deal. By the time that you’re paying Substack a lot of money, it’s because you’re making 10 times that much money. And that, combined with the fact that you can leave when you want to, gives us a lot of incentive to make the platform a good experience for you.
And so, I don’t think that it’s necessarily the case that we, the platform, will be at odds with the creators. I think that’s true on YouTube because the creators are not how YouTube makes money. They’re not the customer.
Because Substack is readers who are paying for writers, and we’re taking a percentage of that, we are much more aligned with actual success. There are much fewer forces that are making us have business reasons to do nefarious things that will screw writers over. At least that’s how we want to set it up.
Last question. What’s the next thing we should look for from Substack?
Check out the reader beta when it lands.