The Future of Substack

All of this brings us to the only way Substack can become a high-growth platform with network effects that attracts and retains all types of authors: it needs a way to cross-promote readers from one author to the other, while maintaining the authors’ independence, so that authors need to come to grow their audience.

 Substack needs some network effects to keep authors tied to the platform, even if they can leave at any moment.  The best way to achieve that is through cross-promotion tools that allow authors to constantly gain new readers that they wouldn’t gain otherwise. That makes their presence on Substack truly valuable.

Medium is trying to become the aggregator of articles.  Why are they trying to do that? Because aggregators can become massive: tens of billions of dollars in value, sometimes hundreds of billions or even trillions. About 70% of the value created by tech comes from companies like aggregators, fueled by network effects. 

For example, I have 85k Twitter followers, but a standard tweet might only get 10k-20k impressions. I don’t have control over whether my followers see my posts. Twitter does. The tradeoff is that it gives me millions of impressions for my most viral posts. I get more new user acquisition by giving away control of re-engagement.

Authors, of course, want both: they want new audiences from the aggregators, but they also want to capture their own audiences to re-engage them. So they will attempt to find ways to create a direct link with their customers.

Another thing I would try is an exchange, which gives authors as much value as they bring to the network. Other companies have already figured this out. For example, in videogames. Companies like Chartboost appeared as exchanges between videogames. You’d plug Chartboost as an ad in your game that would promote other games. A good exchange shows how... See more

You don’t doomscroll Instragram to see content from specific sources, but to see what’s happening. That takes power away from creators. You don’t try to find any website directly; you ask Google. You don’t go looking for websites for apartments: you ask Airbnb. You go to Uber for a new ride, you don’t look for the card you received two years ago fr... See more

What Substack is doing is taking the power away from readers and themselves, and giving it to authors. What does that mean? They are betting that in the market of long-form articles, the player with the most power is the author, not the reader. It’s the supply that matters, not the demand.

The main difference between Medium and Spotify is that Spotify is public about the share it gives to musicians (about 70%), because at least in the music industry, most of the rights are owned by a handful of labels who can pressure Spotify. Medium doesn’t face that pressure, because there are millions of writers who don’t coordinate. So Medium’s o... See more

My first 23 articles on Medium were read on average 5k times each. The 24th one, How to Become the Best in the World at Something, got nearly 300k views. It earned me less than $5k. That’s a dollar for every 60 readers.