How I Learned that the Substack Model Does Indeed Appear to Change Everything for Writers
Inside the Substack HQ, Bob and I had our minds expanded. Here, I describe key parts of the Substack self-publication model for a possible first installment of Substack 101.
Bob’s new publication, The Wary One, was such an overnight success that it was flagged on a dashboard of rapidly growing new publications. It turns out, it's unusual to see a new publication take in over $32,000 on the opening day. We were already learning things.
Hamish McKenzie, co-founder of Substack, monitors that dashboard. His curiosity piqued, he read Bob’s debut column and reached out, congratulating him and offering his best wishes for success on May 14. With that connection made, I jumped at the chance for a meeting. “Bob, we’re going to San Francisco. I’m driving. No Zoom for this one.”
Bob invited Hamish to the launch party we held on May 15, 2024. He couldn’t make it, but I made sure he saw the video of Bob’s heartfelt gratitude for the support and initial success. We had lunch with Hamish on May 22, at the Substack office on Sutter Street in San Francisco. Hamish seemed a bit sheepish about the empty office, explaining that it was acquired pre-COVID and now many work remotely. But this office wasn’t a mausoleum; it buzzed with the energy of early birds setting up for a bustling day. There were also many, many plants.
Seeing Bob and Hamish meet warmed my heart.
Over the last few weeks, amid the whirlwind of transitions, learnings, mistakes and excitement with the successful launches of The Wary One and Comings & Goings, I’ve learned a lot.
I’ve been asked dozens of times what Substack is. Someone even asked me what “slip stack” was. I have many ideas swirling around on numerous topics, but for now, let’s start with explaining what a Substack "publication" is and some basics of how self-publishing works on Substack.
What is Substack?
Substack is a powerful tool for anyone who wants to publish their writing, podcasts or videos. With just a few clicks, you can have the standard Substack business model at your fingertips. It’s so easy that I’ve accidentally created publications a few times and had to delete them. Many of Bob and Wendy’s subscribers also created their own publications, though I suspect not intentionally.
This tool transforms you into a publisher. You can self-publish and run your own publication, running everything on your own terms.
Self-Publishing on Substack
For the solo creator, self-publishing means creating a publication that you own as a sole proprietor, delivered to your subscribers via Substack. You’re now running a business, and your customers are your subscribers. Their subscription to your publication is a perpetual agreement that either party can cancel at any time, whether monthly or annually. Annual subscribers expect a year’s worth of your work—they’ve paid for it, and you’ve received the money.
Stripe and Substack
That subscription resides in Stripe. Stripe handles the agreement, providing credit card information and ratifying terms. Stripe takes a percentage of your incoming funds, and Substack makes all the payment processing magic happen. Talking about the nuances of payment processing can be sleep-inducing, so here’s the essential detail: there are numerous rules, conventions, and policies governing your payment mechanism. You and Substack conform to these rules. You can’t change or negotiate them; if you want something changed, you’d better email your congressman or take on the payment industry cabal. But accepting these rules helps you avoid payment processing pitfalls.
You can move your Stripe subscription list to another competitor at any time. Competitors make it easy, but Substack only works with Stripe.
Your Agreement with Substack
Substack takes 10% of your subscription payments based on actual receipts in real time. These are the only essential financial terms. You could stop using Substack with a few clicks by removing their access to your Stripe account.
I can’t stress how fascinating that decision is. Substack is so confident you won’t pull the trigger on ditching them that they literally rely on your desire to remain in business with them. That’s it. Do you want to work with Substack? Then you do. Do you want to leave Substack? Click a few buttons, and they’re gone.
If you do make that high-stakes click, you’ve ended your association with Substack. What about your publishing platform? You’ve just lost it. Where are you going to go with your subscriptions? Your subscribers expect you to deliver your creations—they’ve paid you. You need a platform to fulfill your end of the bargain.
The Confidence of Substack
There are options, but are they better than Substack? No. You’re not going anywhere unless Substack violates the bargain in a way that drives you away. Substack has designed its business to incentivize themselves to never violate that bargain.
I see almost no platforms as confident in maintaining that desire. Many look for ways to lock you in. The obvious contrast is the legacy media formats, particularly newspapers. I think I’ll do a follow-up post exploring that question since it’s potentially huge. The consequences appear so dramatic that destabilizing doesn’t seem like a big enough word.
Substack’s No-Ads Policy
After Hamish explained the model’s characteristics to us for maybe the fifth time, it finally clicked for me. Substack will never do ads. To do so would betray the creator and the reader. They appear so wildly successful in growing their business that they will never risk that relationship. The creator would just leave. Later that week, Hamish published a piece on the sovereignty of the creator on Substack’s own publication, describing the potential effects he’s already seeing and anticipating.
Sovereign Creators
Both Bob and Wendy are now sovereign creators. Bob shared a ‘state of the column’ post, confirming his publication is viable. The crisis of Bob’s job disappearing is over. He now has a job he gave himself, supported financially by his readers.
Wendy shared a similar message yesterday, where she recapped her invitation to meet a UCD Communications class taught by Professor Narine Yegiyan on May 20. Wendy is replacing her 10-year-old MacBook with funds from her readers. Bob will never again need to use a laptop with a broken L key while covering UCD sports.
The readers showed up overnight and supported them in droves. Just fascinating.
Brian, thanks for giving out the nitty gritty of Substack. I’m enjoying Bob, Wendy, and several new weekly reads.