Substack and the Future of Content


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Substack and the Future of Content
By Keith Teare • Issue #302 • View online
Substack has a new video service in beta. It released the Substack Reader last week on iOS. With a growing number of creators using its platform, the question of what Substack is, and whether it is good has started to arise. Let’s dive in.

Nathan Baschez, CEO of Every, a collection of 13 newsletters, and a former Substack team member, wrote about Substack this week. He said:
The thing I didn’t understand going into it was that Substack wasn’t just about an economic trend of power flowing to individual writers thanks to the leverage technology gives them—it was about creating a morally superior playing field that could help heal our minds from the damage done by social networks. The Substack model wasn’t just a business strategy, it was a political philosophy, and I loved it. 
His point? That Substack’s founders are interested in more than building a startup. They want to change the world. They want the world of content to be separate from and independent of social media and advertising.
Nathan quotes from one of the founding essays of Substack, written by the founders:
We believe that journalistic content has intrinsic value and that it doesn’t have to be given away for free. We believe that what you read matters. And we believe that there has never been a better time to bolster and protect those ideals. Now, more than ever, publishers of news and similar content can be profitable through direct payments from readers. In fact, we are so convinced by this notion that we have started a company to accelerate the advent of what we are convinced will be a new golden age for publishing. The company is called Substack.”
Nathan’s article - linked below - is a contribution to the discussion about Substack from a critic. It makes great reading. I don’t agree with its premise, however. The premise is that Substack will be forced to compromise on its core ideology in order to satisfy its growth-focused investors.
The assumption is that investors are simply aligned with the shortest path to value growth and that this will involve decisions not aligned with the founder’s vision.
There is a good article this week (again below) by Hunter Walk, explaining why he only invests in mission-driven founders. He explains:
We’ve sent hundreds of millions of dollars to startup bank accounts but none of those have gone to teams which don’t have at least one founder we consider to be ‘mission-driven.’ How do I define that term? Loosely, someone who has a personal connection to the problem they’re trying to solve. The tie is sometimes very intimate (as an individual, familial, and so on). Or linked to what they’ve studied (academic) or worked on previously (vocational). They’ve often been thinking about it deeply ahead of even understanding whether it could be a startup or would be an attractive, valuable issue to address. Not everyone on the founding team needs to fit this criteria but we do try to understand the different motivations at an individual level.
This approach is close to the heart of almost every seed investor, and especially good ones. The Substack founding team is mission-driven. the reason investors like this type of founder is that the energy, enthusiasm, optimism required to build a startup and attract others is only found in such founders. Success is not an abstract concept. It is the success of an idea, executed by a team. The idea lives in the hearts and minds of the founder or founders. The outcome is not a function of the shortest path to money. It is the shortest path to a world-changing idea. Money will flow to success. And patience and a long-term view are pre-conditions for that.
That said Substack is so early in executing, there is no obvious need to compromise anyway. The end game for creators is to be able to build experiences for an audience made up of words, images, video - both live and on-demand - audio and then distribute it through a subscriber base and beyond. Nathan shows that there are challenges doing so when the platform does not have any natural network effects. He is right about that. But the launch of the Substack reader and the soon-to-be-launched video add-on both show that Substack wants to give creators the tools needed to produce while also giving the audience a way to engage with and discover creators they will love. I think we are far away from seeing anything other than a startup executing a vision. And the vision seems compelling.
No Andrew Keen this week due to a hot date with Bob Dylan on the East Coast. So no video.
The Substack Platform
Nathan Baschez
I keep seeing people misunderstand @SubstackInc

They model the company as if a random YouTube PM was running the show, following the typical aggregator playbook

But Substack is an ideology-driven company
Substack’s Ideology - Divinations - Every
Seed Funds in the Spotlight
Everyone is going to launch a fund that backs other funds - TechCrunch
What is Pre-Seed Funding?
I Love Backing ‘Mission-Driven’ Founders But Here’s Where They Struggle as Startup CEOs
Hoxton Ventures Closes $215 Million Fund  - Hoxton Ventures
VC “innovator” Alumni Ventures raised almost $1 billion in 5 years — but did it mislead investors on fees? - The Business of Business
VC Firm Foresight Ventures to Plow Up to $200M in Web3 Startups Over 3 Years - Blockworks
Coatue Taps Ex-Index VC Sarah Cannon To Lead European Startup Investing Push - Forbes
Web3 Investing
Web 2.0 Investors Aren’t Cut Out for the Web3 World
Tim O'Reilly's comment on the original
Tim O'Reilly's comment on the original
Tech China
What Chinese tech CEOs are telling Beijing
Social Media and Nations
Essay of the Week
The fight over anonymity is about the future of the internet
The Metaverse and NFT Boom Is About to Go Bust
Rising Africa
3 Dozen Tech Firm Founders Launch VC Fund To Grow Africa's Next Unicorns -
VC fundraising is for African CEOs who studied abroad - Quartz Africa
Venture capital investments in Egypt expected to cross $1bn in 2022 - The National
Startup of the Week
The World’s Billionaires, by Generation
Tweet of the Week
Henri Pierre-Jacques
🧵 How do Seed stage funds think about Series A follow ons??

Many of my founders don’t understand the process and many emerging managers I have spoken with don’t have good follow on models

So let’s clear the air

For the excel model, follow me & leave a comment if interested
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Keith Teare, Palo Alto, California