The Pomp Podcast - #1097 Hamish McKenzie On How This Tech Startup Is Disrupting Mainstream Media

Episode Date: September 28, 2022

Hamish McKenzie is the Co-Founder Of Substack. In this conversation, we discuss the downfall of legacy media, the rise of independent media, where money is being made in this new industry, supporting free speech, the creator "middle class", and the Substack subscription model. ======================= Arculus is the next generation crypto & NFT cold storage wallet that combines one of the world’s strongest security protocols with the easiest to use form factor and app. Arculus requires 3-Factor Authentication to ensure only you have access to your digital assets – something you know – a PIN, something you have – the Arculus Key Card, and biometrics. Learn more and buy it now on getarculus.com. Use promo code POMP to save 15%. Remember, with Arculus, it’s your keys, your crypto. ======================= If you’re trying to grow and preserve your crypto-wealth, optimizing your taxes is just as lucrative as trying to find the next hidden gem. Alto IRA can help you invest in crypto in tax-advantaged ways to help you preserve your hard earned money. Alto CryptoIRA lets you invest in more than 200 different coins and tokens with all the same tax advantages of an IRA. They make it easy to fund your Alternative IRA or CryptoIRA via your 401(k) or IRA rollover or by contributing directly from your bank account. So, ready to take your investments to the next level? Diversify like the pros and trade without tax headaches. Open an Alto CryptoIRA to invest in crypto tax-free. Just go to https://altoira.com/pomp ======================= Amberdata provides the critical data infrastructure enabling financial institutions to participate in the digital asset class. We deliver comprehensive data and insights into blockchain networks, crypto markets, and decentralized finance. Download our Digital Asset Data Guide at https://www.amberdata.io/pomp ======================= Exodus is leading the world out of the traditional financial system by building beautiful and user-friendly blockchain products. With its focus on design and user experience, Exodus has become one of the most popular and loved cryptocurrency apps. It’s supported on both desktop and mobile, allowing you to sync your wallet across multiple devices so you can have access to your funds anywhere. You can instantly exchange around 100 different cryptocurrencies straight from your wallet. Interactive charts let you view an asset’s price history and your portfolio’s performance over time. And maybe the best part, Exodus is integrated with the Trezor hardware wallet - making advanced security easy for everyone. Visit exodus.com/pomp for your free download or search Exodus on the App Store or Playstore. ======================= The number one name in NFT domains and the world’s most powerful wallet are teaming up to bring something new to the crypto and Web3 world: <Your Name.Blockchain> That’s right, Unstoppable Domains and Blockchain.com partnered to create NFT domain names ending in .Blockchain. It’s the perfect ending to show that you’re a believer in a decentralized future. Either sign up for a free blockchain.wallet or visit Unstoppabledomains.com to buy your domain today. =======================

what's up everyone this is anthony pompliano most of you know me as pomp you're listening to the pomp podcast simply the best podcast out there now let's kick this thing off hamish mckenzie is a co-founder of substat in this conversation we talk about the pros and cons of the old media world how the entire new media world is likely to play out where money is being made and lost in the media landscape and how we should think about a broken ad model subscriptions the Substack product, book publishing, and much, much more. I really enjoyed this conversation with Hamish, and I hope that you guys enjoy it as well. As you listen to this episode, keep in mind what you like and what you don't like,

and then get on Twitter and let us know where we did well and where we could have improved the conversation. Hope you guys enjoy this episode. Let's get into it. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment

or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. All right, guys, bang, bang. I've got Hamish here with me. I'm super excited to do this. I thought a great place to start would be on the current state of the legacy media.

Substack's always in the news. You guys are taking over the world. you're a right-wing uh apologist all kinds of different critiques but uh i think that you all have a better understanding of the nuances the pros and cons of legacy world than most people realize so like how do you break down uh the older school media outlets and and platforms what are the pros and cons of those platforms today probably well it's a huge question there's lots of pros it's good to have people dedicated to the pursuit of fact finding and fact telling and storytelling around narratives that help us build better societies and for the most part

that's what everyone in these mainstream journalistic institutions are trying to do whether they're successful or not um you know whether they have the right approach or not they're trying to do that um you know the new york times does a lot of reporting and and lots of local newspapers around the country do a lot of reporting in unglamorous places and about unglamorous issues that wouldn't otherwise be done it's really vital to the functioning of society but some of the cons well the business model is totally broken the economics of the whole industry is totally broken it used to be the case that you could go into journalism and have a hope of having a good stable career now those hopes are really diminishing and so increasingly the

people who work in journalism tend to be from a certain group in society where they can afford to live on low incomes or like do long internships for free um a lot of newspapers failing magazines are shutting down freelance budgets are being squeezed uh social media is changing the way people think and how and how they interact with the news and um i would say that sort of mainstream media is in a bit of a spiral. There are some large global institutions like the New York Times and Bloomberg and Wall Street Journal who are just going to do fine. They'll probably continue to grow, but there's a huge hollowing out of the middle class and it has consequences. It has massive impacts on how we all talk to each other and think together and try to solve some of the

big problems on the stories that get told, on the stories that get highlighted, on stories that get swept under the rug. And I think we see the results of it in the low levels of trust that the public have in mainstream media at the moment. I think the recent surveys have shown that public trust of media in the United States, at least, is close to an all-time low. It's very low. It's like around 30% of people trust mainstream media. So when we think of these articles that are getting written or the topics that are being selected, how much of the quality in journalism is determined just by the topic alone? So when we see, I don't know, Clarissa Ward in Afghanistan, surrounded by the Taliban, war, national defense, insurgency, like these topics are very serious.

They're very heavy. If you are going to go and tell them from the ground, it obviously involves danger. And I think many people, as you pointed out, would say like, oh, that's journalism. whether you know whatever that means today that that's what they would say and then we see other beats or topics that people may write about and folks are like that's like the most unserious thing ever like i can't believe that x outlet is writing about you know y topic is that fair to say just like sometimes the topic that's being covered uh is different in terms of the uh importance that like the audience places on it and therefore that changes the way people view like is it journalism or is it you know uh something else it all gets wrapped up together

right whether it's reporting on the new harry styles movie of the libya wild and the big dramas around that or about like the united states withdrawal from afghanistan it kind of gets called journalism it kind of gets called the mainstream media it kind of gets wrapped up with the certain emotion that people feel about the media and i think probably the most part um what gets paid attention to is the stuff that sells you know the the salacious stuff the gossipy stuff the easy to understand stuff the stuff that you can consume in a tweet or in a youtube video that you don't have to have any deep context on that you don't have to be paying attention to currents of history for um so what i think might be relevant in what in the question you're asking is

people have a reaction to journalism these days or the state of the mainstream media and um they're probably just reacting to a certain slice of it and it might be the slice that they just consume most commonly uh they see most commonly appearing in their twitter feed and it's a filter it's not the whole media it's not the whole story um what about the business model You mentioned that the business model is broken. What does that mean? For 200 years, advertising has been the backbone for funding journalism. And for 200 years, the newspapers and magazines had a pretty good monopoly on it because they were serving local markets, because they owned a distribution.

and they appeal to a broad enough audience that they would get the major supermarkets and businesses in their local regions to buy massive ads. They would have the classifieds that would account for a lot of revenue as well and people were sort of obliged to advertise for like selling their car

or finding the babysitter or advertising the death of a loved one in the local newspaper. The internet has changed that completely. The internet is obviously the best place to go if you want to do effective advertising, if you want to know who's seeing your ads, if you want to know if you're getting value for money with your ads,

if you want to have good targeted advertising. So Craigslist took away classifieds from newspapers. That was one death blow. Then Facebook and Google came along and did targeted advertising better than newspapers or radio or TV could ever hope to. And so the big support structure that had helped fund journalism for 200 years has just been completely removed.

And newspapers and magazines and the main organs of mainstream media have been struggling trying to find out what comes next. Like, how do we survive in this new world where the internet is so much better at doing the thing that we tried to sell for so long? So when I look at many of the mainstream outlets, it appears that they are expanding

in a couple of different avenues or on a couple of different planes. the first is it used to be mostly all written content uh delivered via newspaper they've now pushed into digital but then also they're pushing into video they're pushing into audio like like you see the type of content and the place in which it resides is evolving and some of them have shut down the old type of content or place it resided but for the most part it's just been additive they just keep adding more and more and kind of becoming this bigger and bloated uh thing the same thing is true of the monetization methods. So there's still tons and tons of advertising. Now they're

trying to add subscription or they're trying to add physical products that they're selling and e-commerce and things like that. Is that something that is just a natural evolution of every business is like you kind of dominate or use a wedge to get into a market. And then over time you just add on more and more. And so this land and expand strategy is something that is a natural function of markets markets economics and capitalism or are they doing that because their previous approach is like on a lifeline like they're literally dying as a business and so if they don't do this then they will basically fail and go out of business and and it's more out of necessity than it is just like capitalism well the ones who are failing to do that or don't have

the opportunity to do that are dying the ones that we see doing that and the ones who are doing it effectively are growing and it's like the new york times and um i guess the washington post has actually gone through a hard time since uh trump uh is out of office because there's less interest in their content now um but with jeff bezos funding them they've had a big injection of energy into expanding their storytelling uh platform so more digital more video more uh community type stuff um or audio i think it's a natural like they're playing to the landscape of the internet and with the internet there's no balance there's not like you're not bound by the margins of a printed piece of paper so you can do video you can do audio you

can um go global instantly you can be on social media telling your stories there they kind of have to do that um the subscriptions uh is a the pivot to subscriptions uh is a must like the advertising is going away the new york times does have advertising as part of its business but it's a shrinking part of its business now and subscriptions is a growing part of its business so that's a definite business imperative and economic imperative and it will change the way that these news outlets tell their stories and gather their audience because the subscriptions business is different to the advertising business the subscriptions business is more about delivering over the long term of a relationship where the relationship's quite deep

and the new york times uh they're much i'd say they're since pivoting to subscriptions have become quite a lot more um obviously ideological and so they tell stories that resonate with their readers and that readers want to hear they still do hard reporting and tell stories that not everyone wants to hear but a lot of the stuff that brings these people is opinion or features where there's a strong point of view put forward so i think all these things are basically changing because of the internet. And the ones that were seen changing are the giant success stories that aren't going to die tomorrow because everyone else is dead or dying. And as we see the content changing, I saw a study a while back, three or four years ago, where they went and they looked

at the New York Times at the use of certain words. And it had pretty much been flat and all of a sudden it exploded upwards. And the argument in the study, whether you agree with it or not, was, hey, when they went behind a paywall or started to use subscription, it changes the type of content that they write about because that audience wants to hear something. And if you tell them things they don't want to hear, they may unsubscribe. And so naturally you just kind of cater to them and it starts to build an echo chamber to some degree. Is that a worry or a threat today to kind of these journalism organizations? Or is that something that, you know, it's easy to call out, it's easy to point at some of these data points, but we haven't

even gotten close to reaching uh a saturation point where uh it's something that like could corrupt uh you know all of the mainstream media or like how do you think about uh the importance of that well it's gonna be where it's gonna be interesting right i don't know what the ultimate judgment is going to be on whether it's good or bad but it's definitely a trend where people uh where institutions and outlets are starting to play more to their audiences and having distinct ideological positions and the audiences um go to them because in part their positions are reinforced it's not actually that new but like before the advent of the penny paper and advertising funded uh newspapers that were quite generalist there used to be a lot more like a more parochial

press where factions were catered to you know back in the days of benjamin franklin there were Sometimes one writer would assume multiple political positions or that creates one person like Benjamin Franklin would create multiple publications catering to different political groups or different political interests. In the UK, there's much more of a tabloid and broadsheet culture where the newspapers are oriented around ideologies or political positions. but also social media is doing this on a massive scale as much as we might think of the likes of twitter or facebook as public squares they also sort us into our ideological camps where we have the people around our team and the people are on the other team and then the subgroups within each team so that we get really sorted into our own particular filter bubbles it's a definite of challenge for us to overcome i think as a society and i don't know what the um the ultimate

result is going to be um but i hope that with things like substack and more niches being covered more deeply that there are going to be rewards for people who exhibit integrity and exhibit the ability to cross party lines and say things that their readers don't necessarily want to hear and that there will people there will be people willing to pay because of that integrity social media doesn't really allow for that kind of model. The New York Times does a little bit, but they've become quite strongly ideological. But yeah, there's a lot yet to be seen. How do the people change? So when it's freemium or it is free with ads, we know the people who worked at those organizations. When they move behind paywalls

or they try to push out into video or audio and kind of expand their empires, Do the type of people who work at these organizations change or is really the change in personnel happening because of ideological kind of either differences or a feeling of, hey, this isn't a place that I want to work? i'm not sure well hopefully with subscriptions and with models that are actually working in the modern day these outlets can do better and these sub stacks and small niche publications and other platforms can do better and can make good money to support uh the the journalism uh they're doing and to keep hiring people who can come work for them and so overall um over time maybe this leads to a healthier ecosystem but i think the greater problem is not so much based on um uh like a particular business model but um in the last couple of decades probably three decades maybe more

there's been this trend away from journalism as being something that's sort of open to the working class and there are like ink-stained wretches going after tough stories and sort of priding themselves of being dissent dissenters and speaking truth to power to a different kind of class where journalism has become like one of these knowledge economy jobs where it's um you know it's celebrated in hollywood and it's a little bit glamorous and you get to um have a interesting lifestyle interesting life spend time with interesting people and increasingly it's become a sort of profession that is closed off to anyone other to anyone but those who have like elite educations or know the right people or like hang out in the right circles or have enough

money like i said before to be able to do a free internship at the new york times or vogue um or have enough money to be able to you know have enough family money or background money to be able to like take a really crappy salary at buzzfeed and still live in brooklyn um and i think that cultural effect is really large and maybe underappreciated and it's been a decades long trend. I always immediately jumped to this idea of, is it intentional or is it just a byproduct of these trends, right? So for example, if you take a bunch of people who played college sports or who were in the military or who all went to the same high school or college and you put them in a room, what do they talk about? They talk about the things they know and they all have the

same experience. And if you all have the same experience, then naturally there's not a lot of diversity in kind of the things you're interested to talk about for the most part. And what I think you're highlighting is like, well, if you then put all of those people into an organization that is supposed to be writing about covering and discussing opinions and kind of the thoughts and ideas and critiques of certain ideas, well, then we shouldn't be surprised that you end up getting a lot of the same talking points over and over and over again. And so in some way, by driving out people who were different or came from different backgrounds or whatever, It really homogenized the content, and when that occurred, there's an entire group of readers and then obviously of the population that say, hey, like you guys are crazy, crazy just being like you don't understand me.

You don't understand my life. You don't understand what's going on here, and that feels like that part of this has gotten lost in the conversation and doesn't really get covered nearly as much as maybe it should. Yeah, well, I'll criticize myself because that's a nicer way to do it. But I have an elite education. I didn't go to big-name schools, but I have an advanced degree. I think about intellectual things. I go to places with people who are like me. And I worked in the media.

Canceled. You're canceled. And all the people who I worked with were quite a lot like me. And I'm a foreigner as well, living in the States. And we would write about our interests. would write about what we knew and we had certain prejudices and we weren't aware of many of those prejudices. But you think about a country like America,

I look back when I was a journalist thinking how naive I was about what I didn't know. America is such an incredibly diverse country and yet the mainstream media institutions, The main organs we have for communicating journalism across the country are all based in these sort of enclaves in New York and San Francisco, Los Angeles, maybe Chicago. These very like wealthy places with people and with the storytellers are people from elite backgrounds, usually pretty comfortably middle class and above. and they haven't spent much time like in the foothills of Appalachia or in Alabama or Arkansas and some of those small struggling places that get overlooked and they have not through bad

intent but they have certain interests and causes that are not necessarily at all aligned or relevant to like a huge number of people in this country who also have to like we also have to get along with and understand and try to solve problems for and so um yeah the the gap between the haves and the have-nots and the have-nots in the states seems to be growing and the people who work in the media are definitely on the side of the haves which which creates problems when it comes time to like trying to empathize with and understand the have-nots and trying to bring these groups together when you all started substack was it let's go save journalism was it hey this is a way for writers to make more money? Was it, we want to read different things? Like, like what

was the impetus for saying, let's go do this? Because I think people forget, uh, entrepreneurs are making the biggest bet. They're spending their time, their reputation, uh, uh, years of their life are probably being removed by, by the day, uh, given the stress and all of that. And so like what, what convinced you, okay, let's do this. Yeah. I actually resisted it because of those things i was a reporter right i was a writer and i just finished writing a book and i set myself up for a career as a writer um which is difficult in different ways but i wasn't about to go and become a startup founder because that's a tough job like it's you you can't ever really switch off it's under immense stress i had been a reporter at pando daily a while back which was

covering startup ecosystems and we were telling stories about these founders who were so deeply depressed they were committing suicide um i knew that it's like a difficult journey i wasn't that eager to jump into that and make it my life but it was my wife who convinced me that this problem is so important and it's i'm particularly interested in it and well cut out to try and tackle it because of my background in in journalism and then in tech and being an independent writer and sort of writing about media business models and media technology uh startups that had not quite got there in the past um that eventually i came around and thought okay i've got to give it a shot because substat could work and what we were trying to do was to provide an alternative

to the dominant media ecosystem the dominant media economy which would come to believe is broken fundamentally um and it started when chris wrote this blog post he had been one of the founders and the chief technology officer of kick which is a huge messaging app um with uh hundreds of millions of users in its heyday um but he had finished working there and he wanted to write some more stuff and he wrote this blog post and he sent it to me for my um feedback before he published it and in the blog post he was kind of decrying all that was wrong with the media ecosystem which was that because uh online advertising was at the center of it social media giants had risen up and created these new powerful information systems that

had us all kind of addicted but the types of content and behavior that those social media networks were rewarding was stuff that's like divisive and pits us against each other and polarizes and it's sort of based on cheap outrage and clickbait those are the things that succeed in those systems and it's not much to do with like quality and truth telling and as a byproduct it also meant that the business models that supported good journalism were being eroded and writers were having a difficult time finding ways to get paid and so who's left to do this important work and chris sent me this essay and i said yeah all these things are true but people in the media know these things are true what no one knows is what's something productive what's

something what's a better way forward what's something we can do about it and that led to the discussions between us he never published that post but led to discussions that became substack with the sort of core insight that rather than monetizing viral content it would be better to monetize a relationship a direct relationship between a reader and a writer where the reader pays the writer they trust and therefore the reader becomes not the product as they are in social media but the customer and then the writer can have a clear path to sustainability by rewarding the trust and attention of their readers when it's basically turned into self-stack so when you think of that um i think now you can point to and say that thesis was correct people will argue how big

it can be what the unit economics are how you attract writers all the frank bullshit right just throw that out of the door. The core thesis is correct in that people are willing to pay for content from people that they trust. And that trust can be derived because this person's saying everything I want them to say and makes me feel good. It could be because this person has unique insights into a topic that I want to learn more about and everything in between, right? It feels like there's quite a bit of different topics, different types of writing, all that stuff that's on there. When you look at the things you got wrong, were there any parts of the original thesis that you're like ah we thought x would happen and we've been surprised that it didn't

manifest itself or or uh maybe we thought a and ended up being you know some variation of it but but we got the initial part wrong one of the gratifying things is that we actually started the company by publishing an essay outlining what we care about and why what we're trying to solve and what we're going to build and then we followed up by building the product and launching the first few writers and they succeeded and we went off to the races um we've got like we make mistakes all the time um the sort of micro mistakes along the way of just trying to run a business which and trying to run it in public really because substax a very public platform but the core things that we set out to do and the promises we made uh early on have remained true throughout substax history

and we're five years on from uh starting the company now and i think it's been now we've been able to like stick to those principles because they're pretty simple it's like you can start a paid newsletter or a paid publication and someone can come and read it and if they like it enough they'll put their name on the mailing list and if they like it very much they will pay some money to help you keep doing this work and to keep going um we haven't you know we we've resisted going into advertising we've resisted building like a dick like addictive news feeds where the content is sorted by like engagement um we're just stuck to the simple uh principles of give writers ownership let them have total control and let readers have uh agency by deciding who

they want to invite into their brain and who not to um and because of the simplicity of that we haven't had too many uh major missteps when you all started i don't know maybe i was one of the first 100 250 500 whatever writers on the on the yeah i think you might have been the first 20 for sure first 20 whatever it was early and i remember talking to you all and first of all uh you know that you're early when the founder messages you and is like hey yeah i'm like okay all right got it we're not at a wordpress scale yet um yeah but but what i think resonated with me so much was there was a ton of stuff that you could have done i remember some of our early conversations around like what about this what about this what about this and you all were uh

always uh consummate professionals you would say like good idea maybe later it was never no right but but it was very obvious that like we have to get this first iteration correct how much of that was driven i know bill bishop was one of the very first very large uh success stories on the platform how much of that was uh bill or others saying like this is what i need to be successful versus you being able to say like if we create a great writing experience and then have the payment technology like bill just write don't worry about anything else don't worry about the product like we it works and then the audience will come and we'll kind of go from there yeah it's definitely a balance because we're opinionated about something so we're opinionated

about subscriptions being the thing to focus on and that the writer shouldn't have to do any of the sort of difficult, complicated marketing or back office admin type stuff. They should just type into a box, click publish, and then money will magically appear in their bank account.

And so we're trying to build a system that puts people on the rails to do that so that they do the right things by default without having to be publishing experts. But also, we've built very consciously around writers and through understanding deeply what they want and that started with bill bishop who was the first publisher on substack he writes a newsletter called cynicism it's about china he'd been doing it for five years for free never seriously made money from it turned on paid

subscriptions with substack in october 2017 and immediately got to six figures of revenue on his first day and with bill we're like sitting with him in starbucks sort of trying to figure out how to take group subscriptions for him through this prototypical version of Substack that Chris, the CEO of Substack, Chris Best, was basically building himself. And we took Bill and we built the first versions of Substack

completely around him. And there'll be some negotiations on things that he wanted and things that we wanted until we got to a point where we felt, okay, so some of this can be generalized now and we'll open the funnel a little bit, bring in a few more writers.

And we kept on doing that. And oftentimes we'd find a writer who wanted to be the kind of pioneer for a particular product or feature and you are one of them, Pomp. You are the prototype for, you provided the prototype for the podcasting on Substack.

You wanted an audio feature to be able to do podcasts behind a paywall or audio like readouts of your letters. And so we built the first version of that for you, knowing that we wanted to do it at some stage, but not knowing when we wanted to do that. And so now you can host a podcast on Substack completely free.

It's actually the easiest way to start a podcast that makes any money is to do it on Substack and you get all these other benefits with it as well. But the podcasting features are so great on Substack because we first built them to serve this one customer and then took it from there. This episode is brought to you by Arculus.

Arculus is the next generation crypto and NFT cold storage wallet that combines one of the world's strongest security protocols with the easiest to use form factor and app. They have three factor authentication and you can use your PIN and Arculus key card along with biometrics. They don't compromise your holdings

by requiring a USB port, charging, or browser connections. With Arculus, you're protected from hackers and institutions freezing your access. Learn more today and buy it now at getarculus.com. You can use promo code POMP to save 15%. Getarculus.com, use promo code POMP. And remember, with Arculus, it's your keys, your crypto. This episode is brought to you by Alto IRA.

They can help you invest in Bitcoin and crypto in a tax-advantaged way. That helps you preserve your hard-earned money. Alto's Crypto IRA lets you invest in Bitcoin and over 200 other different coins and tokens, and it has all the same tax advantages of your traditional IRA. There's no setup or account fees, and it's all you need to do, invest in crypto tax-free. Let me repeat that again. You can invest in Bitcoin and cryptocurrencies tax-free. So, are you ready to take your investments to the next level?

Diversify like the pros and trade without tax headaches. Open an Alto Crypto IRA to invest in Bitcoin and crypto tax-free. Go to altoira.com slash pomp. That's A-L-T-O-I-R-A dot com slash pomp. Start investing today. This episode is brought to you by FTX US. They're the safe, regulated way to buy and sell Bitcoin and other digital assets. Trade crypto with up to 85% lower fees than the top competitors.

There are no fixed minimums, no ACH transaction fees, and no withdrawal fees. Download the FTX app today and use referral code POMP to earn free crypto on every trade over $10. The more you trade, the more you earn. Go download the FTX app today and use referral code POMP. What's fascinating about this is, so what we're talking about here is, I remember like it was yesterday. We had a meeting. It was in New York City. And we're talking about a whole bunch of things.

You guys were explaining the business and kind of where you thought the product was going to go and all this stuff. And I think I had a couple of asks. But the two that I remember, uh, vividly was, uh, I said, Hey guys, uh, it's obvious that I'm one of the early writers. Uh, it looks like it's growing the 10% fee. I'm going to need less. I want to need you guys to bring that down. And it wasn't even a conversation. You're like, no, like, like we're, we are going to take the 10%. And some people would have read that as, Oh, who do these guys think they are that they're going to just, you know, be able to charge this, like what was deemed at the time as to be a high fee. but i took it as like no they know that this is going to be super valuable and what they're going to continue to put behind that fee is going to only grow over time and so they're essentially not negotiating against themselves and it was it was i think when i that was the moment when i was like oh shit this is going to be big like like they have a very specific view of the world and they're going to go implement that view and then the second thing was the audio feature and you

guys were like okay we're not going to change the fee but like the audio thing that's interesting like tell us more and then you went and you built it and so it's fascinating i think for a lot of entrepreneurs to kind of hear in the same meeting, you're able to have a very specific view and be very steadfast on things that you are not willing to compromise on. But at the same time, almost have like a blank canvas and say like, hey, but these other things, we have complete, you know, feedback and conversation with our users. And then we want to go and build this. How do you decide what goes in either bucket? Right? Because I think that now that the user base is getting larger and larger, I'm sure you guys are getting emails every day from writers, podcasters, video, you know,

name your uh kind of um content type that are saying i want x how do you sift through it all yeah people tell us um we're stupid all the time we're like charging too much or that not building this feature or not doing ads i'm not doing this thing not doing that thing um there's a ton of opinions but we've got these principles that we're steadfast on and one of them's uh well one an interesting example is that we don't let a writer charge anything less than five dollars per month um you can actually work around it if you use a special discount that you kind of make permanent but the reason we do that is because writers undersell themselves they they typically don't think they're worth anything more than two dollars a month or three dollars a

month and we're like no people are going to pay you five dollars a month you should ask for five dollars a month it's a huge difference to you it's not that much difference to them and we're making that our minimum um the same on the 10 like we know that that 10 is uh more than pays for itself it used to be just because we do your customer support for you because the simplicity of the product saves you a ton of time because substack you had some basic network network effects like if someone's credit card was in the system you're only one click away from being able to subscribe they're only one click away from being able to pay you and now we actually have some pretty major network effects coming online through recommendations and leaderboards and user profiles

so that now we drive um more than uh more i'll say more than a third it's very conservative more than a third of all subscriptions from Substack on Substack come from the Substack network directly and more than 10% of the paid subscriptions so that network is actually driving real dollars that you wouldn't have otherwise got if you're publishing on some other platform but we just know we just know that we've got some principles that we're not going to compromise on and everything everything else is sort of product development and we're listening to people we listen to what writers want um we're not trying to build we're not trying to be a white label agency trying to just respond to every user's every need and therefore ending up with some sort of frankenstein

product that's kind of good for lots of people but not great for anyone um we're here to build a great product and a great company and that means saying no to lots of things so you all i think probably get credited with uh really drawing the line in the sand there is the mainstream media and then there is the independent media or the independent creator or the solo creator, whatever terminology you want to use. It was a trend. People were starting to talk about this. There was, you know, the Mr. Beast of the world and things like that, but no one had really, I think one built a product to facilitate this in a unique way. And also too, uh, it feels like you guys, uh, went from like, Hey, somebody kind of lightly dragged their finger in the sand to

like, you got a shovel and you really made sure people knew where that line was. Um, um how do you view the new world where are we going this like independent media individual creators uh world where is it headed what is the north star what is the finish line on that uh kind of journey which seems to be pulling away from in a different direction than maybe the mainstream media is well there are some um behemoths of the mainstream media that will remain pretty recognizable new york times wall street journal their businesses are fine they're not going to go away anytime soon i think there's the the attention economy media players like tiktok and instagram and twitter and the likes where they'll be like all the way down

one end of the sort of quality spectrum not to say it's all going to be bad quality but of a quality where it's going to be like here's where i go to waste my time this stuff is mostly junk food i know i'm not like nourishing my brain but i love it i'm having fun with it um and then there's going to be a new media media universe uh where substack is hopefully going to be a big part of it um where new types of businesses will be made and new types of uh outlets and uh publications will be created uh they weren't previously possible with the old model because now there's zero gatekeepers you can start a media business on substack at breakfast and be making money from it at lunchtime um people think that by the way people think that's hyperbole that's you're dead

serious and i've seen it work explain like the effectiveness of a product that you can go click a couple of buttons turn around and ask people to pay you and you're literally collecting revenue within hours yeah it's well it's part of that same philosophy like we want people to be able to show up type into a box uh click publish and then money magically appears in your bank account it takes about five minutes if you want to set it up because you've got to connect a strict stripe account um and you've got to tell the world about it but yes you can publish a post within minutes and then money will appear in your bank account and it's really a special model because the you're not you're not dependent on like an overlord uh to be deciding on how you get paid and when you

get paid um and with Substack the money comes in on a rolling basis you don't even have to wait to the end of the month and so when you get a story that breaks out when you do some good work that gets a good audience or gets talked about a lot you actually get a pay rise because you get a flood of new subscribers coming into your system and people some portion of them are going to become your paying subscribers and so you get rewarded for doing good work and get rewarded for doing good stories which is a feeling that's totally different from working in a newspaper or a magazine or any you know a new site where you have to wait for the bosses to decide whether not they're going to give you a pay rise and they're not going to give you a pay rise because

their business is dying um yeah and so we we're trying to remove all the friction from the product to make that process as slick as possible as easy as possible and that creates a whole new dynamic in terms of who's allowed into the media ecosystem like what stories do get told what communities do get served how deeply do those communities get served and that's a pretty exciting world and i think we're going to see um substack and players like substack have an impact on the media economy that's kind of like um the impact of uber and lyft on the ride sharing economy like taxis existed before taxis were a big business but they're nothing like the entirety of like the ride sharing market with uber and lyft in there and i think that substack can catalyze a similar effect

a similar enlarging of their media ecosystem new things are possible it's going to be way more valuable than what uh what we've lived with the last couple hundred years what percentage of people on substack it's their full-time job versus uh hey i write this once a week i have another job but you know i i do this because it's a passion project yeah there's well there's tens of thousands of publishers on substack probably hundreds of thousands by this point and most of them are sort of blogging you know writing for free and they're not intending to go paid or maybe going paid as a one day distant dream um and then there's a smaller class i actually don't know the percentages of it but there's a smaller class who make a make some pocket money they can go out for a restaurant

meal each month that they wouldn't have otherwise been able to do um and then there's some who are making uh full-time livings or and you know good enough uh good enough income so they don't have to take any other job um and then there's some who are like fabulous fabulously wealthy and i don't have sandwiches off the top of my head it's not that um different from other media platforms where there is a power law the big the big players at the top bring in the lion's share of the revenue across the platform but there's an emerging middle class and there are things that we're doing to help um accelerate the growth of that middle class and i think there are going to be services that appear in the future to serve this kind of ecosystem that will also help that middle class

do we know if anyone's ever well you know but uh has anyone cracked 10 million dollars a year yet um i probably i can't say that um okay that must mean someone's close it might be revealing too much okay but there's certainly um like people making very healthy in the millions of dollars a year on sub stack so that was gonna be my question is about how many people do you think on sub stack are making over a million dollars is it like five or six or is it like 50 people it's more than five or six i won't give the exact number again this is kind of um something we want to keep under a hat at the moment but it's a nascent platform this number has grown fast and it's looking pretty good and what's really interesting to me is that some of these people

um it's not a mystery you can go and see who the top earning substack writer is it's on the leaderboards on substack.com uh it's heather cox richardson heather cox richardson she was she was previously writing the same post that she does on substack on facebook for an audience there that um just showed up every day and like some trolls would leave comments like giving this stuff away for free she's still doing it for free on substack but she gives people the ability to pay if they want and one of the privileges they get if they're paid subscribers they can leave a comment um so she was make there's like lots and lots of value created out of nothing where she wasn't making any money she's making tons of money now um there are other journalists with

And there are journalists who have left really respectable, big paying jobs at major mainstream publications who have left and quintupled their income on Substack. And in one case, I won't name names, but increased their income by a factor of 10. So 10-tupled their income. And for me, that's extremely exciting because it's unlocking all this energy in the universe. Yeah. One of the things that I literally was just talking to somebody in the mainstream media. She's a reporter. We were talking about something else. I realized, hey, may not be so happy where she is. And I just said, you know, completely off the record, explain a little bit more. and where the conversation went was like these mainstream media companies they're brokers that's all they're doing they're brokering the attention from the audience with the work from the journalist and the value that is captured they're usually through advertising but more and

more through subscription or other means uh they keep the lion's share they keep like 95 98 percent sometimes 99 they own everything they own that person they own the reporter's stories and ip a reporter does a great story that breaks out and changes the world in some way they don't get anything if that story gets turned into a movie for example other than like a name in the credit line

well in some cases they might be cutting a little bit but yeah like you work for New York Times and someone takes a story and turns it into a blockbuster sensation in Hollywood you're not getting much money from that at all New York Times is going to get a lot of money there yeah I mean that is a whole

other story and quite crazy. But I do think what you end up doing, which we see across the world, is you're taking out the middleman. You're taking out the rent seeker. Now, it's unfair to say that it's just a hand in the cookie jar type middleman because they're providing services, whether it is the brand, the subscribers, the marketing, the operations, editors, like all these different things that obviously make it possible. But it does feel like a lot of folks believe that the economic value being captured may not be, uh, sufficient for the services that are being provided. Now, the reason why I say it in that way, there's a lot of writers who don't want to be entrepreneurs. They actually don't want to run a business. They don't want to do some of this

stuff. And so you all have experimented with a ton of different things, which seemed to be the things that everyone believes are controversial from, uh, putting, uh, essentially down payments, I guess, or whatever you want to call it. Like financing deals for writers to get started. Yeah. Because of that or whatever. So it's like, hey, look, quit your job. Come here. We'll basically provide some safety net for a certain number of months. You have to write X number of times, whatever the agreement is and go and let's see how big it can get. There's been things that you've tried around health care and all these other services. Where have you all landed out? Like, how do you get people to do this who may not want to be an entrepreneur but can't just only write? They have to do something else. yeah and sub stack model is not for everyone right and for some people the newsroom model is the right way to go like if they um they they need the comfort and security of a newsroom there's no judgment about that um for those who can succeed with the sub stack model and it's not just existing journalists there's a you know millions of people around the world who could do

this um if they've got that oh i've got to pay rent and um i've they got that hunger to do it then their chances of succeeding are greater than if they've just got a comfortable salary to rely on. So with the thing that you refer to as, we call them Substack Pro Deals, it's financing up front to help them to take away the risk of leaving their job or saying no to some other opportunities

so they can dedicate themselves full-time to the enterprise of building their own media business on Substack. So we're kind of doing for writers what a VC might do for a startup entrepreneur. they said we're demanding less and we're staying like like it's totally hands off we have no editorial influence on those people or anything um we did find some some when you do that some people do show up for a paycheck and they're like reading it the wrong way because it's hard to get

money to get like any to do anything in media um and some people show up for a paycheck um but some people take that money and they're grateful to have it because that lets them get started on building their their dream publication or doing the sorts of writing that they've always wanted to do and so you have to be quite careful with the with the balance of it it's not just going to be you can't just like spray and pray and of course some of the deals don't work out and some some work out famously it's a little bit like um funding a movie or funding a book or funding a startup in that way um but often what we've found is some of the best earners many of the best earners definitely most of the best earners on substack never had one of those deals they're

just like backing themselves um taking the 90 from the start because if you take a deal like that on the financing package from substack you you only keep 15 for the first year and then you revert to the standard 90 10 model that substack has and those people who are really backing themselves that they can succeed that it seems that they have a like a very like a greater likelihood of success overall and especially of like out earning sort of whatever their modest goals might have been and to make a ton of money on Substack through subscriptions how do you think about the independent individuals versus the people who are building actual publications I think some of uh the folks who have done very well on Substack now have four five six people

and you know I joke that like they're reinventing the newsroom uh not but not like in a negative way like they just realize hey that works for them versus uh maybe bill bishop i think he does it by himself uh and has no uh no kind of team or anything like that like how do you balance that and is either one what you're trying to do or is it actually part of the beauty of sub stack is you could do either depending on what works for you what especially works well on sub stacks if you're a solo artist or a small band but not necessarily like the super band or the super group with many instruments in it um we do have some group publications that are doing really well um it gets more complicated and we think you'd be better off to have individual substack then you then

network together in their own way um but it is really gratifying to see some writers be on substack and become so successful that they start to hire people so casey newton has done this with platformer he's just hired a fellow reporter to work with him on reporting and on the business and um judd legum's hired a couple of people to help him on his own publication popular information we start to see that happening more and more and i love seeing that because it's the writers who are in charge it's the writers who then become owners and they're paying it forward they're bringing other people along for the ride but an individual substack while it can expand to have many contributors and there are several that are doing really well on substack it's probably

better to have it focused and then the way i would like to see it play out is that people build network so you might have the palm letter and then you might have another friend who's doing something on ethereum and another friend who's doing something on like defy and you decide to like band together in a way kind of like a multi multi-channel network on youtube and help lift each other up and maybe share some of the expenses of editing or marketing that kind of way and i think entirely new types of businesses can be built that way and we're just seeing the beginnings of that on sub stack now uh i'm laughing you mean like uh if you had the pomp letter huddle up and the profile and then you had this great feature from sub stack where you could recommend each

other and when people yes exactly yeah i imagine you're right on top of that yes like what if you wanted to share an editor what do you want to share a lawyer what do you want to share an art department um what if someone came in and invested in your little conglomerate there to help you like go on and expand and start covering wine and Italy and all these other subjects. And there's, to me, there's like, that's a pretty borderless way of expanding rather than I'm starting a newspaper. I'm going to have these verticals. I'm going to have a ton of reporters and a ton of editors and a sales team, blah, blah, blah. It's a much leaner operation and it's full of much more potential. Yeah. It's a, it's fascinating. Uh, I want to ask you the hard questions. Uh,

so let's just jump right to the hardest one. What will you take down? Is there anything that someone could write that you guys would take down yeah one of the things and and to caveat this one of the uh critiques from the mainstream media who the second they see that we publish this they're gonna run and they're like oh let's listen to what they're saying uh hey guys uh it is that uh you all take a stand that it is free speech for better or worse there's this element of like hey people should be able to write what they want and i think generally have a negative view towards censorship and stuff like that with that said uh as with most of the platforms who do this there's things like illegal content there's things that uh made just like from a society standpoint

99.9 percent of people reject as an idea or a sympathy towards some sort of uh ideology or whatever where do you guys kind of draw the line or like what is the framework to evaluate content that gets into a gray area or maybe something that other people get upset about yeah we have content guidelines um that are where the terms are pretty narrowly defined so you can't publish anything on substack that incites violence you can't publish uh porn you can't do spamming you can't do doxing that kind of thing um and that's where the lines are for us and it's um if anything falls into a gray area then trust and safety team and the founders uh discuss and decide like can it stay or can it not stay but the problems surrounding those questions

i think are a lot less acute for substack which is kind of this system where readers have control and they can actively opt into the publications they want to follow and opt out of the publications they don't want to follow and they don't have anything forced against their will down their throat um the problems for us are a lot less acute i think than in the social media giants where there's these massive amplification machines that are kind of incentivizing provocative content and controversial content and rewarding those types of behaviors and so those problems there are like it's a different set of problems that they might they might as well be different media they are totally different media ecosystems they may they may as well be in different universes

So doxing is like a really interesting one because we've seen the mainstream media over and over and over again. I'm going to say both sides of the ideological aisle dox people who run pseudonymous accounts, who have some sort of brand. And then they end up saying, hey, here's the person who's running it or whatever. And if you strip away all the political nonsense and the divisiveness and all of that, it's on one side, people like, hey, that was a doxing of an individual. On the other side is the argument of like this ends up being of public interest for ABC reason. So it's weird. Right. And I don't think that we can point to and be like, this is the one rule that is always going to be applicable because there's so much nuance in every single case. But how do you all think about that type of stuff where it's like the mainstream media's maybe not response, but like their defense of something like this would be like, oh, it's of public interest. and actually it's not doxing in a negative sense.

It's like journalism. How do you think through that? Well, the journalist in me thinks that certain stories do rise to a level of public interest, that it's clearly defensible, that it's worth exposing information or shining a light on particular information that might not otherwise have been easily attainable.

And yeah, there's no blanket rule, but I think it's incumbent upon the news organization in that case to make a strong defense and let the public decide. Yeah, I also want to call out that I'm asking you as one individual and I understand there's a whole team of people who look at this.

So I know that you don't have the exact answers, but I do think these are the questions, right? People are like, okay, cool. If we're going to take the media, whatever that ends up actually being, and we are going to strip it out of the hands of these organizations and we're going to give it to a technology company,

like how do you do that, right? how does it actually uh operate yeah well for us is like there is a legal definition of doxing and it's um something along the lines of you know sharing um phone numbers and i think private addresses um and if it's just a general member of the public then you should be very uh you should have you should be careful about that um but i do think it's it's not impossible for even an individual sub stacker to make a case that this is in the public interest and the interest and you have to take it on a case-by-case basis talk to me about audio and video what are you guys thinking there uh outside of just writing everyone knows you for the text-based uh kind of email

newsletter uh with the paid subscription but you're pushing into these other areas what are you thinking on audio and video um i don't think there's much difference between audio video and text in terms of um what's the value to an audience like the the person you know i've said this to you before pomp like people are kind of subscribing to you they're not just subscribing to the thing you write um and so they'll be just as happy to get it um or maybe a different group of people would be happier to get it um if it's an audio or it's on video or if it's just you in a discussion a live chat that kind of thing and i think that the business model there is uh certainly can accommodate the variety of those relationships no matter what the content is or no matter what

the format is so Substack is like we've got first class podcasting features on the platform it's free to host and distribute a podcast on Substack you can have paid episodes or unpaid episodes you can have comments attached to it that go out with a post where you can include other video and all that sort of stuff we will do exactly the same for video we have a beta product for video at the moment you can have subscriber only video it lives in your Substack it's in the Substack app um you can have a discussion thread or if you just want to like have a conversation with uh your subscribers and um yeah i don't think the the actual content type is the the thing that makes it work it's the voice behind it it's the distinctive worldview that's behind it it's the

quality of thought that's behind it and so we'll keep expanding the platform to accommodate all those things so you hit on this a little bit earlier but one of the parts that you all seem to be pushing into that I find the most fascinating. This is me speaking as a consumer of content. This is me speaking as a Substack user. And it's also me speaking from like an investor entrepreneur, just like watching the product evolve. And I think that you guys are playing a little bit of chess here, is that all the features in the beginning were one-to-many communication. It was very much, I write an email, I send it to an entire list. Yes, there are comment sections or whatever, but for the most part, it was one-to-many. Podcast, same thing. I record,

I send it out. Video would obviously continue that trend. You're now pushing into more of like the threads type content, chat, things where it may not be as much one to many. It could be more one to one. Or maybe it's the creator of the publication is just one of many people discussing a topic, an idea or whatever. And so it moves from that one to many to more of like this like community aspect is that something that you think you guys will continue to double and triple down on is this just a test like how do you think about one to many versus like community type stuff yeah well i think it's kind of there's a formality spectrum is right so you can be in your most formal mode broadcasting you could be publishing a post or publishing a podcast episode or publishing

a video and this is like the thing that you've put a lot of thought and time behind and you're willing to defend it and argue it in public and you click publish and there's a moment and it's like all right now this is being broadcast to my world um and then there's the other end of the spectrum which is um something we've been trained on for uh decades now with social media which is sometimes you don't want to have the like the high bar of formality to meet sometimes you just want to have a chat sometimes you just want to have a discussion sometimes you just want to hang out with people who are interested in the same things you like and so we are starting to do more work that enables that kind of conversation and so we have discussion threads which already exist in

substack instead of creating a post you can just start a thread it's kind of like a facebook group post for example um and in the substack app we're pilot piloting um uh a feature that allows you to have an even sort of more informal chat with your subscribers and maybe one day that might be a subset of your subscribers or maybe one day um you just want to like you as a subscriber just wants to chat to one other subscriber from the same uh publication universe and um again i see the model being really interesting for that use case like who's doing paid chat uh discourse i guess in a way um not yeah like i i think there's like the idea of having um a close high signal community um that's tied to the publication but is not um all of the publication it's just really

interesting. And I don't know what it's ultimately going to look like, but it's going to be a really fun area to explore. This episode is brought to you by Amber Data. If you're a financial institution entering the digital asset class, you'll need access to granular on-chain and market data from multiple venues to power research, trading, risk management, and compliance. Amber Data delivers comprehensive data and insights into blockchain networks, crypto markets, and decentralized finance, empowering financial institutions to apply traditional finance methods to digital assets. Amber data eliminates the infrastructure setup, integrated challenges and maintenance headaches to access digital assets data, reducing cost and time to market

to enter the digital asset class. Learn more and download their digital asset data guide at www.amberdata.io slash pomp. Again, that's amberdata.io slash pomp. Go check them out today. This episode is brought to you by Exodus, the world's leading desktop, mobile and hardware crypto wallet they offer beautiful user-friendly blockchain products that sync across all your devices making it easy to send receive and exchange over 150 crypto assets in one place and with world-class customer service available to you 24 7 exodus always has your back run don't walk over to exodus.com slash pump for your free download today again that's exodus.com slash pump go check them out for your free download today this episode is brought to you by unstoppable

domains they've partnered with blockchain.com to create nft domain names ending in dot blockchain it's the perfect ending to show that you're a believer in a decentralized future the blockchain.com community can join a short wait list to get one for free at blockchain.com slash waitlist slash blockchain domain free nft domains provide all the benefits of premium unstoppable domains including fee-free lifelong ownership if you don't have a blockchain.com wallet no worries there's new free domains available to everyone. Either join the wait list for a free blockchain.com domain or visit unstoppabledomains.com to buy your domain today,

starting as low as $5. Unstoppabledomains.com. This is fascinating because I tweeted it recently and everyone was all upset because they didn't get the invite to the groups, which was not my fault. But I said, look, I've actually found private group chats to be way more valuable to my learning information consumption

over the last couple of months than social media. And some of it is just like high trust versus low trust environment. If you put something on Twitter and you've got a big audience, like the trolls are faster with their fingers than the supporters and also more relentless. But at the same time, it's a different medium. It allows for much more follow-up and nuanced discussion and kind of all these different things.

And so it feels like if I was to come out and be like, oh, let's start a paid chat room. People would be like, all right, dude, like, you know, sounds like a scam, sounds like a paid trading signals or, you know, like whatever the joke on the internet is. But when you actually start with the community of like-minded individuals around certain types of content, whether it is the written form, audio, or video, the chat now is a supplementation and allows those people just to have kind of more real-time feedback and communication. And if you could in some way replicate these very small private group chat value in the larger audience, like, damn, would that be powerful, right? yeah i think i think it's like it's very interesting as an idea at least i'm i'm excited for what we're doing here um but i i do think of it as like now everyone can have their own social network what becomes possible when that's the case even if it's just a small social network even if the

only people in your social network are your family um and we we acquired a company called cocoon that was actually building these sort of small community social networks as well um and they are helping us uh that team is helping us build this uh next generation of discussions and threads on substack um and social media it's completely different like social media like it's fun to chat in that real-time kind of way and have back and forth and you can find your communities on social media but it's all a big performance and the trolls are only a click away um or a quote we retweet now dunk away and people get points in that game for being mean to each other or for like taking someone down in a spectacular fashion in front of all their friends so that all their

friends can laugh at you as well whereas in the um community the more the closer tight in that community like you see on substack people are there for um similar reasons like i i like this guy's voice too i'm deeply nerdy about this particular topic too and if i'm paying to be there that's an even stronger signal like i care about this as much as you care about this i care about this so much and i'm willing to part with money to be here and that can create a whole lot of um great conversation much more productive conversation much more good faith discussion and i think that kind of thing um in the long run can have a big impact on the quality of discourse in society yeah it is um uh if if it is possible to get there with a community and you're able to

navigate the spectrum of uh what you called broadcast all the way to chat damn is that powerful. And then also, um, in some way it's fascinating because by building the infrastructure, it almost seems like you all are sitting there saying, how do we take, uh, this group, which the initial thesis was like, they want to have a more intimate relationship by removing the middle man with the creator of that content. How do we just pull them closer and closer and closer and closer together so that they feel like they're getting more value. They're willing to part with that money, but the money is not necessarily going to a media organization. It's going directly in the pocket to the person creating the content uh which obviously uh changes the incentives of the

content that's created that's kind of that's kind of the magic of the internet like the internet kind of started off this way like in blogging days and in friends today's and you know facebook pre uh advertising uh twitter pre-advertising there were much more much more um authentic relationships and direct relationships and uh people weren't trying to game it in particular way there weren't these engagement-based algorithms sorting us into giant tribes and pitting us against each other but the internet like and so we've like the last decade of the internet has been such a rough ride that we've all got these sort of scars and bruises and reflective like hesitancies but the internet can be amazing it can connect people globally instantly around particular topics some of which

are like deeply nerdy and hard to find friends and otherwise are hard to find fellow travelers and otherwise um and so it'd be interesting well i'm very interested and hopeful about what this looks like when the monetization structure for this is not advertising but is direct payments so that really you are the you know as the reader you are the customer you're not the product you're not being gamed for some other purpose and that the writer gets rewarded based on how well they respect your attention or the the manager of that community gets well uh gets rewarded for how well they manage that community and the interest of that community rather than the interest of the advertiser um i think it can go through some like fascinating places and i don't think we've really

seen the potential of the internet yet because it's been short-circuited by this other model that has sent us on a 20-year detour are you at liberty to say what the craziest idea you guys have thought of is oh god we thought of some crazy ideas um maybe one that you thought of but you guys aren't going to do as of right now i really want to get into book publishing i really want um i really want you to be able to click a button and have a book in the same way that you can click a button and you've got a media company you've got a um you know you you publish you've got your post for the day you you've already written it that's the hard bit done then you click a button and then everything the post goes out into the world and money comes to you and

subscribers come to you i'd like to have the same effect uh with books so you're a writer you've written a book um you upload it essentially you click publish it comes out perfectly designed it's got a price that you've selected anyone can come to your sub stack and buy it it gets distributed and marketed to your mailing list um it gets put in all the stores everywhere and then you get the lion's share the lion's share of the sales revenue i think there's great potential for that model it's um a little bit uh beyond where we can go just right now but i do hope to get there yeah that would be uh absolutely fascinating and you know we've seen uh a bunch of people take their blog posts their emails whatever and turn them into books right so

uh, if you're the place where that stuff lives, uh, it seems like it'd be pretty easy for you to be able to just scrape and say, Hey, here's the 10 most popular ones. They're this length put into a book and do a little bit of light editing and off you go. Don't you know someone who's, um, turned, uh, part of the ethos behind their sub stack into a book recently? Uh, I do. Paulina, uh, I'll tell you actually, uh, I don't even know I'm telling you on the here, but, um, one of the pieces, uh, of that process that was fascinating to me is uh polina was talking to a lot of other authors and a piece of feedback that she got from people who had published with some of the independent uh publishers with some of like the

big houses and then some people had self-published was how little the most professional of the organizations did when it came to distribution marketing and like the actual selling of the book so much of their process is focused on like the creation of the book and then they're like okay we move on to like the next customer essentially and i think that that was um surprising to me like i would have thought most of the value of what they were providing to people was like we'll help you sell the book we'll promote it we'll we'll do all this but it seems to be the opposite which is we used to be a lot more like that and they're not actually acting in the writer's interest most of the time they're sort of acting in the company's interest and that's expressed by them deciding to

really put all their marketing resources by right behind the books that are already showing signs of being the winners and so if you don't sell a ton of copies in your first week then all the marketing support will get pulled from your book and put onto the uh the book that is actually starting to move some copies and so the winners get really big and the the the ones that don't have fast starts don't get that much support by which point like you probably would you know you'd be better off just going your own route and self-publishing yeah it is um it is uh uh very interesting to see. I recently posted a video and it was a desk with a bunch of stuff all over it and the computer. And then over 30 seconds, it basically took all the things on the computer

or on the desk and put into the computer. So it took the calendar off the wall and it was an app on the computer. It took the globe and then it was Google Maps and like, and it basically erased everything off of that desk from 30 years ago. And it was essentially visualizing software eating the world yeah what you're talking about is almost uh automation like how much like how do you automate the book publishing process well the first principles component is like well where do you get the content to start and so there's not that many companies substack being one of them but there's not that many others that can say like well we are where some of the content lives that people actually write their books off of or they they kind of create these collections and so you

have to be a very unique company to be able to get to the automation of a book because you have to start with the uh kind of source material yeah the i do think it's kind of similar to the um software in the world metaphor that you're using is that like a lot of publishers somehow book publishing some hasn't caught up and maybe it's because people look at the book publishing market and see that it's so so much in trouble that it's not that interesting to them and like why are they going to try and make books publishing as efficient as possible amazon's done it with kindle program that has its own in the kindle publishing direct program it has its own particular particularities and it's its own kind of closed ecosystem um but to me it just it seems so easy

you wouldn't want to take the humans out of it completely especially you want a good human editor and a good human designer or probably a good human designer maybe generative ai can do something for you um but then the marketing and the distribution of the book and the um getting it into people's hands and the price setting. I don't know why you need a massive publishing house to do all of that anymore. And I'm waiting for some platform to unlock the energy there and just make it super simple for a writer to publish. They don't have to know anything about design. They don't have to know anything about marketing. They don't have to know anything about distribution. I hope Substack can be that company um but it seems totally overdue for me you mentioned generative uh art

you did not say generative newsletters or uh generative words have you seen anyone do it yet and do you think narrative science has been doing that for a while it's like probably one of the easier things to do right like come up with a piece of writing that a computer can write based on the data points um and i think i think we are starting to see like generative art versions of that um with fiction and stuff um and i think there will be like if you're if you're following real estate markets or you're following sports i think a lot of the great stuff to read in the future will be written by by ai um but i don't think that's gonna obliterate the need for human voices in fact maybe it even leads to more demand for human voices yeah i um uh there's a company

in north carolina a couple years ago i'm gonna forget the name of it which i apologize uh to those guys but uh um this guy robbie and joe uh it's probably narrative science those guys are in are they maybe they changed their name uh it was like automated something or whatever maybe automated insights maybe automated insights yes that that uh uh what's the name of the company and when my mind was like oh shit this is a thing is they had done a deal with yahoo for yahoo fantasy football oh yeah every single game that was played like if you and i were in the same league and we had a fantasy football matchup uh on monday we were on tuesday i guess we would get a report that was an article written about how our matchup went and it was all auto

generated and i was like oh my god they were creating like millions and millions and millions of articles every single weekend yeah it i don't care how much money you have you could not recreate that yeah yeah yeah and i think that that's with pretty basic technology by today's standards as well like you can imagine the color and flair that are like uh like a really smart ai might bring to that um it's going to be an interesting world yeah what what about uh taking like the written content on substack and auto generating audio or video or trying to do some of that stuff have you all explored that looked at you're laughing so i'm assuming that there's some like chris just sent a text message about this the other day saw something on online and said

like what about this is prompt so many ideas and so yeah it's very much at the like text message or slack message level of ideation but super interesting isn't it like can you take a take can you take a podcast episode and with one click market it on social media through uh like the right mix of audios and visual audio and visuals and maybe text or can you do the inverse can you take a piece of text and turn it into like a piece of audio that you can then use to market the the publication or the story or even tell the story in fact on substack already and you can click the little headphones icon on any post and it will a robot will read it out to you a convincing robot with a nice voice will read it out to you um or you can choose to override it with your own

voice in your own narration which is even like a higher quality a higher value item uh so yeah i I think that sort of stuff will definitely, that's coming. I'm quite excited about that. Can I give product feedback live now? You can. You can. I'll tell it to the boss. I think it would be pretty simple.

I mean, you have to build the tech to do it. But if people basically said, hey, I want the ability to turn the text into audio with my voice, you probably could come up with like a script. And it's like, hey, sit down for 25 minutes, 30 minutes, read these words into a microphone. Substack's able to then take it build out okay here's like the voice model and then uh you just like drag and highlight the part that you want it to read right because like when I send the email I don't want it to read the whole thing I just wanted to read like the opinion piece uh and then you just click a button all of a sudden it makes the audio and uh and you're good to go now for me yeah yeah I love it save me seven to ten minutes a day right like not not the end of the world but

But at the same time, it's like those little things that get you closer and closer to content creation that is high quality but saves time and increases money for the users. I love it. I'm not enough of a genius to know how much like modeling you'd need before you can get the plausible voice. It'd take Chris like one night. Those other guys will figure that out. But it's kind of like FaceTime, you know. I don't know. What is it?

Face ID on your phone. Make sure you show the phone your face from all the angles. we just get all your we'll get your voice from all the angles until we we've mastered palm and then actually like what do we need you for we just get an ai to write your articles based on the words you use all the time and then the ai to read out your thing and then you can just go we're joking but i i do think um this is going to be sequential right like now it's okay humans do everything we see what the generative are like okay shit this is cool this is powerful like how people will use it is still up uh uh for for a decision but like it's cool yeah taking content

that you just created and then automating it into other mediums seems to be like kind of a no-brainer right and you see this with people like uh taking audio turning it in a transcript and vice versa whatever but the next leap which you're talking about of like okay uh type in one sentence and then it writes the entire article for you i think the technology is probably there where it can create something that like generally talks about it but part of the value of an individual's sub stack at the moment is that it's their unique thoughts right kind of your point about like they're subscribing to x person and how do you recreate that it's to some degree like the creativity or the original thought is the hardest thing for the computer to do um i say

that and then somebody will build a model and it'll like be smarter than all of us convince us said it's creative and original yeah yeah so like it does feel like okay we went through kind of i don't know step one step two now it's like very obvious to see in the next year or two maybe three years uh you'll be able to kind of click buttons and automate into other mediums but the from scratch generation seems a little bit further off uh and and there's like weird ramifications like there's positives and negatives to that world that i don't think we quite understand yet yeah we can't be too we can't be too like the the rate of development with this generative art stuff is incredible and we can't be too far off like 10 years from being able to like if you died right

now like i could load up my pomp app and have a conversation with you that seems original and where you're actually responding to me or at least i'm watching a video message from you with a new idea based on all the things that you've said in the past or the things you've written in the past and your image and no i'm gonna like that's that's fucked up that's 10 that's i'm sure that's gonna be possible within 10 years and so i might never have to end my relationship with you despite you not being on the yeah this mortal coil anymore the the other the other be crazy the other piece of this that um polina actually has this skill and uh i've never said this to her but it's like talking to a computer sometimes like we'll be talking about something she's like oh that reminds

me of and she'll pull out because she's just spent so much time like this person said this or this event in this person's life or in this profile they did this or whatever and what you start to think about is like google does the same thing and like all these systems are just mapping information or data points and they're able to begin to understand the relationship between them and so a writer what do they do they write thoughts so if you're writing about economics for example if uh you mention you know march of 2020 when the market crashed like substack knows what your writing was back then it can easily go and see that and you have uh if a writer is trying to kind of build an ecosystem of content they're linking back to old pieces and like it does become

like a very interesting technology problem where maybe you don't actually generate the article right or the piece but can you almost say like hey by the way you just talked about this concept you know reminder you mentioned this three times in the last two years and then here's the hyper links to the pieces right or something like that i love that yeah the machine the machine the system can be prompting you but not forcing you to include other like references to things that you've done in the past or that appear in other parts of the network like oh you're writing about um you're writing about obama's legacy do you know that's like four years ago andrew sullivan published this big thing based on an interview he did with obama blah blah blah maybe you want to

like this, this sentence seems to be relevant to exactly the thing you're writing now. Do you want to reference it? It's, um, yeah, I think it's like, if you start to, um, create a central network for writing like that, then the opportunities for that kind of, um, advantage present themselves. And it's cool to think about. Yeah. I, um, I, I completely agree. What, um, what, what do you think is the greatest critique of Substack? When you think of all the critics that are out there, What's the one that you agree with or the one that you're like, you know what, I actually think that that's like a pretty fair thing. We're working on it and, you know, hope to be better or improve the product in that way or whatever. I think the potential for audience capture is a difficult and interesting problem to work on.

So, you know, when you're shilling subscriptions, people might choose to pay because you're telling them things they want to hear. And you might get it in your mind that you don't want to say anything that they don't want to hear. um and i don't think this is a big problem i actually think it's a worse problem on social media but it is like a risk like effectively you could be running a cult you might be a charlatan or a huckster just like selling bullshit because you know it's going to turn into money through willing participants who choose to subscribe because they love to hear that stuff um and i think that's actually like an education problem for society but there might be some product design and platform design things that we can do to you know help people connect with

the people who have high integrity ratings or um make sure that there might be more like you get exposed to more perspectives than you might have otherwise um come across had you just you know followed this one writer so i think there's there's not nothing to that critique there there is a risk with a subscription model that audience capture can happen and i think it's like it's incumbent upon us to be like hyper aware of it and sensitive to it my last question for you is if we do this again in 10 years which of course we will uh what is the vision of what substack has become is it is there something different than uh what the public would think well i think one version of it is that just could be like a vastly larger

expression of what it already is which is this like a network of publications where writers have direct relationship with their readers and sometimes those writers are actually doing podcasts or video or live chats or like mostly focused on community type stuff um and i think the like tremendous value will come um when the network gets thick when you start to get more and more um readers and more paying subscribers just because you're a part of the network and there's lots of interaction between from readers to readers and lots of interaction between readers and writers and writers to writers, I think that can get really large and that there might be new sort of supporting business models that Substack can explore and that writers

can explore within that. For example, I would say that Substack at the moment has gone, taken the media through a phase of unbundling at the moment, but there are going to be new bundles in the future. And so ultimately, I see like a huge media ecosystem that's more valuable than the ones that have been presented to the world for the last few hundred years um and i see a system where writers have a lot more control and ownership and they capture the majority of the financial value created within that ecosystem and readers have a lot more agency and they're getting better experiences and they were given by uh the media ecosystems that have dominated to date um so i

think it can be really rich and vibrant and deep and valuable i uh i hope that world comes to fruition that sounds amazing you're helping you're helping make it happen man no no no what uh where can we send people to find you on the internet or if they want to learn more about substack itself where can they go you should check out my substack it's at substack.com there's a bunch of writers there you'll find to love um you should create a substack substack.com sign up it's much easier to publish things and then you might think you don't have to commit yourself to a big newsletter Just write one thing or post one photo or one video. Substack.com is the place I'd send people to.

Don't go to Twitter. Twitter is where the brains go to die. You may not be wrong, my friend. All right. I appreciate it very much. We will definitely do this again in the future. Awesome. Thanks, Paul.

Thanks so much for listening to today's episode. I really hope you enjoyed this one. Make sure you're subscribed on Apple, Spotify, or your favorite podcast player. And if you're looking to transition into a brand new job in the Bitcoin or crypto industry, we've got you covered. Head over to thecryptoacademy.io.

My team and I have been working with the top HR teams in the industry to develop an intensive three-week training program with over 50 live events. We teach you exactly what you need to know to break into the industry, including live interview prep and resume review. Our students have been hired at over 75

of the world's best Bitcoin and crypto companies. Go to thecryptoacademy.io to learn more. Again, that's thecryptoacademy.io. If you enjoyed today's episode, make sure you share it with your friends and I'll see you all for the next episode.