The Why of Substack 

Not for the first time, the newsletter platform Substack is coming under criticism for hosting and now (accidentally) promoting Nazi content. Today, John Gruber of Daring Fireball is leading this crusade. This seems to be a recurring occurrence. They have controversies. Many express outrage. Some leave the platform. And Substack keeps growing. Why? 

I took a step back and asked some basic questions. The answers should help you understand the “why” of Substack.

• What is Substack really selling?
• Why do they have 5 million people paying for subscriptions on their platform?
• Why are they growing?
• What have they built?
• Why did they receive $100 million in new funding at a valuation of $1 billion?

Back in 2011, in an interview with McKinsey & Co, Eric Schmidt, former CEO of Google, pointed out that, “Over 5 or ten years, fiber optics and the wireless explosion will completely crush the business models of old media companies and industries. For companies focused on content and distribution, distribution just goes away.” 

Around that same time, I remember Jeff Bezos saying that books were in competition with everything because it was all about attention. Netflix’s Reed Hastings said his company was in competition with sleep. What they are essentially saying is that all media platforms exist to sell “attention.” 

None of this is a surprise to me. I explained this in an essay I wrote more than a decade ago, just when platforms like Facebook were wresting control over our attention from traditional media outlets and brands.

What Substack has done is that it has aggregated “reading attention” on its platform. Those of us who are old enough to remember Tumblr know that platform worked because it was a virtuous cycle of attention: one Tumblr to another to another and back to the original. If you are an independent blogger or a newsletter writer, you are on your own to find an audience. 

It has done so with time-tested strategy. Just as Facebook and Twitter wooed big media brands and celebrities, Substack wooed, paid, and promoted independent writers. These writers brought credibility and, more importantly, their audiences. Those audiences willingly entered their email addresses and payment details and helped push the platform, all the while thinking they were promoting the individuals they had backed. 

What Substack’s critics miss is that the company has “network effects” working for it. Sure, I am perennially annoyed by the spam I get from Substack. Many people just invite me to newsletters they think I might be interested in. I am not. Still, all that spamming (also known as growth hacking) seems to work. Substack’s network now drives 50% of all new subscriptions and 25% of new paid subscriptions on the platform.

The growth numbers tell the story. Substack’s paid subscriber base has exploded from just 11,000 subscribers in July 2018 to over 500,000 by November 2021, then doubling to 1 million by November 2021, reaching 2 million by February 2023, and hitting 5 million paid subscriptions by March 2025. That’s a nearly 500x increase in less than seven years.

Substack’s app is an attention-trap and helps people who publish on the platform. About 25% of subscriptions originate from Substack’s apps, which include discovery features like search, leaderboards, and reader profiles. Substack’s 35 million subscribers show the density of users and why they can translate into dollars for writers. 

What they have done is create a social network around opinions (and other media). They can extend this idea from the written word to audio and video. The words can be long or short. In our modern society, where opinions trump everything, they have a social network for the chattering classes. And it is a network that has density. One person who recognizes this is the co-founder and CEO of Beehiiv, Tyler Denk. 

“I actually see Substack as building more of a social network now, like Twitter, Threads, Bluesky and LinkedIn,” he recently told The Information. “We play in that ecosystem, but we’re much closer to an email platform or a website platform. Their product direction is totally different.”

This also explains why some of the more seasoned media investors decide to pump in $100 million into the company. None of this is to say that they are not without problems, or that I personally don’t care to use them as my publishing platform. 

Of all Gruber’s criticisms, the one that stands out for me is this paragraph, as it fundamentally shows that media entities, including individuals, are willing to trade their own reputations and brands for easy money.

Only with Substack does anyone perceive creator branding as being subservient to the platform — something that ought to be seen merely as an interchangeable CMS — like that. That is not by happenstance. It’s a trap and it is by design. It’s exactly what Substack wants, and exactly what independent writers and content producers should not. — Daring Fireball

This is no different from the time when Medium was all the rage. This conflation of platform with your own work is a hallmark of the media industry, which needs to latch onto platforms.

Some believe that Substack can pose an existential risk to the creators and professional journalists who have switched over to it. I don’t necessarily disagree, as the company has investors and must find ways to grow. It is still unprofitable. And then there is the dreaded subscription fatigue. Still, the platform has done something I had talked about in a piece I wrote twenty two years ago.

In “The Dawn of MicroPubs,” in which I argued that we would see a new entity emerge. “Micro-pub is a combination of old-fashioned newsletter, blog, and a directory service, managed by one to ten people,” is how I described it. They are now everywhere, and most (if not all) are on Substack.

I can tell you from personal experience what building an independent publishing entity really costs. When I started GigaOm, we had to build our own website using WordPress. For newsletters, we used a hacked-together version and Mailchimp for delivery. It cost thousands of dollars a year. It still does. 

On top of that, when I went solo with my current website, I had to go through the same process. I had to come to terms with the fact that I would have lower visibility, fewer readers, and not as many subscribers. I have over 25,000 who get my occasional articles in their inbox. And that is fine because I am no longer a professional or working journalist. For a gentleman blogger, that is pretty good.

However, if you have to make a living from writing and newsletters, life isn’t easy. It isn’t going to get easier on Substack — I hear there is an influx of B-list celebrities trying to supplement their incomes.

It is very easy to switch to other platforms such as Ghost, Buttondown, or Beehiiv as long as you have built up an audience on Substack or elsewhere. However, if you are a writer starting cold, you will find it very tough on the new platforms. I have used all three options Gruber is recommending. They are all good (and not so good) as long as you can bring an audience and attention. They aren’t cheap either, especially once you have some scale.

The pressure to write regularly and constantly is bad enough, but maintaining your publishing infrastructure can be a challenge. Finding growth and new subscribers isn’t easy. The reality is that gaining attention online today is becoming increasingly difficult because social networks are now saturated and overcrowded.

Trying to build an independent publishing entity in this new environment is not easy. Substack offers a cheap, easy way to start and hopefully grow. The company and its founders are betting that the growth and the audience will keep you using their platform. 

Remember, media people kept using Facebook even when Mark Zuckerberg no longer needed their content. It is no different from Twitter. I remember when many people left the platform in a huff but slowly came back. Why? Because network and attention trump everything. People understand how difficult it is to get attention. 

The top 10 authors on Substack now collectively make $40 million per year, up from $7 million in September 2020. Apparently there are over 50 newsletters earning about a million dollars a year. That kind of exponential earning growth is hard to walk away from, even when the platform hosts content with which you fundamentally disagree.

As for me, I am happy I have my own homestead on the Internet. I control every aspect of it. And for my newsletters, I use WordPress’s newsletter system. It isn’t the easiest, but then being independent isn’t supposed to be easy.

August 3, 2025. San Francisco