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Substack cofounders Hamish McKenzie, Chris Best (its CEO) and Jairaj Sethi beleive newsletters represent a fundamental shift in the media ecosystem.

Image: Substack
Substack cofounders Hamish McKenzie, Chris Best (CEO) and Jairaj Sethi
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Substack’s CEO explains why we’re all obsessed with newsletters now

And why he thinks his VC-backed platform can avoid making some of the judgment calls that Facebook and Twitter are currently wrestling with.

If it seems like everyone is launching a newsletter these days, well, you're not wrong. Chris Best, CEO and founder of the newsletter platform Substack, said readership and writership has doubled there in the first three months of the coronavirus pandemic.

Part of it is that people currently have more time on their hands: They're finally getting around to reading more or starting the writing projects they put off. But there's also an increasing wave of writers and particularly journalists — such as former BuzzFeed reporter Alex Kantrowitz, former Protocol reporter Levi Sumagaysay and even The Wall Street Journal — who are launching newsletters and building their own audiences on Substack.

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Substack has grown since its 2017 launch to become a popular platform for newsletter authors, letting them either distribute their writing for free or via paid subscriptions. Its top paid publications range from Bill Bishop's thoughts on China to Emily Atkin's newsletter for people "pissed off about the climate crisis" to Luke O'Neil's "Welcome to hell world: weekly dispatches from the pit of despair" (which charges $6.66 a month). Substack's business model means it takes a 10% cut — higher than other platforms such as Patreon. Silicon Valley investors have also bet on the platform: A graduate of Y Combinator, it has raised $17.6 million from investors including Andreessen Horowitz.

Protocol spoke to Best about why people are obsessed with newsletters, why he decided to raise venture capital and the very thorny question of what would happen if President Trump sent his looting and shooting remarks via newsletter.

This interview has been edited and condensed for clarity.

I just started writing a newsletter every week, and it's really hard. Why do people like writing newsletters?

I think a big part of it is the idea of having a direct connection with your readers. Part of the magic of the newsletter is the way the social contract of it works, like I'm going to give you my email, and then you're going to reach out and show up in my inbox. It's not one of those things where you're constantly crafting things to get reach on social media. You're agreeing to have this ongoing relationship between the reader and the writer, which is more valuable on both sides.

What surprised me as I was writing mine is that it did feel weirdly more intimate than writing an everyday story.

Do you get replies to your newsletter?

Only a few, but they thankfully have been more positive so far. I'm still worried that there will be an explosion of negative comments one day.

For what it's worth, something that we hear a lot as a surprising thing for people who write newsletters is that they're shocked at the difference in people who privately hit reply to the newsletter and the tenor of that. It usually just skews a lot more positive than the feedback they get in other places. And I hope it continues that way for you.

It's definitely something I worry about just as a female journalist on the internet. I've dealt with my share and have gotten used to dealing with it, but it was scary starting a newsletter in that I was maybe opening myself up to some more targeted harassment.

Totally.

What have you seen be important in terms of getting someone to open a newsletter?

One thing I would say about the open rate is, in the long run, it's a pretty good measure of how you are doing. If over the weeks and months your open rate remains good, that's a pretty good sign that you've got a valuable newsletter. In the short run, between one issue and another, it mostly indicates did you write a clicky subject, did you send it at the right time. You can't read too much into "this many people opened this one" and "this many people opened that one." But you can look over time and say "hey, I'm three months in and this thing still has a 50% open rate." That means people really like it.

What makes people read a newsletter?

That's a deep question. It comes back to developing a level of trust with the author. You get this feeling that I trust what the author will say, and they will have things that are interesting and relevant to me. I know that seems sort of hopelessly broad, but that dynamic works for people who are reading a business-focused newsletter about investing all the way to religious comedy. It's just a wide range.

Are people really writing that range? Can you give me an idea of what most people write about on Substack?

It's really broad. Something we wondered about early on, especially with paid newsletters: Will anybody pay for a newsletter that's funny or entertaining in some personal way? The answer is definitely yes. We have a really wide range of topics, everything from business to politics to religion to sports to comedy to poetry to music recommendations to comics. And the through line through all of this is that trusted relationship between the reader and the writer.

Chris Best "One of the cool things about this model is if you just have one newsletter that people want to read, that's kind of enough," says Substack CEO Chris Best.Photo: Courtesy of Substack

How do you convince writers to join Substack? Are you doing a lot of outreach to writers you like?

My co-founder Hamish [McKenzie] is himself a writer. A lot of the early days was reaching out to people he knew and the people they knew. There's sort of a two-fold come-to-Substack thing. One is like: "Hey you want to write a newsletter. We're specifically designed for that. It's not going to cost you anything to send, even as your list grows very large." And then the other is we do have this option where you can turn on subscriptions and, in doing so, you're unlocking this new and exciting business model for funding culture on the internet where you can write a newsletter for 1,000 people paying $10 a month for it, and it becomes real money, real fast. So you can create something that is very valuable to relatively not a huge audience.

Take me back to those early days. How did you convince the first people to join Substack?

One of the cool things about this model is if you just have one newsletter that people want to read, that's kind of enough. Hamish knew this guy Bill Bishop, who had been writing an email newsletter about China for years that was widely read and respected, and he had kind of been intending to do a paid thing with it. So we basically launched with one writer. We built the platform for one person and scaled it up.

How did you make the decision to raise venture capital?

This is a decision we came to pretty early, before we went to YC. Basically, we had this discussion of: Do we see this as being a cool niche business that can help some creators out, or do we think there's a fundamental shift in the media ecosystem that's happening here that will leave the world in a fundamentally better place and that we can have a hand in helping catalyze and shape? It's all very grandiose, but we just really do believe that it's a real thing. We're in an important moment of how we consume and fund writing and culture and [we thought] that we could make a bigger impact on the world if we built a venture company and went for wide scale and impact.

What was the fundamental shift you saw happening?

The way I think about this is like a shift in the attention economy. Basically, you used to be able to get bored. Before we had smartphones and the internet, you could be sitting at home and be like, gee I wish I had something to fill my attention with, this is boring. And sometime in the past 20 years between the internet and smartphones and the algorithmic newsfeed, we kind of ate up all of that. Every possible second that you want to be distracted, you now can be. Everyone has their attention already allocated, and the only way to improve your media diet is to pay attention more wisely, spending it on stuff that you think is actually more valuable, that's more trustworthy, that's a better use of your time. And if you have to spend money to do that and at the same time can fund the people that are creating things that you find worth your time, it just suddenly makes a lot more sense.

I went back and read the post where you announced that you'd raised funding and read all the comments. For many people, there's kind of a fear about media companies taking venture capital, and a lot of VC-backed media companies have ultimately failed. How do you think accepting venture has changed your business?

First of all, we don't think of ourselves as a media company. We think of ourselves as a platform that enables writers and readers. The main thing that's changed for us is the speed at which we can do things. We have always been sort of thoughtful about having a business model that works from day one and scaling the company at a rate that's sustainable. We have a lot of people that are building their livelihoods on Substack, and we see that as a weighty responsibility.

To your point about being a platform that enables writers and readers, Medium used the same kind of description of itself in the beginning, and then we saw it get into also producing its own original content. Do you have plans to get into the content space where you would be paying or sponsoring writers directly?

Not specifically.

What does that mean? I feel like that leaves the door open for some interpretation.

I'm not going to say we'll never pay a writer to write a thing. But that's not the core business model of what we're doing, and the model is working well for us now.

How have you seen your platform use change during this pandemic?

We've been in the fortunate position where things accelerated. In the first three months of the pandemic, we saw our revenue go up by 60% and readership and writership double. It's really a privileged position to be in a place that's increasing and having the numbers go up while there's so much craziness going on.

There's two overlapping effects. One is a transient thing where people are suddenly at home and are changing their routine, so they're finding time to read more or start their writing project that they'd been meaning to start. The other is that the sort of business model for writing that powers a lot of legacy media companies has not been working great for a while. I think COVID has accelerated some shifts that were already happening where existing newspapers weren't necessarily thriving anyway.

So what's the result of that?

There's more writers who are becoming independent. There are more writers who are looking ahead and thinking one day that would be a good option. And there's more readers who are out there looking for trusted voices and are happy to support the writers that are creating.

Platforms like Twitter and Facebook have been in the news recently because of Trump and his comments. What would you do if President Trump joined Substack and sent something similar to his comments around looting and shooting?

No comment at all.

But what do you think the role is for tech companies and platforms, like your own where you are dealing with writers and authors, in terms of stepping in and making these kinds of judgment calls?

It's complicated, and I think in the cases where you are a platform where you are massively deciding what people read by presenting it within a feed, that's a different calculus.

Compared to your own platform where people are actively choosing what they want to read?

Let me put it this way, I think there should be a higher bar for when you should go to someone and say, "Hey, I know you subscribed to Biz's newsletter, but we're going to prevent you from seeing that because Biz has violated our platform's terms of service" versus you're a random member of the public and you're coming to your feed and you're seeing this thing at the top of it. There's a different level of what the responsibility is there.

Is there an end to the newsletter boom? At least from my position inside the media, I feel like the industry has gone through waves where a few years ago it was all about video, and then it became all about podcasts, and I feel like the last year or so has been all about newsletters.

I think the underlying mechanics of "I'm a reader and I want to connect directly to the writers that I trust. I don't want that to be mediated by an algorithm that might not have our best interest at heart. I want to follow people I trust and support them directly" — I think that doesn't have an end in sight, and I think newsletters are a manifestation of that.

I think the way podcasting works is similar to the way the newsletter works, where you sort of decide to subscribe to it, and then it shows up. We're very bullish on that and think it's a large shift in how people will want to consume things.

To your point about podcasts having a similar dynamic, do you see your company becoming also a place for podcast subscriptions or monetizing podcasts?

We have a beta feature that lets you add a podcast to your newsletter and do a lot of that stuff. I think in the long run, this model of "I want to subscribe to things that I trust" isn't limited to the written word. I will say that our focus is on writers right now, that's what we know best.

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