Most startups if they fail to scale their product to many users and find a great audience, eventually get acquired.
It’s somewhat likely that this will be the fate of our beloved Substack.
While you might argue they have found product-market fit in Politics or Finance, for most categories there’s a limited number of Creators. The dynamics of why this is rarely debated or covered, or that this is even the case is somewhat taboo.
However in an era where media has gone behind paywalls and Newsletters and podcasts drive a lot of traffic, revenue and opportunity for Media firms and walled platforms alike, who stands the most to acquire Substack?
I find it a reasonably interesting hypothetical question if you care about the future of media and indie journalism. Even if you care about the future of blogging and think about who might be most valuable to Substack to enable them to scale with financial, technological and platform integration?
Traditional media, social media, a Creator Economy company or/and even a Web3 (e.g. NFTs) platform could all benefit from Substack as part of their product, while at least at the beginning remaining true to Substack’s ideological narrative, however true it may or may not be.
Who would stand to gain the most from a Substack acquisition frankly? Whatever the potential valuation of the business, which is also debatable.
I’m not a media expert or a social media expert, but here are some of the names that come to mind: (indulge me if you have better names, and why?)
Cox Enterprises
LinkedIn (Microsoft)
The New York Times
Binance
OpenSea
Twitter
Meta (Facebook)
Substack has an architecture that could grow into a media empire of its own. With its limited funding it’s highly unlikely to scale well during the 2022 to 2025 period. This will put it at considerable risk to get acquired in the 2022 to 2026 period, before it even goes public.
I could see another big bet of a16z being a suitable acquisition partner. Especially if a leading NFT platform found a way to make Substack’s monetization problem a little bit more viable for writers and micro niche Creators around the world.
Thinking about a hypothetical Substack acquisition also helps one think about the future of the ownership economy and the future of media itself. Some aspects of Substack’s SaaS model are sound, but there are some missing pieces.
LinkedIn or the New York Times would most likely be the best companies to help fine tune those missing pieces of Substack’s growth story. This is just my opinion. I would conservatively say that Substack has a 40% chance of being acquired in the next three years.
I've been on this bandwagon since the beginning of Medium and LinkedIn's Newsletter product. I'm not exactly sure how Substack's ideology is not a clone of Ev William's early Medium ideology?
Perhaps someone can explain it to me. If your Manifesto reminder is taking in some parts word for word the keywords Medium used or uses, it's a bit weird.
While I do prefer the SaaS model of direct Creators2Audience communications, the language is about the same. The problem with this of course is some of us have already been let down by how Medium turned out.
It's been a long road for bloggers or writers online during the past decade. It's not that we don't believe in the idealism, it's just that our experience with various ecosystems has been underwhelming. The hype vs. the reality is always somewhat problematic.
Substack has a chance of remaining true to its ethos, but that glimmer of hope is getting a bit dimmer in these economic macro conditions I would argue.
I wonder if Substack has synergy with Twitter though with all the political content, journalists and the like? Twitter Notes, Twitter threads could have some great synergy with Substack's "stack" of Creator tools.
I'm not sure Revue was the best fit for Twitter to be honest.
Interesting though Amihai that you are the 2nd person to name Google.
Yes it's a bit worrisome, especially if you pretend to be other than what you are. Small startups often feel very different from Silicon Valley, but they tend to grow into it. The pressure to grow fast is immense when you have VC backers - a16z is a special beast.
Writers and artists are an underdog in today's internet. Even the majority of Creators are exploited for very little pay.
It is extremely hard to witness the cold world of business compared to the writer's soul.
Yes that is a really good point. Some of the co-founders do seem idealistic about what indie media could become. Medium founded in 2012 had very similar values starting off, and they have lasted a decade independent, however they also have a Tycoon Venture Capitalist founder!
If only Substack was more transparent about their growth and actual number of Creators and unique readers, it would be easier to evaluate.
As many pandemic beneficiaries, the demand curve I imagine must have slowed down considerably after the pandemic lockdowns.
That they delayed their next funding round due to harsher VC and funding conditions is most worrisome. There's no doubt Substack is undergoing a rough patch, it's make or break time for the product and leadership team on multiple levels.
Certainly you are right though, part of Substack's charm is its indie feel and ideological branding.
Sometimes it's good to make people believe in dreams.
The ownership economy could one day scale into an architecture that's a true meritocracy but then it would likely not have elements of a being a pyramid or a ponzi scheme.
I've been on this bandwagon since the beginning of Medium and LinkedIn's Newsletter product. I'm not exactly sure how Substack's ideology is not a clone of Ev William's early Medium ideology?
Perhaps someone can explain it to me. If your Manifesto reminder is taking in some parts word for word the keywords Medium used or uses, it's a bit weird.
While I do prefer the SaaS model of direct Creators2Audience communications, the language is about the same. The problem with this of course is some of us have already been let down by how Medium turned out.
It's been a long road for bloggers or writers online during the past decade. It's not that we don't believe in the idealism, it's just that our experience with various ecosystems has been underwhelming. The hype vs. the reality is always somewhat problematic.
Substack has a chance of remaining true to its ethos, but that glimmer of hope is getting a bit dimmer in these economic macro conditions I would argue.
Fair point. It has to do with the connections the investors has more than anything else (unfortunately)
I feel Google can show serious interest because inwardly they need a platform to check models beyond adds.
Wild guess though
I wonder if Substack has synergy with Twitter though with all the political content, journalists and the like? Twitter Notes, Twitter threads could have some great synergy with Substack's "stack" of Creator tools.
I'm not sure Revue was the best fit for Twitter to be honest.
Interesting though Amihai that you are the 2nd person to name Google.
Personally it’s sad for me to see the game of “ idealistic capitalism “
I truly hope they won’t sell their soul
Yes it's a bit worrisome, especially if you pretend to be other than what you are. Small startups often feel very different from Silicon Valley, but they tend to grow into it. The pressure to grow fast is immense when you have VC backers - a16z is a special beast.
Writers and artists are an underdog in today's internet. Even the majority of Creators are exploited for very little pay.
It is extremely hard to witness the cold world of business compared to the writer's soul.
Been in this world most of my life… learned the vanity of it and started to write ;-)
I actually think that Google will acquire Substack. Let's check back in a few years time and see if I'm right! 😃
Well at least that would be a nice SEO boost heh!
Hehe true!
Not a knowledgeble expert in acquisitions but I hope not since bigger does not ususally man better.
Yes that is a really good point. Some of the co-founders do seem idealistic about what indie media could become. Medium founded in 2012 had very similar values starting off, and they have lasted a decade independent, however they also have a Tycoon Venture Capitalist founder!
If only Substack was more transparent about their growth and actual number of Creators and unique readers, it would be easier to evaluate.
As many pandemic beneficiaries, the demand curve I imagine must have slowed down considerably after the pandemic lockdowns.
That they delayed their next funding round due to harsher VC and funding conditions is most worrisome. There's no doubt Substack is undergoing a rough patch, it's make or break time for the product and leadership team on multiple levels.
Certainly you are right though, part of Substack's charm is its indie feel and ideological branding.
Inevitably, decentralized platform that was not designed by corporations, will win.
I don’t know if in our life time, but I am ready for it.
Sometimes it's good to make people believe in dreams.
The ownership economy could one day scale into an architecture that's a true meritocracy but then it would likely not have elements of a being a pyramid or a ponzi scheme.
It’s not pyramid for sure. I have a design for it. It’s more like a fractal
A kaleidoscopic fractal would not be bad.