Substack is Crowdfunding a 'Community Round'
Let's support other writers!
Hey Everyone, Welcome Back!
I sometimes feel like I’m growing up again as a writer on Substack. As someone who has written on a lot on platforms, I’m glad I came to Substack and can write pretty much on any topic that I’m truly passionate about.
The dream of being a writer, is not dead.
To be honest, Twitter is likely to fail, TikTok could get banned (I wrote something about this today for my AI Newsletter), things are changing on social media. I don’t think Medium has a long future either.
Substack is like crowdfunding writers we love! So why not give back?
Substack said today that it is starting a process that will let writers and readers invest in Substack and own a piece of the company. They say they are serious about building Substack with writers and readers and this community round is one way to concretize that ideal.
They will prioritize investments from writers first (like Bill Bishop did way back when), readers can also invest if there is room. Visit their page at Wefunder to learn more:
They also gave a lot of good information and transparency around their ecosystem in the pitch, which I myself very much appreciate.
So why invest in Substack? You are directly investing in writers. Substack is in 2023, the subscription network for independent writers and creators.
Cumulatively, readers have paid writers more than $300 million through Substack.
At the time of writing, they are up to $784,549. Their goal is 2 million with this crowdfunding round.
Their pitch is not unlike Medium when it first came out, and is a cause that I believe in. The last couple decades of the internet have created a media system in which writing has been economically devalued and advertisers have been served above all others.
Substack Stats
See their LinkedIn post here. You can retweet the post below if you enjoy this platform and want to spread the word.
Leading the “community round” are writers Bill Bishop—the first-ever writer on Substack, joined by Ted Gioia, Heather Havrilesky, Suleika Jaouad, Anthony Pompliano, and Polina Pompliano. No matter how small, other writers are surely likely to contribute.
I find the idea of writers investing in a writer’s network that’s scalable to a big variety of different topics and angles really pretty refreshing.
Writers typically make between $0.84 to $0.86 on the dollar depending on their ratio of monthly and yearly subscriptions from their readers via Stripe fees.
As well as Substack has scaled since the pandemic, this is a terrible time to raise more funds from a16z given the current Venture Capital and interest rate reality.
A Substack valuation of $585 million is high, but not outrageous.
The company says it’s on a mission to build a new “economic engine” for culture, and that to do this, it needs to build a kind of network that is based on principles that give control to writers and readers. Substack is focused on building a subscription network founded on creator ownership.
Here is the TechCrunch PR based on this.
17k paid writers isn’t bad, and it’s about what I thought in my own estimates, though some would have imagined it was way higher.
Today, there are more than 35 million monthly active subscriptions and 2 million paid subscriptions to writers on Substack.
2 million paid subs
35 million monthly active subscriptions
Over 17,000 paid writers.
More than 17 thousand writers are earning money on Substack, with the top 10 publishers on Substack collectively making more than $25 million annually.
Very impressive Substack!
As Substack scales, early writers really do get rewarded
That Bill Bishop invested in Substack years ago still blows my mind!
Substack is still small, but how it scales means it can empower hundreds and thousands of new writers each year moving forwards.
TLDR
So all this to say that readers have paid writers more than $300 million through Substack, and that the platform now has more than 35 million active subscriptions, including two million paid subscriptions. Substack also revealed that more than 17,000 writers are earning money on Substack, with the top 10 publishers on Substack collectively making more than $25 million annually.
Not bad for 5 years. A few have literally built media empires on Substack. In truth Substack has only been truly thriving during the last 2.5 years. It’s still very nascent.
Here’s a snapshot of their first few years according to them:
2017 Founded Substack.
2018 Graduated from Y Combinator (W18). Raised $2 million in seed funding.
2019 Raised a $15 million Series A, led by Andreessen Horowitz.
2020 Hit 100,000 paid subscriptions.
2021 Hit 1 million paid subscriptions. Raised a $65 million Series B, again led by Andreessen Horowitz.
2022 Added support for podcasts, video, and Chat. Launched the Substack app. Introduced Recommendations.
Thanks for reading!
Interesting. Could you expound on why you don't think Medium has a long future?