I’ll admit, I have a major soft spot for Substack. It’s home to some of the most electrifying writing online, and I happily pay for a few newsletters myself. However, as someone who’s looking to build a long-term business around my own writing, you couldn’t pay me to use the platform. The cost is too high, in more ways than one.

The critique that’s coming is going to be brutal. But first, a few acknowledgments, because Substack’s founders have indeed done something extraordinary. They’ve properly aligned the incentives between creators and consumers, unshackled some of the world’s best writing talent, and singlehandedly made the idea of paid newsletters cool again.

In a media ecosystem increasingly dominated by the loudest, most outrage-driven voices, Substack’s carved out a space where thoughtfulness reigns, and individual creators are rewarded for the depth of their contribution. It’s refreshing, and it gives me a glimmer of hope for the future of indie media.

Substack also deserves credit for how simple and frictionless their platform is. It’s the only tool I know where you can set up a paid newsletter in the next 20 minutes, even if you’re technologically illiterate. I doubt we’d have seen the explosion in quality writing this year had it not been dead simple to get started.

However, most of that praise comes from a consumer perspective. As a creator and entrepreneur, I’m perplexed and concerned by Substack’s seemingly endless list of shortcomings. Though it’s incredibly popular right now, I believe it’s important for ambitious creators to understand the downside before staking their claim on Substack.

Who do I recommend Substack for?

Before we get into the critique, I have to stress that Substack is not a bad piece of software. Though it’s a poor fit for serious creators, there are people who will get amazing value from Substack.

For starters, it’s the obvious choice for hobbyists. If you’re looking for a place to write, unencumbered by expensive marketing and website tools with features you’ll never need, go for Substack. It’s free, simple, and so, so easy to maintain. Plus, you can always turn on subscriptions if you want to generate a bit of side income. Just beware, if your intentions shift towards building a business, you’re going have to deal with all of the limitations below.

I’d also recommend it for creators who value simplicity and ease above all else. Personally, I enjoy getting into the weeds and finding the perfect tech for the job. I don’t mind a bit of extra complexity if it results in a better business for me, or a richer experience for my fans. But if all you want is to write and get paid, and you don’t have the time or temperament to piece together various tools, go with Substack. I still hope you’ll read the rest of this article, though, because there are very real tradeoffs you’re making with this approach.

Lastly, I’d recommend it for serious entrepreneurs who are looking to rapidly deploy an MVP for a paid newsletter. Maybe you’ve got a hypothesis for a newsletter you think would kick ass, but you’re not sure it’d work. Instead of investing the time to build your custom infrastructure up front, you can jump on Substack, publish a bit, do some marketing, and see if your hypothesis holds water or not.

I’m pretty sure that’s what Rosie Sherry is doing with her Substack. She used it to build a writing habit, validate that people will pay for great community-building content, and is now moving to a better set of tools.

Just beware, the longer you stick with Substack, the harder it’s going to be to switch. So I’d recommend using it for a few months at most, then migrating to a set of tools more suited to building a business.

With all of that said, let’s now get into Substack’s shortcomings for serious creators.

A pricing model that penalizes success

How much would you reasonably pay for the service that Substack provides? I’m going to keep coming back to this simple question throughout the article. So keep it top of mind.

Substack, of course, is free to start. Only once you monetize do they take a flat 10% out of your earnings. (And hey, if you never charge, you’ve essentially got a forever-free newsletter/blog hybrid.)

Assuming you’re just getting started with subscription media, this is an amazing deal. You get full access to a platform that would likely cost $30-100/month were it priced as a traditional SaaS tool. And you never pay anything close to that in fees until you’re bringing in real money.

This is part of what makes Substack so seductive. It’s not only easy to get started, but it comes with the veneer of being a great bargain.

However, as you start growing a genuine business around your content, and that 10% creeps ever higher, it becomes less obvious what value you’re getting in return for Substack’s fee.

Here are a few examples that demonstrate this well.

When I first started planning Ungated, I briefly considered building on Substack. After all, that’s where all the cool kids were writing. Then I started doing the math.

The plan was (and still is) to build a $10/month publication, and within a year, have 1000 happy customers. Yep, a year from now, I plan to be living the Kevin Kelly dream.

That’s $120,000/year in top line revenue. Of that, Substack’s take would be $12,000 annually, or $1,000 a month. (Keep in mind, this is simplified math that doesn’t take into account the additional 2.9% + 30¢ from Stripe.)

That hypothetical $12K annual fee—how does it strike you? Does it feel like a fair exchange of value with Substack? Are you getting your money’s worth?

For me, the answer was a clear and unambiguous hell no. And you’ll see why as you move through the rest of this post.

Let’s step it up a notch, and use another real life example to drive home the point.

As of this writing, Matt Taibbi has the third most popular paid newsletter on Substack’s leaderboard, with “tens of thousands” of subscribers. Now, by all accounts, Matt’s super happy with Substack, so this’ll be hypothetical. But it’s instructive nonetheless.

For the sake of easy math, let’s say he’s got 15,000 paid subscribers at $50/year. That translates to roughly $750,000 per year, without yet accounting for fees or churn or new subscribers.

That means, unless Substack cut him some kind of deal (which they’ve been known to do with high-profile journalists), Matt Taibbi’s singlehandedly paying $75,000 a year in fees.

Can we let that sink in for a moment?

That’s a year of tuition, room, and board at Yale University. That’s a middle manager’s yearly salary. That’s a brand new Tesla Model S. That’s an entry-level house in Detroit. Hell, that’s a full time employee—or several contractors—Matt could hire to help grow his media business (which he recently expressed interest in doing.)

Broken down, that’s $6,250 per month in fees. If Matt posts twice per week, he’s essentially paying Substack $781.25 every single time he publishes.

For what?

Is Substack, as a platform, delivering a fraction of that much value on an ongoing basis? Sure, it’s easy and low-maintenance, but how much are those things truly worth? At what point are you flushing money—that you’ve rightfully earned by delivering value to your fans—down the toilet?

Again, I would like you to consider the question: what would you reasonably pay for the service that Substack provides? $50 a month? $100 a month?

In 2020 as I write this, the market for “passion economy” software is exploding. Anyone can now piece together an email, membership, and website tech stack that is far more capable than Substack, and only pay $15-200/month.

For the creators who succeed on its platform, Substack really has to deliver something above and beyond to justify taking 10% in perpetuity. And I don’t see much evidence of that.

In fact, as we’re about to see, the sky-high fee is just the tip of a very depressing iceberg.

Update: After chatting with someone at Substack, it seems they do offer ongoing benefits to their higher-earning creators. It just isn’t advertised anywhere. Those benefits include things like health care, legal defense if you get sued, and design/marketing help, which are indeed hugely valuable. I’d hope for more transparency from Substack as to how creators can qualify for any of this, because right now, it’s very unclear.

In a world that rewards uniqueness and personality, Substack forces sameness

I’m subscribed to roughly eleventy thousand Substack newsletters. That number has actually grown since I started writing this article. I’ve clearly got an addiction, and someone should stage an intervention ASAP.

Jokes aside, the moment you subscribe to more than a handful of Substack newsletters, you’ll notice something rather alarming—they all start to blend together.

They all look and feel the same. The user experience is the same (and not very good, as I’ll detail later). And hell, the content itself is even starting to blur together, given that it’s mostly tech/media/politics folks on the platform.

Even the strongest, most thoughtful writers start blending in with one another, as they have almost no discernible brand. And in a landscape with more people becoming indie creators each day, that is a seismic fucking problem.

Let’s back up a moment.

One of the core principles of succeeding in the modern creator economy is that your work needs to be genuinely worthy of people’s attention. We live in a world of media abundance, and if you want to be seen as signal in the noise, you need to be different or better in some way.

A big part of that is honing in on a specific niche, or finding your “personal monopoly” as David Perell would say.

But another, equally important part is finding ways to inject your personality, values, and aesthetic sensibilities into everything you do. In other words, it’s about having a unique, discernible brand.

On Substack, you can kiss that possibility goodbye from day one.

In fact, Substack gives you so little control over your design and brand that it’s actually a bit comical. You get the option to upload a logo, and choose from one of, like, two dozen accent colors. That’s it.

I don’t know about you, but as a creator myself, I have exactly zero desire to be “yet another dude with a Substack newsletter.

Not only is it counterproductive from a marketing and branding standpoint, but it’s antithetical to being a creative. We’re all unique to some degree. And the internet gives us nearly unlimited avenues to express that uniqueness, and use it to attract and retain fans.

When you choose Substack as a place to build your business, however, you’re working to build their brand for them. They dictate your design. Their logo and name appear all over the place, including your URL.

And, to top it off, you’re paying 10% in perpetuity for the privilege of being “yet another Substack newsletter,” all while you build their brand for them. Pretty cool, huh?

If it were a traditional SaaS tool, how much would you pay for a service like this?

A poor UX that makes it harder to earn the long-term affection of your fans

Having signed up for dozens of Substack newsletters at this point, there’s one recurring UX pattern that makes me want to smash my computer in a fit of hulk-like rage.

I often find good pieces on Substack, and decide to subscribe to that writer’s free list. However, the moment you opt-in, the very next screen asks you to commit to a paid subscription.

Look Louis, you seem great and all, but I just gave you my email like 3 seconds ago. IS THAT NOT ENOUGH FOR YOU?!!

It’s like asking for marriage after a reasonably pleasant first date. Someone just took the step of giving you their email, and Substack forces you to say “That commitment you just made isn’t enough. Give me money now.” It’s off-putting. It’s presumptuous. And it undermines the relationship capital you just accrued with great content.

Building a creator business is a long game. It’s about doing great work, attracting people into your world, building relationships, and then giving people a great offer when they’re ready. As the old marketing saying goes, it’s about “sending the right message, to the right person, at the right time.”

With Substack, it’s impossible to create that kind of user experience. It makes an offer by blunt force far, far too early in the relationship. As a creator who cares about creating a welcoming UX for my peeps—where every touch point deepens the relationship—this pisses me off.

You’re basically forcing everybody who signs up for your free list to make a binary choice—should I pay for this content or not—before you’ve ever had a chance to cultivate an ongoing relationship with them. For the vast, overwhelming majority of consumers—most of whom aren’t accustomed to paying directly for media—this makes it easy to say no.

Again, I ask: How much would you reasonably pay for the service that Substack provides?

An email tool that gives users none of the marketing power of email

Email is, without a doubt, one of the most magical marketing channels known to man. Not only do you truly own your list, but modern email software gives you an incredible number of tools to segment, automate, and ultimately delight your fans. It’s the single best channel for turning a casual reader into a customer and then into a lifelong superfan.

Given how powerful email is, you’d think that Substack—an email-focused platform for selling direct to fans—would want to give creators at least a little bit of this power.

But nope.

Substack’s entire automation capability is that you get to tweak the copy in your welcome email. And I’m pretty sure it’s the same email for both new free and paid subscribers. That’s it.

There’s no segmenting. There’s no sequencing. There’s no meaningful automation of any kind. You get your welcome email, and then you live in broadcast city for the rest of eternity.

You can’t even send targeted messages to different segments of your list. For instance, if you wanted to run a campaign to urge monthly members to upgrade to annual, you’d have no way of doing that. Nor can you send messages to just annual members, if you wanted to invite just them to a community Zoom call.

At the very least, I would want a customizable welcome sequence, where I can drip out my best content to new subscribers on a regular schedule. I’d also want one for new paid subscribers, to help them get the most out of their membership.

To make matters worse—and this could be a section of its own—Substack is completely closed off as a platform. It’s not like you can connect Zapier and use another email platform for automation. You’re either using Substack’s email functionality, or you’re using something else. There is no in-between.

You already know the question I’m going to ask. Is this something you’d happily pay 10% for?

(Sidenote: If you want to get deep into mechanics of using email automation to build relationships, I can’t recommend André Chaperon and Brennan Dunn highly enough. These dudes are email wizards, and they do it with the highest integrity, all with a focus on serving and delighting customers.)

A comments section is not a community

This one’s more of a nitpick. But since Substack positions itself as having “community features,” it’s worth digging into a little bit.

At its core, community is about connection. It’s about creating an ecosystem where people feel safe to have conversations, form relationships, and help one another towards a shared vision of the future. Real community is spontaneous and emergent. It’s more about your people interacting with each other than it is about you.

What Substack has is a comments section. You publish something, then people leave comments. You can also start a thread, which is basically the same thing as an article, but it’s directing people to discuss a topic.

This is a top down, rather authoritarian approach to community. People can discuss things, sure, but only when you explicitly allow them to. If your fans want to find, connect with, and converse with other like-minded audience members outside of that structure, they’re shit out of luck.

And hey, there’s nothing wrong with having a comments section. In fact, Substack has some of the more constructive, engaged comments sections anywhere online at the moment. Kudos to them for that.

But it’s fundamentally different thing from a community. It’s you, as the creator, dictating the rules of engagement and the discussion topics from on high. If you truly care about building a community, you’ll need to look elsewhere.

A grab bag of additional shortcomings

In the words of the late, great Billy Mays, “But wait, there’s more!”

Here are a few smaller annoyances and limitations of the Substack product. These don’t necessarily need their own section, but are still worth pointing out.

  • The whole product is engineered as newsletter first, with the web experience seemingly treated as an afterthought. Frankly, I think this is a mistake. A nice newsletter experience is important, but your biggest opportunities for growth and marketing come from having a killer web presence.
  • As a creator, there’s no way to tag or categorize your content. It all just blends into one never-ending reverse chronological feed. This is fine at first, but after a year or two of consistent writing, your new fans will have no accessible, topical way to access your vast archive of goodies.
  • Everything has to be sent as an email. You can’t post some things to the web, and send others as a newsletter. Again, this is a frustration resulting from the newsletter first approach.
  • You get exactly zero control over the URL slug for each piece of content. This isn’t a huge deal, but it has some bearing on SEO, especially if you want to include target keywords that aren’t in your headline itself.
  • You can’t put an email gate on free content. This is such a massive missed opportunity for creators looking to grow their free lists. Then again, given there’s no meaningful automation on the backend, you’re not missing out on that much opportunity here.

In terms of the software itself, these are the limitations you should know about before committing to build a business on Substack. But there’s one last thing that gives me pause. The funding.

I don’t trust VC-funded companies that step between creators and their audiences

There’s a long, rich history of creators being used, then abused by major tech platforms. The most obvious example is facebook, who for years told brands and creators alike to build up a presence, only to rip away their ability to reach followers organically. Now it’s pay to play.

Medium is another great example. Throughout the years, they’ve lured plenty of top talent and publications to the platform, and lost most of them through sheer jackassery. Despite lots of puffy, idealistic language around setting writers free, Medium has a nasty streak of inviting you in on false pretenses, then being like, “Oh wait, we have a different business model now. Sorry! ¯\_(ツ)_/¯”

Their shenanigans continue to this day. Here’s John O’Nolan, founder of Ghost (which is the best alternative to Substack for most people) pointing out yet another new way that Medium is screwing creators by locking them further into the platform.

Point is, any time you put a company between you and your fans, you’re taking on a risk. And certain categories of companies come with more risk than others. For me, VC-backed tech companies are at the very top of that list.

But let’s back up a little bit.

In mid-2019, Substack raised a $15.3 million Series A round led by Andreessen Horowitz.

The reason this worries me is that VC money, by definition, comes with a set of expectations around growth and returns. Substack can no longer be a nice lifestyle company that stays aligned with and fights for creators, growth be damned. They have a new set of stakeholders to consider now, whose priorities might well differ from creators.

Right now, Substack is absolutely gracious and sincere towards the creative community (minus the obnoxious restrictions outlined above). But you own your data and customers, and you’re free to leave at any time.

But peering down the road a year or three, it’s not hard to imagine Substack tightening the screws on creators because they need to increase revenue to justify their valuation.

Nor is it hard to imagine their legal or “trust and safety” department declaring certain types of content or topics as non-kosher, and booting those creators off the platform with no warning.

As the old saying goes, “Fool me once, shame on you. Fool me twice, shame on me.”

At this point, creators should be incredibly wary of the companies they put between them and their fans. Given how restrictive Substack’s platform already is, and given their VC-backed status, I’m willing to bet it’s not a case of “if” they make decisions that hurt creators, but “when.”

One last time, I’d like to ask. What would you reasonably pay for the service that Substack provides? Is it the kind of place you'd feel comfortable building your own business?

What should you use instead?

If it’s not clear by now, I don’t recommend Substack for serious, entrepreneurial creators. I believe wholeheartedly that choosing this platform for your livelihood is a shortsighted move. It’ll give you some quick wins and a bit of instant gratification up front, sure. But it’s a decision that’ll cost you big in the long run, in more ways than one.

All of this begs the question, what do I recommend instead?

Well, dear reader, I’ve spent the bulk of 2020 trying to find the perfect tech stack for both Ungated, and for another media business I’m building. And I’ve landed on two distinct solutions for each one.

I’ll share that journey, along with my various recommendations, in the next article. See you over there.

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