I was reading an interview with a tech CEO the other day when I had to stop and ask my wife a question.
“The phrase ‘we only make money when you make money’—that’s MLM talk, right?”
“Oh, one hundred percent,” she said, without pausing. She would know. Following the wacky world of multilevel marketing businesses (pyramid schemes with extra steps basically), is one of my wife’s hobbies. (My wife is weird.)
I kept reading to her. “And then for this guy to say that, then follow it up with talk about earning millions of dollars at home, with your own business—is that also an MLM move?”
“That’s the MLM move,” she said. Now she was curious. What wild new scam, she asked, was I looking at? What newly-minted pharaoh was raising pyramids in the desert?
“Chris Best,” I said, “the CEO of Substack.”
Best had just said those things in an interview with The Verge while describing their business plan. “We take 10 percent as the fee. That’s how we make money. We only make money when you make money. And so, at some point at the start, that was a great deal. People are like, ‘Oh, it’s free. I can publish my email. This is a wonderful thing.’ And then they start making millions of dollars a year…”
I read this back to my wife. “Oh, that’s bad,” she said.
“It gets worse,” I told her. “They’re launching a Twitter knock-off.”
“That’s really bad,” she said. “They must be desperate.”
Substack really wants me to tell you about Substack Notes. Substack has been really good to me, so I’m going to respect their wishes and tell you about Substack Notes: I don’t like it, and I have no faith in it.
At its core, Notes is an online feed for Substack users (both readers and writers) to post links, images, short texts, and other kinds of content. A user’s network expands in two directions: upward, towards writers they subscribe to, or downward, towards people who subscribe to them. I can see what my subscribers post (Hi, subscribers!) and what the people I subscribe to are posting. You can like a note, comment on it, and share it.
The idea here, obviously, is to make a better, less-obnoxious, more-focused version of Twitter. If you have an idea that’s too short for a full newsletter, or want to share something that you think your subscribers will enjoy, or continue a conversation inspired by somebody else’s newsletter, you open up the Notes page, fire off a Note, and before you know it you’re engaged in fun, stimulating, chronologically-sorted social media with friends and like-minded strangers like it’s 2009 all over again.
Notes is supposed to be prelapsarian social media, not yet corrupted by the sins of advertising, algorithms, pile-ons, troll farms, clickbait, thirst traps, super-threads, clap emojis, reaction GIFs, quote-tweets, DM-slides, hashtags, humblebrags, sponcon, ratios, and everything else that has made social media a reeking, sulfurous hellscape.
Notes will be different! Notes will be pure! Notes will let social media be social again! Finally, we will have a writer-focused social media site where writers can be writers. But Notes will not succeed—or at least, it will not replace Twitter as the social network for writers, journalists, researchers, bloggers, and readers.
The biggest problem is Substack’s business model. Despite their CEO’s best efforts to present it as one, Substack is not a pyramid scheme. The company’s core newsletter product is, essentially, enterprise software: in exchange for using Substack’s wonderful, intuitive newsletter architecture, the company takes a small cut from all subscriptions to keep the servers running and the lights on. This is a fine business model, and Substack has a fine product, which is why I use it.
This model doesn’t translate very well to social media, though. The lack of advertising money means that pure attention has much less currency: this is good, insofar as it pushes out the kinds of lunatics who can make a living just by being the loudest jackass on Twitter, but it also means that Notes’s core users will inevitably need to use their platform to push subscriptions. A Substacker’s Notes feed will inevitably look like a legacy publication’s Twitter feed, with bits and bobs of goodies for casual followers, along with paywalled links and enticements to subscribe.
If Notes winds up being nothing more than billboards for good newsletters, this isn’t such a bad thing. It’s hard to imagine, though, that fun, thriving communities will form in a place built on intellectual windowshopping, where every enticing door is locked behind a $10 monthly fee. Perversely, the more successful Notes gets, the more expensive a proposition it will be. And this is coming at a time when subscription fatigue is already high.
Organizing communities of readers and writers, which is Notes’s goal, is also hamstrung by the fact that very little of the internet is actually on Substack. If you only read writers and creators on Substack, you can go far with a Notes community, but I suspect the vast majority of users belong to other groups with zero presence on Substack. Why silo off a few of your interests on a weird little Substack social media platform when you can consolidate most of your interests on a well-organized Discord channel or subreddit? After all, making a Discord channel has been the default form of community organizing for Substack from the beginning.
And all of this is skirting around an obvious issue, related to the Verge interview quoted above: Substack doesn’t seem ready to moderate a large social media network. While I was struck by the MLM-like language of the CEO, most readers were focused, with good reason, on his exasperating refusal to lay out a clear plan for content moderation.
Interviewer Nilay Patel asks what was intended to be a softball question—what’s the moderation process for the Notes team when somebody posts something like “We should not allow brown people in this country?”—and Best responds with vague mumbling about protecting free speech and a bizarre, blanket refusal to answer the question. The whole thing has to be read, but here’s a snippet:
You have to figure out, “Should we allow overt racism on Substack Notes?” You have to figure that out.
No, I’m not going to engage in speculation or specific “would you allow this or that” content.
You know this is a very bad response to this question, right? You’re aware that you’ve blundered into this. You should just say no. And I’m wondering what’s keeping you from just saying no.
I have a blanket [policy that] I don’t think it’s useful to get into “would you allow this or that thing on Substack.”
If I read you your own terms of service, will you agree that this prohibition is in that terms of service?
I don’t think that’s a useful exercise.
And it only gets worse from there. As Patel points out, major social media networks employee small armies of contractors with advanced software to resolve moderation disputes and take down posts that violate copyright laws, at great cost. Substack, meanwhile, only employs about eighty people in total. And the costs of moderation, as Patel points out in the interview, scale exponentially with growth. The more diverse and large your network, the more moderation headaches arise.
And there are real consequences for failing to moderate your app: Truth Social, Donald Trump’s own goofy take on a Twitter clone, has been repeatedly blocked and removed from app stores for failing to comply with their content moderation policies. Substack may or may not be ready to police its users, but Apple and Google will gladly do it for them by blocking the app entirely.
So there are a lot of reasons why I think Notes isn’t going to succeed. I have no doubt that Substack is staffed by good people making a product they believe in. At the same time, I am probably a bullseye for their target audience—terminally online thirtysomething professional with a writerly bent—and all I can see are red flags. I’ve focused here so far on why I think Notes as a product isn’t likely to succeed, but it’s important to answer an even more basic question: why is Substack doing this?
And the answer is very simple: Substack is overvalued, and failing to return on investment. In 2021, at the peak of the newsletter boom, the company was valued at $650 million, and given a giant infusion of $65 dollars. A year later, the newsletter bubble burst, the company laid off 14% of its workforce, and Substack got so eager (read: desperate) to meet its valuation that it asked users to invest directly in the company.
Substack is a very fine email newsletter company, but newsletter companies don’t have nine-figure valuations and change the face of online media, as Substack wants to do. So the newsletter service has seen substantial feature creep: podcasting services, a chats widget, a recommendation engine for writers to shout out other writers, an Explore tab to find new writers and posts based on your existing subscriptions.
And now, there’s Notes. Substack’s goal is clearly to get you to spend more time on the Substack app, because they have calculated that more users spending more time on the app generates more subscriptions, which generates more revenues, which staves off the yawning, abyssal despair of operating a product overvalued by half a billion dollars.
The problem is, at every step, the company seems to get farther and farther from its original product—really good email newsletters and a way to consolidate paying for them—and make an app that looks more and more like a pale imitation of the rest of the web.
And that’s just sad. I really like Substack as a newsletter platform. But I like it as an invisible platform, a bit of online architecture that simply works, and gets me where I want to go, like my email client, my RSS reader, or my notes archive. I want that part of Substack to succeed, not with wild tumor-like growth, but in a slow, steady, and sustainable way. The market, however, doesn’t want slow and steady, and I fear Substack might soon go the way of Medium, turning into a confusing, algorithmically-sorted mess.
I’m going to continue using Substack, but I’m also going to save backups of my essays and subscribers list, and plan for the worst.
And, of course, I’m not going to use Notes.
From the Archives
Speaking of a slower, more sustainable web, last year I investigated the possibility of navigating the web using only unlit e-ink displays that mimic the appearance of text on paper. Conclusion: the Printernet is possible.
That’s all for this week. Happy reading!