In addition to communication services, as a communication tool, what else can e-mail be used for?
A16z-backed project says email can not only be made into a subscription platform for paid content, but also make a company a quasi-unicorn in Silicon Valley.
The platform, called Substack, was launched in 2017 and was originally tepid, but it ushered in explosive growth during the epidemic.
Today, in the United States, many well-known journalists have left the media they have worked for many years to join Substack, and a large number of scholars, writers, and artists have also flocked to Substack.
Last December, Substack had only 250,000 paid subscribers. Not long ago, the official announcement exceeded 1 million. It tripled in one year.
In March, Substack also completed a Series B financing of $65 million, led by A16z, with a post-investment valuation of up to $650 million.
In contrast to high valuations and high growth, Substack's function is simple. Anyone can write articles on it, produce paid content, and email it to subscribers.
Such a simple, even somewhat "ancient" product, why are creators, users, and capital willing to pay?
There is no shortage of free content for users, so why spend money on Substack?
$5 is the starting price of the subscription fee, depending on the author. For example, there is a column focusing on meditation and mental health for $5 a month. A column that discusses the cryptocurrency and blockchain industries is priced at $50.
Substack's creators are diverse. There are many journalists who are good at writing about current politics, culture, sports and other fields, including authors who write serial novels, and practitioners in various industries such as drawing comics, teaching bartending, and making bread.
The internet is not lacking in content, especially free. How does Substack keep users kryptonian for content?
In this regard, Chris Best, the founder of Substack, has a saying, "Creating content on Substack has a sense of customization."
Substack's official website shows | Substack
For users, this sense of customization is reflected in the fact that they have reached a new type of relationship with the creator. The two sides can interact more directly. Users can even participate in content co-creation.
For example, a creator in the food industry has created a community for subscribers on discord while running a Substack paid column. She chats regularly with readers to gather questions that interest them, as well as the material stories they provide.
The content consumption of the Internet is slowly changing in this intensive and direct interaction. The earliest was "what institutions do, what we look at". Now it's "what the algorithm recommends, what we look at". The future could be "what I want to see, the creator will do".
A more direct example is on onlyFans, a competitor to adult video site Pornhub, where users can now tip directly for customized content that allows creators to shoot pornographic footage of specific costumes and scenes.
At this time, in the user's mind, what is more prominent is the creator's personal brand, rather than the platform brand. The logic of users paying for content is no longer to become a member of a platform, but to pay for the personal brand and buy the content products it offers.
As a result, in terms of functional iteration, Substack does not strengthen the possession of content, as well as the control of creators and users.
Paid content is sent directly to the user's personal email. Authors can export subscribers' mailboxes at any time. If you don't want to create in Substack, you can continue to send emails to this group of readers on a different platform. This has even become its promotional advantage in attracting creators.
Substack is well aware of its positioning under the new logic, not to recreate a social platform like Facebook, but to become a base station for creators to incubate personal content brands.
"I can't lose my job until thousands of people fire me."
Thirteen years ago, Kevin Kelly predicted that "to be a successful creator, you don't need a million followers, you just need 1,000 hardcore fans."
Hamish McKenzie, another co-founder of Substack, said, "Even if you create content that is particularly vertical and valuable only to minorities in a particular area, assuming you price it at $5 per month, as long as 1,000 people pay, your annual revenue on substack is enough to exceed $50,000."
It is understood that the top ten paid columns that are currently subscribed to on Substack have a combined annual revenue of up to $20 million. 500,000 users paid to subscribe to at least one column.
On Google, searches for "substack" have grown by 1900% in the past two years. This has increased by 500% in the last year alone.
Nowadays, this model of followers directly giving money to creators is becoming an entrepreneurial outlet.
In April, Patreon completed $155 million, post-investment valuation of $4 billion. Artists such as musicians, writers, illustrators, and more are brought together on Patreon, and fans can access their artwork through a monthly subscription fee. Patreon wanted to let artists get away from the advertising monetization model and create freely.
At the same time, a product called Cameo also received $100 million in Series C financing. Cameo is very popular among Generation Z, and users can pay 5-3000 US dollars to get customized video content for celebrity groups such as actors, influencers, athletes, creators, reality TV stars, etc., which is another attempt to "connect direct fans".
The "creator economy" that emphasizes the individual is emerging. Geek Park previously reported that "creators cover practitioners with certain expertise in various segments and industries from the top stream." Content consumers, fans, and users in a broader sense. Not only are traditional top-down star-chasing fans, but there are also more democratized supports such as one user for another or similar creators."
In this regard, media person Packy McCormick analyzed that the individual is the atomic unit of the Internet economy. The creator economy is about empowering individuals to do more on their own. Packy McCormick even made a bolder judgment that "in the near future, there will be a trillion-dollar company with only one full-time employee, the founder himself."
This idea coincides with Chris Best's vision of founding Substack. Chris Best says, "What Substack is about not going to be a media company, it's about helping creators set up a million media companies."
And one media personality who has successfully transformed in Substack also emphasized: "In the past, a quarter of bad advertising revenue could have cost me my job. But today, only if thousands of people decide to fire me can I really lose my job."
Is Substack subverting the Internet creative economy?
The rise of Substacks is reminiscent of RSS, which was popular twenty years ago.
However, RSS tools are very demanding for users. First, users need to have a stronger ability to organize information and know exactly where they want the information. Second, users should regularly organize their subscription sources and control the number of RSS feeds.
Not many users can meet these two conditions. Therefore, the users of RSS products are also limited to a small number of groups such as geeks and media practitioners.
In addition, RSS weeded out advertising and did not find a more reasonable business model for alternative advertising. In 2013, Google Reader announced its shutdown, indicating that RSS was temporarily withdrawing from the historical stage of the Internet.
Chris Best is a fan of RSS reader readers in its own right. As a result, Substack inherits the core benefits of RSS by promising not to use algorithms to recommend content or bundle different paid emails without the author's permission.
Substack's three founders, Hamish McKenzie, Jairaj Sethi, Chris Best, | Substack from left to right
In addition, Substack is also exploring a more reasonable monetization model in addition to advertising.
Currently, Substack charges a 10 percent share of user subscription revenue from calling creators, as well as a 2.9 percent credit card transaction fee. In addition, Substack has launched a project called "Substack Pro".
The project pays authors an upfront fee for a year to support them in launching their own columns. In return, in return, Substack will take a larger percentage of the author's subscription revenue, and then in the second year, it will return to a normal 10 percent share.
Chris Best believes that this model is subverting the current Internet creation economy.
The problem with today's content platforms, as well as social platforms such as Facebook, is that they rely too much on advertising revenue. The most straightforward way to increase ad delivery is to show users what they are most likely to click on.
Chris Best says this ad-driven attention economy creates a form of bad competition, with people creating eye-catching content around algorithms rather than creating what they think is the best quality content. This is what Substack wants to change.
The core mechanism of email subscription is manual recommendation. Before each email is sent, it undergoes manual information collection and information filtering. People who write emails aggregate information along with their own analysis and opinions about the information.
Twitter acquired Substack's rival Revue earlier this year. Facebook also launched Bulletin, an app similar to Substack, in July. The email subscription model is also regarded by giants as an optimization of the content distribution system in addition to the algorithm recommendation.
Chris Best emphasizes, "Today, creators can harness the power of the internet to achieve direct contact with their audiences and reduce the negative impact of the attention economy through changes to incentives."
Header image source: TR
Editor-in-Charge: Jing Yu