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Oct. 5, 2017, 9 a.m.
Business Models

‘Stratechery as a service’: Substack aims to streamline the creation of independent subscription news sites

What’s the most effective way to encourage more writers to start their own subscription sites? Reduce the time they spend doing anything that’s not writing, argues Substack.

Chris Best knew he was onto something with Substack when his personal trainer, after hearing Best talk about Stratechery, compared the site to The Quad Guy. That membership site is run by Julian Smith, a longtime bodybuilder who, for $6 a month, offers subscribers step-by-step exercise tutorials, dieting tips, and daily workout videos. “It’s basically Stratechery for your quads,” explained Best, referring to Ben Thompson‘s popular tech site, which has become the textbook example of a successful one-man publishing operation. “Once you get into all these niches, you realize that there are so many of them. The area under the long tail is huge.”

Substack is designed to encourage countless more writers to create their own variations on The Quad Guy/Stratechery model. The company’s name refers to its “stack” of software tools, which include blog and email publishing, payment collection, analytics, article sampling, and even forums and other community tools. Together, they’re meant to offer a more streamlined alternative to the typical process of cobbling together tools (MailChimp, WordPress, Stripe, Memberful) that are essential to making the small publishing model work.

Best, however, thinks people like Ben Thompson and Jullian Smith are unicorns — rare types of entrepreneurs who have not only the deep knowledge of a particular topic, but are also prolific content creators, smart business people, and competent enough in technology to string together the tools required to build their businesses. Substack is designed for everyone else. “If we could make it so that, of all of those things that these guys have to do, you just have to be a great writer and we can take care of the rest — well, that would be transformative,” Best said. “The vast majority of people who would be in a position to do this don’t necessarily have a picture in their minds of the pieces, on a technical and business level, that make a subscription publication work.”

Best and his co-founder Hamish McKenzie (himself a one-time reporter for tech site PandoDaily, which turned to subscription) see an opportunity for Substack in the chaos that has overtaken the media industry. While the Internet has broken down many of the existing media business models, it’s also made new ones — partially those built around niche areas — more feasible. Sites like Stratechery and The Quad Guy, though they’re focused on very different topics, are almost identical structurally: They’re built around a tight focus on a particular subject or sector, low overhead costs, and, most importantly, the deep expertise and personalities of their founders. With the Internet, these sites now have access to a far wider base of potential subscribers, meaning that even the most narrow of niches can be the basis for a sustainable, potentially wildly successful media business. The model has been apply widely, and to vastly different areas. Luke Timmerman has applied it to his coverage of the pharmaceutical industry, Nick Quah has done it with podcasts, and sports writers such as Bob McGinn, Jeff Gluck, and Joe Sheehan have applied it to specific sports and teams.

The success of these businesses, however tenuous at the moment, comes at a time when there’s growing appetite for high-quality content produced by trusted creators, and an increasingly willingness to pay for it. This is most obviously true for streaming video and music services like Netflix and Spotify, but it’s also true for many other kinds of content, as the success of many Patreon campaigns has shown (35 creators earned over $150,000 on the platform last year alone).

“The desire for quality has gone up as people have been flooded by content that lacks quality,” argued McKenzie. “It’s easy to be assaulted on a daily basis by crap that’s dressed up as journalism, but that’s also increased people’s appreciation for stuff that respects their time and intelligence, and people are willing to pay for that.”

Substack is “still in its larval” stage, its founders say. Best and McKenzie have only reached out to a handful of creators who they think could build successful publications with Substack’s tools. Some of those are creators who have existing free newsletters with large subscriber bases; others are writers with large fanbases who have recently been laid off from large publications.

The goal is to help these creators launch their own Substack publications, and to use their models to establish a proof of concept that will encourage others to jump on board when Substack opens up its platform in the future. These early creators will also be vital to the platform’s identification of best practices that later creators can learn from. Substack’s founders say that the company’s business model is fundamentally aligned with that of their writers: Substack will take a “small percentage” of revenue from subscriptions sold through the platform, so the more readers it can help its subscribers attract, the more successful the company itself will be.

“In the early days, a lot of it is about learning as a community,” Best said. “This whole model is so nascent that there’s so much more to be gained by growing the pie and everyone figuring out how to do this together. Getting publications to work together and share notes and promote each other’s stuff will help accelerate this future that we know is coming.”

Photo of a one-man band by Tbz.foto used under a Creative Commons license.

POSTED     Oct. 5, 2017, 9 a.m.
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