We Have to Talk About Substack

E.M. Rogers developed the Diffusion of Innovation Theory in 1962. According to the theory, people fall into one of five categories when adopting a new idea, product, or innovation. In today’s world, it’s often used to describe the adoption of new networks, platforms, or products.

Arranged on a bell curve, the five categories are:

• Innovators (2.5%): Risk takers who want to be first to new ideas. Innovators need no convincing to try something new.
• Early Adopters (13.5%): Organizational leaders who understand the need for change. Early Adopters know change is necessary and usually only need basic information to adopt a new idea.
• Early Majority (34%): People who follow leaders into adopting a new idea before others. The Early Majority require evidence that the adoption will solve a problem or benefit them.
• Late Majority (34%): People skeptical of change who require extensive evidence that change is worth the effort. The Late Majority need substantial proof from others that the change or new idea works.
• Laggards (16%): Those who fear change. Laggards are the hardest to convince change is necessary and typically only adopt new ideas after pressure from others.

I’ve always been a borderline Innovator/Early Adopter. Change doesn’t scare me, but I typically need a sliver of information before adopting something new. Beta testing software? No problem. Trying new social networks? I’m game.

I sent my first Substack newsletter in February 2020. The platform provided a unique take on blogging merged with the direct-to-reader appeal of email.

After a few months on Substack, the market expanded, and Twitter purchased rival Revue. I moved my newsletters there to take advantage of the audience-building tools integrated with Twitter.

Unfortunately, the risk of being an Early Adopter is that sometimes those platforms or choices don’t pan out. Aside from a few changes at launch, Twitter invested little time into Revue, and the platform lagged as Substack thrived. Then, Elon Musk bought Twitter and shuttered Revue outright.

I moved my newsletters back to Substack last Fall, right before Musk announced Revue would close. The writing was on the wall, and, while email lists are portable, setting up a new system takes time. I took a gamble the work to move from Revue would pay off.

Today, I’m facing a similar decision about Substack and the platform’s viability.

The Substack Investment Problem

After failing to secure another round of venture funds last year, Substack recently announced a crowdfunding investment campaign. The concept was novel — go straight to the users for investment. Ben & Jerry’s famously had a similar early investment round with Vermont residents.

The catch with Substack? They asked for early reservations to invest beforereleasing their financial statements. Being the Innovator/Early Adopter that I am and as someone who wants Substack to succeed, I registered for a modest investment.

Substack released its 2020 and 2021 financial records last week, and, well, it’s not ideal. In 2021, Substack had $5 million in negative revenue. I have an entrepreneurship degree and consult with nonprofit businesses; I’m no stranger to balance sheets. Negative revenue feels like some backroom accounting shenanigans — it’s definitely not something I’ve ever seen before.

Due to Substack’s very strange 2021 financials and their curious lack of 2022 numbers, I’m skeptical about fully committing to the investment. As I mentioned earlier, I want Substack to succeed. The platform provides a novel approach for writers and is practically free (more on that in a second). But, as an Early Adopter, I don’t want to wait until it’s too late to transfer platforms.

The Substack Cost Problem

Substack is a unique approach that combines blogging/article publishing with email. However, despite being built on an open protocol (email), Substack is trying really hard to lock people into their system. They’ve recently announced several new features ranging from in-app chat threads to a forth-coming Twitter clone. And let’s not forget they don’t have an API…

These features make sense for Substack the business. The more people are tied to their infrastructure, the more difficult it is for them to go anywhere. Refer to the description of the Late Majority and Laggards above, and you’ll see that change is difficult for many people. If Substack can continue to lock people into its ecosystem, it’ll likely be ok as a business.

However, all these concepts fly against the idea of an open web and look a lot like the centralized platforms dying around us. Not wanting to run into another Revue situation, I’m making sure I have a viable life raft ready to go.

This weekend, I started looking at Substack alternatives and quickly realized why the company has a revenue problem. Sending emails to a mass audience is expensive. This Week In Writing sends to around 18,000 people. Here is a quick breakdown of major email platforms’ monthly fees for a 20,000-person audience:

• Mailchimp: $220 – $535/month
• ConvertKit: $150 – $210/month
• Ghost(Pro): $149 – $269/month
• Buttondown: $139/month
• MailerLite: $105 – $125/month
• Mailgun (100,000 monthly emails): $75 – $90/month
• Flodesk: $35/month (affiliate link)
• Substack: free

All of the platforms listed (except Flodesk) offer paid subscription tiers. They are, essentially, the same service as Substack and are all substantially more expensive. I use Flodesk to manage The Writing Cooperative’s database, though it’s geared more toward marketing then newsletters.

Ghost is a complete publishing platform that is probably the most directly compatible version listed — think what would happen if Medium and Substack had a baby. It’s an open-source platform run by a nonprofit organization, similar to WordPress. The pro version funds the nonprofit. A free, self-hosted version of Ghost requires Mailgun to send emails which is why Mailgun is listed above (horrible name, by the way).

Again, sending emails is expensive. Substack is giving away a costly service in an attempt to attract users. It’s worked for platforms like Facebook and Twitter, but will it continue to work in the future? I’m skeptical.

The Substack Evacuation Plan

I’ve become pretty smitten with Ghost. The platform is sleek, modern, and simple. Ghost has the best features of WordPress without all of the bloat. Plus, the self-hosting option means I can manage the entire platform independently, a big win in my book.

I began building a mirror of my website with Ghost this weekend. This is the first step of a lengthy process — when I set up my WordPress mirror of Medium, it took a few months of work. I imagine transitioning from WordPress to Ghost will be a similar amount of work.

Right now, everything I publish on Substack or Medium is also posted on my website. By transitioning from WordPress to Ghost, I can set up the infrastructure necessary if I ever need to move from Substack in the future.

There’s a direct-to-Ghost import of Substack subscribers (including paid folks). From the user’s perspective, a transition should be seamless. Ghost is my life raft. Having it in place will allow me to transition from Substack without any hassle should the need arise.

You probably think I’m overreacting if you’re not an Early Adopter. Look, I get it. Setting up Ghost and migrating from WordPress will be a lot of work that could be for nothing. However, If Substack makes it through and thrives, I’ve not lost anything, as Ghost will simply replace what I’m already using. Plus, I don’t want to be forced to make a quick decision in the future as I did with Revue.

Quick aside: WordPress has plugins that provide subscription features similar to Ghost. However, most WordPress plugins add extra bloat and slow down the user experience. It’s why I’ve not considered it an option.

The Future

I obviously don’t know what the future holds for Substack. I want to see it succeed and continue providing a vital service to fellow writers. At the same time, I don’t think it can realistically continue surviving by only taking a cut of subscriptions. This likely means more fees and other charges in the future.

No matter what, This Week In Writing will continue. I love sending this weekly newsletter and connecting with all of you — reading your responses is something I genuinely look forward to weekly. This is why I’m setting up a proper Substack life raft. My words and audience will remain safely under my control, and I’ll have a way to continue connecting with and encouraging you.

Fellow writers will have to make their own decisions regarding platforms. What do you think the future of Substack holds? Are you building a life raft, too?