In May last year, Andrew Walker, a portfolio manager at Rangeley Capital, and host of the Yet Another Value podcast, made the switch. After several years of blogging, he decided that he’d had enough of the technical problems that came with managing a site on his own. At least once a month, he noted, something on the site would break, requiring a few hours to fix.
So he followed the direction of thousands of other writers and moved his entire blog to Substack. The platform, he says, “just works,” giving him more time to research and write, and requires him to spend less time fixing technical problems.
Half a year later, the switch appears to have worked. Substack, he says, has indeed turned out to be “substantially easier.” More than ease of use, the new platform has also grown his audience.
“There’s been a noticeable increase in readership and email sign up,” he says. “I believe in the roughly nine months since we’ve switched to Substack, we’ve increased our email list more than we had in about four years of having a solo blog.”
And that growth in readership has also brought an increase in income. Unlike blogs, Substack makes it easy for publishers to charge readers for their newsletters. So in addition to free posts, Walker also offers a premium service where he publishes two posts every month. One post is a well researched and actionable investing idea; the other includes thoughts and ideas that provide updates on previous concepts. Subscriptions cost $200 a month or $500 a year.
By enabling writers working online to sell subscriptions for their work, Substack has achieved what once looked impossible. It’s enabled content creators to charge for their work and find audiences willing to pay.
What Is Substack?
In a post accompanying its launch in 2017, Substack described the moment Benjamin Day put the New York Sun on sale for a sixth of the price of its competitors. The low rate was subsidized by advertising, creating a new funding model that would dominate the newspaper industry for 180 years. The growth of the Internet put that model under strain. As advertisers shifted to Google and social media, newspapers laid off journalists and tried to figure out how to make money out of content that readers now expect to be free.
Eventually, outlets landed on solutions. Online readers aren’t prepared to pay for single issues in the same way that they might drop a coin into a machine and take a copy of a newspaper. But they are increasingly prepared to pay for subscriptions in the same way that they subscribe to Netflix, to GamePass or to Microsoft 360. The New York Times has 8.8 million subscribers but less than 800,000 of them are now print subscriptions, a number that continues to fall as the number of digital subscribers continues to rise. When Andrew Sullivan moved his blog from The Daily Beast, and started charging $20 readers a year to access it, Substack noted, he soon picked up 30,000 subscribers and his seven writers generated more than a million dollars in revenue without taking advertising.
Other writers and blogs followed. In 2013, Jessica Lessin launched The Information, a tech site that now costs $39 per month. Ben Thompson launched Stratechery in the same year, turning it into a full-time job the following year. He now charges $12 a month for daily updates.
It was the success of those sites that led to the creation of Substack, a platform that enables writers to charge subscriptions for their content and receive 90 percent of their revenues. Five years later, the idea appears to have panned out. In November 2021, Substack announced that the platform had more than a million paid subscriptions, with the top ten publications generating total revenues of more than $20 million a year.
But success at generating revenue from Substack means producing content that people are willing to buy and making sure that they know it’s available. How do you do that?
Finding Your Newsletter Voice
Christopher Lochhead, a former CMO of three Silicon Valley companies, launched Category Pirates in January 2021 with Eddie Yoon and Nicolas Cole. The idea was to produce a more flexible and dynamic alternative to traditional business books. A year later, the Substack newsletter is in the top 0.5 percent of paid business newsletters and is charting in fourth place in the platform’s business charts.
In a post written at the end of October, the three outlined seven ways in which publishers can differentiate their content and stand out far enough from the crowd to persuade people to buy subscriptions. They include presenting a unique point of view, offering new data, avoiding old ideas and clickbait content, not confusing length with value, and rejecting the premise—another way of developing original ideas.
All of which is to say that the most effective way to build a successful newsletter is to produce a unique newsletter, one that offers original and usable content that people can’t find anywhere else. Publish a newsletter that provides answers that people can somewhere else online for free, and you’ll struggle to sell subscriptions.
But that uniqueness extends beyond the content itself to the style of the newsletter itself. Voice, says Lochhead, is both foundational and missing from most business media.
“Most people write to appeal to as many people as possible and to not offend. Like a Marriott lobby. Massive mistake. Being different makes all the difference.”
For Category Pirates, that need to find a voice posed particular problems. Because the newsletter is produced by three people, it took about six months before the team jelled and the newsletter’s voice became clear.
“Fascinatingly (and no surprise) that’s when our paid subscriptions exploded,” says Lochhead.
The best way to refine that voice, he advises, is to write every day, even when you’re writing as a team. Working constantly both together and apart helps each contributor to adapt their voice to the others and forge a single voice.
Finding Your Newsletter Market
So unique content in a unique voice is as important for paid newsletters as it has been in other forms of content. Substack publishers, like bloggers, podcasters, and book authors, have to deliver value and they need to have a hook.
But they also need to have an audience.
When Andrew Walker set up his Substack, he was able to bring his audience from his Yet Another Value blog so he wasn’t starting from zero. Category Pirates had the same advantage. Its three contributors each had their own large audiences, built through bestselling books and podcasts.
Increasing that audience has taken a number of strategies. Lochhead emphasizes that the group publishes “a ton” of unpaid social media, especially on LinkedIn and Twitter which, he says, works best for their category.
Category Pirates also give away plenty of free samples, particularly one-week trials of their paid newsletter. Before they published their latest book on Amazon, The Category Design Toolkit, they gave a digital copy to anyone who wanted it. The book topped Amazon charts on launch and remained there for over a month.
Despite those giveaways, Lochhead emphasizes that Category Pirates does not engage in direct marketing. “So when we share on social, we have a teacher/sensei mindset,” he says. “And we’re not trying to convince or sell anyone. We’re educators. Missionaries.”
Building Your Substack
For anyone considering building their own Substack newsletter then, it’s clear that starting with an audience already in place helps. Just as traditional publishers now expect non-fiction writers to already have a platform, so Substack publications benefit from readers who are already waiting for their next instalment, in whatever format that instalment takes.
If you don’t have a platform, then teaming up with people who do might work, but you’ll need to bring something to the newsletter that the rest of the team lack to compensate for your own missing audience.
Or you’ll need to be patient. Keep churning out unique content with a unique voice that readers can’t find anywhere else and you should find that people who encounter that content sign up to receive it more often.
“Writers who are radically different, have a unique point-of-view, write with courage, in an effort to make a difference and ultimately become known for a category they own, will create legendary success for themselves,” says Lochhead.
To help those readers to find and understand the value you offer, combine your paid content with plenty of free content. Yet Another Value provides free newsletters alongside the higher value premium articles. Free subscribers to Category Pirates receive one out of every four newsletters without paying.
And if you have other content that you can give away, such as ebooks or reports, those freebies can also help to build interest and demonstrate value.
Social media can also provide a place to find new subscribers, especially Twitter and LinkedIn for newsletters that focus on business. But the approach should be educational, rather than commercial. Aim to teach people information that they need but don’t know rather than try to pitch them to land sales, and you should turn that interest into curiosity.
And it’s a willingness to pay to satisfy that curiosity that Substack has proved. On the face of it, the idea that people would not only pay for content online but pay to receive emails sounds absurd. But the success of Substack and its publishers has shown that people are willing to pay every month for content that they find valuable and can’t find anywhere else.
Deliver that content and you’ll find that you’re building a successful Substack newsletter.
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