State of Substack (w/Casey Newton)
The Dead Cat podcast goes meta as we talk about Substack and the media.
One of the many joys of going independent and writing on Substack is that I work at the eye of a trend piece. There’s a storm circling around me with fights about Substack’s politics and its promise as a media disruptor. But at the center of that vortex, I’m far more focused on my own business than the broader maelstrom around me. I’m very fortunate to say that my paid subscriber count has now grown beyond 1,500 and more than 22,000 people now receive my free emails. I’ve been enjoying a steeper growth curve lately.
This week on the Dead Cat podcast, Katie Benner, Tom Dotan, and I talk to technology Substack writer Casey Newton. On the podcast, I reminisce about how I phoned Newton during the depths of the pandemic to tell him that I was going to leave Bloomberg to start a Substack only to learn he was about to launch one as well. Newton founded Platformer, a go-to destination for news and analysis about what’s happening in the technology industry — especially at social media companies. Newton and I are part of a group of writers that formed the Discord community Sidechannel together. (Paying Newcomer subscribers get access to the community, though I’ll confess that my channels are fairly dormant.)
Our discussion was sparked by a news story about what’s not happening. Substack apparently isn’t raising a new round of financing, according to the New York Times. Unlike fellow Andreessen Horowitz portfolio company Clubhouse, which raised at a $4 billion valuation in April 2021, Substack hasn’t earned a unicorn valuation. Substack reportedly generated about $9 million in revenue in 2021. Given the turbulent financial markets, Substack abandoned its fundraising effort, according to the report.
Newton celebrated Substack’s failure to fundraise in his newsletter:
One, it reduces the pressure on Substack to financialize every facet of its newsletter, podcast and app ecosystem. In March, when the company introduced an app, I noted here that Substack shut off emails from your subscribed publications by default — a worrying step, I thought, toward building a centralized platform that the company could monetize more aggressively. To its credit, Substack changed the default to preserve email subscriptions within 24 hours. But giving up more equity to VCs will bring more “suggestions” from the company’s board to move in this direction. The more Substack can rely on its own cash flow, the more easily it can chart its own future.
Two, having less cash on hand can enforce a useful kind of discipline on a company. Having giant piles of cash on hand can be great for making splashy acquisitions or experimenting with new products. But Substack is still figuring out just how many people can sustainably enter this line of work — solo creators, operating mostly without a safety net, selling media for a monthly fee.
(On the podcast, we also talk about Elon Musk’s Twitter bid and Snap’s tumbling stock price.)
Give it a listen.
Read the automated transcript.
The State of Newcomer
Given that we’re already talking about Substack — and since I’ve gained a bunch of new readers lately — I wanted to give a brief tour of the Newcomer newsletter to help you all navigate what I’m publishing and get a sense for the rhythms around here.
I publish Dead Cat — the podcast with my friends and fellow reporters Tom Dotan and Katie Benner — toward the end of the workday every Tuesday. (We usually record on Fridays.)
The podcast is free and is meant to be a little looser than the newsletter. Dead Cat, while still pretty fixated on Silicon Valley inside baseball, is more oriented toward the culture of tech and less focused on money than my newsletter articles.
Dotan is a reporter for Insider. He writes about the gig economy after spending years covering companies like Snap and Disney. Benner writes about the U.S. Justice Department for the New York Times after many years writing about Wall Street and Silicon Valley. The three of us worked together as reporters at The Information, where I was the first employee. We’ve been close friends for many years.
You can listen to the podcast on Substack’s app or on Apple or Spotify. I’ve started including an automated transcript of our conversation in each podcast post.
We’re averaging more than 1,800 listeners for each episode, according to Substack’s analytics. If you’re not interested in Dead Cat or don’t need an email to remind you to listen, you can opt out of receiving the emails on your account page. (I’ve been trying to put more meat on the bone of podcast posts so that even if you just read them, you’re receiving an email that will interest you — like my interview with the Uber driver who leaked the video of Travis Kalanick that arrived beneath a Dead Cat episode.)
The podcast’s name is a reference to a text conversation between Marc Andreessen and Mark Zuckerberg. Though if you prefer to associate it with a dead cat bounce, I won’t hold it against you.
As regular readers know, I publish newsletter articles somewhat chaotically. Variety is the spice of life and I enjoy chasing different types of stories that take varying amounts of time to complete.
I almost always publish a standalone newsletter article each week (usually toward the end of the week). Most weeks, I try to save something for paying subscribers. That can mean putting a paywall halfway down an article — like saving exclusive financial information for paying subscribers — or putting entire pieces behind the paywall.
Types of Newcomer Posts
In-depth profiles of Silicon Valley main characters based on a probing interview. Think: Elad Gil Wants You To Live Longer or General Catalyst's Secret CEO or Above the Crowd.
Sweeping, deeply-reported narratives about a venture capital firm. Probably my most iconic piece remains, The Unauthorized Story of Andreessen Horowitz. And Andreessen Horowitz has been perhaps the main character of this newsletter with pieces like When Will a16z Become a Public Market Investor? I’d put my profile of Bessemer Venture Partners — The Anti-Portfolio — in this bucket. I’ve also been covering Y Combinator closely with my interview of YC President Geoff Ralston YC = Growth, What Insiders Think About YC's New Deal Terms, and Ali Partovi Wants to Beat the Old YC.
Stories about top investment firms based on their private fundraising materials. Recently, I published a look at Tiger Global with some of the firm’s private fundraising decks. (I added a few more slides after publishing the article by the way if you haven’t returned to it since.) Fans of that piece should also check out my article Inside 3 Crypto Funds' Investor Decks. I’ve gotten my hands on another pitch deck so I should have another similar piece out in the coming days.
Market trend pieces. Recent examples: Here’s What Investors Think the Treacherous Public Markets Mean for Private Startups or Good Times in The Great Revaluation. These pieces rely on my building up a depth of information about a particular sector before dropping it in a single post.
Story of a Cap Table articles. These are fun and instructive venture capital case studies. They’re always popular. An example from late last year: The Story of a Cap Table: GitLab. The challenge with these pieces is that they require interesting companies to file to go public — and cooperative sources at a regulatorily-paranoid time in a company’s lifetime. Given the slow IPO pipeline, there’s been a slowdown in cap table stories.
Weekend reading posts. It’s a fun way to concisely hit a bunch of different topics at once. But, truth be told, I’m always ambivalent about them. If you know me, then you know I feel guilty whenever I’m not breaking news or bringing exclusive access to a piece. But I think the reality is that I spend a unhealthy amount of time reading tech news and many readers are happy to get a rundown of what I think matters. I’m always trying to think of new ways to level these pieces up.
Scoops. I’m addicted to scoops. I live for the adrenaline. Definitely, my scoop on OpenSea’s funding round was important for the newsletter. I made that piece a broader look at Katie Haun and Andreessen Horowitz. If it’s getting toward the end of the week and I haven’t published anything yet, I’m probably scrambling for a scoop. It’s a great time to send me a tip.
There are other long-form pieces that don’t fit neatly into these categories. I wrote a case against Rivian. I’m still really proud of my investigation into Palantir’s SPAC investments. I should write a follow-up piece on how many of those investments have gone terribly.