How Substack started with one paid newsletter
Substack's origin story centres on one day of revenue. The company's 2019 retrospective says Sinocism brought in six figures of revenue by the end of its first paid day. Hamish McKenzie repeated it in a 2024 essay, writing that Bill reached six figures on the day he turned on paid subscriptions. A first paid day like that depends on readers who were already there. People pay for a newsletter they have been reading, so that revenue was earned well before the paywall went up.
A prototype in a spare room
The software that took those payments was new. Chris Best built the first prototype in the spare room of his apartment in Kitchener, Ontario. The founders went full time on Substack and lived on their savings.
So on Sinocism's first paid day, the product was unproven and the people running it had no salary. Whatever made those readers pay, years of platform features had nothing to do with it. The software handled the payments. The readers came with the writer.
The reader pays, so the reader is the customer
Substack's 2019 retrospective puts the idea plainly: the reader becomes the primary customer, ahead of any advertiser. The business model follows from that. Substack says writers keep 90% of their revenue, minus credit card fees.
That changes what the writer is working for. Ad-funded work has to hold attention long enough to show the ad. Reader-funded work has to be worth paying for again next month, and every renewal is a reader deciding it still is.
Substack or Monograph
The name nearly went the other way. On Rick Rubin's Tetragrammaton podcast, Chris Best said the choice came down to Substack or Monograph, and they picked Substack after somebody bought monograph.com. That account comes from the interview, and no official Substack page is cited for it here.
What Substack added after the newsletter
In March 2022 Substack launched an iOS app for reading, which gave subscriptions somewhere to live outside the inbox.
Notes came next. As of 11 April 2023, Notes was available to all writers and readers on Substack. Writers can use it for short-form posts and to share posts, quotes, comments, images and links. Readers can also follow writers, which Substack describes as a lighter relationship than subscribing.
Today the About page lists written posts, podcasts, live video and subscriber chat in one place. Video and audio can also be published automatically to Substack, Apple, Spotify and YouTube.
Finding a writer, following and subscribing are separate steps
A writer starting from nothing can't expect a first paid day like Sinocism's, and much of what Substack added later deals with the steps before payment. Substack says readers discover new voices through recommendations, Notes and collaborations. From there a reader can follow, the lighter relationship that can later be converted into a subscription. Substack still treats subscriptions as the most important relationship on the platform.
Each step needs its own reason. A Note can earn a follow. A follow turns into a subscription when the writer gives that person a reason to want the full posts. Payment is the narrowest step of all. A paid launch is hard to plan for when almost nobody is reading yet, so it makes sense to build the earlier steps first and switch on paid subscriptions once there is evidence people want more.
What existing work could become on Substack
The examples below are hypothetical and based on Substack's current features. Each starts with work a creator already has.
A podcast you already record. Substack can push audio and video to Apple, Spotify and YouTube automatically, so the show could run from one place. What has to change is the written side: a short post with each episode gives subscribers something to read in the email and something to share. This fits when the show already has listeners who would want it delivered directly.
Long blog articles or essays. These become posts with little editing, though an older article usually needs a new opening that explains why it is being sent now. The strongest lines can go into Notes as quotes, images or links back to the full post. This fits when the writing still holds up and has a clear point of view a reader could follow week to week.
Live sessions, Q&As or workshops. Substack supports live video and subscriber chat, so a regular live session could sit alongside written posts. What has to change is the schedule, because live formats depend on turning up at a set time. This fits when the creator already runs something live and wants it attached to a subscription.
It fits less well for a brand account posting product announcements, or a creator who expects the platform to supply an audience without much output of their own. Discovery tools exist, but every route on the platform leads back to readers choosing a particular person to follow and pay. Work with a voice behind it has a better chance there than work that could have come from anyone.
Frequently asked questions
How much of their subscription revenue do Substack writers keep?
Substack says writers keep 90% of their revenue, minus credit card fees.
What is the difference between following and subscribing on Substack?
Substack describes following as a lighter relationship than subscribing, one that can later be converted into a subscription. It treats subscriptions as the most important relationship on the platform.
Can Substack publish a podcast to other apps?
Yes. Substack's About page says video and audio can be published automatically to Substack, Apple, Spotify and YouTube.