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Why I left Substack and the Email Renaissance

kevin-indig.com

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Re: Why I left Substack and the Email Renaissance

#11

Post by Dowwie »

tinyhouse wrote: post #8

I'm surprised Substack's business model is charging ~10% from one's revenue. A fixed pricing would make more sense. Why would anyone who is planning on profiting from their newsletter would go with a deal like that? Building a newsletter site these days is a pretty simple task with many no code solutions. I'm not saying what Substack provides is not worth paying for, just that it's a bad deal for people with successf…

They're charging "ad valorem" -- relative to the value received. The value that a Substack user with 4000 subscribers receives isn't the same as what someone with 50 subscribers receives. This is a very common fee structure that exists across industries.

Re: Why I left Substack and the Email Renaissance

#12

Post by cally »

"I’m one of a few that saw the power of RSS, which is now coming back in the shape of podcasts"

I don't think the rise of podcasts is massively due to RSS. I think it's because of the low cost / high creativity balance of the format, where the format uses RSS.

Re: Why I left Substack and the Email Renaissance

#13

Post by _b8r0 »

freshfey wrote: post #3
kevin_indig wrote: post #2

2 years ago, I started a newsletter on Mailchimp called Tech Bound and built it out to +3,000 subscribers. 3 months ago, I decided to migrate to Substack. One week ago, I went from Substack to publishing on my own site. In this post, I explain why, what my current stack looks like, and a larger trend that has been in full swing for 2 years.

Thanks for the article! Can you describe how you implemented Memberful + Convertkit? Or did you follow a guide you could share? Thanks!

+1 for a Memberful and Convertkit how my site works post.

Re: Why I left Substack and the Email Renaissance

#14

Post by tinyhouse »

Dowwie wrote: post #11
tinyhouse wrote: post #8

I'm surprised Substack's business model is charging ~10% from one's revenue. A fixed pricing would make more sense. Why would anyone who is planning on profiting from their newsletter would go with a deal like that? Building a newsletter site these days is a pretty simple task with many no code solutions. I'm not saying what Substack provides is not worth paying for, just that it's a bad deal for people with successf…

They're charging "ad valorem" -- relative to the value received. The value that a Substack user with 4000 subscribers receives isn't the same as what someone with 50 subscribers receives. This is a very common fee structure that exists across industries.

The fact it's a common fee structure that exists across industries doesn't mean it makes sense for Substack. And I wouldn't call 10% standard. Most companies I know of, take Stripe for example, charge much smaller fees percentage wise and rely on high volume transactions.

Maybe a better example I can think of is a referral site. Maybe a site like Kayak can charge Marriott 10% each time they refer someone who books a room. If that room wouldn't be booked otherwise it's probably a good deal for Marriott. Substack does help with discoverability, and that's probably where their main value is (similar to FB, Instagram, etc), but the problem is that unlike the Marriott example, the fee is not a one time payment.

Re: Why I left Substack and the Email Renaissance

#15

Post by dna_polymerase »

tinyhouse wrote: post #14
Dowwie wrote: post #11

Earlier quoted context omitted.

They're charging "ad valorem" -- relative to the value received. The value that a Substack user with 4000 subscribers receives isn't the same as what someone with 50 subscribers receives. This is a very common fee structure that exists across industries.

The fact it's a common fee structure that exists across industries doesn't mean it makes sense for Substack. And I wouldn't call 10% standard. Most companies I know of, take Stripe for example, charge much smaller fees percentage wise and rely on high volume transactions. Maybe a better example I can think of is a referral site. Maybe a site like Kayak can charge Marriott 10% each time they refer someone who books a…

And you think Substack can achieve the same high volume as Stripe does?

> Substack does help with discoverability, and that's probably where their main value is (similar to FB, Instagram, etc), but the problem is that unlike the Marriott example, the fee is not a one time payment.

No, they also provide the platform, the tools, the analytics. They are not just an aggregator. Also, Marriott has to pay for every transaction, just like someone using Substack. You pay per transaction.

Re: Why I left Substack and the Email Renaissance

#16

Post by kevin_indig »

cally wrote: post #12

"I’m one of a few that saw the power of RSS, which is now coming back in the shape of podcasts" I don't think the rise of podcasts is massively due to RSS. I think it's because of the low cost / high creativity balance of the format, where the format uses RSS.

RSS is not the only reason but enabled, for example, Apple to create a platform for podcasts.

Re: Why I left Substack and the Email Renaissance

#17

Post by toyg »

cally wrote: post #12

"I’m one of a few that saw the power of RSS, which is now coming back in the shape of podcasts" I don't think the rise of podcasts is massively due to RSS. I think it's because of the low cost / high creativity balance of the format, where the format uses RSS.

It's somewhat ironic that podcasts have effectively outlived the two technologies they were based on (rss and iPods). Accidents of history and all that...

Re: Why I left Substack and the Email Renaissance

#18

Post by tinyhouse »

dna_polymerase wrote: post #15
tinyhouse wrote: post #14

Earlier quoted context omitted.

The fact it's a common fee structure that exists across industries doesn't mean it makes sense for Substack. And I wouldn't call 10% standard. Most companies I know of, take Stripe for example, charge much smaller fees percentage wise and rely on high volume transactions. Maybe a better example I can think of is a referral site. Maybe a site like Kayak can charge Marriott 10% each time they refer someone who books a…

And you think Substack can achieve the same high volume as Stripe does? > Substack does help with discoverability, and that's probably where their main value is (similar to FB, Instagram, etc), but the problem is that unlike the Marriott example, the fee is not a one time payment. No, they also provide the platform, the tools, the analytics. They are not just an aggregator. Also, Marriott has to pay for every transac…

> No, they also provide the platform, the tools, the analytics

Maybe I'm in a bubble but I don't see it as their main value for successful users who make money from their newsletter. I've setup a newsletter with analytics a few weeks ago without writing a single line of code and with a fixed cost (and custom domain...). Yes, starting with Substack is cheaper to start with but long term it'll cost you).

> Marriott has to pay for every transaction, just like someone using Substack. You pay per transaction.

I guess I'm not familiar enough with Substack. What does it mean you pay per transaction? It's a newsletter - you make money from paying subscribers who pay monthly let's say. Are you saying Substack users pay per email sent to their paying subscribers?

Re: Why I left Substack and the Email Renaissance

#19

Post by kevin_indig »

freshfey wrote: post #3
kevin_indig wrote: post #2

2 years ago, I started a newsletter on Mailchimp called Tech Bound and built it out to +3,000 subscribers. 3 months ago, I decided to migrate to Substack. One week ago, I went from Substack to publishing on my own site. In this post, I explain why, what my current stack looks like, and a larger trend that has been in full swing for 2 years.

Thanks for the article! Can you describe how you implemented Memberful + Convertkit? Or did you follow a guide you could share? Thanks!

Thanks for reading! Memberful integrates directly with ConvertKit, so you don't have to do much besides setting up some list tags in ConvertKit (see here: https://memberful.com/help/third-party-integrations/convertk...).

Re: Why I left Substack and the Email Renaissance

#20

Post by dna_polymerase »

tinyhouse wrote: post #18
dna_polymerase wrote: post #15

Earlier quoted context omitted.

And you think Substack can achieve the same high volume as Stripe does? > Substack does help with discoverability, and that's probably where their main value is (similar to FB, Instagram, etc), but the problem is that unlike the Marriott example, the fee is not a one time payment. No, they also provide the platform, the tools, the analytics. They are not just an aggregator. Also, Marriott has to pay for every transac…

> No, they also provide the platform, the tools, the analytics Maybe I'm in a bubble but I don't see it as their main value for successful users who make money from their newsletter . I've setup a newsletter with analytics a few weeks ago without writing a single line of code and with a fixed cost (and custom domain...). Yes, starting with Substack is cheaper to start with but long term it'll cost you). > Marriott ha…

> Are you saying Substack users pay per email sent to their paying subscribers?

No, I was referring to the whole Marriott thing. If you book a Marriott hotel with an aggregator (like Kayak), Marriott has to pay for that booking. If you do it the next week again, Marriott has to pay again.

Substack fees work the same, you pay a fee to Substack whenever a person renews (transaction).

So to make the loop back, no the Kayak example works the same way as Substack does. It just happens to be the case, that customer retention is higher with Substack (or lower-cost transactions in general)

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