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Hamish McKenzie is co-founder of Substack, a platform for writing and other content. He is a writer and former journalist based in San Francisco.
In this week’s conversation, Yascha Mounk and Hamish McKenzie discuss how Substack was formed, why its business model rewards different behaviors to traditional social media, and its commitment to free speech in the face of criticism.
This transcript has been condensed and lightly edited for clarity.
Yascha Mounk: I know you as the co-founder of Substack, but you're actually a journalist by training. How does a nice, honest journalist end up in tech?
Hamish McKenzie: The CEO of Substack is Chris Best, who's my close colleague and co-founder. We started the company in July 2017 and then very quickly added a third founder, Jiraj Sethi, who's the Chief Technology Officer. My job has been coming at it from a journalist's perspective and that means working with writers, working with journalists, helping them succeed on the platform and also telling the story for the company. But how did I go from that world to this world? The problem was I met Chris. I blame Chris for everything, including the brilliance of the system design of Substack and everything that's important about Substack. But I had been writing a book and working at a company called Kik while writing that book to pay the bills. And at Kik, Chris was one of the founders there, and we became really good friends. By the time I finished this book, Chris had finished working at Kik and he got in my ear about this idea that was bugging him, which led to Substack.
Mounk: What was the idea at the time? One of the amazing things about successful startups is that they keep transforming. Substack is different today from when I first joined five years ago, but there's a kind of direction of travel. I think we have a sense, hopefully, of what it might look like in five years. We'll talk about that a little more perhaps later in the conversation. But what was the initial pitch? What was the initial idea of what Substack was supposed to do and be?
McKenzie: Well, it sprung out of Chris's idle time. He wanted to get back into writing and started writing this blog post where he was kind of decrying the state of the media because the incentives of social media were leading to all these bad behaviors, not only from people trying to win at the social media game, but from mainstream media institutions that had to follow the rules of social media just to be able to get the attention they needed to support their own businesses. In this blog post, he outlined all the problems of that and then sent it to me for my feedback because I was like a journalist guy he knew. My feedback to him was that all the points he made were really sharp, but people in the media knew that these were the problems. What they didn't know was what would be a productive solution to them, so I suggested adding a couple of paragraphs to his blog post, suggesting an alternative, a better way forward.
He didn't get around to finishing the blog post, but through conversations with me and through his own thinking, he got to this point where he decided that the fix needs to come from making the readers and subscribers the customers instead of making the advertisers the customers, and to have direct payments from the subscribers to the writers and the creators so that they are incentivized to serve those people instead of playing like an algorithm game hoping to go viral in the social media context. Those are the basic conversations that led to the development of the Substack model.
At the start we said, we’ll make it simple to start a paid subscription publication. That was confusing for some people. They wondered if we meant like an academic journal or a magazine or something like that. And so we decided to simplify it and say, we’ll make it simple to start a paid newsletter. And a lot of the reaction was, no one's going to pay for newsletters. Who's going to do that? There's so much free content on the internet and so much great free content. But we believed that people would pay for writers who they trusted or loved. And they'd happily pay, they'd like to support and be part of their mission.
Mounk: What were the criticisms or the points of skepticism towards this idea and the business model you were presenting at the beginning that you think have just clearly been disproven? What are some of the difficulties that people pointed out early on that you think the platform is still struggling with?
McKenzie: I think we're making good progress against the things that we set out to do. The types of challenges we faced were, can we build a network that has enough people in it, that can keep helping new voices grow, and find fast enough success from subscriptions that they can go on and build their own empires—and we've actually achieved that I think at a certain scale, like there's so much more room to go. But in those early days, the questions were like, who's going to pay for paid newsletters? One of the early models for Substack was a guy named Ben Thompson running a publication called Stratechery which is a combination blog and email newsletter that he charged $100 a year for if you wanted to get everything he published. Our thought was, well, currently there's not that many Ben Thompsons in the world, but with a model like this and with the demand from readers who are hungrier for higher value content or media experience and want to be closer to those writers and creators who they most trust, we think that a whole lot of energy can be unlocked. That has all proven true. I think the game we have to win now is to keep building it to scale so that there's enough subscribers in the world waiting to be unlocked by new publishers.
Since the first live Q&A was really fun, we’ll try to make this a monthly feature! So please join me for the second iteration on Monday, March 31 at 6pm Eastern. I will once again try to answer any questions you may have—whether about my writing, the current state of the world, or what might happen next. Join us on Zoom here. —Yascha
Mounk: I think one of the signs that this has really succeeded is when famous fiction writers like Elif Shafak in the UK or Sherman Alexie in the United States look for an outlet where they can directly communicate with their readers. Or well-established journalists for one reason or another want to leave legacy publications like Jennifer Rubin did recently at the Washington Post or Paul Krugman did at the New York Times. I presume that at the beginning, the problem was how do we attract talented serious writers with or without an established name? How did you go about doing that in the early days of a platform?
McKenzie: That's right, we had to get some examples of success to be able to point to and give people the confidence that this model might actually work for them. But in those earliest days, well, for a start, I convinced one person, it was Bill Bishop, who I knew from my days when I was a reporter living in Hong Kong and he was always a go-to source for China. And then I subscribe to his newsletter, which is called Sinocism. It covers U.S.-China relations for an English reading.
Bill was already primed to add a paid tier to his existing free newsletter, and we had a good relationship, so it wasn't that much of a hard job to convince him to do it with us instead of trying to strap together the various tools that you'd had to piece together in those days. Once we had him launch and immediately be successful, we were able to say to other people, look, this model works with Bill Bishop, we think it could work for you too. Then there were other people who in those early days were succeeding. Daniel Lavery, who was one of the co-founders of The Toast, which was like a culture website, totally different to Bill Bishop, who writes for a business audience. Daniel Lavery's audience is sort of mostly librarians who are paying 50 bucks a year out of their own pocket rather than putting it on a corporate expense account.
We were able to take those early success examples and reach out to people who sort of fit a similar mold, who had kind of like blogger or podcaster instincts, who are self-disciplined enough to be producing enough material. And then we also tried to get press around those stories so that people would start paying attention to this as a new model. It's not just a new social network where we can convince you to come over and you click a button and you get all these dopamine hits. It's a new model that we're trying to bring into the world and that requires quite a lot of education, a lot of hand holding, a lot of convincing, and a lot of conversion.
We still do this. We build personal trust relationships with the writers and creators of Substack, even though it's not something that any sales professional will tell you to do. It's not scalable, but it does build deep relationships and then those people hopefully will go out and tell their peers about what a good experience Substack has been for them and that helps build the entire ecosystem.
Mounk: Do you feel like there was an inflection point at which you could suddenly see that part of the operation juggling and coming together? For myself, when I was starting to think seriously about creating a magazine that advocates for philosophically liberal ideas and decided in June 2020 that that was the moment to do it, I had never heard of Substack. I assumed that perhaps I would build a website to do this, or perhaps I would go to one of the platforms that were better known at that time, like Patreon. And a friend of mine said, hey, these other friends of mine have just started this series of linked newsletters on a place called Substack, and I think that's going to be a better model for you, and I really had no idea what that was.
A couple of weeks later, I started Persuasion on Substack and a couple of weeks after that, we had significant income from subscriptions generated on Substack to be able to build the staff, start paying editors and contributors, and so on to run this publication. But in my experience, it was around the middle of 2020 that Substack went from being something that I'd never heard of to something that was an important part of my professional life. Was that a coincidence or was there something about that moment of you breaking through into wider visibility?
McKenzie: There was a particular moment in 2020. We had been building momentum and traveling through word of mouth and kind of underground networks in New York media. For example, a lot of people there and in certain corners of Silicon Valley knew about Substack, like newsletter nerds and original old school bloggers. But we were never very loud about marketing. We still don't have a marketing division at Substack. We've relied heavily on those peer-to-peer recommendations and word of mouth. But in 2020, things did suddenly accelerate because the pandemic hit and all of a sudden there was an intensified need for meaning and seeking out expert voices across a range of topics, but especially in public health and then politics. And then there are also people spending a lot more time on their phones looking for things to read at home. The media went through an accelerated period of insecurity, even worse than it had been up until then. That was happening economically, like people losing jobs, newspapers were shutting down, news sites were shutting down, et cetera, or at least cutting down their operations. But it also was happening culturally, where at the time there was a kind of a mania in the media industry where people who had views that didn't conform with their newsrooms were under a lot of pressure to leave or were getting pushed out by the bosses of those organizations.
Mounk: A lot of people who were columnists at some of the most famous newspapers, and some of whom are still columnists at those places today, were told very clearly that the articles they wanted to write, they could not write and they could not publish. I have many examples of people who've told me this in private. I'm not going to cite them here but they’re writers whom the majority of the majority of listeners to this podcast would know, they’re articles that really would have been thought of as unexceptionable at any period and would be thought of as such today. I do think that was a moment where there was hunger for that direct and unmediated access to the actual thoughts of writers because it was so palpable at that time in particular that that had vanished from traditional media.
McKenzie: Exactly. It was a high pressure time in the culture. This was around the time with the Harper's Letter as well, where there was an active debate online about it. But in that stretch of time, a bunch of high profile journalists decamped to Substack around the time that Persuasion was being established, Andrew Sullivan, Bari Weiss, Matt Yglesias, and Glenn Greenwald—all in quite high profile circumstances—left their existing institutions, the New York Times, Vox, New York Magazine, The Intercept, and announced that they're setting up on Substack so they could have a direct relationship with the readers who cared about their work. That was a big moment for Substack that put us onto the main stage and then more people started hearing about it.
Mounk: You have an interesting political balancing act to play here, because you’re a supporter of a value that should be apolitical, a value that is inscribed in the Constitution of the United States and that I think should be important to any journalist, no matter their political leaning, which is that of free speech.
Substack, I think, has been admirable in how robustly it has defended that through various attacks. But the value itself has, of course, in some ways become political. We're in a moment in which this may change over the course of a Trump administration for obvious reasons. But at least in the last years, it felt very much as though the left had given up on the value of free speech in important ways and preferred to talk about the danger of misinformation in ways that often advocated explicit or implicit censorship. Increasingly, it's been a bunch of heterodox liberals like myself, but also often conservatives and people even on the further right who wanted to claim the value of free speech for themselves. What's interesting about Substack is that there are writers on the platform that really are from every political persuasion, even among the more visible and famous ones. There are ones that are well to the right of me, but also ones that are well to the left of me. How do you manage to sustain both of those things, the clear commitment to free speech, even as that is becoming increasingly a politicized concept that sadly, to my great chagrin, is often seen as right coded and maintaining the status as a platform that's actually attractive to people across the political spectrum?
McKenzie: Yeah, and there have been pressure campaigns to kick off certain writers or change our content moderation policies through the years and it's always very difficult to go through that. It's a heightened emotional issue, but the way we look at it is that free speech and freedom of the press, which I think cannot be separated, are fundamental values for protecting great culture and protecting voices at the margin, giving power to the powerless against the powerful.
That is a long-term game. It's not something that can be won in any moment of a press release or in staring down a mob or collapsing to a mob. It's something that you have to keep showing up for over time and that means taking some hits along the way. At a company level, it's enshrined in the company as one of the core values. You have to be willing to stand up for free speech if you want to work here. And so that makes it a bit easier in those times of tumults when we're not feeling so much internal pressure as other companies have over the years to bend one way the other.
Mounk: This means, for example, when you're interviewing people for jobs or for roles, do you ask them explicitly about their stance on free speech? If a candidate who is otherwise great gives you a very equivocal answer, would you have second thoughts about hiring them? How do you make sure that you maintain that company culture?
McKenzie: It’s very hard and as a company gets bigger, you have to work even harder to maintain that kind of standard. But we asked them directly in an interview process: Substack sometimes comes under criticism for its content moderation approach, which is hands off and is dedicated to upholding free speech. We've taken licks from the Atlantic and the New York Times and just about everyone else on the planet, and in those times you're going to hear from your family and friends about these kinds of issues and they're going to ask, what's this about? Why is Substack being bad? How do you feel about not only representing the company in those moments to your social circles, but standing up for these values too? And if they're uncomfortable with that, then we don't hold it against them, but we'd say that you're probably not going to be comfortable working at Substack.
That helps give us a good steel rod when those moments get hot. Other than that, we're not a bunch of 20 year olds starting the company. I'm 43 and I remember the ACLU's position on free speech being extremely strong and uncompromising and the ACLU being thought of as a very left wing or very liberal institution. I’ve also seen enough times that people on the right in the meantime claim free speech as a mantle, but are really just using it as a political weapon in the moment to get things the way they want them. So having a founding team and a leadership team and people in the company who have seen a few things and are ready to stay calm under pressure is helpful.
And then the way we talk about it. We outlined our principles on content moderation when the moment wasn't hot. We said, here's why. And it's not because we don't want to have any responsibility for anything that goes on on the platform. There are content guidelines at the extremes in line with the First Amendment. You can't be inciting violence. You can't be doxing or spamming or do pornography on Substack—technically that's not in line with the First Amendment, but it creates a different kind of culture for the platform if you do allow it and you have to build a whole lot of things to cater for it and we're not interested in that. But being able to lay out those principles in writing in a time of calm so that we can keep pointing back to them for ourselves and for anyone who's challenging us on our possessions has been a really useful thing.
Mounk: So walk us through what those principles are. As you're saying, it's not everything goes, obviously there's legal constraints, you're under legal obligation to make sure that people don't use the platform to distribute child pornography, to take the most obvious example. You're also making some decisions like banning pornography more broadly. What's in and what's out? How did you decide to come up with those rules? How do you undertake to apply them in such a way that people across the political spectrum feel that you're treating them fairly in the process?
McKenzie: We write down the content guidelines and our stance about content moderation, and then we show people that we don't bend over time to the pressure mobs. Hopefully that sends a message to people that we are going to apply them fairly. We took some heat last year because some journalists went and dug up a bunch of accounts that they said were far right extremist accounts and you should kick them off and then you should kick all these other people off as well, just who they decided were bad people. Pretty soon after that Mehdi Hasan left MSNBC and joined Substack and said that hardcore free speech approach really appealed to him because he knew that it meant pro-Palestine voices wouldn't be kicked off the platform. Hopefully people see through our actions and our track record that these things are going to be fairly applied. But I think the foundation of it, the thing that makes it different for Substack versus the likes of TikTok, Instagram, Facebook and X, is that our model creates different conditions that produce different types of results, different behaviors and different content, rewards different behaviors and rewards different content than those other machines reward.
On those other machines, you're rewarded for keeping people scrolling. Keeping people maximally engaged in the feed, keeping their emotions maximally peaked. On Substack, you're rewarded for demonstrating that you're a trustworthy voice that it's worth continuing to show up for. Even if you don't always agree with the writer, you've invited them into your inbox for a subscription, even if it's a free subscription: that's a big barrier to jump over. And you can punish that writer by unsubscribing if they lose your trust. Even more extreme is you can pay with your money out of your pocket to say I really trust you and then the writer's responsibility is to keep living up to that standard and keep living up to that trust. When you change the business model that drives the whole platform, then you change the outcomes. You change the culture of the platform.
We haven't tried to fix the speech problems or the action problems that have resulted from the bad social media models of the last generation, which I think is why people have this mania about misinformation etc. We haven't tried to fix that stuff with a smarter content moderation policy or a bigger content moderation apparatus. We've tried to fix that at the business model level, at the root. I think that's why you see Substack as a different type of ecosystem. It feels different. The quality is higher, the thinking is better, and the toxicity is lower.
We don't want this thing to devolve into something that becomes unproductive or unfriendly that turns people off. I will also say that it's impossible to stamp out all the bad guys and impossible to stamp out bad speech. If you give someone a place to publish something anywhere on the internet, you're going to get some of it.
We have a good challenge ahead of us in continuing to build the tools that give people more control over their own experience on these feeds. At the moment, you can do the blocking and the muting that you're accustomed to from other platforms. Actually, you can even delete replies to any posts you make in the Substack feed, which is totally different from other social spaces. You get to set the terms for your own little space there, even on each post, even in each little note that you publish. And maybe it is true that we're only getting away with this so far because we're small relative to the others and that as scale happens, we'll face more and more problems. I think there will be more problems, there will be more challenges. We'll have to keep getting better and we've got grand plans for that.
But I do think that the model makes a huge difference. It just gives you a massive leg up, a different type of starting point for the kind of culture that actually emerges. I remember Twitter pre-algorithmic feed ranking. I remember Instagram pre-advertising and those spaces were actually pretty good spaces. People really deeply loved Twitter in 2010. And there were many more people on Twitter in 2010 than there currently are in the Substack feed. Not that we're tiny, but we're at the start of a big growth period for that product.
People did come to associate Twitter with being toxic or like unruly or like a place where a lot of harassment happened. Most of that happened beyond a scale where they already had hundreds of millions of users. And most of it happened after 2016 when it introduced algorithmically ranked feeds that were mostly serving advertising. The algorithm wasn't trying to maximize the number of paid subscriptions you would get or the number of free subscriptions you would get or the number of deeper meaningful relationships you had with other people who cared about culture. That's what Substacks algorithm is trying to do. Those algorithms were trying to maximize your engagement and the time spent on their feed so that you would see more advertisements. It depends on how you look at it. I don't want to say unfortunately necessarily, but coincidentally, that's also the time when Donald Trump came onto the scene with a particular style of politics. It was also two years post Gamergate, which was 2014.
Mounk: Elon Musk says the right thing when he promises that his goal at Twitter is to maximize unregretted user minutes. I have to say on the rare occasions when I venture to look at X on my phone, I can't say that the algorithm always delivers on that laudable ambition—in part because I'm often served up all kinds of crazy conspiracy theories and extreme statements that I don't think my browsing behavior has shown any indication I am particularly interested in spending time with.
But to what extent do you think that that is a choice by the designers of the algorithm? I guess what you would argue is that on Substack Notes, your goal is not to have people spend time on Substack Notes. Your goal is for people to discover a great essay, a great set of photographs, a great piece of content from one of your Substack creators, and then hopefully choose to get that directly into the inbox more regularly and perhaps even choose to pay some money to that creator on a regular basis because you're getting a 10% cut of financial revenue from these subscriptions. Is that a choice that other platforms could make or are they just in such a different business that there's nothing they can really learn from you in that respect?
McKenzie: Yeah, well I think we already see that on some level, on some scale, it does lead to a different culture. The culture of the Substack ecosystem is palpably different to the culture of X or the culture of Instagram. How far that can play out, we're going to find out. We are really optimistic, but of course, one can't see the future and there will be unforeseen things that might always pop up. I think those other platforms are screwed.
I think they are trapped by their business models. Unless they rip out advertising, they're going to have to become more and more like TikTok, which is the master of this kind of game. And you see Facebook and Instagram and X trying to become more like TikTok, trying to become more visual, more like dopamine scrolls. As long as advertising is the model, they don't want you to leave their feeds. That's why it's hard for Substack writers to get people over from X onto their Substack accounts now because X essentially suppresses the links, but it's not just for Substack, it's for the New York Times, it's for any external links. And X has caught some shit for that, rightly so, because that's not a contribution to a better culture. But they're also just playing the game exactly the same way that Instagram and Facebook have been playing it for years, because their business model demands that. So I think that those cultures are gonna keep coursing in and not serving the people who add value to those platforms, the writers and the creators, and the people who care about what those writers and creators have to say for as long as they're playing the advertising game. But it does create space for Substack and other networks who share, see what Substack sees to emerge, and it won't only be Substack.
Mounk: Let's talk a little bit more broadly about how you're thinking about developing Substack further. I think that the new Substack app has made it easier to discover other good voices, and I certainly can feel that for our own content there's been an uptick in the number of people who come to it through the Substack ecosystem.
There's obviously also a risk that the space may get saturated, which is to say when there were very few newsletters and most people didn't subscribe to many newsletters, the ability to get into their inbox was an incredible privilege that traditional publications didn't have. They woke up in the morning and they had a stupid email from the bank and they had an annoying seven emails from their job. And here was a fresh, interesting piece of content that they could read, so they would click on it. And so you're suddenly competing with five or six other articles that came in at the same time. My open rates are pretty good, hopefully they're still pretty likely to read me, but if in a couple of years, even more interesting writers are on Substack and suddenly they're getting 20 emails from Substack every morning, at some point, there's just going to be diminishing returns in terms of that kind of reach. That's one kind of way in which further expansion may be a risk.
The other, of course, is the financial model where it's been amazing to see how many people are willing to pay for quality content. And I'm very grateful to them because they allow me to do my writing on Substack and Persuasion to pay our editors and do our work and create this amazing ecosystem. Of course, people have financial constraints and if they have three subscriptions on Substack, that's one thing and if they have 10, that's another. And if you ask them to take out 20, I mean, that really is starting to be unrealistic other than for people who are very fortunate in their financial situation. So how are you thinking about those risks of saturation?
McKenzie: I've got two answers for each of those. One answer is cultural, one is economic. On the cultural side, for the first problem you describe, these writers on Substack have to compete with all these other writers for attention. The cultural thing is that competition puts upward pressure on quality which is good for the consumer who wants to be getting better stuff to help them think and help them use their attention wisely. And for just generally up-leveling the production of culture in the world, I think social media doesn't really do that. Social media is the dominant cultural machine at the moment, because all you are optimizing for on social media is a moment of virality. That's the ultimate reward in social media.
So that kind of upward pressure on quality, I think, is a good thing for the consumer, even if it makes life harder for the publisher. But the second thing is, the economic thing is, there are quite a lot of people in the world. And the numbers that a publisher needs to hit to be financially successful with the Substack model are not jaw-dropping. People who are used to writing for traditional media are accustomed to thinking that if their piece isn't read by hundreds of thousands of people, then really it's like it hasn't succeeded or it's not going to be financially successful. They're not going to be financially successful. On Substack, if you can get a thousand people who are willing to pay you 50 bucks a year in most places in the world, that's enough to live on.
And if you can get 2000, you're fine. If you get 10,000, you're wealthy. And those kinds of numbers, while difficult and not a walk in the park, are very, actually, very attainable for the people who have got the talent and the quality and the consistency and the ability to do this kind of work. And they're so different to the numbers you need to be hitting on the likes of YouTube or even at the New York Times to be able to make something financially viable.
Mounk: What are other things that you're focusing on at the moment in the development of Substack? How do you think the Substack ecosystem, the Substack experience will look differently in three or five years if your plan succeeds?
McKenzie: That five-year time horizon is such a complicated thing because no one's quite sure yet how the AI revolution is going to change the landscape for online content, online relationships, how your experiences are curated and delivered. So I don't know exactly what it will look like, but the foundation will always remain intact. As a publisher, you own your relationship with your audience.
You will primarily make money from direct subscriptions and you own all your content. You can export that anytime you want. And as the consumer, you'll be able to choose which writers and publishers you want to support and opt into and out of the experiences you want. The social network aspects of Substack will continue to grow and get thicker and more valuable as a machine that drives subscriptions.
I think that in the first era of Substack people sort of thought of it as a platform for newsletters that were mostly text-based, but increasingly Substack is known as a place where podcasts are hosted and where video shows are created. Substack Live is actually pretty new, but going very well. It's where you can just go through your app and do a live public FaceTime kind of thing where you can be in conversation with someone else. And then you can publish that as clips or you can publish it as a podcast episode on your Substack. I think we're going to see a lot more shows leveraging Substack Live. For example, Tim Acosta recently left CNN and now hosts a daily live show on Substack through the Substack app. I think you're going to see that get a lot more professional, a lot more sophisticated and a lot more prevalent. And then we have a feature called chat, which is a bit of a sleeper feature at the moment, but it's kind of like a WhatsApp group you can host with all your subscribers where people can be in communion with each other. It’s not just the writer talking to the subscribers, but the subscribers talking to each other as well.
And you can make those just for paid subscribers, just for free subscribers, whatever you want to do. It's the humanity, that soul connection is actually really important. Those things will grow in importance in Substack over time.
In the rest of this conversation, Hamish shares his tips for how to be a successful Substack creator, including big strategic questions (how to find your niche and forge a strong relationships with your readers) and seemingly small tactical questions (how often to write and when to send out your emails). This part of the conversation is reserved for paying subscribers…
