Substack founder welcomes new competitors Facebook and Twitter

Generally, you don’t welcome the folks planning to steal your business.

Yet, that was Substack co-founder Hamish McKenzie's basic approach with a warm greeting to Facebook and Twitter as they enter the newsletter market.

“If Facebook and Twitter are earnest in their pursuit of this opportunity, I implore them to go all in. They have enormous influence and can make a big positive difference in the world by taking the lessons from Substack to heart. This is about more than just doing the right thing for writers; it’s about improving the entire information ecosystem.” —Hamish McKenzie

The background: Twitter acquired Revue, an editorial tool for writers, and plans to offer creators’ subscription options, tipping, and ticket sales.

• Facebook also is reportedly building a newsletter tool for writers, publishers, and content creators.

• Facebook hopes to launch in the summer of 2021, allowing users to curate lists and manage paid subscription services.

What it means: Facebook and Twitter are ready to compete with Substack’s newsletter service.

• Substack has more than 500,000 paid subscriptions, and the top ten writers are collectively making more than $15 million a year, the company reports.

• With Twitter’s and Facebook’s massive user bases — 330 million and 2.8 billion, respectively — there will likely be rapid adoption of the tools.

Emotional intelligence on display: McKenzie used Big Tech's entrance into the newsletter industry as an opportunity to empathize with users and crystalize the company’s value to society. Both values — empathy and social skills — exhibit emotional intelligence.

While some may scoff at his hospitality, McKenzie’s letter was as much a welcome note as it was a trust-building strategy.

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Analysis: Take, for example, McKenzie’s thoughts on the attention economy, a term coined by economist Herbert A. Simon, who asserted that attention was the “bottleneck of human thought."

In addition to noting the problems that engagement-based platforms have caused society, McKenzie details the creator-empowerment ethos that catalyzed Substack.

“It is undeniable that our addiction to social media is having negative effects on both individual and collective thought. As individuals, we fret about doomscrolling and watch in hopeless horror as we become rage-monsters in the digital public square. As a society, we wonder how it has come to pass that a conspiracy theory-addled mob can overrun the Capitol. … However, we at Substack have never thought that the solution lies in simply shouting about how engagement-based business models lead to media products that are superficially compelling but underneath are eroding the foundation of society. Instead, we have set out to show that platforms that put writers and readers in charge are just better.” —Hamish McKenzie

Focused on the customer and mission: McKenzie’s letter elevates writers — i.e. Substack’s customers — as the key to a societal and economic problem.

• In the last 10 years, quality writers’ and creators’ voices have been diminished in favor of strategically-crafted content that increases session duration.

• While not inherently wrong, McKenzie contends that our information ecosystem incentivizes a “dopamine hit” rather than thoughtful reflection.

His solution? Empower writers with a space that rewards trust.

“On Substack, writers succeed when readers feel that their trust is being rewarded, and we, the platform, succeed only when writers do well. There’s nothing sophisticated about this model. We’re not hoping you become addicted to our feeds or that you will trade sleep for content consumption so we can sell your attention to advertisers. Instead, we hope that readers find amazing things to read and that the writers who produce that stuff make a ton of money.”—Hamish McKenzie

Takeaways for indie hackers: McKenzie’s letter can serve as an example of how indie hackers can address competitors and differentiate themselves.

Rarely is any industry in a zero-sum scenario. Rather than becoming frustrated with a new competitor, think of how it can be an opportunity for growth, to connect with customers, or accentuate your value. An attitude that embraces competition can be incredibly useful in building and sustaining a business.

Banking on consumer ignorance isn’t a viable strategy, especially for digital products. Your prospective customers will almost certainly be able to find information on competitors. Being honest and transparent — about your mission, challenges, competitors, and even pricing — will build trust that will ultimately help your business.