Aug 14, 2022

Hey Everyone,

Most startups if they fail to scale their product to many users and find a great audience, eventually get acquired.

It’s somewhat likely that this will be the fate of our beloved Substack.

While you might argue they have found product-market fit in Politics or Finance, for most categories there’s a limited number of Creators. The dynamics of why this is rarely debated or covered, or that this is even the case is somewhat taboo.

However in an era where media has gone behind paywalls and Newsletters and podcasts drive a lot of traffic, revenue and opportunity for Media firms and walled platforms alike, who stands the most to acquire Substack?

I find it a reasonably interesting hypothetical question if you care about the future of media and indie journalism. Even if you care about the future of blogging and think about who might be most valuable to Substack to enable them to scale with financial, technological and platform integration?

Traditional media, social media, a Creator Economy company or/and even a Web3 (e.g. NFTs) platform could all benefit from Substack as part of their product, while at least at the beginning remaining true to Substack’s ideological narrative, however true it may or may not be.

Who would stand to gain the most from a Substack acquisition frankly? Whatever the potential valuation of the business, which is also debatable.

I’m not a media expert or a social media expert, but here are some of the names that come to mind: (indulge me if you have better names, and why?)

Cox Enterprises
LinkedIn (Microsoft)
The New York Times
Binance
OpenSea
Twitter
Meta (Facebook)

Substack has an architecture that could grow into a media empire of its own. With its limited funding it’s highly unlikely to scale well during the 2022 to 2025 period. This will put it at considerable risk to get acquired in the 2022 to 2026 period, before it even goes public.

I could see another big bet of a16z being a suitable acquisition partner. Especially if a leading NFT platform found a way to make Substack’s monetization problem a little bit more viable for writers and micro niche Creators around the world.

Thinking about a hypothetical Substack acquisition also helps one think about the future of the ownership economy and the future of media itself. Some aspects of Substack’s SaaS model are sound, but there are some missing pieces.

LinkedIn or the New York Times would most likely be the best companies to help fine tune those missing pieces of Substack’s growth story. This is just my opinion. I would conservatively say that Substack has a 40% chance of being acquired in the next three years.

I’m open to debating any aspect of this.

What do you think?

15 Comments

Michael Spencer

Aug 14, 2022Author

I've been on this bandwagon since the beginning of Medium and LinkedIn's Newsletter product. I'm not exactly sure how Substack's ideology is not a clone of Ev William's early Medium ideology?

Perhaps someone can explain it to me. If your Manifesto reminder is taking in some parts word for word the keywords Medium used or uses, it's a bit weird.

While I do prefer the SaaS model of direct Creators2Audience communications, the language is about the same. The problem with this of course is some of us have already been let down by how Medium turned out.

It's been a long road for bloggers or writers online during the past decade. It's not that we don't believe in the idealism, it's just that our experience with various ecosystems has been underwhelming. The hype vs. the reality is always somewhat problematic.

Substack has a chance of remaining true to its ethos, but that glimmer of hope is getting a bit dimmer in these economic macro conditions I would argue.

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