Pod Insights The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch 20VC: Substack Founder Chris Best on The Future of Public Journalism, Why The Economics Of Attention Have Been Flipped & Why Micropayments For Content Will Not Work About this episode Chris Best is the Founder & CEO @ Substack, the company that makes it simple for a writer to start a paid newsletter. To date, Chris has raised over $17M in funding from the likes of a16z, Y Combinator, Twitch CEO Emmett Shear and Zynga Co-Founder Justin Waldron to name a few. Prior to founding Substack, Chris was the Co-Founder & CTO @ Kik, letting users connect with friends, groups and the world around them. The company raised over $220M in funding from Spark, Tencent and USV to name a few. In Today’s Episode You Will Learn: 1.) How Chris made his way into the world of startups and came to found Kik? How his journey with Kik led to his founding Substack? 2.) During COVID, traditional media publications have been hit hard and Substack has taken off, how does Chris see the correlation there? Given the public journal of record has always been free, how does Substack interact with public news? What does Chris 3.) Why does Chris believe that micropayments are a fundamentally bad idea? Structurally why would they not work? Does Chris agree the biggest problem consumers face today in content is one of discovery? Why not? 4.) When designing the Substack product today, how does Chris think about incentive design? Why does Chris believe with incentives, Substack is the opposite of Twitter from a product perspective? Why have the "economics of attention now been flipped?" 5.) How has Chris seen himself evolve and change as a leader over the last 3 years? What advice would Chris give to CTOs making the move into the role of CEO? What does Chris believe his greatest strengths and weaknesses are as a leader? How does Chris find the war for talent today? Items Mentioned In Today’s Show: Chris’ Fave Book: The Death and Life of Great American Cities As always you can follow Harry and The Twenty Minute VC on Twitter here! Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.
Transcript Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Harry Stebbings? Welcome back to the 20 minute VC and Founders Friday with me, Harry Stebbies. Now, we're gonna dive straight into the show today and I've been such a fan of this product for a long time now. It's changing the very structure and mechanics of an industry, the writing industry. Now, I've probably given it away with that, but I'm thrilled to welcome Chris Best, founder and CEO at Substack, to the hot seat. Substack makes it simple for a writer to start a paid newsletter. To date, Chris has raised over $17 million in funding from the likes of Andreessen Horace, Y Combinator, Twitch CEO Emmett Shear, and Zynga co-founder Justin Waldron, to name a few. Prior to founding Substack, Chris was the co-founder and CTO at Kik, letting users connect with friends, groups, and the world around them. And the company raised over $220 million in funding from Spark, Tencent, and USV, again, to name a few.
0:44 Harry Stebbings? I'd also, though, want to say a huge thank you to Emmett Shear at Twitch and Ted Livingston at Kik for some fantastic questions and suggestions today. I really do so appreciate that. But before we dive into the show today, you have to check out Main Street. Main Street helps startups discover tax credits and incentives they didn't even know existed. The average startup using Main Street will save more than $50,000 with less than 30 minutes of work. Now, that's an incredible ROI. And it's an incredibly easy way to get non-dilutive cash to help extend your runway, especially in these times. So go to mainstreet.us/20vc to skip the waitlist and get a 25% discount. It's free to sign up. They only make money when you make money. It's a total no-brainer. And speaking of total no-brainers, the team over at Pando, the product cloud company,
1:29 Harry Stebbings? just launched a free product performance benchmarks microsite, where you can see how your product stands up against your peers. They gave me a sneak preview and my reaction was like, "Holy hell." I know so many founders who are desperate to compare their products to competitors. And that's what Pando's done. They've analyzed more than 1,000 software products and created benchmarks for startups, scale-ups, and enterprises across five different categories. It's all presented with some pretty slick visualizations. And you should check it out at pando.io/products-benchmarks. That's pando.io/products-benchmarks. However, that's quite enough from me, so now I'm very excited to hand over to Chris Best, founder and CEO at Substack.
2:15 Speaker 01 You have now arrived at your destination.
2:18 Harry Stebbings? Chris, it is such a pleasure to have you on the show today. As I said, I've been a big fan of many Substack authors for a long time now, so huge thank you for joining me today.
2:26 Speaker 02 Thank you for having me.
2:27 Harry Stebbings? Not at all, but I would love to start the show with a little context. And so Substack has become this kind of phenomenon of content over the last year, but how did you make your way into the world of startups? And what was that founding story and aha moment for you with Substack in a brief two to three minutes?
2:41 Speaker 02 Well, before Substack, I was a co-founder of Kik, which was a messaging app. I was like the CTO. I started out building some of the original BlackBerry and Android apps. And I sort of grew the engineering team. I was the sort of co-founder and CTO, grew the engineering team, sort of shifted into product over time. Was there for, I think, almost eight years. Actually, I started when I was in third year university. And that was a wild ride, a wild experience. We were in Waterloo, Ontario, Canada. We went from two guys in a dorm room to raising money at a billion dollar valuation to just a whole host of wild things. And I think maybe the biggest thing I took away from it, other than sort of just general learning to do company things the hard way, was the extent to which the tools that we use to interact with each other online, especially when we're communicating,
3:25 Speaker 02 kind of shape the the outcomes of that communication and affect the wider culture. So you can't really change human nature. You can't change what people want or how they think about the things that you're building for them. But despite not being able to change that, you can change the behavior that gets rewarded, the behavior that ends up flourishing in an online system. And I sort of learned that firsthand at Kik.
3:48 Harry Stebbings? Can I ask, what was the founding story for you then with Substack? Was that the kind of cool takeaway for you and that translated straight into Substack? And what made that kind of founding moment happen?
3:57 Speaker 02 So I left Kik after being there for seven plus years under sort of good circumstances. But I was just doing a bunch of different stuff. I was like taking time to live my life and see my friends and family and taking a break. And one of the things I wanted to do on that break was try my head at writing. I've always been an avid reader and I think that great writing is this tremendously valuable thing because it changes people's minds. It changes how you think about the world, it shapes. Who you are. And so if you're a writer that's creating, you know, great writing, it's this really high leverage value creating thing to do. I was like, I should write stuff like that. That how hard can it be? And I wrote something that I thought of as kind of an essay or a blog post. That was basically just bemoaning the state of our current media ecosystem.
4:41 Speaker 02 It was like, hey, you know, the internet came along and made distribution global and instant and free for written content. But at the same time, it like killed all of the existing business models for written culture. And now we live in this weird world where the underlying economic incentives of people's addictive social media feeds is shaping so much of what we read and what we see. And I wrote an essay, basically just complaining and bemoaning all this stuff. Sends it to my friend Hamish, who's a writer, saying, you know, hey, I wrote this essay. What do you think of it? He was like, this essay is boring. You're bad. You shouldn't be a writer. But there is some kernel of truth here. And while anybody can complain about it, the interesting question is, if all of this is true, what would you do about it? How could this be different?
5:22 Speaker 02 And that sort of started the conversation that eventually ended up becoming Substack. I was procrastinating from finishing an essay, I suppose.
5:29 Harry Stebbings? I love that in terms of the realization moment, and it takes a true friend to tell you that feedback. I do want to ask that you mentioned, obviously, Kik and I spoke to Ted before, your co-founder. And he asked in particular, what worked with Kik that you've taken with you to Substack? And on the flip side, what didn't work that you maybe have disregarded and not taken with you?
5:48 Speaker 02 I think something that I took from Kik and that I got from probably Ted in particular is a respect for the hard work of building a thoughtful product for people. Which sounds kind of, I guess, sounds kind of apple pie. But when you want to make something that somebody, a human being is actually going to use and is actually going to integrate in their life and be a way that they're interacting with their friends and their family. The returns on thoughtfulness and putting in the effort to like, figure that out and to empathize with it. And to sort of like, go from something that's kind of okay to something that's actually usable is very high. And I think getting a lot of that right, mostly to Ted's credit, is a big part of why Kik went through the wild trajectory that it did.
6:27 Harry Stebbings? And on the flip side, is there anything that didn't work where you're like, actually, we disregarded it when we started Substack and we've disregarded it. Moving forward.
6:34 Speaker 02 There's a couple of things that I specifically wanted to have different. I mean, one thing, at least for the time that I was there at KIC, we never really had a business model. We sort of had this theory that we're going to build up this big user base and that's going to be a thing that's ultimately valuable. And that worked for some people, but one of the lovely things about Substack is that we sort of have a business model right at the gate. There's money involved. It's a thing that really works. Another thing that I did differently is that with KIC, we stayed in Waterloo, which is this town an hour outside of Toronto. Whereas with Substack, we sort of came to the valley. We came and did Y C. We moved here and I guess time will tell if that pays off, but I'm feeling pretty good about it.
7:09 Harry Stebbings? Absolutely. No, and it's incredible to see the people you have around the table now, especially on the investor side. But I do want to dive straight in today and really discuss kind of the state of the, maybe the macro landscape. And during COVID, we've seen some of the traditional media publications really hit quite hard. But then on the other hand, we've seen Substack absolutely take off. So a question actually from Seth Bannon was, how do you think about this? And would you say that they're directly correlated?
7:31 Speaker 02 I would say they are correlated and we've been on a pretty good growth trajectory for a bit, but it has certainly accelerated during COVID times, which is very fortunate. I mean, there's a lot of companies that are really struggling in these times. And so it's a privileged position to be in to actually see our growth accelerate. And I think there's sort of two parts to it. One part is sort of a transient effect where all of a sudden people are at home. Some people have more time to write. Some people had this side project they wanted to do for a while and it's time to do it. Or they're looking for more stuff to read and they're looking for more sort of trusted information. And I think those things are sort of temporary effects that we see, but there's also structural effects. So a lot of the things that are the sort of decline of existing media companies is this trend that's been going on for a long time.
8:13 Speaker 02 It's a big part of the worldview of why we think Substack is an important thing. And COVID has just accelerated that pre-existing trend. And that's something that's not gonna, you're not gonna turn back time on that after that happens.
8:23 Harry Stebbings? Speaking of kind of the pre-existing trend, again, I spoke to another of your investors, Emmet at Twitch before the show. And he asked, given the above happening, and as he said that, the structural changes, the public journal of record, though, it has always been free or near free. How do you think Substack interacts with public news first off?
8:41 Speaker 02 I think there's two interesting things. One key thing about this. Substack model is even when you go paid, even when you say, I'm going to charge money for this, I'm going to have subscribers bringing me reoccurring revenue. You still get to choose with every piece you publish, is this going to be only for paying subscribers or is this going to be free for everybody? And it's actually a core part of the model that you continue to publish stuff for free. And in fact, our emphatic advice to writers is take your best stuff, take your most impactful stuff and publish that for free. And from a business perspective, that's because that's their top of the funnel. That's where people find out that this is a writer they care about. This is somebody they trust. This is somebody who they're willing to pay to have more of in their life. And so it actually makes the business side of it work.
9:21 Speaker 02 But it also means that you can have your cake and eat it too as a writer. You can be a public intellectual, you can have sort of a wide impact and far reaching, far traveling, public writing. And still have a model that actually works. So I think the Substack model is totally compatible with having sort of a free public record that's widely available and widely traveled. And I think the thing that is perhaps most important about that, and especially when you talk about the public record, is just having sources that you trust. Nobody has the problem in 2020 that I don't have enough stuff to read, or I can't find a piece that's written about a topic that I care about. Or I can't find this information. The problem that people have is can I trust this?
9:58 Speaker 02 Is the incentives of the person creating this set up in a way to favor what I need or the truth or any of these important things or is it something else? And I think that's also something that Substack sort of is set up to do well, but I'm biased.
10:11 Harry Stebbings? I mean, there's so many things to unpack there for me, especially as a content creator. So I agree with you on the trust being a problem. But for me, I would actually not push back, but I would add another problem, which is the core problem with content today is discovery with the proliferation of content that we've seen in terms of creation. How do you think about solving the discovery problem? I'm really interested.
10:29 Speaker 02 Yeah, and it's the fascinating discovery problem because it's a signal to noise problem. From the reader's perspective, from the person doing the discovery, the problem is not, I can't find enough stuff. The problem again is how do I find the thing that's actually going to be valuable that I can actually trust or that is actually worth my time and attention? I don't have a pat answer. I think it's a fascinating problem and something that we'll be in an interesting position to maybe help with.
10:52 Harry Stebbings? Absolutely. And it's in the podcast. Industry too. I'm also super interested. We mentioned kind of the public journal of record there. And when we look at kind of the future of the media landscape more generally and more from a macro perspective. In my mind, I see the juggernauts continuing, be it your Forbes, your Wall Street Journals, your major publications. And then you see the rise of the Substack creator economy. And everything in between, in my mind, becomes kind of the no man's land. Do you think that's a too binary approach to kind of the future of journalism and the public record? And how do you see that playing out then?
11:22 Speaker 02 No, I think that's exactly right. I mean, I think this is the thing you get when the internet creates kind of a global marketplace for things. Is you want to be the best in the world at something. And that either means being the best in the world by being really good and being the primary thing. You know, you're the New York Times of writing stuff. Or you want to be the best in the world at a very specific thing. And so you want to be the best in the world at being the local paper for this city or covering this very specific niche. And I think that that's a powerful mode for creating great stuff. And it's not enough to be mediocre and try and make something that's good enough for sort of a medium number of people. You either have to make something that's so good for the masses that it continues, it's like the best in the world. Or that's very good for like a targeted audience. And that's where obviously the Substack model is very strong.
12:07 Speaker 02 You know, even if you just, there's a few thousand people in the world that massively value this thing you're creating. You are still creating a lot of value and this is a model that actually makes that work.
12:16 Harry Stebbings? You mentioned the model there and you mentioned the business model earlier. A lot of people, as we both know, for years have been saying that journalism could be saved by a rise in micro payments. When we chatted before there, you said to me, actually, micro payments aren't even a good idea. Can I ask, why do you think that maybe micro payments aren't the solution? And what makes you so bearish?
12:35 Speaker 02 I think that micro payments, as we sort of traditionally think of them as like, I'm going to quickly decide whether I want to spend 20 cents unlocking this thing. Just don't work on sort of a fundamental products level. I think when you decide to pay for something, there's sort of two components of the pain that come with that. Part of it is like the financial pain of like, I'm parting with this much money. And part of it is just the decision pain of being put to a decision and trying to make a good choice about, do I want to spend on this thing? Do I want to think about spending this? And as the amount of money in a transaction goes down, as it does in a micro payment. You end up in a place where that sort of like decision pain kind of dominates the equation. And so you're like maximizing pain and minimizing the amount of money you're actually getting on the other side.
13:18 Speaker 02 And it just ends up being, it doesn't work. It's not a pleasant experience.
13:21 Harry Stebbings? Can I ask, and this one's completely off the bat, but I'm just too intrigued. The product paradigm that you have today with Substack could extend into so many different areas, from marketing technologies focusing on retention and optimization of Substack pages, tools that if you wanted to go very long term to incentivizing creators with insurance products and financial products even. How do you think about the product paradigm with Substack? And where it may be, not ends, but the limits that you want to take it to?
13:44 Speaker 02 I'm not sure what the limits are. I feel like there's a big frontier of opportunity for us. And this is sort of what it feels like to be building this company right now, is there are more things that we could start to spend our time diving into that are, seem very exciting and seem potentially like a big deal in creating a lot of value than we can possibly spend our time on. And so a lot of sort of the running of the company is more about an exercise in focus than an exercise in, oh geez, we're sort of like playing against some limits. The place where I see us focusing and the strategy that I see us focusing is starting with making the best possible thing for writers and readers. Making the sort of core Substack product for writers who are connecting directly with their audience
14:27 Speaker 02 and getting paid directly by their audience and sort of having this long lasting, high value, high trust, renewerative experience. Doing everything we can to make that amazing. And then, and only then, sort of expanding from that base into some of the other potential areas of opportunity for the company.
14:44 Harry Stebbings? Speaking of kind of making that amazing experience, both on the kind of creation and the consumption side, incentives are kind of so key to all that we do, both as I said, on the creator and the consumer side. And when we spoke before, you also said deliberate or not, incentive design really shapes user behavior. You left me on that cliffhanger, Chris, but can you unpack this stream of thought for me? And how do you think about incentive design?
15:04 Speaker 02 Yeah, so I think it's basically incentives matter. And you have a system where people are communicating, there's going to be an incentive structure, there's going to be things that win. And so you're, let's say Twitter, and you're designing a product and you don't even think about the incentives for the users, but you just think about what's kind of maximizing engagement and what's sort of getting people to come and spend the most time on the site. What you end up doing is you create a set of incentives. There are certain things you can do on Twitter that make you win at Twitter. You know, there are certain types of content that get. Get elevated, that tend to get retweeted, that tend to have a wide reach, that tend to have people talking about them and seeing them. And whatever you reward in that way, that's what you tend to get. Because even if most people within the system don't want clickbait content, let's say, or wouldn't want to create clickbait content.
15:47 Speaker 02 If that's the thing that wins, that's the thing that you'll see more of. And I don't think that that's something that you can fix by sort of patching on some extra rules. Like if your underlying algorithm is maximizing for engagement, you're not going to be able to like turn up the like, don't make bad content dial in the algorithm and have like a permanent fix for that. The only real solution to that is to sort of play by different rules of the game. And so a large part of what Substack is, is just what if the game had different rules? What if we weren't trying to gobble up as much of people's attention as possible because that's how we make our ad money? What if it was, we're trying to bring as much value to readers as possible so that they, as their best selves, make the decision to pay for people that they trust?
16:29 Speaker 02 Now the incentives point to serving readers well. It's serving readers in a way that they themselves think they like because they're choosing to pay for it. And that's not perfect. I don't think there exists a perfect set of incentives and there's no magic wand that you can wave and sort of like, always get happy, great behavior at the other end. But there's better and worse. A system where people are paying directly to writers they trust is going to create better, more trustworthy content, more trustworthy relationships, more valuable culture at the end of the day than a system where people are trying to like game the engagement algorithm.
17:02 Harry Stebbings? How do you think also about the payments mechanism? Just as a pure system as of accountability for the writers to continue writing at the same cadence and quality, knowing that they're accountable to fundamentally paying subscribers? Is that really a driver, do you think?
17:15 Speaker 02 Yeah, no, I think it's absolutely key. And I think the fact that the unit of value is sort of the individual writer, like people are willing to pay more to subscribe to one writer on Substack, then they'll pay for like Netflix because this sort of relationship that they build up over time, reading somebody, has so much value to them. And so making that the center upon which the monetization strategy is built, just feels like this really important piece of what we're doing.
17:39 Harry Stebbings? Totally with you there. I mean, speaking of kind of. The incentives and the economic incentives to writers then. I've heard you say before, the economics of attention specifically have now flipped. What did you mean by this kind of flipping of attention and how have they changed?
17:52 Speaker 02 So this is part of my broad thesis is that I remember when I was a kid, when I was young, before we fully had the internet, you could like be bored. You could be sitting at home and be like, I have more attention than I know what to fill with. And I need diversion, I need entertainment, I need to like, I'm like flipping through daytime TV and there's nothing there. And sometimes since then, with the advent of smartphones and algorithmic feeds and all just all of the things we have today, I think we've basically filled that up. You never have to have a moment of your day, there's not a second that you couldn't fill with some really sort of compelling diversion. You know, you have your phone with you, you can always pull it out, you can always pull out your sort of drug of choice of whatever's good. And you don't have to be bored, you can be on your phone instead.
18:35 Speaker 02 And what that means is that now your attention is actually the last scarce resource, right? You can fill up every second, every sort of possible time you have to spend consuming media. And the only way to improve is not to get more of it, it's to get better, it's to get a higher signal and noise ratio, it's to get something that you trust more. And under those circumstances, if you can spend money to get better, higher signal, more valuable, more trustworthy stuff, it's totally rational for you to do that. And so sort of the first phase of the internet attention economy where it was sort of like the land grab for attention, where it's being free is the most important thing and we're just going to go and fill up everybody's spare minutes with whatever is going to be just a good enough thing is kind of over. And the next thing is how can we help people spend their time and attention and thought more fruitfully?
19:19 Harry Stebbings? I'm super intrigued because you mentioned obviously that the rise of the creator economy and the kind of how people think about spending their time. When people think about kind of the libraries of authors and creators that they subscribe to, it's a finite amount. How do you think about the limitations or the maximums that people subscribe to? Because people can't subscribe to 25 Substack authors. Where are the limits and what are your lessons on the kind of appetite of attention from the consumer side?
19:42 Speaker 02 I think there is likely some limit. There are people who subscribe to 25 Substacks, you'll be surprised to know. But I totally agree that for most people, there is some limit there. I think we are before the place where that matters yet. By the time the biggest problem we have is, hey, everybody's already subscribed to five people on Substack and like is struggling to do a sixth, that's a really great place for us to be. First of all, that's a lot of money net activity, but really it's like the amount that we would be as a society spending on funding creation in that world where we're pushing up against that limit is already so much more than we are now. So much more like a correct amount where we're paying to have high value culture created than it's good. But once we get there, yeah, it starts to become interesting. Like, do you start to want to have bundling of some sort?
20:24 Speaker 02 Do you want to have some way that writers can sort of self federate together and sort of help solve that problem? I think, you know, bundle economics are very real. That's definitely a thing that will become interesting. It's just like, feels like a champagne problem from where I sit today.
20:38 Harry Stebbings? Chas, what do you mean by bundle economics and how do you see that playing out? I'm really interested by that.
20:42 Speaker 02 So bundle economics is kind of, okay, if you have a set of publications that are interesting to you and they all sort of have like their own disparate values and then they're trying to get as much money as possible from a variety of people. You can construct that in such a way where if you bundle them all together and the end consumer is sort of like paying for them all at once, kind of like a cable bundle, that it ends up being a win-win for both the consumer and the creator. Because as a consumer, you're paying only a little bit more and you're getting a lot more access. And then as a creator, you're getting, you know, sort of more money on net from sort of everybody being there. And so there's a real value to being able to bundle things as like, just like a raw sort of surplus for both creators and consumers.
21:24 Speaker 02 The trick is that you have to do it intelligently. You can't come in and impose bundles on people because then it kills that golden goose of the direct relationship between readers and writers.
21:33 Harry Stebbings? Yeah, no, absolutely. And it goes back to kind of the Confederacy and the power of a potential Confederacy. I do want to ask it, Chris, because we mentioned the growth, as we've said over the last year, which has been incredible to see. But it also requires changing you as a leader. At Kik, you were founder and CTO. Now it's Substack. You're obviously CEO. I speak to many CTOs who are looking to make that transition. A cool question that they always ask is, how would you advise me? What can I do in terms of making that move from CTO to CEO?
21:59 Speaker 02 Get good co-founders.
22:02 Speaker 02 Find someone, this is what I did. I found someone that is a better CTO than I could ever be. My co-founder, Giraj, is genius CTO, and that's probably the most important. Because if you're trying to also be the CTO, I think that's probably tough. Beyond that, I think just be ready to learn a lot is probably the one.
22:18 Harry Stebbings? Having a plastic mind is always key. I guess the other thing is like, you know, when you adopted the role of CEO three years ago, more than three years ago, three and a quarter years ago, I think it is according to the trusty LinkedIn, but you change a lot. How have you seen the biggest developments for yourself in the CEO you were three years ago versus the CEO you are today?
22:36 Speaker 02 I think I'm becoming more confident at it. It's getting to the point where it's like, this thing is kind of working. We're kind of doing it. We're sort of like, I'm not sure.
22:45 Harry Stebbings? Is there anything that you've struggled with still today? You know, there's always things to grapple with in terms, and what I mean with struggle, I didn't mean with the business. I mean more in terms of the leadership aspects. It could be moral maintenance, it could be fundraising, it could be whatever. But within that discipline, there are elements where you're like, I want to do better on this.
23:02 Speaker 02 Yeah, I think focusing on building a great team is something that I spend a lot of my time and effort doing. And I feel like is the most important thing to continue to improve at. It's sort of something that I'm, another obviously critical piece of being a CEO.
23:14 Harry Stebbings? How do you find the war for talent today? Everyone always says about the war for talent in the valley. You said about moving to the valley kind of permanently, obviously with Substack. How do you find the war for talent?
23:23 Speaker 02 I think it's real. I think there's upsides and downsides. I mean, one of the things that I believe about recruiting for a, especially an early stage company that's building something genuinely new is, and it's cliche, but you really do want missionaries and not mercenaries. Like, we really want to hire people at Substack that get what we're doing and care about it and value reading and writing and see the vision for the way that we want to change the world. And funnily enough, the war for talent helps that a little bit because the people that don't see and don't care and don't want that stuff go somewhere else. They're not going to come work for you. You don't have to worry about somebody coming and joining just because it's a job because they have so many other options. Like, you almost get this automatic filter for people who care. It's interesting.
24:05 Harry Stebbings? I love that. The other kind of often spoken about kind of war is kind of the fundraising war and often on the actual kind of supply side with the Have you found the fundraising journey and have there been any big takeaways for you from raising for Substack?
24:16 Speaker 02 One thing I really valued, and this is maybe this goes back to like advice for CTOs becoming CEOs. I found the Y Combinator, going through Y Combinator, very valuable. And early on, I just sort of like took a lot of their advice fairly wholesale on how to think about fundraising, how to approach it. In general, I'm sort of a believer that it's much better to be a passable fundraiser. And as great as you can be at building a successful business than it is to like flip those things and be a great fundraiser and have an okay business. But you still have to be passable and just being able to plug into the Y C knowledge base of just like all the basics of how to do this stuff. And I just defaulted to like doing what they said. I now recommend people do that unless they have a really compelling reason not to.
25:00 Harry Stebbings? I love that and totally agree in terms of the power of the Y C network. Can I ask, in terms of the investors that you chose, obviously many mutual friends on your camp table. Why didn't you choose the investors that you choose? And I guess for me as an investor today, what's the most valuable thing that an investor can provide beyond money?
25:14 Speaker 02 I mean, it's a little bit hand wavy, but perspective is a good thing. Just being able to sort of see things from the outside and be able to just have the perspective of seeing a bunch of different companies. Having an outside perspective that you can really trust is something that we have in many of our investors and is very valuable. You know, there's lots of tactical things like having a good sort of network and being able to not just make introductions, but suggest people to whom you might benefit from introduction, like all that stuff is real too.
25:40 Harry Stebbings? Yeah, absolutely it is. I do want to move then to my favorite element. I have to admit of any episode though, Chris. And it's a quick fire answer. I say a short statement and you give me your immediate thoughts in about 60 seconds or less. Are you ready to dive in?
25:52 Speaker 02 Let's do it.
25:53 Harry Stebbings? So what's your favorite book and why? I'm sure you've read Endless, Endless, Endless Reams. What's your favorite book and why?
25:58 Speaker 02 I really don't have a favorite book, but if I'm forced to name one, I think I would name The Death and Life of Great American Cities by Jane Jacobs. I think the reason why I find it so fascinating is because sort of the idea of like city craft and what makes a great city has so many parallels in the thoughtful crafting of sort of human ecosystems on. The internet, which is a topic that obviously fascinates me. And I just think the the level in that book of like, kind of practical ideas of like, if people can see the street, like, that's a good thing. And here's why, having sort of like that object level idea of what to do. And then combining it with kind of an idea of like, liberty is a force for good is just, it hits me in my sweet spot.
26:40 Harry Stebbings? Tell me, what's your superpower and weakness when it comes to company building?
26:43 Speaker 02 This may be a little sort of self aggrandizing, but I I think of my superpower or the superpower that I aspire to is kind of the respect for both art and science in creating good products and a good company. And so I think of sort of art as the subjective, the design side, the sort of thoughtful, empathetic, human side of things. And the science as kind of the data and the metrics and the quantitative side of things. And I think that both great products and great companies are necessarily a fusion of both of those. Getting those different things to work together in harmony. And it's something that, whether or not I'm good at, I'm at least obsessed with getting it right.
27:19 Harry Stebbings? What's the weakness?
27:20 Speaker 02 I think I'm less decisive than I should be. I'm a great subscriber to the theory that an okay decision made quickly is often better than a good decision made after much agonizing. But my personality pushes me to agonize, and so that's something that I could definitely improve.
27:35 Harry Stebbings? I think that's one we share, so not to worry there. Who was the first check into Substack and how did it come about?
27:41 Speaker 02 The first outside money was Julian Frackman, who's a friend of Hamish's. And Ted Livingston, who's a friend and my old co-founder at Keg. And there's just people we had sort of, we knew and we sort of hit up with almost no, we're just like, we're doing a thing. Invest, and those are the people that said yes.
27:59 Harry Stebbings? Those are always the deals that you should say yes to, I've learned. It's when it comes with an armory of data rooms, you go, ah, not so much. I love that as a first start.
28:07 Speaker 02 Ted said that, he's kind of like, when your friends go to do something, like, just invest so that if nothing else, you're cheering for them to win.
28:14 Harry Stebbings? My lesson is always invest more than you feel comfortable when it's your friends, actually, because it normally goes right. I do want to finish, though, and the most important, really. What do the next five years hold for you and for Substack? And like, when you think about that vision, can you paint that for me?
28:28 Speaker 02 At the broadest, most grandiose level, I think what we're doing Is helping to reinvent the business model for culture. And if you take a step back and kind of think just broadly at sort of a human society scale, how much are we investing in creating great culture? And all of the things that come with that? And is that amount like too much, too little, just right? And I believe that it's sort of massively too little. And that the ecosystem we have for funding creators, and a lot of it is valuing and funding creators, but really the net thing is funding creators in such a way that it causes great work to be done, that it causes, you know, great writing to come into existence that otherwise never would have. It causes sort of scenes and movements to form
29:12 Speaker 02 and for sort of like the broader project of humanity to improve. It's like we're massively under investing in that. And in my dream for what we accomplish with Substack is that we're a major booster force for that. We help millions of writers and creators of all sorts have a superior business model, do things professionally when that makes sense for them to do, make it their job to create good culture and to have sort of like the space and capture the upside of sort of advancing the human project in that way. And I think of this like, you know, I had my first son two months ago. A lot of my next five years is Substack and that. And I think of it as I want him to grow up in a world that is richer in creativity and culture than anything that came before,
29:56 Speaker 02 where the people who are shaping and creating our culture are valued and where that's like a sort of a valid professional path and aspiration. I just think that's a vision for the future that I would want for him and for us all.
30:11 Harry Stebbings? I think that's probably the best and most meaningful answer, Chris. That makes me very happy to hear and congrats on the newborn. But I do want to say again, as I said, a huge fan of all you've built with Substack and thank you so much for joining me today.
30:21 Speaker 02 Thank you so much for having me.
30:24 Harry Stebbings? I absolutely love that discussion with Chris and it's rare that we get to go deep on a very specific industry like the public record there and like the journalism and the future of journalism there. So huge thanks to Chris for that. And if you'd like to see more from us, you can on Instagram at H Stabbings 1996 with two Bs. I always love to see you there. But before we leave you today, you have to check out Main Street. Main Street helps startups discover tax credits and incentives they didn't even know existed. The average startup using Main Street will save more than $50,000 with less than 30 minutes of work. Now that's an incredible ROI. And it's an incredibly easy way to get non-dilutive cash to help extend your runway, especially in these times. So go to mainstreet.us/20vc to skip the waitlist and get a 25% discount. It's free to sign
31:09 Harry Stebbings? up. They only make money when you make money. It's a total no brainer. And speaking of total no brainers, the team over at Pendo, the product cloud company, just launched a free product performance benchmarks microsite where you can see how your product stands up against your peers. They gave me a sneak preview and my reaction was like, holy hell. I know so many founders who are desperate to compare their products to competitors. And that's what Pendo's done. They've analyzed more than 1,000 software products and created benchmarks for startups, scaleups and enterprises across five different categories. It's all presented with some pretty slick visualizations and you should check it out at pendo.io/products-benchmarks. That's pendo.io/products-benchmarks. As always, I so appreciate all your support and I can't wait to bring you a fantastic
31:54 Harry Stebbings? episode with David Sacks at Croft Ventures on Monday.
Previous 20VC: Lightspeed Partner, Merci Victoria Grace on The Future of Collaboration Tools, Bundling vs Unbundling, Synchronous vs Asynchronous & What It Means To Productise The S*** Out of Venture Next 20VC: Craft Ventures’ David Sacks on How To Assess Founder Psychology, How To Accurately Evaluate CAC, Burn and Churn & What Makes The Very Best Startup Boards Page updated September 29, 2026 · transcript and summary are machine-generated
