“You could tell he had big ideas.”Īt Pando, McKenzie’s coverage of Tesla and SpaceX caught the attention of an editor who approached him about doing an Elon Musk book. “He seemed very, like, ‘I wanna shake things up,’ ” remembers Paul Carr, Pando’s former editorial director. Two years later, he joined the American woman who would become his wife, Stephanie Wang, in the United States, eventually landing a reporting gig at PandoDaily, the now defunct technology news website. In 2006, he moved to Hong Kong and freelanced before helping create Hong Kong’s edition of Time Out. At the University of Otago in New Zealand’s southeast, McKenzie got into journalism, which brought him to Canada’s University of Western Ontario for graduate school. Slim and clean-cut, McKenzie grew up in a rural wine and farming region, where his father worked as an atmospheric scientist and his mother a high school language and culture teacher. McKenzie, a 40-year-old New Zealander who lives in San Francisco with his wife and two kids, is Substack’s de facto ambassador to the media. “What we are trying to do is build a true alternative to the attention economy.”
“We’re not here to build a small boutique business and just hope for the best, and hope that Google doesn’t crush us one day, or Amazon doesn’t crush us one day,” he said. When I asked McKenzie about that, he didn’t recall making the remark, but neither did he shy away from laying out the company’s ambitions. They’re not in Mark Zuckerberg territory just yet, but that appears to be the goal: Someone who’s friendly with cofounder Hamish McKenzie told me he once said that Substack would be the next Facebook. Substack also appears to have influenced strategy at major legacy news brands, like The Atlantic and The New York Times, which have been building out their own newsletter portfolios and, in some cases, vying for talent with Substack. In February, President Joe Biden bypassed the long queue of print reporters clamoring for a sit-down and offered one instead to Heather Cox Richardson, the breakout history professor who became Substack’s most-read writer last year. (Substack typically skims off 10 percent of a newsletter’s revenue, but individual deals vary some writers take a lump sum in exchange for relinquishing 85 percent of their subscription dollars.) In addition to Smith, several other literary lions have joined Substack (Salman Rushdie, George Saunders, Roxane Gay, Chuck Palahniuk, Joyce Carol Oates), which has also begun to attract celebrities of varying stripes (Padma Lakshmi, Nick Offerman, Dan Rather, Edward Snowden, Kareem Abdul-Jabbar). In November the company, headquartered in San Francisco’s Financial District, offered a tiny glimpse into its otherwise opaque revenues, saying it had surpassed a million paid subscriptions to Substack publications, the top 10 of which, out of hundreds of thousands, collectively bring in more than $20 million a year. Its head count is about 90, up from 10 at the start of the pandemic. I feel a bit like that.”Ī year and a half ago, in a column published in the pages of this magazine, I suggested that Substack “feels like a player that might just be on the cusp of the big leagues.” Since then, Substack has raised an additional $65 million in venture capital, bringing its total funding to $82.4 million-led by mega-firm Andreessen Horowitz-and its valuation to a reported $650 million.
“It makes me feel like, in the movies, where you see the reporter that goes to the phone booth and calls in her article. “I really like my Instagram, but it has specific boundaries, and this was something new,” said Smith. But as it morphs from a niche publishing concern into a heavyweight start-up mentioned in the same breath as Twitter and Facebook, its user base is proliferating accordingly. In its early days, Substack primarily catered to a certain set of internet-savvy writers and journalists, lured by the promise of monetizing a direct relationship with their readers.