Yo! Great post! We actually went pretty deep into these sorts of ideas in 2020 and 2021; it was the web3 era, and Chris (our CEO) has had some experience with various kinds of decentralized ownership projects. Substack has always made its reputation among writers for basically financial reasons, so anything that makes the financial picture rosier, better, more compelling for writers is music to our ears.
As you can imagine, there are two major issues with any such projects: (1) the mathematics and (2) regulations. There are substantial regulatory / legal complexities around nearly anything that touches money, and especially anything that approaches ownership / stakes / securities. The government is really anxious about the possibility of fraud or predation, so most interesting arrangements are simply not permitted.
But honestly, (1) is worse. I can't give away any of our numbers, but basically none of this would add up: there aren't enough writers making enough money to support the oceans of writers making no money, not even close. The $60M figure is also close to the total amount of money Substack has raised; so even if we used all of our funding on this, it wouldn't add up and we'd be bankrupt in a year, at which point no one would be making any money.
The math is brutal because Substack, like most platforms, has a very, very long tail; it's longer than people realize, and its volume is immense. If we announced that any writer who joined would make $12K / year, we'd instantly have *millions* of writers signing up for that money; especially globally, that's a giant amount of money. If we then decided βto save the program and companyβ to qualify writers somehow, well (a) it would be so costly and time-consuming to qualify millions of applicants that we're back to the math problems and (b) it would put us in the position of choosing "who deserves to make money," which we deeply do not want to be in.
There are a lot of people in the company very keen to make writers richer and to make writing a viable livelihood; it's the whole reason the company exists! We also have some web3 people, so these conversations never stop; every few months, we explore something new in this area. You may have heard that we did a community round of investment under brand-new SEC rules that allow regular people to invest (which is a great e.g. of how regulated this all is; until recently, you were legally barred from investing in startups or owning equity in any way in this category of business; the SEC doesn't like creative financial ideas; too often, they're scams, so they locked the whole scene up!).
Shared this internally with the folks who cogitate on this stuff; thanks very much for sharing it!
Wow, thanks so much, Mills, for this insanely thoughtful reply. Much appreciated.
Great points, all well taken. Yeah, the math and legal issues seem like sticky wickets. But, y'all have lawyers and quantoids to figure that stuff out, right? ha!
While playing around with the napkin math for such a program, the figure for revenues needed to offset program costs ballooned very quickly. But, I come from the public and nonprofit arts sector which is starting to fund artists and creators more seriously and more equitably, and the ideas of universal basic income and WPA like projects have become more feasible. Some of that has to do with large infusions of cash for recovery and relief, especially for the performing arts, through ARP, CARES and many other initiatives. $60 million is a lot, but a feasible as a goal if supported by writers on Substack, philanthropists and government agencies. DIFFICULT to do, but possible. A pilot program at a much smaller amount would be a great way to test! I bet you could find 1,000 Substack authors right now with some basic criteria for consistency of output for a period of time (no other parameters re: quality or content). Selected randomly if there are more than 1,000 that meet a basic criteria. Pay them for a year and see what happens (evaluate the program). $14 million. It could even be a smaller pilot, but that isn't as fun. Not saying I can raise $14 million, but I'm happy to help to try an push some conversations forward if y'all were interested. Regardless, I'm a huge fan/substack evangelist and really appreciate the vehicle.
The point about the flood of users plus administrative cost plus adjudicating who gets paid, is well taken. I don't have immediate answers, but I think these are solvable problems. It would have to be a slow build, starting with a pilot, testing, test marketing, opening it up to more and more folks while the user base continues to grow. But the goal of a large scale universal income program for human creative output is a good one. It may be essential for a better future.
And maybe this is all a grift to get substack to pay me for writing...bwahahahahha.
If the only thing we achieve is getting you moolah, it could still be worth!!! I do think these are some of the most interesting concepts in our possibility space, and we'll keep working the more structural angles for sure; it's how we made our initial foray βwith a structural play, a new modelβ and I bet it's how we could make more moves, too. Time will tell!!!
I don't think I got that tag to show up on my feed, my man! It would be cool if this would work but my jaded self fears it won't. Why is it artists don't have patrons anymore? Google for greatest art patrons. Why is this not a thing anymore today? Starts with a C. There are good and bad "isms"...
There are still art collectors and patrons, but part of the problem is a legacy of "art for elites/patrons" which can only support a handful of artists. There aren't enough patrons and too many artists, which makes the market for art absurd. Still, many create regardless of financial prospects. I think the system has to be democratized and some initial forays into paying people for this creative work based on a UBI like system is a great way to test the concept! All we need is $14 million US for a test program. Should be easy! haha.
Yo! Great post! We actually went pretty deep into these sorts of ideas in 2020 and 2021; it was the web3 era, and Chris (our CEO) has had some experience with various kinds of decentralized ownership projects. Substack has always made its reputation among writers for basically financial reasons, so anything that makes the financial picture rosier, better, more compelling for writers is music to our ears.
As you can imagine, there are two major issues with any such projects: (1) the mathematics and (2) regulations. There are substantial regulatory / legal complexities around nearly anything that touches money, and especially anything that approaches ownership / stakes / securities. The government is really anxious about the possibility of fraud or predation, so most interesting arrangements are simply not permitted.
But honestly, (1) is worse. I can't give away any of our numbers, but basically none of this would add up: there aren't enough writers making enough money to support the oceans of writers making no money, not even close. The $60M figure is also close to the total amount of money Substack has raised; so even if we used all of our funding on this, it wouldn't add up and we'd be bankrupt in a year, at which point no one would be making any money.
The math is brutal because Substack, like most platforms, has a very, very long tail; it's longer than people realize, and its volume is immense. If we announced that any writer who joined would make $12K / year, we'd instantly have *millions* of writers signing up for that money; especially globally, that's a giant amount of money. If we then decided βto save the program and companyβ to qualify writers somehow, well (a) it would be so costly and time-consuming to qualify millions of applicants that we're back to the math problems and (b) it would put us in the position of choosing "who deserves to make money," which we deeply do not want to be in.
There are a lot of people in the company very keen to make writers richer and to make writing a viable livelihood; it's the whole reason the company exists! We also have some web3 people, so these conversations never stop; every few months, we explore something new in this area. You may have heard that we did a community round of investment under brand-new SEC rules that allow regular people to invest (which is a great e.g. of how regulated this all is; until recently, you were legally barred from investing in startups or owning equity in any way in this category of business; the SEC doesn't like creative financial ideas; too often, they're scams, so they locked the whole scene up!).
Shared this internally with the folks who cogitate on this stuff; thanks very much for sharing it!
I just learned that math isn't real, so that is no longer a problem.
https://www.kirkusreviews.com/book-reviews/eugenia-cheng/is-math-real/
As a terrible, terrible, terrible math student and an innumerate adult in tech, I am PLEASED to click this link!!!
Next time someone asks me about maths or to pay a bill, I'm saying:
"Math is real in much the same way that Santa Claus is real: as an idea"
Wow, thanks so much, Mills, for this insanely thoughtful reply. Much appreciated.
Great points, all well taken. Yeah, the math and legal issues seem like sticky wickets. But, y'all have lawyers and quantoids to figure that stuff out, right? ha!
While playing around with the napkin math for such a program, the figure for revenues needed to offset program costs ballooned very quickly. But, I come from the public and nonprofit arts sector which is starting to fund artists and creators more seriously and more equitably, and the ideas of universal basic income and WPA like projects have become more feasible. Some of that has to do with large infusions of cash for recovery and relief, especially for the performing arts, through ARP, CARES and many other initiatives. $60 million is a lot, but a feasible as a goal if supported by writers on Substack, philanthropists and government agencies. DIFFICULT to do, but possible. A pilot program at a much smaller amount would be a great way to test! I bet you could find 1,000 Substack authors right now with some basic criteria for consistency of output for a period of time (no other parameters re: quality or content). Selected randomly if there are more than 1,000 that meet a basic criteria. Pay them for a year and see what happens (evaluate the program). $14 million. It could even be a smaller pilot, but that isn't as fun. Not saying I can raise $14 million, but I'm happy to help to try an push some conversations forward if y'all were interested. Regardless, I'm a huge fan/substack evangelist and really appreciate the vehicle.
The point about the flood of users plus administrative cost plus adjudicating who gets paid, is well taken. I don't have immediate answers, but I think these are solvable problems. It would have to be a slow build, starting with a pilot, testing, test marketing, opening it up to more and more folks while the user base continues to grow. But the goal of a large scale universal income program for human creative output is a good one. It may be essential for a better future.
And maybe this is all a grift to get substack to pay me for writing...bwahahahahha.
If the only thing we achieve is getting you moolah, it could still be worth!!! I do think these are some of the most interesting concepts in our possibility space, and we'll keep working the more structural angles for sure; it's how we made our initial foray βwith a structural play, a new modelβ and I bet it's how we could make more moves, too. Time will tell!!!
I don't think I got that tag to show up on my feed, my man! It would be cool if this would work but my jaded self fears it won't. Why is it artists don't have patrons anymore? Google for greatest art patrons. Why is this not a thing anymore today? Starts with a C. There are good and bad "isms"...
There are still art collectors and patrons, but part of the problem is a legacy of "art for elites/patrons" which can only support a handful of artists. There aren't enough patrons and too many artists, which makes the market for art absurd. Still, many create regardless of financial prospects. I think the system has to be democratized and some initial forays into paying people for this creative work based on a UBI like system is a great way to test the concept! All we need is $14 million US for a test program. Should be easy! haha.
14 mil is peanuts for the 1%. They spend that before breakfast and get it back double after lunch.