Substack: the email-newsletter platform that turned writers into entrepreneurs
Chris Best, Hamish McKenzie, and Jairaj Sethi founded Substack in 2017 to give writers a simple way to charge readers directly for email newsletters. By 2026 Substack hosts thousands of paid writers, has facilitated hundreds of millions of dollars in writer revenue, and has reshaped how independent journalism, criticism, and commentary economically work. The platform takes a 10% cut of revenue. The case is studied as the defining creator-economy infrastructure play.
- Story: Chris Best, Hamish McKenzie, and Jairaj Sethi founded Substack in 2017 to give writers a simple way to charge readers directly for email newsletters. By 2026 Substack hosts thousands of paid writers and has facilitated hundreds of millions of dollars in writer revenue. The platform takes a 10% cut.
- Why it matters: Substack is the defining creator-economy infrastructure play. The platform turned email-newsletter publishing from a side hobby into a venture-scale business model.
- Takeaway: Take-rate must be transparent and fixed. 10% is the only revenue model.
- Takeaway: Email-list portability is a feature, not a bug. Writers owning their lists builds trust.
- Takeaway: Content-moderation choices have consequences. The hands-off approach attracted writers and produced controversies.
Substack — the four-step story
Substack at a glance
Quick facts
Where independent writing was in 2016
In 2016, independent writers had limited options for getting paid directly. Patreon existed but was aimed mainly at podcasts, YouTube, and other ongoing creative work; newsletter-as-business was less developed. Medium had a Partner Program but the economics for writers were unpredictable. Most writers either worked for traditional publications (with declining pay) or wrote for free hoping ad revenue would eventually emerge.
Substack's thesis was that email newsletters were a uniquely good economic format. Writers could keep email lists portable, charge readers directly through subscriptions, and avoid the algorithmic dependence that made social-platform monetization risky. The platform infrastructure (hosting, payment processing, subscriber management) was the missing piece.
The platform
Substack launched with a simple proposition: write a newsletter, charge subscribers, Substack handles infrastructure and takes 10% of paid revenue. Free newsletters were free to host indefinitely. The 10% take-rate was the only meaningful revenue model. A few choices made the platform attractive to writers:
- Email list portability. Writers owned their subscriber lists and could export at any time. The promise meant writers weren't locked into Substack the way they'd been locked into Medium or other platforms.
- 10% take-rate, no other monetization. Substack made money only on commission. No ads, no algorithmic feed mixing in other content, no commission on free subscriptions.
- Editorial autonomy. Substack initially took a hands-off approach to content moderation, letting writers publish what they wanted within legal limits. The position became more contested over time as it produced controversies, but it attracted writers wanting editorial freedom.
- Substack Pro grants. Substack offered initial-year guarantees to specific recruited writers (six-figure amounts in exchange for a higher Substack commission for the first year). The program brought high-profile writers to the platform early.
What grew
Substack scaled significantly through 2019-2024. Multiple writers reach $1 million-plus in annual revenue through the platform. Cumulative writer revenue has passed hundreds of millions of dollars. The Substack app (2022) and Substack Notes (2023) extended the platform beyond pure newsletters into broader creator-distribution infrastructure.
Competitive pressure has increased. Beehiiv launched in 2021 with a more newsletter-business-focused product. Ghost has built an open-source alternative. Patreon has stayed a meaningful adjacent platform. The competitive dynamics suggest the creator-economy platform space will continue consolidating, and Substack's 10% commission rate may face pressure from competitors offering lower rates or different mechanics.
How RGM thinks about creator-economy platforms
When clients ask about creator-economy plays, the Substack case is useful as a structural example. The conditions: identify a creator-monetization format that's economically attractive but operationally complex (newsletters are simple to write but the subscription-infrastructure is real), provide that infrastructure with a clear commission model (10% take-rate, no other monetization), and align with creator interests on portability (email lists belong to the writer, not the platform).
The harder lesson is about platform-position vulnerability. Substack's commission model can be undercut by competitors. The content-moderation debates are ongoing and produce occasional writer departures. The creator-economy platform space is still in the “who will dominate” phase. We tell clients that creator-economy platforms have to choose between commission-rate competition and feature-differentiation competition — trying to do both produces operational complexity that often hurts the platform.
Frequently asked questions
How does Substack make money?
10% commission on paid-subscription revenue. Free newsletters generate no revenue for Substack. The take-rate is fixed; there's no add-on advertising or alternative monetization in the standard product.
Can writers really take their email lists?
Yes. Substack publishes a clear position that writers own their subscriber lists and can export at any time. Several high-profile writers have left Substack for competitors, taking subscribers with them, which validates the portability claim.
What are the moderation controversies?
Substack has been criticized for its hands-off approach to content moderation, especially around writers publishing content other writers and outside critics consider extremist or harmful. The debates have produced several public departures and ongoing tension. Substack has held the line on its editorial-autonomy position despite the criticism.
Sources & references
- Substack (company site) — Product reference.
- Chris Best founder writing — Substack's own blog with founder-led content.
- Substack Pro program — The initial-year writer-recruitment program.