A sophisticated paywall's goal isn't just to block content; it's to intelligently guess a user's likelihood to subscribe. If they won't subscribe, let them read to build brand. If they will, present the paywall. This guess is based on referral source, story type, and other user data to optimize both reach and revenue.

A16Z invested in Substack believing that providing writers with a monetization tool would unlock a new supply of high-quality content. This new supply would, in turn, create its own demand, rather than competing in the existing market for free content.

Withholding your best, most actionable ideas for a paid tier is a strategic move to preserve their effectiveness. By sharing powerful concepts with a smaller, dedicated audience, you prevent them from becoming diluted and overused, thereby justifying the premium subscription cost.

Substack's founder argues that online spaces become "heaven or hell" based on their core business model. Ad-based models optimize for attention (often leading to outrage), while Substack's revenue-share model forces its algorithm to optimize for the value creators provide to their audience.

Substack's growth wasn't just a "COVID blip." Its continued success is driven by a fundamental shift in the economy of attention. As attention becomes our scarcest resource, we are more willing to pay to curate it with high-quality, trusted content.

Substack's founder doesn't see it as replacing other social networks but as a distinct "city" with a unique culture—intellectual and cosmopolitan. This framing attracts a specific type of user and creator, differentiating it from "cities" like TikTok or Twitter.

Making user data and audiences portable seems counterintuitive to retention. However, Substack found that by allowing creators to export their email lists, it removed the fear of platform lock-in. This trust makes creators more willing to invest deeply in the platform.

New publications without established brand names cannot immediately lock down content. The priority is letting users sample enough high-quality work to understand the unique value proposition and build trust. This strategic delay sacrifices short-term revenue for long-term brand equity.

Substack offers a powerful platform for writers to build a direct audience and revenue stream through subscriptions. It's an ideal alternative for creators who excel at writing over video, allowing them to directly monetize their skills and build a recurring revenue business.