The Intersection of Substack and Reducing Product Risk: Building for Quality Information and User Value

The Intersection of Substack and Reducing Product Risk: Building for Quality Information and User Value

In today's fast-paced digital age, the demand for high-quality information has never been greater. Just as we willingly invest in high-quality food, clothes, and cars, it is only natural that we seek out the same level of quality in the information we consume. With our time and attention being finite resources, the need for effective filtering and trustworthy sources becomes paramount. This is where Substack, a popular platform for newsletter writers, comes into play.

Substack operates on a simple revenue model: they take a 10% cut of subscription fees, providing an incentive for writers to increase their revenue. The company's success hinges on three key factors: increasing the number of readers who convert from free to paid subscriptions, encouraging paid subscribers to have multiple subscriptions, and raising the average cost per subscription. To achieve these goals, Substack must prioritize building discovery tools, such as recommendation engines, to help writers expand their audience and entice readers with more engaging content.

One potential avenue for growth is through the concept of bundling. By offering curated bundles of newsletters, Substack and its writers can generate more revenue by enticing casual fans to make a purchase. This approach not only benefits the platform and its writers financially but also allows readers to access a diverse range of high-quality content conveniently.

While Substack focuses on delivering quality information, another aspect of building successful products lies in reducing product risk and eliminating the "minimum viable product" (MVP) mindset. When it comes to different types of customers, the approach to de-risking projects should be tailored accordingly. Initial releases may not have all the features teams desire, but continuous iteration is the key to success. As long as users are receiving value with each iteration, the absence of certain features becomes less of a concern.

However, relying solely on user feedback can be problematic. Users often struggle to articulate their own behaviors and preferences accurately, making it difficult for product developers to rely solely on their input. The responsibility falls on the product team to infer solutions based on user problems. As Henry Ford famously stated, "If I'd asked customers what they wanted, they would have said a faster horse." This highlights the importance of product thinkers who can envision and create solutions that surpass customer expectations.

When it comes to investing in product development, Cody's design quality framework proposes a crucial thesis: the level of investment before a product reaches the customer is directly linked to the team's confidence in understanding the problem and the viability of the solution. Building features, rather than fully-fledged products, can be a more lightweight approach, especially when leveraging existing products as a foundation. MVPs (Minimum Viable Products) and MVFs (Minimum Viable Features) serve as proof-of-concept to demonstrate that ideas can effectively solve problems. Once proven, further investment is often necessary to fully realize the potential of the product or feature.

Releasing products or features regularly plays a vital role in de-risking the overall vision. By incrementally scaling and testing what has been built, teams gain valuable insights into how their creations perform and identify any potential issues. This iterative approach allows for continuous improvement and reduces the risk of encountering major problems all at once.

To summarize, Substack and reducing product risk share common ground in their pursuit of delivering value to their respective audiences. Substack's focus on high-quality information aligns with the need for reliable and trusted sources in an information-saturated world. Simultaneously, the approach to reducing product risk involves understanding customer needs beyond what they explicitly express and continuously iterating to deliver value incrementally.

Actionable Advice:

1. Embrace the concept of bundling: If you are a writer or content creator, consider collaborating with others in your niche to offer curated bundles that attract a wider audience and generate additional revenue.

2. Foster a product-thinking mindset: As a product developer, strive to understand the problems your users face and be proactive in finding solutions. Don't rely solely on user feedback but aim to exceed customer expectations by envisioning innovative features and experiences.

3. Embrace iterative development and regular releases: By releasing products or features regularly, you can de-risk your vision and gain insights into scalability and potential issues incrementally. This approach allows for continuous improvement and reduces the likelihood of encountering major problems all at once.

In a world where high-quality information and user value are highly sought after, platforms like Substack and product development strategies that prioritize reducing risk play pivotal roles. By combining the principles of delivering quality content and iteratively building products, we can create a more informed and user-centric digital landscape.