The underlying problem wasn't the algorithm not doing its job correctly or that moderation efforts were nascent. It was that they were doing an outstanding job at what they're supposed to: getting users to spend more time on the app.

To fix the current state of media, they hypothesized, you must change the business model from one that optimizes for your time to one that optimizes for your money.

A hypothesis for this disconnect (and the guiding principle behind building Substack) is the shift around how we value attention. Attention quickly went from being one of our most abundant resources to one of the most scarce ones.

thanks to Patreon and a nascent pre-Substack subscription publishing movement, it's also clear that a significant number of people are willing to pay good money for podcasts about war history, YouTube shows about video game critiques, in-depth NASCAR reporting, bodybuilding, and many other niche interest areas.

A fundamental principle of competitive advantage strategy is new products compete on only two dimensions: Differentiation or Cost.

For an ad-driven media publication, the lever a publication exercises most control over is distribution cost: how much does $ is spend to generate one article view.

The bet Substack made was the rise of media businesses competing on the differentiation axis instead of the cost one.

To maximize value creation for each writer from the very early days, they built the first Product for just one person: Bill Bishop, author of Sinocism.

Hey Bill, we're making this thing called Substack, it'll be a very simple way to do a paid newsletter, would u be interested in being the first publisher?

-Hamish recounts

They built a product exclusively for him. Small scope, large impact.

This approach led to discovering and building features that may have otherwise seemed like a post-MVP thing. A most prominent example of this was building group subscriptions in the very first version of the product.

Hamish and Chris continued with the same approach, recruiting already established writers and solving the needs of their acute publication in a generalizable manner.

Substack did not sell a better product. They sold trust.

Substack’s moat is hard to grasp at first; they built a product that lacks any sort of writer lock-in. The lack of platform lock-in, in fact, is one of the core value pillars of the product.

the critical value proposition for Substack centers around trust.

this high degree of trust makes end-readers of a particular Substack publication more susceptible to subscribing to other Substack publications.