I recently talked to a close friend (Justin) about how much fun I'm having on Substack lately. I explained to him how Notes has transformed the user experience and how it feels like a respite from traditional social media platforms.
They’re playing a completely different game.
Taking a piece of subscription revenue allows Substack to avoid the perils of the attention game. They have no advertisers to cater to. They don't need you to live in their app 24/7 to make money.
You can't buy a blue check; you must earn an orange one the hard way.
For now.
But Justin doesn't believe the hype.
He sees a world full of people struggling with subscription fatigue. Annoyed that every little thing on the internet is behind a paywall.
He questions if writers outside the top 10% can earn a living from paid subscriptions. Justin, a musician, compared the ocean that artists drown in on Spotify to the abundance of writers attempting to succeed on Substack.
I had rebuttals, but I also had doubts.
I wanted to steelman his argument and wondered what the experience of having a conversation with Claude would look like. Leveraging AI to learn and to get a deeper understanding of a subject is a skill that will only become more valuable.
A quick aside on what I mean by steelmanning.
Steelmanning an argument is a debate technique that involves the following:
Presenting the strongest version of your opponent's argument
Addressing the most charitable interpretation of their position
Focusing on the core principles and best evidence supporting their view
Avoiding misrepresentation or exaggeration of their stance
Demonstrating a thorough understanding of the opposing perspective
Some benefits include:
Fostering more productive and respectful discussions
Encouraging critical thinking and empathy
Strengthening your own argument by addressing the best counterpoints
Identifying potential weaknesses in your own position
Building trust and credibility with your audience and opponent
Steelmanning is the opposite of strawmanning. It involves:
Misrepresenting or weakening the opponent's argument
Attacking an easily refutable version of their stance
Focusing on minor points rather than core issues
By steelmanning, you can engage in more meaningful and constructive dialogue. This leads to a deeper understanding and more effective problem-solving. The first thing I did was try to find an essay that touched on some of the challenges of paid subscriptions. Luckily, I forgot I bookmarked a piece from Michael Simmons:
Some key points.
1. Exploding paid subscription content supply. There are tens of thousands of paid newsletters (on Substack alone). And that’s growing fast.
2. Limited attention and money. There is only so much money that individuals have to pay for those newsletters and only so many hours to read them.
3. Fierce competition. The result is a Hunger Games-style competition for money and attention.
Here was my initial prompt in Claude:
DH: Act as a debate champion. I want to steelman an argument.
Claude:
Understood. As a debate champion, I can help you steelman an argument. Steel manning is the practice of presenting the strongest possible version of an opposing viewpoint before attempting to counter it. This approach demonstrates intellectual honesty and helps create a more robust debate.
What specific argument or position would you like me to steel man? Once you provide that, I'll construct the most compelling version of that argument, incorporating the strongest evidence and reasoning in its favor.
DH:
Argument:
Paid newsletters on Substack aren't sustainable. The rich will only get richer.
Reasons:
1. There are too many newsletters on Substack, just like there are too many artists on Spotify.
2. The average consumer doesn't want to pay for more subscriptions.
3. The quality bar is only getting higher and it requires more time to grow and stand out.
Claude responded with long-winded answers which I won't copypasta but here are the 7 main points:
1. Oversaturation and the "Winner-Takes-All" Effect
2. Subscription Fatigue and Economic Pressures
3. Rising Quality Standards and Time Investment
4. Algorithm and Visibility Challenges
5. Limited Monetization Options
6. Platform Dependency and Risk
7. Competitive Pressure from Free Alternatives
I then asked Claude to write a sentence summary for each point.
DH: Write a sentence summary for each of the 7 points listed above.
Claude:
Certainly. Here's a sentence summary for each of the 7 points:
1. Oversaturation and Winner-Takes-All: The newsletter market on Substack is becoming overcrowded, leading to a situation where only a small percentage of creators capture the majority of subscribers and revenue.
2. Subscription Fatigue and Economic Pressures: Consumers, faced with numerous subscription options and economic uncertainties, are less likely to pay for newsletters, viewing them as non-essential expenses.
3. Rising Quality Standards and Time Investment: The increasing quality expectations for newsletter content require significant time and resources, making it challenging for many creators to sustain their efforts without guaranteed returns.
4. Algorithm and Visibility Challenges: Substack's discovery mechanisms may favor established newsletters, creating a visibility barrier for new and talented but unknown writers.
5. Limited Monetization Options: Substack's reliance on subscription-based revenue limits creators' ability to diversify their income streams, potentially hindering long-term sustainability.
6. Platform Dependency and Risk: Writers building their audience on Substack become vulnerable to platform changes, potentially jeopardizing their newsletter's viability.
7. Competitive Pressure from Free Alternatives: The abundance of free, high-quality content online creates strong competition for paid newsletters, making it harder to justify subscription costs to potential readers.
The first 3 are the only arguments I agree with to some extent.
Number one is the biggest challenge for new creators in my mind. The Pareto Principle would be great. Unfortunately, reality is much worse.
The top creators are getting more than 80% of all revenue.
Today, the creator economy is diverse, vibrant, and growing. However, across many of the creator economy platforms, a similar pattern emerges. The lion’s share of the revenue is captured by a very small portion of the content creators. Far more than 80% of the revenues are created by far fewer than 20% of the creators. In short, the Pareto principle, or 80/20 rule, does not apply. The creator economy is “winner takes most. — Citigroup
In less than five minutes, this exercise got the axons in my brain firing rapidly.
I had so many ideas and additional questions I wanted to dive into.
I could expand all of this into several essays and endless short-form content.
I could also have the same conversation with ChatGPT and get a second opinion.
Steelmanning an argument that you see online is such a great way to learn and it helps generate an enormous amount of momentum that is helpful when you're not quite sure what to write about next.
Love this post. I believe it's not 80/20 but more like 95/5 to be honest.