You make a valid point Paul Soldera BUT the bottom line is that Substack is NOT a profitable business at this stage.

What keeps it going (I assume as I am not privy to the internal accounts) is VC Funding.

VCs are not charities obviously and their strategy is usually one of the following:

1. Invest in profitable companies to make them even more profitable or take them public (or both);

2. Invest in early stage companies in the hope they make the right bet and it becomes a dominant player in its niche;

3. Invest in companies they perceive as having high growth potential and then pursue said potential using every means possible (including cross pollination with their other investments) with a plan to monetise said growth later on.

In my opinion a16z and Marc Andreessen (who are probably the most savvy VCs there are in the tech space) invested in Substack for reason #3 and are currently pursuing said “high growth potential” in order to monetise it properly later on because they understand that the current business model (strictly revenue share) is not sustainable long-term if said high growth is to continue (as it requires significant ongoing investment).

Therefore, other monetisation avenues WILL be introduced (including ads in the notes feed imho) with one already emerging with the Substack VIP program currently in “closed beta” with The Free Press.

I also think there will be new features introduced to the platform later on that will be strictly paid with a traditional SaaS model and potentially even some existing features going behind the (metaphoric) paywall.

Publications on Substack with large recurring revenues often find it more financially beneficial to go elsewhere where they pay a fixed amount instead of doing revenue share. I think this trend will accelerate significantly with Ghost introducing ActivityPub integration in version 6.0 because it will add a significant “social layer” to that platform which is much much (much!) bigger than Substack’s current user base.

Keen to hear your take on the above.