Many good points have been made on both sides, I’m compiling this writing here. If you’re aware of other examples, please send them over.

Against Substack

Packy McCormick (#11 Free): Personal Email

their product velocity is dog shit… don’t do anything for discovery… it crashes all the time… It absolutely blows my mind that they’ve raised as much as they have and have improved the product as little as they have.

Gwern: Comment on Reddit

One additional aspect of this is that Substack, technically, [is] just not very good. When I moved over, I ran immediately into multiple problems: the tracking links are so long that my newsletters get cut off, subscripts/superscripts just don’t work, etc. (Other problems have come up: AlwaysKillSticky is broken on Substack because they do really abominable things with comments, and we never did figure out why a Substack page is constantly firing off requests to the server.) I don’t aspire to make my newsletters as awesome as my website, but I expected Substack to at least be as decent as your raw dumped-HTML Mailchimp newsletter.

The Scholar’s Stage: Why I am Bearish on Substack

This is a recipe for intellectual sterility. A media ecosystem composed of the New York Times, a few other large newspapers, and a swarm of hungry Substackerati will starve itself out. The big Substack names will continue to rake in subscriptions, of course, but what will they have to talk about? Only the same old ideas they had been playing with for decades.

Applied Divinity Studies x Nintil: How Substack Became Milquetoast

The most damning thing about Substack is not any of these theoretical structural mechanics, it’s the easier more intuitive understanding that nothing great will be written here. Each piece we read and publish is a bite sized dose of momentary stimulation. It follows an unwritten contract between each party: I will not try too hard to write anything serious, you will not try too hard to understand my writing, and both of us will be happier for it.

Rob Hardy: The Case Against Substack

This is a top down, rather authoritarian approach to community. People can discuss things, sure, but only when you explicitly allow them to. If your fans want to find, connect with, and converse with other like-minded audience members outside of that structure, they’re shit out of luck.

For Substack

Nadia Eghbal: Twitter Thread
Re: Homogeneity within newsletters:

On the contrary, we encourage, and see the best success from, writers who actively take risks with their newsletters. You should try to filter for your most loyal fans. This problem is endemic to creative work generally… if anything I think Substack reduces this issue more than other social platforms (e.g. Twitter). A lot of ppl feel pressure to acquiesce to fans, but they’ll be rewarded more if they don’t.

Byrne Hobart: Subscriptions and Incentives ($)

This is true—a newsletter with exclusively evergreen content is closer to a library than to news. But it’s possible to work within this constraint, by focusing on evergreen themes that are illustrated by day-to-day news. And this enforces good intellectual hygiene: a theory that never produces evidence in its favor is a pretty useless theory, and pure theorizing without practical examples is boring to read

Applied Divinity Studies: How to Become Famous on Substack Overnight (in Ten Years)

I’m pretty confident saying that these overnight successes tend to take ballpark 10 years, either in building a mailing list, gaining expertise, or struggling in obscurity writing words no one will ever see… [this] strengthens Substack’s argument that it is genuinely a place for writers to achieve financial stability and own their relationship with readers. This isn’t some horrible new wave distinct from all previous media, it’s just a better format for the same authors.

Petition: Yes it can work

So f*ck it. If you have a good idea — a differentiator — and you have the stamina to give it a go, you should. Be the exception to the rule (if it is even, in fact, a rule). Don’t listen to the naysayers.

The Atlantic: Why Matthew Yglesias Left Vox

Like Andrew Sullivan, who joined Substack after parting ways with New York magazine, and Glenn Greenwald, who joined Substack after resigning from The Intercept, which he co-founded, Yglesias felt that he could no longer speak his mind without riling his colleagues.

The Geyser: Site of the Year: Substack.com:

Clearly, Substack has tapped a need in the market, and their technology, while still nascent, is effective and easily adopted. By embracing the subscription model, Substack has also made writing commercially viable again, something many newspapers forgot how to do years ago, to their peril.

Neutral

The Guardian: Why are public thinkers flocking to Substack?:

It’s a Faustian bargain to commodify your personality. You’re free from the limiting influences of institutions… Yet, input from editors is inevitably just replaced with the pressure of analytics… In a few years’ time, I predict we may look back at the chaotic information ecosystem of the 2010s as a sort of social media interregnum. Seduced by the seemingly magical qualities of our new powerful technological tools, we deluded ourselves into believing clout and exposure could be a replacement for dollars and sense.

Alexey Guzey: The most we can say about earnings of Substack’s top writers

Below is the full table of the best possible earning estimates of all the top Substack writers, as of 2020-11-15, based on both bounds-based reasoning and the changes in orders of magnitude of the number of paid subscribers in October-November 2020.

u/nansenamundsen: The Case For and Against Substack

It makes the web less open. Each blog/website has its own culture and aesthetic. Each Substack pretty much feels the same. It also makes it much harder to find content online without each author’s home looking different.

Put A Number On It!: SubOnlyStackFans

People talk about how the 90s promise of the internet as a medium of unconstrained individual expression turned into a reality of social media monopolies forcing people into homogenous boxes for data harvesting. But if you have something to express and show the world you don’t have to stay boxed up. Let the internet be your canvas.

Napkin Math: Substack Rhymes with Medium

However, the big question is their cost structure. For each publication, they take 10% of the subscription revenue. At the beginning of a publication’s life, this is reasonable. Maybe even a steal. But once a writer builds a business that makes hundreds of thousands of dollars a year, what’s stopping them from moving to another platform like Ghost or building their own tech in-house to save money?

Writing On Substack

Earlier, I wrote “the most damning thing about Substack is… that nothing great will be written here”. Accordingly, Substack’s true redemption lies not in theoretical arguments, but in the writing itself. Screw the incentives, the mechanisms, the fixed or variable payments schemes and arguments about media ecosystems. Either Substack produces great writing, or it doesn’t.

This is a difficult point for me to make, because I don’t read Substack! But there are still a few pieces and blogs that have stood out to me. If you email me your favorites, I’m happy to take a look and add them to this list.

High Tea
As far as I can tell, High Tea is the only good “explainer for Gen Z culture” out there. It achieves this distinction largely by not functioning as an explainer, but as a language immersion experience. If you’re old, the first post won’t make any sense, but by the 3rd you might feel like you genuinely understand something beyond the top line demographic trends.

The Dispatch

• A Mostly Peaceful G-File
• The Folly of Prediction
• The Dispatch Fact Check

Tyler Cowen mentions over email that he reads Bill Bishop’s Sinocism.

I also like The Diff by Byrne Hobart, but I liked his pre-Substack writing even more.

Changelog:

• Added Sinocism
• Added Napkin Math article
• The Geyser emails me their own article
• Sean Monahan emails me his own article

How many of our greatest minds have we lost?

From The Dream Machine (p50) on John Atanasoff:

He was determined to build a computing machine… But with all his teaching responsibilities, he’d had very little time to focus on the problem. Finally, however, on a bitterly cold winter night in late 1937, he just couldn’t take it anymore; he had to get away to concentrate. So he jumped into his car in Ames, Iowa, and drove east through the subzero temperature at more than eighty miles per hour. Almost three hours later, after he crossed the Mississippi River into Illinois, he stopped at a roadhouse to warm up. And there, somewhere between his first and second bourbons, he conceived four crucial ideas to make him computer work."

Incredible! Atanasoff was busy, but finally got down to doing the thing he really loved, the world recognized his genius, and he was given all the resources he needed to complete his work.

At least, that’s what would have happened in any reasonable society. Instead, we’re told:

Atanasoff didn’t develop his invention any further, as it happened. Soon after the United States entered the war, in December 1941, he went to the Naval Ordinance Laboratory in Washington, D.C., where he supervised the counting testing of mines. He never returned to computing.

Who knows what else he could have given us? Instead, his entire lifetime produces one brief period of real scientific producitivity, bookended by teaching responsibilities and war.

Once you start looking, these stories are everwhere. Here’s The Daemon, the Gnu and the Penguin on the invention of Unix:

In August 1969, Ken Thompson’s wife Bonnie took their year-old son on a trip to California to show off to their families. As a temporary bachelor, Ken had time to work. “I allocated a week each to the operating system, the shell, the editor and the assembler [he told me]… and during the month she was gone, it was totally rewritten in a form that looked like an operating system”

Maybe this is a greatly exaggerated myth, but how terrifying would it be if that was true? Is it possible that Thompson was burdened by responsibilities his entire life, and then in a brief moment of freedom did some of the most important work anyone has ever done?

And then from Wikipedia, on Wilbur Wright:

…Wilbur never flew again. He gradually became occupied with business matters for the Wright Company and dealing with different lawsuits. Upon dealing with the patent lawsuits, which had put great strain on both brothers, Wilbur had written in a letter to a French friend, “When we think what we might have accomplished if we had been able to devote this time to experiments, we feel very sad, but it is always easier to deal with things than with men, and no one can direct his life entirely as he would choose.”

But why on earth not? Why couldn’t Wilbur Wright, now admired as one of history’s greatest inventors, find time to continue his most important work? The story continues:

Wilbur spent the next year before his death traveling, where he spent a full six months in Europe attending to various business and legal matters… He was also constantly back and forth between New York, Washington and Dayton. All of the stresses were taking a toll on Wilbur physically. Orville would remark that he would “come home white”.

Then finally:

After returning to Dayton in early May 1912, worn down in mind and body, he fell ill again and was diagnosed with typhoid fever. He lingered on, his symptoms relapsing and remitting for many days. Wilbur died, at age 45, at the Wright family home on May 30.

These were some of the most brilliant minds we had, and they were each nearly unable to fulfil even a tiny fraction of their potential. We should ask how much more each of them could have accomplished, but also how much we’ve lost from would-be inventors unable to find even a month of genuine free time with which to pursue their dreams. And of course, how many have been effectively barred from research by poverty or discrimination.

What hits me hardest is not the material loss, but the squandering of human spirit. As Bret Victor once explained:

We recognize that a dog has to be allowed the full free expression of its entire range of capabilities. Sticking him in a cage or constraining his range of experience, you’re not letting him do all the things that dogs can do. And this is exactly what we’ve done to ourselves.

And so the stories above strike me not even as tragedies, but as something more inhumane.

My greatest fear is that intelligent life will arrive on earth. It won’t be an invasion, or colonization, or anything horrible. They’ll just sit us down, and ask about the lives of our heroes.

We’ll proudly tell them about this guy Wilbur Wright. How he and his brother invented a machine to fly in the sky as gods. We’ll tell them about our culture of research and innovation, and how Wilbur, self-taught engineer from Ohio, changed the entire world.

And then we’ll have to explain how gruesomely we murdered him.

Not with sticks and stones, but with a barrage of patent lawsuits. We will have to tell the aliens how we used this great system of socially legitimate torture to slowly wear him down over the years.

We will tell them how in the end, poor brilliant Wilbur became old and tired and incapable of producing anything beautiful ever again.

I do not think they will forgive us. I am not sure we should forgive ourselves.

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See Also
Alexey – Reviving Patronage and Revolutionary Industrial Research
Gwern – On Stress

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Yes, I understand that Wilbur also sued people. I’m not claiming that he was a good person. My point is that in a humane world, no part of this story would even be possible.

When people talk about incentive alignment, what they really mean is correlated returns.

Consider equity as a solution principal-agent problems. Since founders and employees are both paid as a percent of company valuation, their returns are correlated, and incentives are mostly aligned. [1]

But even where returns are perfectly correlated, there’s no guarantee that actors actually have each other’s best interests in mind. A more concrete way to think about this is: would you be willing to delegate your decisions to the other party? This is what I mean by “true alignment”.

This can go wrong in at least three ways:

1. Returns are correlated, but with different opportunity cost
2. Returns are correlated, but with different levels of risk
3. Returns are correlated, but with different second degree utility

1. Returns are correlated, but with different opportunity cost

Real estate agents are typically paid on commission of a home’s sale price. As a result, their returns are really well correlated with the homeowner’s:

In theory, this ought to mean that real estate agents and homeowners are truly aligned.

In practice, the real estate agent is the one doing work, which means that they’re the one paying opportunity cost.

Let’s say an agent can expect to earn $200/day, and gets paid 6% of home sale price. It’s not worth it for them to spend another 5 days of work pushing up your home price from $500k to $510k when this only nets them $600 against an opportunity cost of $1000.

In contrast, a homeowner would happily wait a week to get another $10k, or $9.4k after commission. Even factoring into account the time value of money, an additional 2% week-over-week is great.

If both sides were explicit about incentives and willing to broker a side deal, the homeowner would happily pay the full $1000 opportunity cost to get an extra $9000. But in the absence of transparency, the real estate agent will do their best to convince the owner to sell, even at net loss to their collective interests.

The result is correlated returns without true alignment. Neither side ought to trust the other.

2. Returns are correlated, but with different levels of risk

Another classic example is Venture Capitalists versus Founders. For any given startup, a founder might own 30%, and the VC 10%, so their returns are really well correlated:

In theory, this ought to mean that VCs and Founders are truly aligned.

In practice, VCs are massively diversified across startups, providing insulation against any one failure. As a result, they’re eager to push for riskier bets, even when it’s against the interests of an individual founder.

3. Returns are correlated, but with different second degree utility

Say you’re going out to dinner with a wealthier friend, and you’ve agreed to split the bill. No matter where you go, you’ll be paying the same amount, and getting the same consumption, so returns are really well correlated:

In theory, this ought to mean that wealthy and less wealthy diners are well aligned. You should be willing to let your friend pick the restaurant, and visa-versa.

In practice, each party may pay the same financial cost, but has a different marginal utility for their money. Assuming utility is something like log(wealth), the utility cost to a $100 dinner are far greater for you than for your wealthier friend.

Even assuming you have the same gastronomic tastes, your incentives are not actually aligned. You should not trust your friend to pick a restaurant. [2]

Conclusion

Taking “true alignment” to mean “would be willing to delegate decisions”, and “correlated returns” to mean “correlated first order financial returns”, everything I’ve said is true.

But in all these cases, the trick is just to think about the actual experienced utility rather than first order financial returns.

It’s presumably pretty straightforward to sell a home for a fair price, but much more work to sell for substantially more than what it’s worth. So the opportunity cost increases faster than the price of the home. Taking that into consideration, we can chart the agent’s returns with a consideration of non-linearly growing opportunity cost:

Which makes it clear that returns were never really correlated to begin with.

Similarly, risk-avoidance is a function of diminishing returns from wealth. As a result, founders would prefer a more certain return, while diversified VCs can afford to pay in risk for higher expected returns.

So the conclusion is not that something wacky is going on and alignment is impossible. It’s just that we have to take into account returns to actual utility rather than just naively looking at immediate finances.

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Postscript

I framed these as three different examples, but in a sense, they’re all the same.

The Venture Capitalist is risk-indifferent because they’re diversified. The founder is risk-averse because they experience diminishing returns from wealth to utility. Otherwise, a 1% chance of a billion dollar exit would be just as good as a guaranteed $10 million exit. So this is outwardly about risk, but really about second degree utility.

Arguably, diminishing returns to wealth are also just a function of opportunity cost. The more money you have, the less consumption in one place becomes a substitute for consumption elsewhere. This is also the case of a concave production-possibility frontier: the more you produce one good, the more the opportunity cost increases. This gives us a sense of diminishing returns, even without appeal to the hedonic treadmill or other psychological effects.

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[1] Note that this only works for early employees at startups. The more your compensation is defined by salary rather than equity, the more your returns are fixed, and the less aligned you’ll be with your founders.

[2] Unless of course, they offer to treat you.