Substack is laying off 14% of its staff (opens in new tab)

Definitely a crazy multiplier, but not the craziest on the market given other parameters.

If not 72, what revenue multiples are more appropriate as per the yardsticks you are familiar with?

You could have real estate in the heart of Manhattan that you make $0 on, but that doesn't make it worthless because of the potential of that real estate.

We know highly trafficked websites (and apps) can make billions selling ads. My guess is that investors saw value in the virtual real estate of Substack so that $650m might not be as unreasonable as it seems on the surface.

Valuations are based on future performance, not current performance. If they're going to do $100m in revenue this year then the valuation is perfectly reasonable.

But I'm just guessing. It might be as unreasonable as you suggest. I'm just saying there can be cases when that kind of valuation would make sense if the potential for higher future revenues / earnings exist.

Same way that WeWork was 'valued' at $50bn, before they revealed their full financials to the public. Then the IPO collapsed; the company was worth $10bn tops, and most of that is in assets they purchased during Softbank's dalliance with Adam Neumann.

The same Adam Neumann that Substack investors A16Z have given $70m to to develop a carbon credits trading blockchain. I shit you not.

ROI: https://www.youtube.com/watch?v=BzAdXyPYKQo

Actually now that I think of it, zero of the people whose writing I would pay for are "writers" by trade, which is part of the dullness problem of consumer media.

True, there are actually some real writers worth reading on substack, but imo, not enough of them, and even less of them that I would be willing to pay to read - heck, I won't even pay to read a newspaper online anywhere as you can get it almost all for free someplace else with a few clicks.

Seems like an attempt to monetize free blogs, problem is, there are still plenty of other free blogs to read - they haven't gone away.

Alternatively, if I care what you have to say, you're probably not a professional writer. Maybe there's a better way to do it than we've seen so far, but I have yet to watch someone go that route without overhyping every little thing, stretching the truth, and then outright making stuff up.

For me email is a big ball of stress, there is always a huge amount of spam to delete, even if I keep up on unsubscribing from lists and blocking addresses that send me spam.

When I am reading email I am generally trying to get some specific task done and having email newsletters get in the way means I'm going to skip over the newsletters and never read them.

What the world needs is an RSS reader which is like that Talking Heads song Psycho Killer: "See something once, why see it again?"

Their target consumer (affluent/intellectual enough to pay for access to ideas) has access to a far wider variety of arguably better content if they're willing to build up a set of RSS feeds.

Maybe there's room to build a company on top of the RSS ecosystem, but it's difficult when free, feature-rich, and high quality alternatives exist.

FWIW, it does seem like Substack is trying to attack this space: https://on.substack.com/p/new-reader-homepage.

However, as a publisher/bundler of paid RSS feeds, they have a big conflict of interest in offering an RSS reader. Like Spotify and their "exclusive" podcasts, they have an incentive to push bland content and obscure the rich niches that make the RSS ecosystem actually-valuable.

What a great quote!

People are having to tighten budgets and cut gym memberships, newspapers, Netflix and Spotify subscriptions. Substack isn't even in the mix there.

Don't cross the streams. Not on Substack itself, anyway. The recommendations can happen via other websites like Hacker News and the occasional author link.

Unfortunately, Substack wants to do an internal reference or "recommendation" system that basically mimics a closed clique. Those that know other writers may get a friend to "recommend" their newsletter, but it will very likely not be anything that the readers of this friend are interested in since the recommendation may have nothing to do with the content, or the merits of the recommended writer, it's just who they know.

I think people are interested in the content, in a subject, or a genre/type of writing, like humor, advice, reviews, etc. They may want to spend more time with a subject rather than being given irrelevant recommendations based on who the writer reads.

"Why the f* didn't anyone tell me I could take less?"

https://www.youtube.com/watch?v=hsmmznL9sFg

I recently cancelled my NYT subscription, but I would happily pay a one-time fee for a nicely packaged, printed copy of their journalistic scoops. I think their last big one was about the impact of drone bombings in civilian areas in Afghanistan and Pakistan. That's an important piece of research that deserves a permanent home.

No such option exists. And unfortunately, I'm not going to pay $20/mo CAD for what appears to be 50% opinion columnists, often writing columns about the same thing week after week.

Cost of goods sold is always deducted before reporting revenue, otherwise companies like Uber, Lyft, Doordash, Amazon, Stripe, Square that pass through most of their receipts would all seem 10-100x bigger than they actually are.

Retail tends to have large revenues and tiny margins. I can say Amazon retail should be worth more based on their revenue, but when their margins are 0 or negative, that would be dumb

That isn't what I read. Their big payments (which weren't structured as advances but as guarantees for which writers had to forgo X months of subscription revenue) to big name writers ended up being lower than the standard author cut of the subscriptions those writers generated. So much so that this might account for a significant part of the $9MM.