You Can Make a Lot of Money with a Substack Newsletter

I interviewed writers who are crushing it on Substack to give you the ultimate guide (good and bad).

Substack is a ridiculously easy way for a writer of any skill level to make money. I looked into Substack 6–12 months ago and gave up. Why?

Substack is not intuitive. It’s not made for dummies like me.

After I divorced Substack and dismissed it as lame like a brat millennial, I began to hear stories of writers who loved Substack.

I decided to give Substack a second go and interview and research a few writers on there who are making a crapload of cashola.

Substack can be a side-hustle or even help you earn a full-time living.

Substack equals freedom

What makes Substack so different is that you don’t have to worship the tech giants and their rules. Substack allows you to make up your own rules. Writers seem to love that freedom.

On Substack, they allow you to directly charge your readers to receive a regular newsletter from you. A newsletter is a fancy way of saying your readers will get an email from you. That email you send readers can be anything you like. You control it and you own the email list.

Other platforms have “followers.” Followers cause people to lose their minds, inflate their egos, and chase something fundamentally ridiculous.

Why is a follower ridiculous? Because you don’t own a follower and they can follow anyone. A follower is a human without an email address.

When you don’t have a person’s email address, you can’t easily talk to them or build an audience around your writing. This is a huge pain-in-the-ass.

The other big difference is that your content is not seen based on a social media algorithm. On LinkedIn, for example, they decide how many people see your content. Tech giants can censor anything they want — from a health crisis, to a political debate to a new form of money.

Platforms like Substack lets you have freedom of speech without a psychopath, biased algorithm in control.

There’s a massive hidden catch to Substack

Substack is bring-your-own-audience.

There is one page that features a few top publications and writers, but for the most part, you’re on your own pal.

This means you can’t solely rely on Substack unless you have an email list. The good news is you don’t need a lot of email subscribers to do well on Substack.

If you charge $5 per month and have 1000 paying subscribers, then you will make $60,000 per year from Substack. That’s a pretty decent living with not a lot of people.

Don’t underestimate the power of a small audience.

So what all this means is you need a second channel to publish free content and have a call-to-action that allows readers to sign up for your Substack Newsletter. This is not a dealbreaker by any means. It’s not easy, though, if you’re new to blogging.

Getting people to discover and read to the end of your work so they see your call to action is a challenge. You can do it if you choose to, though.

PAID content vs FREE content

One thing I learned about Substack is that not all content is paid. You can release free content via Substack to build your audience. Most writers from my research seem to have a mixture of free and paid content.

Simon Purdon is one writer I interviewed who has learned a lot about the platform. He gave me this advice:

Currently my free newsletter goes out once a week, and the paid segment does too. I know guys that do one free for every four paid’s.

But I’m still growing, and making my content free is a good way of doing that. It’s the best proof there is for someone wanting to sign up.

So the answer to free vs paid depends on whether you want to grow your audience quickly or monetize as soon as possible. I spent many years never making a dollar from blogging. I credit those years of starving as a writer as part of any tiny bit of success I had later on.

I spoke to another writer who has gone all-in on Substack and makes a full-time living from writing on Substack alone (they prefer to be anonymous). What makes them unique is they optimize for the reader, not money. Ever. This is their split between paid and free Substack content:

I do about 6 paid a month, most people do more though. And yeah, only one free a month. And yep, they [the readers] have to actively look for it.

They charge $8 a month for their Substack newsletter and have around 4000 subscribers (you can expect 10% of the email subscribers you collect to sign up for paid content on Substack, according to Simon Purdon).

4000 subscribers x $8 per month = $384,000 USD per year.

Do Substack Unsubscribers ruin your life?

So you’re making a lot of cash from Substack. What about the people who leave you?

I asked this question to the people I approached. You can expect 3%-5% of people to unsubscribe each month. The number goes down further once you establish yourself.

That’s a pretty good burn rate and it means you won’t have to be desperately filling your newsletter with new subscribers every month — or getting down on one knee and begging people to sign up for your newsletter and giving up their firstborn child.

Niche is the key to Substack success

Niklas Göke is another writer who has had some success on Substack. I interviewed Nik and he gave me one piece of advice that is key.

You have to niche down on Substack. Broad newsletters are tiring.

Simon Purdon agrees with Nik. For me, this means deciding between a newsletter about personal finance, entrepreneurship, startups, writing, relationships, business or career.

Nik gives even more precise advice: “There has to be a clear promise and outcome for the reader.”

Substack can be a secondary marketing channel

Nik uses Substack differently. He sends out his most popular blog posts from other platforms, like his website, through Substack. It’s another way he promotes his writing.

Getting your writing out there is half the battle.

Minimalist layouts make creativity thrive

I’m a sucker for a minimalist layout which Substack has.

With pure white space and simple tools to format your work, your ideas and creativity can shine for the reader and affect their life in powerful ways.

Unlike other newsletter platforms, Substack is dead simple to use. You don’t need a 100-page FAQ to write your vision into reality.

Formatting is simpler because you can’t go viral

One difference with newsletters, according to the writers I spoke to, is that you don’t have to worry about going viral.

A newsletter has almost zero chance of going viral.

This means you can choose to have no images or keep the formatting quite simple. I’ve read many newsletters on the platform and the key theme is to be helpful with a newsletter — not load it up with infographics and images that distract the reader.

Make the relationship with the reader intimate

Add a weekly Q&A, says Michael Thompson.

Launch your Substack newsletter and then have a weekly Zoom call where you allow readers to ask you questions.

This gives the reader something more from you that they can’t get anywhere else. This strategy also separates you from all the amateur Substack writers who may take the generic path to nowhere.

A reader who has asked you a question while looking you in the face is a potential reader for life. That’s the power of Q&A.

Substack vs an Email Provider (like ConvertKit)

Newsletters (emails) existed long before Substack.

I use ConvertKit currently to send out a weekly newsletter to my audience of 44,000 email subscribers. One question that came up is “why the heck do I need Substack on top of an email list provider?” Simon gave me a few hints that are not in the glossy brochures of Substack.

Substack has the following downsides:

Substack is expensive. Mailchimp starts at $9.99 USD per month, whereas Substack take 10% of every dollar you make. (Mailchimp banned me for life though with no explanation, so be very careful.)
Substack doesn’t connect to anything. Substack has no incoming or outgoing APIs. For non-techies that means you can only collect email subscribers by sending them to your Substack page or embedding a highly non-customizable form on your personal website.
Your Substack page can’t be hosted on your own website domain. This means the SEO (Search Engine Optimization) benefit goes to Substack, not to you and your internet dreams.
Substack has no automation or sales funnels. This means you can’t sell a digital product like an eBook, course, or coaching later on. Effectively you need to run an email provider like ConvertKit and Substack.

Substack makes your life complicated

Because Substack has no automation or sales funnels, and because Substack has no ability for readers to discover writers and subscribe to them, you need two of everything.

You need two places to blog if you use Substack.

You need two email marketing platforms if you use Substack.

Simon Purdon gave me another valuable insight I hadn’t thought of. His biggest problem with Substack is that every time a reader signs up as a subscriber on his website popup, he needs to manually import them into Substack each time before sending a newsletter out.

Substack deliverability is high

One problem with email and newsletter is the Spam Folder. According to ConvertKit, 15% of emails never make it to the reader’s email inbox and get trapped in the dark hole known as the Spam Folder.

Simon measured deliverability with both Substack and ConvertKit. Here are his results:

Deliverability is WAY better with Substack. And I had done all the admin around sending emails from my own domain through Mailchimp. A jump from 30% to 35% average to consistently above 50% with Substack. That makes a difference.

Making sure your content reaches the reader is crucial in your success as a writer.

What happens if you want to leave Substack?

You can pack your bags and export your audience’s email addresses. This is a handy get out of jail free card if you decide to leave.

Like with anything, there will always be something you left behind that you might miss. Pretty sure a lot of the data you collect while using Substack will be lost once you leave. That’s why it pays to make your decision carefully.

Worried Substack will die in a recession?

This is a genuine concern when choosing a platform as a writer. Will the tech company you choose, go bankrupt in a recession?

Anything is possible. Substack’s lead investor is Andreessen Horowitz who has helped grow some of the biggest tech companies on the planet: Box, Lyft, Facebook, Slack, Github, Instagram, Skype, etc.

So with a strong investor behind them, who tends to be ahead of the trends and excellent at getting companies through difficult times, there is some comfort if you choose Substack, that they won’t go bankrupt.

Pomp shows the sky’s the limit to your writing goals

How far can you go on Substack? Anthony Pompliano of Twitter fame shows what is possible with Substack. “The Pomp Letter” has 35,000 subscribers and costs $10 per month.

This means Pomp earns $4,200,000 USD from his Substack newsletter.

For the Tesla lovers out there, that’s a lot of electricity to put in your car and drive anywhere you like.

Final Thoughts on Substack

Part of the reason I wrote this article is that I’m considering setting up a Substack Newsletter. After doing the research, I’m not sure about Substack.

It feels like if I set up a newsletter I’d have to double-handle email subscribers and complicate the hell out of my life by having ConvertKit and Substack. The other decision you have to make as a writer is how do you want to monetize your work? I’ve always given away my content mostly for free.

I like the idea of making a living as a writer behind the scenes in less obvious ways (coaching, consulting, eBooks, courses, Masterminds, etc).

Directly charging for content via a newsletter is not an idea I’m sold on yet — sorry Substack. I am big on building a highly automated email list that allows me to help readers as best as I can. I also don’t want to annoy every email subscriber with stuff they are not interested in.

The key with email lists is creating segmented audiences. This means for me that I can direct writing advice content to one lot of email subscribers, finance content to another segment, and self-improvement hacks to a different segment again.

My verdict: Substack is good for small niche audiences but it’s not good if you like to write about lots of things. Substack also assumes you only want to write a newsletter for the rest of your life. I find this reality limiting.

You can reach readers in any way you choose. Choose the platform that gives you control and allows you to plan for the future. Because writing can change your life and you don’t want to be held back by the platform you built your audience on.