Big announcement: Shane Snow and I have done what is now mandated by law for two millennial dads who write pop business books and are best buds.
That’s right—we’ve started a podcast.
It’s called The Art of the Zag, and it’s an excuse for us to explore the topic that has dominated our conversations ever since I tricked Shane into becoming my friend 15 years ago: What are the bold, contrarian ways of doing things that lead to big breakthroughs? When everyone else is zigging, how do you zag and win?
We have an amazing lineup of guests already, starting with an old friend—Substack co-founder Hamish McKenzie. Watch the teaser below of an absolutely fascinating and bonkers conversation:
You can watch/listen to the podcast on Substack, through the video player on the top of this page. It also should be on all your favorite podcast platforms, assuming that the Substack podcast sync to Apple Podcasts and Spotify actually works like it’s supposed to!
And for those of you who just want to read what we talked about — here’s a lightly edited transcript of the conversation!
Joe Lazer: Hamish McKenzie, welcome to The Art of the Zag.
Hamish McKenzie: Thanks. It feels so good to be here. It’s great to see you. Yeah, it’s great to have you here. And this is a long, long-term relationship we’ve had, occasionally checking in with each other, but stems back all the way to the early 2010s.
Joe Lazer: —a little tan down in Costa Rica. But I do remember when I first—because Shane knew you before I did, yeah—but the first time I encountered you, I remember it vividly, because I was sitting at this big table, the long table we had in the Contently office.
And you wrote this piece for PandoDaily, proposing that we buy ProPublica. Do you remember this?
Hamish McKenzie: I remember it very well. Yeah.
Shane Snow: Was your editor like, “What the hell?”
Hamish McKenzie: There’s no editor. I mean, sort of around, but I don’t think they were looking at my stuff before I hit publish. [Pando Daily founder] Sarah [Lacy] wasn’t looking at it, no. Maybe afterwards, and then she’d yell at me.
Joe Lazer: Because we just raised a $9 million Series A. And it was a great idea, but no f*cking way can we afford to buy ProPublica.
But it did inspire us to start the Contently Foundation. That was our nonprofit that did investigative journalism and won some awards and stuff. So thank you for that, because that was the most fun part of doing Contently—starting the journalism foundation.
Hamish McKenzie: Man, you got—that’s awesome, that that is how it played out. And I’m sure you are over-crediting my role in that, but it is awesome that you started the Contently Foundation and that it went on to do amazing work. And I’m so glad that I got to play even a minor role in its conceptualization.
Joe Lazer: No, no, seriously, there was no way in hell that Joe Coleman, the CEO, was going to approve that idea. Besides the fact that that article came out and got some buzz, you actually were the catalyst behind us.
Hamish McKenzie: That’s amazing. Okay, well, that’s great.
And let me say that, you know, that was obviously a ridiculous provocation—that Contently or a startup should buy this storied media institution, which was relatively new itself at the time. But the feeling was that some startups exist, and that there are ways to use technology and venture capital to serve the interests of culture and media, and that some players in these spaces have their hearts andideals in the right place. And you guys were among them with Contently.
And on the other side of things, there are media businesses that are trying to do important work—or media organizations, because ProPublica is nonprofit—and that could really use the help of an industry or a sector that does have access to capital and that does want to do the right things, but otherwise doesn’t see great financial opportunity in journalism, which at that time was considered a shrinking field. Obviously, it’s exploding now.
And so even if Contently wasn’t going to buy ProPublica, that is an interesting provocation—that a startup that cares about journalism and says it cares about journalism might act in genuine service of journalism by doing something costly to live out their values. And it is what ended up happening, just in a different, probably much better way. So kudos to you guys.
Shane Snow: Well, thank you for that. And it’s again, there’s a dotted line you can look back on and see what you’re doing now with Substack.
But I remember it was, yeah, shortly after that, you left sort of the world of traditional journalism to go and play this role as sort of in-house journalist or content lead at some for-profit companies, which I think at the time felt a little edgy itself, for someone who had a great reputation as a journalist to go and do this.
Are you comfortable talking publicly about working at Tesla and standing up to Elon Musk as the in-house journalist during that era? Is that something you talk about?
Hamish McKenzie: I ended up writing a book about it, so I’m comfortable with that all being public and out there.
And it didn’t work out ultimately in the way that I hoped it would work out when I went in there. Elon hired me because in those days, he had great judgment, really. He really recognized the value of good storytelling. That is very true. He continues to recognize the value of good storytelling. He’s telling stories in particular ways right now that are sort of at odds with bringing as many people into the tent that he wants to build as possible.
And I was really a big believer, and I continue to be a believer in Tesla. It’s a good company. They make great cars. It has made a massive contribution to weaning the world off fossil fuels. And I was fascinated by Elon and excited by Tesla and what it was doing to revolutionize the auto industry, with aspirations to revolutionize the energy industry.
And so he asked me to go work there. And I thought that could be a really fucking cool job—go and be an in-house journalist at one of the world’s most incredible companies. And I got there, and first of all, the communications team, my colleagues, turned around and said, “Who are you and what are you doing here?”
I did a little bit of the in-house journalist type of thing, but it became really difficult to actually do that in the way that it needed to be done to be successful, because the editor ultimately was Elon. And he is not only a really difficult guy to please, with his own particular views about how the stories should be told, but also running three or four different companies at once and hard to get the time and attention for.
And so what I ended up doing was sort of being the lead writer at Tesla who would take on any project that had to do with external writing and sometimes internal writing, including blog posts and marketing emails and earnings reports. I would edit the earnings reports, press statements, and all this sort of stuff, which was a crazy and ill-defined role and really cool, but it comes with its own stresses, not least of which are due to who the boss is.
Shane Snow: Yeah, but it’s cool that you made that bet—that, hey, this company that cares about its impact on the world and has the money to pay to tell good stories could be a way to fund the telling of good stories. I think it’s interesting, you know, seeing—yeah, we don’t have to make this a podcast about Elon Musk, the world twists and turns in interesting ways.
But out of that, you eventually ended up at Kik, right? And then was that the last stop before Substack?
Hamish McKenzie: Yes. So I finished working at Tesla because its communications team was in constant reinvention. Let’s say now the communications team at Tesla is a poop emoji. I think that Elon just set it to auto-reply to any reporter inquiry.
Joe Lazer: Wait, is that really how it works?
Hamish McKenzie: I checked. I’ve sort of lost interest in following the variations.
But the team—so I was there for a year and a quarter, and had three bosses of the communications team in that time. It’s the most cursed position at Tesla.
So that role kept on changing, and the team kept on changing. And eventually, for starters, it looked like they were gonna cut me as they built a new team. And then they changed their mind and asked to keep me, but then I had already sort of gotten committed to this other idea, which was to leave and write a book.
And then while I was writing the book, I would pay for the rent at home with a half-time job, essentially working in communications and editorial for Kik, which was a big messaging app, which has since been destroyed by the winds of the tech industry and Instagram and Snapchat getting popular and all that sort of stuff.
But Kik was full of nice Canadians, and it was sort of the cultural opposite of Tesla, and I loved the CEO—still do—Ted Livingston. I wanted to—believed in that company, and believed that they could be the WeChat of the West. Because the side interest I had was China and how tech was taking off there, and how China had built the greatest consumer app in history, WeChat. And there was nothing like that in the US yet.
In those days, even Messenger—Facebook Messenger was just direct text messaging, but in the Facebook skin. And Kik was actually building towards a vision where they could realize something that could become kind of like WeChat. They ultimately didn’t get to do it for various reasons, but I wanted to go and help with that while I was working on the book.
And through that work, became friends with Chris Best and Jairaj Sethi, who I ended up starting Substack with in 2017.
Joe Lazer: So essentially, the trauma of the relationship with having Elon Musk as your editor sent you into the warm Canadian arms of Chris, who came to you with the idea for Substack.
Hamish McKenzie: That’s a decent synthesis. Yeah, that’s the nutshell.
Joe Lazer: Yes. All right, yeah. So I actually really want to hear the founding story from your perspective, because I’ve heard a couple podcasts of you and Chris, and Chris tends to take the lead. So I want to hear your narrative of how this all got started.
Hamish McKenzie: Obviously, I’m the true genius at the center of it, and Chris just absorbs my energy.
Joe Lazer: And the reason we wanted to have you on is because Substack is the ultimate zag, right? You have this company that’s now become a unicorn darling, one of the fastest growing media platforms. But when it came out, it was a platform for writers to send paid newsletters, which no one was doing at the time, right?
Shane Snow: You were betting on writers at a time when writers were the example of a dying industry.
Hamish McKenzie: Not the sexiest commercial proposition on the market.
Joe Lazer: No, we were all taking brand jobs.
So it’s, you know, now it’s treated as this inevitable darling, right? But it definitely wasn’t when it started. So, yeah, tell us that story from your POV.
Hamish McKenzie: So Chris had finished working at Kik—he stepped away. He’d been there nine years. He was one of the founders and the CTO there. And I had just about finished writing a book that became Insane Mode, which is about how Tesla catalyzed the electric car revolution. That title, by the way—side remark—looks more and more apt as time progresses.
But in that space where Chris is, “Okay, I’m gonna use my time to do whatever I want now for a while,” one of the things he did was go and learn how to fly light aircraft. And the other thing was to write more.
And he had written this blog post, which was going to be the first thing he published on his website, which was explaining and sort of decrying the existing incentives of the media ecosystem, which was dominated by the attention model, which was drawing us into these games where conflict was maximized, and sensationalism was maximized. There wasn’t much going on in terms of helping us understand each other and build towards the truth.
And he shared this draft with me for my feedback, because I was one of the writers—the only journalist he knew. And my feedback was, this is a great piece. And all the points you’re making are strong and right, but people who work in the media kind of know that these are the problems. And you hear about this sort of problem a lot.
The actual main issue is that no one knows what to do about it. There’s no clear way forward or proposed alternative that we could pursue to change things for the better. So my suggestion to him was to include a couple of paragraphs suggesting other ways forward.
And he insolently didn’t do the work, and never got around to finishing that essay. But he formed the foundation of Substack. Which is that, based on the simplest insight, you need to create a different type of system with a different set of rules and incentives, where the customer is the audience and not the advertiser.
And so when people pay the writers whom they trust most directly, they get to be active agents in shaping a culture that they want to exist. And the writers have an attainable, sustainable model for supporting the work that they believe is most important.
And so one simple way of expressing that was let people start a paid subscription email newsletter. And we thought—well, I thought—well, I know someone who’d be good at doing that, and that would probably work for, and it’s this guy, Bill Bishop, whom I knew from my days when I used to live in Hong Kong, writing about digital marketing in Asia.
And he was a go-to source for China. He has a much-loved newsletter about China that had been read by everyone who mattered for five years, but he never monetized it. And I thought, well, if he did a paid newsletter—and I knew he actually planned to do it, but he just hadn’t got around to putting the tools together—then that could be a big success. And if that thing works, then all sorts of new possibilities present themselves.
So we did that one simple thing with Bill Bishop, starting the paid email newsletter, and it worked. And then we did it with a couple of other people with totally different profiles to Bill Bishop, and that worked. And at that point, we’re like, we think we might have unlocked a special new model here that we should try and take to the maximum.
Shane Snow: So when I think about those early days of Substack, the pitch I would give to people is: if you have an email list—well, if you’re writing, you have an audience. Your publisher or your employer owns that audience, or Facebook owns that audience—you don’t know who these people are. And if you go on your own, you’re starting from zero. If you have your own newsletter, you have to pay to send emails to the people who have subscribed to you.
And so the pitch for Substack that I was giving to writers early on was, these guys are footing the bill for your email newsletter.
And I think a lot of people—I don’t know—I’m curious, because going from “this is something that could work for Bill Bishop and some of those people” to—you know, there’s tons and tons of people, I don’t even know how many users using Substack now—to cross that chasm, you had to get people who didn’t already have huge audiences. You had to get people to believe that they could build something with this.
And that’s where, I think, my crude pitch to other writers was “free emails”—MailChimp costs 10 cents to send an email to someone or whatever. But what really was the secret, the inner workings of that model, to get a mass audience on board with this idea, not just the people who could immediately monetize?
Hamish McKenzie: I always say that Substack doesn’t represent a format revolution. It’s not like you can now do text, images, and video together in these new ways, or just text or newsletters. And it’s not a technological revolution—the tools and the system that we’re building are great, and the engineers who work at Substack are geniuses. But it’s not like blogging software hadn’t been invented, or payment software hadn’t been invented.
To me, it’s a business model revolution. It’s a new business model available as an option for people to try, and it will work for some. And the only question is, how many can it work for?
And we knew in those early days that it could work for Bill Bishop, who has a dedicated China observer audience—journalists and academics, diplomats, business people, etc.—and could charge a high price for subscriptions.
But we also found out that it could work for Danny Lavery, who was one of the founders of The Toast, who’s writing comedic riffs on Victorian literature in modern vernacular. And the audience for Danny was librarians in the Midwest who are paying five bucks a month out of their own pockets.
If it can work for those two character types, it can probably work for new people who don’t even consider themselves writers, or who consider themselves podcasters or video makers.
And one of the early success examples at Substack was an anonymous person writing about bankruptcy and distressed assets from inside the industry, for an industry audience—an industry that has never been well covered, because the people who are writing about this stuff are usually English degree majors who find a job at the Wall Street Journal and do this as a beat for one year before they move on to write about what they really want to write about.
And so a hugely important and hugely valuable sector gets under-covered. But different character types can emerge because of this business model to cover this in more depth and with more nuance than it’s ever been covered before.
And we always believed from the early days that almost every imaginable editorial niche could be served by this business model, to some extent. And it was just a matter of finding out how far it could go.
Shane Snow: So the idea is that when you can get the whole world somehow together on the internet, all of these niches could become profitable or kind of subscriber-rich categories for a lot of people. Basically, that’s the idea, right?
Hamish McKenzie: You wouldn’t even have had to get the whole world together into a network for that to be possible. There could still be each publication as its own island, and each writer could be operating in isolation, covering their industry and thriving with the Substack business model.
But when you can network them together, and you can get cross-pollination effects and collaboration, and audiences exposed to—sorry, publications getting exposed to audiences that didn’t already know about their work—then a whole lot of new things become possible. And there are ways not only to publish and monetize, but grow as well, if you’re the publisher.
So in that way, if we can do that, and if you can have a destination that people go to—which is true of Substack now, because it’s an app that millions of people use every day—then you get something that starts to look a lot more like a modern reincarnation of YouTube.
Which sounds ridiculous, because YouTube is about 10,000 times larger than Substack. But it is a place where you can publish and distribute your work and find an audience and monetize, all under the same umbrella. But you also have ownership over those relationships with your audience, a direct connection. And you’re not constrained to just one format type. You’re not constrained to just video.
Joe Lazer: Just on that point around the network—I mean, I think for me, that was a big motivation for moving my newsletter and my list over to Substack, is you have this network effect that’s going to bring people together.
And I feel like, as I spend more and more time on Substack—as you’ve added Notes, and it becomes kind of more of this social media platform in a way—you see this thread of folks who are always sort of thinking about Substack as a newsletter and writing platform, its original iteration. And there’s sometimes this cultural rejection, it almost feels like, of adding in the different formats.
When you add Notes in the feed, it’s like, “Oh, Substack’s just gonna become LinkedIn.” When you add videos, it’s like, “Oh, this is just gonna become TikTok, and this is gonna become trash.”
But what I get from you, and I get from you guys, is that you don’t really think of Substack, as you said a second ago, by that format construct at all. It is a business model in which the business’s incentives are aligned with creators’ incentives, and you can take your audience with you to another platform whenever you want. That really distinguishes Substack. Am I kind of reflecting that right?
Hamish McKenzie: Yeah. The business model allows a new type of media ecosystem to emerge, and it’s a media ecosystem where the incentives are aligned. So Substack, the platform, can only succeed when the writers or creators succeed, and they can only succeed when their subscribers, when their audience, feel like they’re given good value. And so you change the dynamics compared to other options.
Other options are big, aggregated, closed gardens, monetized through advertising, where platform owners control relationships and end up creating really bad cultural outcomes—some good, some bad.
Or, the other side of it is traditional media, which has really good values and total ownership and direct relationships, but their business models stop working, and so they are more and more distressed, more and more vulnerable, and increasingly, unfortunately, still reliant on those other systems that control the relationships and kind of eat them away anyway.
So traditional media’s got a physical illness, which is the business model problem. Social media has a mental illness, which is the discourse problem. And Substack is this beautiful new creation that solves both—it gives you a transparent business model that works, and it gives you a way to engage in discourse that doesn’t drive you crazy.
Shane Snow: Yeah, I mean, we’ve been seeing more and more traditional media jump onto Substack. Can you talk a little bit about—I’m following McSweeney’s and The New Yorker—can you talk a little bit about why they would jump onto someone else’s platform, rather than sticking to the old way that they’re doing it?
Joe Lazer: And how does that relate to what you said a second ago around the physical illness, right? Because many media companies’ business models now rely on subscriptions, they’re also paired with a continued reliance on ad revenue, which leads to really bad reading experiences. So I’d love to hear you flesh that out a little bit more, too—how that intertwines with what you see as kind of that physical illness of traditional media.
Hamish McKenzie: And I’ll even make my answer so textured and subtle that it will address the point you’re making about people’s concerns about enshittification, basically.
What happens is, people have mental models that are based on not-crazy assumptions. And one is that we’ve seen the social media game in the past. We know how it goes. And it’s got a feed, it’s got comments, it’s got ways that you can like people and DM people. That’s just like Twitter, and that’s just like Instagram, which have gone in these particular directions that I don’t like. Therefore, don’t do that social media stuff. It’s bad.
Our response to that is: okay, a lot of the technologies and a lot of the surface things that you see here are familiar from these other contexts, but the whole fuel that powers the system is different and is going to create different results.
Just like an electric car looks the same as an internal combustion engine car, but its powertrain is completely different, and the result—not only in the performance of the vehicle, but its externalities—are different. There’s less pollution than there is from an internal combustion engine car.
A similar dynamic plays out in how traditional media players have viewed Substack. They have a mental model, they have an assumption—and you guys remember, because I was covering this stuff at the time in 2012 to 2014 at Pando Daily—when these media companies had bet their futures on social media platforms.
BuzzFeed lived and died because of Facebook’s algorithm changes, and so did Vice. And Mic. And Vox managed to squirrel out of it. But there were huge, damaging, traumatizing effects of that wrong bet in that time.
And the wrong bet was not so much that internet network effects can help you grow—that’s definitely true—but that we should trust our audience relationships in the hands of these places that actually concentrate power and don’t distribute it.
And so Substack is a model where you can get the benefits of the network effects, but hold onto the ownership of the audience relationships, which is actually brand new. You could only have one or the other before Substack. Substack’s the first time you don’t have to choose between one of those. You can have both.
And the reflex response of traditional media to Substack was, because it looks like this thing that we know goes bad, we’re going to be very hesitant about it. It’s another VC-funded Silicon Valley startup that says it’s going to save the media, but actually, it’s just trying to turn us all into pawns in their closed garden.
And there’s also a competitive aspect about it, which is that some of the best writers from the traditional media companies were jumping the fence to go independent and achieve success on Substack, which was a threat to media companies and felt like it. And so their posture for a long time was: Substack, dangerous. Substack, a competitor.
But that view—which I think is basically not right, or there’s a different opportunity to look at Substack that could have helped them hold on to a lot of that talent and grow with that talent if they conceptualized it in a different way—but regardless of its merits, it blocked them from seeing the potential in Substack.
And the potential of Substack for them, too is that it’s a new land to build on. This is new infrastructure. This can get you exposed to a new audience that doesn’t already necessarily follow you or subscribe to you. It gives you a new set of publishing tools and a new way to directly engage with people.
And I think there’s a lot of experimentation to come, and we’re in the really early days, but we’re starting to see traditional media warm up to Substack. The New Yorker’s on. The New York Review of Books. FT Alphaville—I think they do the most interesting stuff of the above-mentioned. New York Magazine. Anything that’s got “New York” in the name—
Shane Snow: —is now, all of New York moved over, yeah.
Hamish McKenzie: I think they’re in experimental phases, and there are new expressions to realize. But I’m so happy to see them warming up to seeing this as new land to build on that doesn’t corrode their ownership rights. It’s different from the past generation of social media.
Joe Lazer: Yeah. And I think in part because we have so much of that trauma from every social media platform inevitably screwing us over as well, there’s this natural skepticism that’s been brewing around Substack, as you mentioned.
But specifically around the paid business model is what I’ve come to understand. You know, there’s the “Substack entrapment theory” piece that came out, I think, in Puck a couple of weeks ago.
Hamish McKenzie: The coverage from Dylan Byers is the dumbest, worst coverage I’ve ever seen. Good job.
Joe Lazer: It was a mildly confusing piece.
Hamish McKenzie: Oh no, this was Julia Alexander.
Joe Lazer: I think it was Julia Alexander, yeah. But I think it was a somewhat interesting question, right? That I have no idea—I want to ask you: does this have any weight? That, okay, you can always take your audience with you, right? You can download your list. But if you’re getting paying customers through Substack, can you take those paying customers with you? And is that a new form of, essentially, entrapment, the way that other platforms have entrapped creators and publishers?
Hamish McKenzie: Yeah, I think entrapment is 180 degrees wrong. It’s the exact opposite of what is true of Substack.
On Substack, you own your payment relationships, even in a Stripe account that you control, and you can connect to Substack or disconnect at any time. There’s no walled garden in the history of humanity that would ever allow that level of control and ownership and exit rights. And the same goes with your mailing list. You collect your audience on a mailing list that you have total dominion over, and you can take it with you anytime you want. And the same is true of your content. Take it with you anytime you want.
There’s some crazy people out there who somehow have become upset about Substack in past years and have moved to other platforms. And we’ve made it as easy as possible for them to do that. Because what is fundamental to our success, and the success of a media system that we want to be healthier and better for the world, is that it has to be based on trust. And if we’re corralling people and blocking off the exits, that would corrode the fundamental value at the heart of Substack: trust.
So in fact, that piece—that part of it—was factually wrong and conceptually inept.
Shane Snow: I can confirm. I can log in to my Stripe account and see all my Substack subscriptions, and it’s my Stripe account that’s billing them. So, yeah.
Joe Lazer: That makes sense. Yeah, I just wanted to dig into that, because that’s just generated a little bit of noise on the platform.
Shane Snow: It creates—it sparks two things for me. One is, the bigger and more powerful any organization gets, the more haters it gets. And I think sometimes it’s because we see power amassed and growth happen, and it becomes evil. And so I think there is this kind of question of, what’s gonna go wrong?
You know, with every round of funding that Substack has, it’s like, “All right, well, now they have to sell for $10 billion. But who do they sell to? And what will happen then?”
Hamish McKenzie: That’s the New York mindset. Who are you gonna sell to? Who’s gonna buy you? Who’s gonna be your daddy? But the independence is its own game, and you can be independent forever and still make shitloads of money for everyone anyway. Sorry, yes—
Shane Snow: Well, no, I think, you know, it’s a new model, which I think is the most compelling argument for how this isn’t going to go the exact same way that every social media company has gone, because it’s not a social media model.
But when I think about the “what could go wrong” of this company that, you know, that I use, that I love, that we’re glad to see grow—I think about, oh boy, here comes generative AI. Here comes the slop. Here comes the AI content.
And you’ve even written recently about, as we get more media from robots, what’s going to happen. What’s the plan? What’s the stance that Substack is going to take to handle that sort of looming hurricane?
Hamish McKenzie: Well, I think the ultimate guarantee of Substack continuing to grow in a way that really does distribute power, rather than hoard it, is the business model.
Even if we weren’t the world’s most wonderful people with our hearts in the right place and a bone-deep commitment to furthering this mission to help create a better culture, we would be forced to do the right thing by the capitalist imperative of our business model, which is: we can only make money when the publishers make money, and they have exit rights, which forces us to be in service to them, to prove that we provide enough value for them to stay on the platform.
So that is—you know, things might change in the future. We might be struck by an asteroid, or some hurricane, that suddenly changes our personalities or principles. Or the business model might change in some unforeseeable, fundamental way. Bad shit happens in the world all the time.
But the reason we started Substack, and the reason we gave ourselves that constraint of that business model, is that we’d be forced to be in service of the people who make culture.
AI, I think, is going to be really interesting as a challenge and a new factor. But I think as robots make more stuff for us—and there’s going to be the places that we go to get the good entertainment experiences and information experiences from robots—it’s simultaneously going to increase the value and importance of human-to-human connection, and people sharing stories with each other, and those relationships which are not just a moment on the timeline, but an ongoing thing built on trust.
And that stuff is not just a nice thing that we can get sometimes, or that has appeared in the marketplace and succeeded over time. It’s something that’s fundamental to human evolution. And it’s not to say that the AI media experience will cease to exist. It’s just a completely different quality, and the knowing that there’s another human on the other end of this cultural exchange is a major, important thing that people will be happy to pay for, because the other thing highlights how important it is.
Shane Snow: It’s interesting. It’s the scarcity idea that, because it’s rarer, we will value it more, even if it’s sort of less of a big piece of the media pie.
Hamish McKenzie: It’s different. It feels better when you’re in a relationship with a human than when you’re in a relationship with a robot, even though there are some values to having a relationship with a robot.
Shane Snow: I totally agree with the first and not the second point. I—well, I haven’t met a robot yet that I want a relationship with.
Hamish McKenzie: But I have relationships with robots. I will come out on the record and say that. And those relationships are helpful to me, and they do improve my life. But they’re a very cheap, poor imitation of the soul connection relationships that I get with other humans.
Joe Lazer: I think part of the concern that, at least that I would have, is that so much of what I love about Substack is that feeling, right? That I’m getting stories from another human being. This is something that they’re super passionate about writing about. This is their beat.
And a lot of what makes storytelling so meaningful to us is that sense of human-to-human connection. This is another human that’s making every choice in the words they’re choosing and the stories they’re telling.
But we’re quickly accelerating to a world where AI is blurring the line of reality. Even the video that we see, we have no idea if it’s real or not. If this is a real human being. It used to be that posting a selfie video was proof of reality. I think we’re very, very close—weeks or a couple months away—from that no longer being the case.
With writing, it’s the same thing. You think this is a personal essay coming from someone, but it could just be AI-generated slop.
And so is there a risk with AI ruining that magic that you just talked about with Substack? And then, have you guys talked about what’s Substack’s responsibility—for the audience at large and also for the business model in the long run—of labeling and detecting AI-generated content?
Hamish McKenzie: Yeah, it increases the value and importance of discernment—your decision as a consumer about who to enter into a relationship with. That’s a good thing, introducing more intentionality into your media diet.
And you know, truth is, you might get quite a lot of value from subscribing to something that is completely run by AI, and you might even be happy to pay for that. And I don’t think that’s a problem. But I think what is important is that you do that knowingly, or that you have the alternative option to place your bets on humans. Or you want to have a certain part of your budget that’s just going to go directly to humans, even if some of these AI relationships are important to you.
And there are interesting questions that not just Substack, but all of the online media system, are going to be learning and iterating on over time. And I’m not sure—I honestly don’t know what it’s going to look like.
I don’t know if a flag that says “Warning, this is completely generated by a robot” is the way to go, or if there are other signals there that you can use to verify the humanity of someone you’re in dialogue with.
And so, you know, a really dumb version of this is that celebrities are starting to show up on Substack, and we want people to know that they are the celebrities who they say they are. And so they can get a grey check mark. They’re just—you know, if they’ve got a Wikipedia page or—I’ve forgotten the exact definitions we have for knowing that they’re verified. Or if they have an Instagram account associated with the Substack account that shows their humanity, we just give that signal to people to increase their confidence that it’s the real person with whom they’re in dialog with.
And I can imagine those types of technologies coming online as the ecosystem evolves.
Shane Snow: Yeah, I was gonna ask if Substack can play a role in helping people know this is a human, if that is indeed an important thing philosophically.
Hamish McKenzie: Yeah, 100%.
Joe Lazer: Certified grass-fed human.
Joe Lazer: Yeah, because I think you’re right. It’s not like “AI bad,” right? That no one can read content that was AI-generated or no one can watch a video that’s AI-generated. But there’s something important about just knowing, right? That’s really hard already.
Almost every couple of nights, my wife is looking in bed at a video and turns to me and is like, “Is this AI?” I used to have a really good eye for it. But it’s getting harder and harder to tell. And I think that’s what I kind of worry about us losing, is that sense of knowing, especially on a platform like Substack that I love, and I spend a lot of time reading, that something is created by a human.
And I think, with text, it’s maybe a little bit more blurry because people use AI in the writing process in different ways. It’s not 100% one way or another.
But video, as you have more and more video on the platform via podcasts and reels, it feels like that’s one that—you know, TikTok has done this with detecting AI-generated content—that feels, at least to me, almost inevitable, that you would want to have some sort of mechanism for it. Whether it’s detecting AI-generated content, or what Adam Mosseri from Instagram just proposed, which is that eventually we just need to watermark and label all human-generated content, because that’s going to be the minority, and it’s gonna be much easier to distinguish that way than the other way.
Hamish McKenzie: I’d much rather, from the business analysis point of view, be a platform that is predicated on trust relationships in that world than one that is predicated on an endless content feed where the relationships don’t matter as much.
And you might—you have your cast of characters in your mind and in your inbox who you’ve grown to trust over time. And therefore, you can have more confidence that what they’re showing you is genuine and not just produced to manipulate you in some sort of way.
And so you get more of a head start in a system like Substack that is predicated on the relationships than you do on the other platforms. Which is not to say that the challenge goes away completely, but it is a different environment.
Shane Snow: There’s something I’ve been wanting to ask you, Hamish, because we all—the three of us have kids. I think we all have boys. We all have boys who like to color with crayons on every surface.
And yeah, so I think a lot about what the media environment that my kid is going to grow up in. We actually produced a kid show about media literacy, because we thought that’s one of the skills that kids are going to need, and it’s hard to teach that to young kids.
But you, as someone who thinks all day long about the media environment and the thing that—the model that you’re building that goes against sort of the standard way the whole rest of the media world is gone—what do you think your kids need in order to be good sort of citizens or media consumers? What are they going to need to be able to do, to discern, to sort of be in whatever newfangled environment is next, once we’re in our 60s and they’re paying our bills for us? How do you think about that, the next generation?
Hamish McKenzie: They need systems that are going to be tilted in favor of their best selves.
And I am 100% optimistic that we’re going to get there, and partly because of the painful lessons of this era that we’ve had to grow up through, which is a transition era from pre-internet media to post-internet media.
And we’re in the—for the last 20 years, we’ve all sort of been—the last 10 years have been the heightened expression of it—but we’ve been trapped in a system where everyone decided that the model that should prevail is one based on attention. And that’s not a system that rewards your best self. That’s a system that rewards your most reactive, weakest self.
But systems can be good. Technologies can be good. They don’t always have to be married to the bad things.
And what I think we see with Substack, and then other platforms that are sort of embodying similar ideals, is that there are other ways to help writers and consumers thrive and get high-quality stuff that actually makes them better-thinking citizens of the world, without it seeming like they’ve been forced to eat their vegetables.
And so, even if Substack died tomorrow, I think the secret of its business model has been revealed to the world. The secret of the ecosystem design has been revealed to the world, and it’s now inevitable that it will grow and flourish. Whether Substack is central to that or not.
And as long as that happens, I think we can get a much richer, more diverse, and more interesting media ecosystem based on depth and real trust relationships. That doesn’t mean it’s going to be perfect in every vector and every point, but it’s going to be a massive improvement from the reality we live in today.
I hope so. Yeah, I’m going to look like a fool if this turns out not to be true.
Shane Snow: Well, hopefully there’s enough of us that want that for our kids, right? That we’re recognizing this time that we’ve been living through and realizing we don’t want that for the next generation.
Hamish McKenzie: One of the good things is that, as a creator, as someone who makes media and culture, the other platforms suck as options. It’s really hard to make money on those platforms.
Even on YouTube, which is the best of them by far, you have to have an audience of millions basically before you start making your first dollars. With Substack or a direct subscription model, a few people paying you start to make a meaningful economic difference very early. And then the path to wealth through this model is much more attainable than through the current social media platforms.
Joe Lazer: You gotta get your mom and your aunt subscribing to you and your baby on Substack. Yeah.
All right. So we want to get to our final two questions. Which is, first, who are you following or reading right now that you think epitomizes this idea of when everyone else is zigging in the world, it pays to zag?
Hamish McKenzie: I’m terrible at this game because I’ve got bad top-of-mind recall when it comes to thinking of things I’ve read recently or movies I’ve watched recently.
But an example I love to talk about: Sam Kriss, who writes crazy, long, deranged essays that blend fantasy with nonfiction, and should be a totally uncommercializable product. But he is thriving on Substack and he’s got a real cult following. I think he is a perfect embodiment of the Zag.
Joe Lazer: Last one: what’s one controversial or counterintuitive idea that you think everyone listening to this should consider?
Hamish McKenzie: That media businesses are going to be the greatest businesses of the future. Media founders today are the equivalent of software developers and software founders of the 2000s.
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